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This has been WITHDRAWN - see Opinion # 5042

State v. Dutch Harbor Seafoods, State v Trident Seafoods (12/27/96) sp-4456

Notice: This opinion is subject to correction before publication in the Pacific Reporter. Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone (907) 264-0607, fax (907) 264-0878. THE SUPREME COURT OF THE STATE OF ALASKA STATE OF ALASKA, ) ) Supreme Court No. S-6919 Petitioner, ) ) Court of Appeals No. A-5642 v. ) ) District Court No. DUTCH HARBOR SEAFOODS, LTD., ) 3KO-S94-319 Cr. ) Respondent. ) ______________________________) STATE OF ALASKA, ) ) District Court No. Petitioner, ) 3KO-S94-321 Cr. ) v. ) O P I N I O N ) TRIDENT SEAFOODS CORP., ) [No. 4456 - December 27, 1996] ) Respondent. ) ______________________________) Petition for Hearing from the Court of Appeals of the State of Alaska, on Appeal from the District Court of the State of Alaska, Third Judicial District, Kodiak, Donald D. Hopwood, Judge. Appearances: W.H. Hawley, Assistant Attorney General, Anchorage, Bruce M. Botelho, Attorney General, Juneau, for Petitioner. Joel H. Bolger, Jamin, Ebell, Bolger & Gentry, Kodiak, and Walter W. Mason, Jamin, Ebell, Bolger & Gentry, Seattle, for Respondents. Before: Compton, Chief Justice, Rabinowitz, Matthews, Eastaugh, and Fabe, Justices. MATTHEWS, Justice.  The question presented in these consolidated cases is whether entities charged with strict liability commercial fishing violations are entitled to a trial by jury. (EN1) We answer this question "no"based on the criminal trial section of the Alaska Constitution, and "yes"based on the civil trial section. I. Procedural Setting Respondents Dutch Harbor Seafoods, Ltd. and Trident Seafoods Corp. were charged with strict liability commercial fishing violations under AS 16.05.722(a). Specifically, they were charged with unlawful failure to register vessels within registration area "J"before operating trawl gear, in violation of 5 AAC 28.020(a) and (c), (EN2) and with unlawful possession of fishtaken by an unregistered vessel in violation of 5 AAC 39.197. (EN3) Respondents moved for trial before a jury, arguing that they were entitled to a jury trial under article I, sections 11 and 16 of the Alaska Constitution. (EN4) At oral argument respondents asserted that the State would be seeking a forfeiture of some $158,000 from Trident and $110,000 from Dutch Harbor, representing in each case the value of the fish onboard. The State did not dispute the substance of this assertion. Respondents' motions were granted. The State petitioned the court of appeals for review of this ruling; the petition was denied. The State then petitioned this court for hearing. We granted the petition. II. AS 16.05.722 Described One who is accused of violating commercial fishing regulations may be charged either with a "violation"under AS 16.05.722, (EN5) or with a misdemeanor under AS 16.05.723. (EN6) Guilt under subsection .722(a) does not require any culpable mental state; punishment is by a fine of not more than $3,000 for a first conviction and $6,000 for a second or subsequent conviction. A person guilty of a violation under subsection .722(b) may also be ordered to forfeit fish, or the fair market value of fish, taken as a result of the commission of the violation. Subsection .722(c) expressly provides that one who is charged with a violation is not entitled to a trial by jury. By contrast, when a misdemeanor is charged under section .723, a culpable mental state of at least negligence must be proven; punishment is by a fine of not more than $15,000 or by imprisonment for not more than one year, or by both. A misdemeanor conviction can carry with it an order for forfeiture of illegally caught fish or their fair market value as in section .722, and the forfeiture of the vessel and gear. Enhanced fines are also imposed in certain circumstances under subsections .723(b) and (c). A jury trial is available to persons charged under section .723. III. Article I, Section 11 of the Alaska Constitution Does Not Apply Article I, section 11 of the Alaska Constitution applies only to "criminal prosecutions." The question here is whether a strict liability commercial fishing violation comes within the meaning of this term. In Baker v. City of Fairbanks, 471 P.2d 386, 402 (Alaska 1970), we discussed the meaning of the term "criminal prosecutions." We stated that the term includes (1) offenses in which a direct penalty may be incarceration, (2) offenses which may result in the loss of a valuable license as punishment, and (3) offenses which, even if incarceration is not a possible punishment, still carry a connotation of criminality. With respect to the last factor we noted that a heavy enough fine may carry such a connotation: In extending the right to jury trial, we define the category of "criminal"prosecutions as including any offense a direct penalty for which may be incarceration in a jail or penal institution. It also includes offenses which may result in the loss of a valuable license, such as a driver's license or a license to pursue a common calling, occupation, or business.28 It must also include offenses which, even if incarceration is not a possible punishment, still connote criminal conduct in the traditional sense of the term.29 Excluded from the requirement of jury trial are such relatively innocuous offenses as wrongful parking of motor vehicles, minor traffic violations, and violations which relate to the regulation of property, sanitation, building codes, fire codes, and other legal measures which can be considered regulatory rather than criminal in their thrust, so long as incarceration is not one of the possible modes of punishment. (EN7) ______________________________________________ 28 This does not cover revocation of licenses pursuant to administrative proceedings where lawful criteria other than criminality are a proper concern in protecting public welfare and safety, as the basis of revocation or suspension in such instances is not that one has committed a criminal offense, but that the individual is not fit to be licensed, apart from considerations of only guilt or innocence of crime. 29 A heavy enough fine might also indicate criminality because it can be taken as a gauge of the ethical and social judgments of the community. Id. Applying the Baker three-part test, strict liability commercial fishing offenses do not entail incarceration as a direct penalty. The loss of a valuable license will not result from a finding that such offenses have been committed. Thus only the third part of the test is involved. Is there a connotation of criminal conduct which is carried by conviction of a strict liability commercial fishing offense, either based on the nature of the offense or the size of the fine? (EN8) As to the nature of the offense, because strict liability offenses do not require a culpable mental state there is nothing inherent in a conviction which connotes traditional criminal conduct. See Resek v. State, 706 P.2d 288, 292 (Alaska 1985) (forfeiture action not a criminal prosecution within meaning of article I, section 11 because the owner of forfeited property may not be criminally culpable). With respect to the size of the fine, it is our view that a maximum fine of $3,000 for a first offender, or $6,000 for a repeat offender, does not in itself connote criminality in the context of the highly regulated multi-million dollar fishing industry. See State v. O'Neill Investigations, Inc., 609 P.2d 520, 538 (Alaska 1980) (plurality opinion of Dimond, J.) ($5,000 civil fine assessable for unfair or deceptive bill collection practice does not render proceedings criminal prosecutions as those found guilty will not suffer severe collateral consequences such as curtailment of future economic opportunities or substantial social opprobrium). To be considered along with the fine is the possibility that the fish, or the value of the fish, caught by a vessel while committing a fishing violation will be forfeited. As this case illustrates, sometimes the amount which may be forfeited is substantial. Does a substantial forfeiture connote criminality? Resek gives a negative answer. Subject to forfeiture in Resek were five automobiles, thirty-five ivory carvings and $16,500 in jewelry and cash. Id. at 290. We held that forfeiture of these items would not be "equivalent to the imposition of a fine so heavy that it indicates criminality." Id. at 291. We noted: the forfeiture law does not attempt to tailor the amount of loss suffered through a forfeiture to the degree of culpability -- to fit the "punishment"to the crime. The forfeiture penalty may be high for some, and negligible or nonexistent for others who are as deserving or even more deserving of criminal punishment. We recognize that application of the forfeiture laws can result in severe loss to a property owner, and that there clearly is a punitive component to the forfeiture laws. Nonetheless, the absence of a correlation between the culpability of the property owner and the size of the penalty indicates that the legislature had additional aims in mind. Id. at 292 (footnotes omitted). We went on to discuss the remedial nonpunitive purposes of a forfeiture, including, relevant to this case, its deterrent effect and the need to deny profitability to law-breaking activity. Id. Some of the property forfeited in Resek was property used in the commission of crimes, and some of the property represented the proceeds of criminal activity. Forfeitures of property used in the commission of crimes are more punitive in nature than proceeds forfeitures. A fisherman who must give up his catch is roughly in the position he was in before he began fishing illegally. A fisherman who must give up his catch and his vessel and gear is in a much worse position. Alaska Statute 16.05.722 permits only proceeds forfeitures. Its purpose is "to prevent violators from profiting in any way from their illegal catch." McCann v. State, 817 P.2d 484, 486 (Alaska App. 1991). For this reason the absence of a connotation of criminality is clearer in this case than in Resek. Moreover, the size of a proceeds forfeiture is dependent solely on the amount of the proceeds and does not reflect a judicial or legislative judgment as to the nature of the conduct of the defendant. Therefore, the fact that the amount of such a forfeiture may be substantial is not suggestive of criminality. We thus conclude that strict liability commercial fishing violations are not criminal prosecutions under article I, section 11 of the Alaska Constitution and therefore no jury trial is required under that section. (EN9) IV. Article I, Section 16 of the Alaska Constitution Applies Article I, section 16 of the Alaska Constitution requires a jury trial in civil cases where the amount in controversy exceeds $250 "to the same extent as it existed at common law." Under the approach we followed in Loomis Electronic Protection, Inc. v. Schaefer, 549 P.2d 1341 (Alaska 1976), in determining whether a jury right exists in a particular case, the crucial inquiry is whether the remedy sought is appropriately regarded as "legal"or "equitable"in nature. We have correspondingly de-emphasized "what has been called an 'abstruse historical' search for the nearest 18th-century analog." Tull v. United States, 481 U.S. 412, 421 (1987). See Vinson v. Hamilton, 854 P.2d 733, 737 (Alaska 1993) ("[W]hether a jury trial right existed was dependent not on whether the plaintiff or defendant was in possession," as would be critical at common law, "but whether a claim for damages as distinct from an order adjudicating ownership or user rights was sought . . . ."). To decide whether article I, section 16 applies to this case, it is necessary to discuss separately the forfeiture and fine provisions of the strict liability commercial fishing violation statute. We begin by considering the forfeiture remedy. The State argues that a proceeds forfeiture is restitutionary in nature and that restitution is an equitable remedy for which no jury trial was available at common law. The respondents offer no direct response to this argument and we find it to be persuasive and in accordance with our case law. Two cases supporting the argument warrant emphasis. First, in State v. First National Bank of Anchorage, 660 P.2d 406, 423-24 (Alaska 1982), the State sought a return of the purchase price paid by defrauded land buyers to a property developer under Alaska's Uniform Sales Land Practices Act and on a common law fraud theory. The amount in controversy exceeded $1,600,000. We held that this was restitutionary relief only and that a trial by jury was therefore not required. We also noted that the State had originally sought civil penalties but that this claim had been dropped. This made it unnecessary to "decide whether a right to jury trial would exist had the State sought civil penalties under . . . USLPA . . . ." Id. at 424 n.28. Second, in Loomis we indicated that a statutory action for back pay lost as a result of discrimination in employment is properly regarded as "equitable"because the remedy of back pay is a form of restitution. 549 P.2d at 1343 n.9. (EN10) The remaining question is whether the respondent's liability for a fine that exceeds $250 gives rise to a jury trial right. We hold that it does. The relevant Alaska decision on this point is Loomis. In Loomis, we held that the remedies of compensatory and punitive damages available under the state anti-discrimination act triggered a right to jury trial under article I, section 16. It is difficult to perceive any distinction which has a bearing on whether there should be a jury trial between the statute at issue in Loomis, which permits punitive damages to be assessed, and one such as AS 16.05.722, which permits the assessment of a fine. Both sanctions are designed to punish, rather than to compensate or restore the status quo. It therefore cannot be argued that a suit under either statute is analogous to restitution or to any other equitable remedy. In addition to being consistent with Alaska precedent, notwithstanding the State's argument to the contrary, our decision today comports with analogous federal cases. The State asserts that in public rights cases, that is cases in which the government sues to enforce public rights created by statute, Congress or the legislature may provide that no jury trial is available. In support of this proposition the State cites Granfinanciera S.A. v. Nordberg, 492 U.S. 33, 42 (1989), and Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S. 442, 460 (1977). These authorities are inapposite. They hold only that Congress may delegate to administrative agencies the power to impose civil fines free from the jury trial requirement of the Seventh Amendment. The Supreme Court case most similar to this case is Tull. In Tull, the Supreme Court recognized a right to a civil jury trial in Clean Water Act civil penalty actions in Article III courts. One noteworthy difference exists between the situation under consideration and the situations considered by the Loomis court and the Tull Court, respectively. Alaska Statute 16.05.722 states that a person charged with a violation under the section is entitled to a trial by a court but not by jury. By contrast, the statutes at issue in Loomis and Tull were silent as to jury trial. Indeed, as one commentator has noted, there exists no case in which the Supreme Court has been faced . . . with the situation in which Congress has expressed a strong preference for nonjury trial and has provided reasons supporting that preference. Read . . . narrowly, then, the cases do not foreclose the possibility that Congress can provide for a statutory cause of action that is not purely equitable to be enforced in the district courts without a jury trial. However, it must be remembered that there is a constitutional presumption for jury trial, which means that there also is a very heavy burden of proof on those desiring to overcome it. (EN11) The Alaska Supreme Court also has not previously encountered such a situation. Alaska Statute 16.05.722 obviously contains an explicit legislative directive that a litigant is not entitled to a jury trial. However, there is no clear indication that the legislature perceived any compelling functional justification for denying a jury trial in the context of the statutory scheme at issue. (EN12) Against this backdrop, we think that AS 16.05.722 fails to overcome the constitutional mandate for jury trials embodied in article I, section 16. Assuming that the legislature has any ability to provide for a statutory cause of action that is not equitable in nature to be enforced in courts of general jurisdiction without a jury trial, that ability is necessarily circumscribed and has been exceeded here. Accordingly, we conclude that article I, section 16 requires that cases brought under AS 16.05.722 in which a fine greater than $250 is sought be tried to a jury. (EN13) Insofar as subsection .722(c) is inconsistent with this conclusion, it is unconstitutional. V. Conclusion The order of the superior court is affirmed to the extent that it was based on article I, section 16 of the Alaska Constitution and reversed to the extent that it was based on article I, section 11 and on the federal constitution, and this case is remanded for further proceedings consistent with this opinion. AFFIRMED in part, REVERSED in part, and REMANDED. ENDNOTES: 1. This is a legal question to which we apply our independent judgment. Swanner v. Anchorage Equal Rights Comm'n, 874 P.2d 274, 277 (Alaska 1994). 2. 5 AAC 28.020 provides in relevant part: (a) Before a person uses a vessel to operate groundfish gear in the territorial waters of Alaska, except for the Eastern Gulf of Alaska registration area, the vessel owner or the owner's authorized agent shall register the vessel with the department. However, the commissioner may waive this registration requirement for a specific fishery or season if the commissioner considers waiver to be necessary. . . . . (c) Before operating groundfish gear within a registration area, the vessel owner, or the owner's authorized agent, shall complete the registration requirements by mail or in person at a department office located within the registration area. A completed form validated by the department satisfies the registration requirements. In the form, the department may require check-in and check-out procedures for fishing specified subsections within the registration area. A copy of the completed form must be retained onboard a vessel operating groundfish gear in the registration area. 3. 5 AAC 39.197 provides: No person may possess, purchase, sell, barter or transport fish within the state or within the water subject to the jurisdiction of the state if that person knows or has reason to know that fish were taken or possessed in contravention of 5 AAC 03 - 5 AAC 39. 4. Article I, section 11 of the Alaska Constitution provides: In all criminal prosecutions, the accused shall have the right to a speedy and public trial, by an impartial jury of twelve, except that the legislature may provide for a jury of not more than twelve nor less than six in courts not of record. The accused is entitled to be informed of the nature and cause of the accusation; to be released on bail, except for capital offenses when the proof is evident or the presumption great; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense. Article I, section 16, provides: In civil cases where the amount in controversy exceeds two hundred fifty dollars, the right of trial by a jury of twelve is preserved to the same extent as it existed at common law. The legislature may make provision for a verdict by not less than three-fourths of the jury and, in courts not of record, may provide for a jury of not less than six or more than twelve. 5. AS 16.05.722 provided during the relevant time frame: (a) A person who without any culpable mental state violates AS 16.05.440 - 16.05.690, or a regulation of the Board of Fisheries or the department governing commercial fishing, is guilty of a violation and upon conviction is punishable by a fine of not more than (1) $3,000 for a first conviction; and (2) $6,000 for a second conviction or subsequent conviction. (b) In addition, the court shall order forfeiture of any fish, or its fair market value, taken or retained as a result of the commission of the violation. For purposes of this subsection, it is a rebuttable presumption that all fish found on board a fishing vessel used in or in aid of a violation, or found at the fishing site, were taken or retained in violation of AS 16.05.440 - 16.05.690 or a commercial fisheries regulation of the Board of Fisheries or the department. It is the defendant's burden to show by a preponderance of the evidence that fish on board or at the site were lawfully taken and retained. (c) A person charged with a violation under this section is entitled to a trial by court but not by jury, and is not entitled to representation at public expense. 6. AS 16.05.723 provides: (a) A person who negligently violates AS 16.05.440 - 16.05.690, or a regulation of the Board of Fisheries or the department governing commercial fishing, is guilty of a misdemeanor and in addition to punishment under other provisions in this title, including AS 16.05.195 and 16.05.710, is punishable upon conviction by a fine of not more than $15,000 or by imprisonment for not more than one year, or by both. In addition, the court shall order forfeiture of any fish, or its fair market value, taken or retained as a result of the commission of the violation, and the court may forfeit any vessel and any fishing gear, including any net, pot, tackle, or other device designed or employed to take fish commercially, that was used in or in aid of the violation. Any fish, or its fair market value, forfeited under this subsection may not also be forfeited under AS 16.05.195. For purposes of this subsection, it is a rebuttable presumption that all fish found on board a fishing vessel used in or in aid of a violation, or found at the fishing site, were taken or retained in violation of AS 16.05.440 - 16.05.690 or a commercial fisheries regulation of the Board of Fisheries or the department, and it is the defendant's burden to show by a preponderance of the evidence that fish on board or at the site were lawfully taken and retained. (b) If a person is convicted under this section of one of the following offenses, then, in addition to the penalties imposed under (a) of this section, the court may impose a fine equal to the gross value of the fish found on board or at the fishing site at the time of the violation: (1) commercial fishing in closed waters; (2) commercial fishing during a closed period or season; (3) commercial fishing with unlawful gear, including a net, pot, tackle, or other device designed or employed to take fish commercially; or (4) commercial fishing without a limited entry permit holder on board if the holder is required by law or regulation to be present. (c) Upon a third misdemeanor conviction within a period of 10 years for an offense listed in (b) of this section or any combination of offenses listed in (b) of this section, the court shall impose, in addition to any penalties imposed under (a) of this section, a fine equal to three times the gross value of the fish found on board or at the fishing site at the time of the offense, or a fine equal to $10,000, whichever is greater. 7. In Alexander v. City of Anchorage, 490 P.2d 910, 912-13 (Alaska 1971), we synthesized our holding in Baker as follows: We defined "criminal prosecution"as including "any offense a direct penalty for which may be incarceration in a jail or penal institution." We also included in the definition of that term offenses which may result in the loss of a valuable license and offenses where a heavy enough fine is imposed so as to indicate criminality because such a fine could be taken as a gauge of the ethical and social judgments of the community. (Footnotes omitted.) Our most recent synthesis of the test to be used in determining whether a proceeding is a criminal prosecution was expressed in Resek v. State, 706 P.2d 288, 291 (Alaska 1985), as follows: This court has defined "criminal prosecution,"as that term is used in Article I, as including (1) offenses for which a direct penalty may be incarceration, (2) offenses which may result in the loss of a valuable license, and (3) offenses for which the fine imposed is heavy enough to indicate criminality, because such a fine could be taken as a gauge of the ethical and social judgments of the community. 8. The function of the third part of the Baker test is to recognize that incarceration and revocation of licenses are not the only possible methods by which the legislature might punish criminal conduct. Home confinement, community work service, probation, and fines are examples of alternative methods of punishment. Therefore, the court must determine if, in the social and ethical judgment of the community, the offense connotes criminal conduct in the traditional sense of the term, despite the lack of punishment by incarceration or revocation of a license. 9. Although respondents based their motion for a jury trial only on the Alaska Constitution, the superior court judge stated in his oral remarks that he was also basing his decision on the Constitution of the United States. The Sixth Amendment to the United States Constitution guarantees defendants the right to trial by jury in "all criminal prosecutions." By judicial interpretation this guarantee has been held not to apply to "petty offenses." Any crime in which incarceration of more than six months is a possibility is not a petty offense. Blanton v. City of North Las Vegas, 489 U.S. 538, 542 (1989). Where the maximum period of incarceration is less than six months a defendant is entitled to a jury trial "only if he can demonstrate that any additional statutory penalties, viewed in conjunction with the maximum authorized period of incarceration, are so severe that they clearly reflect a legislative determination that the offense in question is a 'serious' one." Id. In United States v. Nachitgal, 507 U.S. 1, 5 (1993), the Court held that a fine of $5,000 taken in conjunction with a maximum period of incarceration of six months did not render the offense in question a serious one as to an individual defendant. See also Muniz v. Hoffman, 422 U.S. 254 (1975) ($10,000 fine imposed on a labor union does not trigger assumed jury trial right). Whether forfeitures can be considered as additional statutory penalties under Blanton seems to be an unanswered question. Austin v. United States, 509 U.S. 602 (1993), held that an in rem forfeiture of real property which had been used in drug violations was punishment subject to the excessive fines clause of the Eighth Amendment. While forfeitures of property used in the commission of crime, as in Austin, may be regarded as additional statutory penalties under Blanton, we doubt that forfeitures of the proceeds of illegal conduct, as in this case, will be so regarded. The purpose offoregoing we conclude that the Sixth Amendment to the United States Constitution does not require a jury trial in these cases. 10. The State's argument is also supported by King Mountain Condominium Ass'n v. Gundlach, 425 So.2d 569, 570 (Fla. App. 1982) (disgorgement of secret profits is an equitable remedy which does not give rise to a right of trial by jury). 11. 9 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure sec. 2302.2, at 53 (1995). 12. Compare two lower federal court decisions upholding the Foreign Service Immunities Act, Goar v. Compania Peruana de Vapores, 688 F.2d 417 (5th Cir. 1982); Rex v. Cia. Pervana de Vapores S.A., 660 F.2d 61 (3d Cir. 1981). The Foreign Service Immunities Act "provides for subject matter jurisdiction in the federal courts for actions against foreign governments or their instrumentalities and contains explicit language that jurisdiction is limited to nonjury proceedings." Wright & Miller, supra note 11, sec. 2302.2, at 53 (citing 28 U.S.C.A. sec. 1330(a)). The legislative history also "reveals that the legislature decided to provide only for nonjury trials because of a desire to promote uniformity in decisions and to avoid the international friction that might occur because of a perceived aberrant verdict rendered by a jury." Id. sec. 2302.2, at 54 (citing H.R. Rep. No. 1487, 94th Cong, 2d Sess. 14 (Sept. 9, 1976)). 13. Of course, a timely demand is required. Alaska R. Civ. P. 38.