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State, Commercial Fisheries Entry Commission v. Carlson (3/14/2003) sp-5673
State, Commercial Fisheries Entry Commission v. Carlson (3/14/2003) sp-5673
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) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.THE
SUPREME COURT OF THE STATE OF ALASKASTATE OF ALASKA,
)COMMERCIAL FISHERIES ) Supreme Court Nos. S-
10091/10101ENTRY COMMISSION, )
) Superior Court No. Appellant/
) 3AN-84-5790 CI Cross-Appellee, )
) O P I N I O N v. )
) [No. 5673 - March 14, 2003]DONALD H. CARLSON;
WARREN )HART; GERARD HASKINS; EARL )WEESE; and
LYLA C. WEESE, )Individually and as Class
)Representatives on Behalf of )All Persons
Similarly Situated, )
) Appellees/ ) Cross-
Appellants. )________________________________)Appeal
from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Peter A. Michalski,
Judge.Appearances: Stephen M. White, Assistant
Attorney General, and Bruce M. Botelho, Attorney
General, Juneau, for Appellant/Cross-Appellee. Loren
Domke, Loren Domke, P.C., Juneau, for Appellees/Cross-
Appellants.Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices. FABE, Chief
Justice.I. INTRODUCTION
This is the third appeal arising out of a lawsuit
centering on whether Alaska can charge nonresidents more for
commercial fishing licenses than it charges resident commercial
fishers. The case is brought as a class action by a group of
nonresident commercial fishers. In previous rulings in this
case, we held that different rates can be charged for resident
and nonresident commercial fishers, and we derived a formula for
calculating the acceptable difference. The components of this
formula, including various budget expenditures and oil revenues,
are in dispute in this appeal. We conclude that direct and
indirect costs associated with the fisheries budget and costs
associated with the hatcheries loan fund can be included in the
calculation of the allowable fee differential. We further hold
that at an earlier stage in this litigation the State conceded
that the protest requirement for recovery of overpayment of taxes
has been satisfied. Finally, we hold that prejudgment interest
will be applicable if on remand it is determined that a refund of
a portion of fees is required.
II. FACTS AND PROCEEDINGS
Litigation in this case began in 1984. At the time
this case was first before this court, nonresident commercial
fishers were charged three times as much as resident fishers for
fishing license fees.1 The relevant statute at the time, AS
16.05.480(a), dealt primarily with authorizing the establishment
of fees for commercial fishing: "A person engaged in commercial
fishing shall obtain a commercial fishing license. The fee for
the license is $30 for residents, and $90 for nonresidents." The
relevant current statute, AS 16.05.480(h), establishes: "For a
crewmember fishing license[2] issued for calendar year 2002 and
following years, a nonresident engaged in commercial fishing who
is 11 years of age or older and who does not hold an entry permit
or an interim_use permit shall pay an annual base fee of $60 plus
an amount, established by the department by regulation, that is
as close as is practicable to the maximum allowed by law." The
principal difference is that the current statute does not set the
amount which nonresidents can be charged, but rather allows this
amount to be set at the maximum legal amount.3
A similar fee structure is established for entry
permits and interim-use permits where the creation of limited use
zones is deemed necessary for controlling, through the permitting
process, the number of people who can fish in a given geographic
area.4 However, in 2001 the fees for nonresidents were three
times the amount for residents.5 Crewmembers are not required to
have entry or interim-use permits, although they are required to
have a commercial (crewmember) fishing permit to work on a permit
vessel.6 The class never specifically stated in its brief that
it is challenging both commercial fishing licenses and entry
permit fees, but one of the challenged superior court orders
states that it applies to both "commercial licenses and limited
entry permits." Furthermore, Carlson I defined the class as
consisting of "all persons who participated in one or more Alaska
commercial fisheries at any time who paid non-resident
assessments to the State for commercial or gear licenses or
permits."7 This language was taken directly from the initial
complaint. We therefore find it appropriate to address both
commercial fishing licenses and entry permit fees. For the sake
of simplicity, the two will be referred to collectively as
"commercial fishing fees," except in those instances where it is
necessary to differentiate between the two.
A. Prior Case History Before the Alaska Supreme Court
Before proceeding with the issues in the present case,
it is helpful to review the decisions in the previous appeals
before this court. In Carlson I, we held that different fees for
residents and nonresidents did not automatically violate either
the Privileges and Immunities Clause or the Commerce Clause of
the United States Constitution.8 We noted that "[l]ess favorable
treatment by the state towards nonresidents runs afoul of the
Privileges and Immunities Clause if: 1) the activity in question
is `sufficiently basic to the livelihood of the Nation . . . as
to fall within the purview of the [clause], and 2) [it] is not
closely related to the advancement of a substantial state
interest.' "9 We proceeded to determine that "[c]ommercial
fishing is a sufficiently important activity to come within the
purview of the Privileges and Immunities Clause, and license fees
which discriminate against nonresidents are prima facie a
violation of it."10 We recognized that states may "charge
non_residents a differential which would merely compensate the
State for any added enforcement burden they may impose or for any
conservation expenditures from taxes which only residents pay."11
Because the appropriateness of a 3:1 fee differential had not
been addressed, we remanded the case for such a determination,
placing the burden of persuasion on the State.12
We conducted a similar analysis with regard to the
Commerce Clause. Noting that the Commerce Clause "limits the
power of the States to erect barriers against interstate trade,"13
we concluded that if a law is shown to discriminate against
interstate commerce, either in its wording or in its effect, the
burden is on the State "to demonstrate both that the statute
`serves a legitimate local purpose,' and that this purpose could
not be served as well by available nondiscriminatory means."14 We
held that the superior court improperly relied upon Salorio v.
Glaser15 in granting summary judgment to the State.16 We
determined that applying Salorio, in which New Jersey imposed
additional fees on nonresidents to pay for transportation
facilities,17 to the present case would result in nonresidents
subsidizing the activities of residents because nonresidents
could then be required "to pay up to 100% of their pro rata share
of expenditures regardless of what percentage of their pro rata
share residents are in fact paying."18 However, because the
majority of the state revenues are derived from petroleum
production, a source to which nonresident fishers make no
contribution, we ruled that the State could recoup conservation
expenditures from nonresidents in the form of differential fees.19
We reasoned that the oil revenues spent on conservation "could
have been used to benefit residents through various other
programs and they are, analytically, equivalent to `taxes which
only residents pay.' "20 In that the extensive use of oil
revenues as a source for state expenditures created a greater
financial burden on nonresidents than residents, a fee
differential based upon residency was justified.21 Consequently,
"the state may equalize the economic burden of fisheries
management; where residents pay proportionately more by way of
foregone benefits than nonresidents for fisheries management,
nonresidents may be charged higher fees to make up the
difference."22 This is the same conclusion that was reached in
the Privileges and Immunities Clause analysis. Consequently, we
remanded the case for a further determination of the
appropriateness of the fees.23
In Carlson II, we addressed the question of what would
be an acceptable fee differential for nonresidents to pay.24 We
first affirmed our decision in Carlson I that neither the
Commerce Clause nor the Privileges and Immunities Clause
prevented the imposition of an increased fee for nonresident
commercial fishers.25 The class had argued that two cases, which
held that states violated the negative (also known as dormant)
Commerce Clause by charging greater taxes on out-of-state waste
than on in-state waste, decided by the United States Supreme
Court after Carlson I but before Carlson II, were applicable to
the present case.26 We distinguished these two cases by holding
that the facts in the present case did not involve the
"interstate flow of articles of commerce."27 In response to the
class's Privileges and Immunities Clause argument, we stated that
we did not in Carlson I advance the type of fee-shifting
arrangement denounced in Oregon Waste Systems, but rather
explicitly held that nonresidents could be required to pay only
that amount that would make their contribution to state-provided
benefits substantially equal to the contribution of similarly
situated residents.28
Accepting the constitutionality of the fee differences,
we next determined a formula for allowable differences. We
adopted the per capita fee differential formula advocated by the
class as opposed to the pro rata formula offered by the State,
holding that the allowable fee differential could be determined
by: (Fisheries Budget/Alaska Population) X (percentage of State
Budget from oil revenues/1.0).29 We rejected the State's proposed
formula30 because it improperly compared the contributions made by
nonresident commercial fishers to those made only by resident
commercial fishers, rather than viewing the resource expenditures
benefitting the nonresidents in terms of the population of the
state as a whole:31
Resident commercial fishers are paying the
license and permit fees they are charged plus
their per capita share of oil revenues which
are diverted to fisheries management from
other benefits or State services. It is this
quantity which must be equivalent to the fee
differential for the fees to be
constitutional under the Carlson I
analysis.[32]
We remanded the case to the superior court to determine if, under
the formula adopted, the nonresident fee differential exceeded
the resident contribution, including the forgone oil revenues of
the average Alaska resident.33 The superior court on remand was
also to address what budget figures should be included in
executing the formula.34
On the issues of refunds to the class and prejudgment
interest, we recognized that "the record indicates that the State
agrees that those fees which were paid after June 22, 1984, were
paid under protest sufficient to permit a refund under AS
43.10.210."35 The class admitted that it could not have satisfied
the protest requirement before then and thus would not seek a
refund for any fees prior to that date.36 We remanded the case to
determine if the action of filing suit constitutes sufficient
notice to satisfy the requirements of AS 43.10.210(a)37 and to
determine whether, if the class ultimately prevails, prejudgment
interest is due.38
B. Recent Case History After Remand to the Alaska Superior
Court
On July 17, 1998, Superior Court Judge Peter A.
Michalski issued an opinion addressing class decertification and
prejudgment interest. Judge Michalski denied the State's motion
for class decertification because all four components of class
certification - numerosity, commonality, typicality, and adequacy
of representation - were met. The State had argued that because
the class shifted its legal theory from common law theories of
assumpsit to a statutory argument, the original class
certification under Alaska Civil Rule 23(b)(2) must be
reexamined. The State further argued that numerosity did not
exist because only the named parties actually protested the fee
differential; conceded that commonality existed; asserted that
because different permits and fees were involved, there was no
typicality of claims; and contended that the variety of remedies
that the legislature could adopt if the fees were found to be
unconstitutional rendered it impossible for there to be adequacy
of representation. The superior court held that the State did
not provide a sufficient change in circumstances to justify
decertifying the class and noted that speculation as to how the
legislature might react to a ruling was also not grounds for
decertification. Judge Michalski further ruled that the status
of a class as a "unified legal entity" overrode the State's
interest in making distinctions between class members.
Consequently, the superior court concluded that "no distinctions
will be made among class members when determining whether the
state waived the protest requirement or whether the class met the
protest requirement."
In addition, the superior court held that notice to the
State existed as of December 13, 1984. The State had argued that
every member of the class was required to protest to obtain any
refund. However, Judge Michalski, quoting Principal Mutual Life
Insurance v. State, Division of Insurance,39 stated that the
purpose of the protest requirement was to provide the State "with
notice of the claimed tax illegality, the grounds advanced in
support of the claimed illegality, and [to] afford[] the state
the opportunity to fashion budget appropriations, or
expenditures, taking into account the magnitude of the claimed
tax illegality." Because the class was defined extensively
enough to include all commercial license and permit holders,
Judge Michalski held that the State should have known the
magnitude of the potential claims and budgeted appropriately. It
was therefore not necessary for each class member to protest the
fee differential because to impose such a requirement would be a
mere technicality. Judge Michalski thus held that the protest
requirement of AS 43.10.210(a) was satisfied by the certification
of the class in the suit.
As to prejudgment interest, the State asserted that AS
45.45.010, which had been invoked in Carlson II as the basis for
a determination of whether prejudgment interest was due,40 only
set the maximum interest rate and did not specifically authorize
prejudgment interest. The superior court conceded that the
State's interpretation of AS 45.45.010 was correct, but concluded
that this court intended the superior court to look beyond just
that statute in addressing the issue of prejudgment interest.
Looking to AS 43.05.280, the superior court determined that
interest was allowed on an overpayment of taxes. Because we held
in Carlson I that Title 43 applied to the present case even
though fees, and not taxes, were involved,41 Judge Michalski held
that the class could recover prejudgment interest on their
overpaid commercial fishing fees were they ultimately to prevail
on their claim.
Left undecided was the issue of what comprised the
different components of the formula derived in Carlson II. This
was resolved by the superior court at an evidentiary hearing held
June 12-14, 2000. The court adopted the State's methodology for
computing the fisheries budget with regard to both direct and
indirect operating expenditures, but agreed with the class that
general government costs, capital costs, the hatcheries loan fund
subsidy, and forgone revenue from fishery resources could not be
included when computing the fisheries budget. The resulting
fisheries budget for fiscal year 1996 was $127,289,000. Both
sides agreed on the methodology for determining Alaska's
population, namely the yearly estimate made by the Alaska
Department of Labor, yielding a state population of 605,212 in
fiscal year 1996. The superior court agreed with the State that
the oil revenues component should "include general fund petroleum
revenues, the draw on the constitutional budget reserve, and the
net income from the Alaska Permanent Fund appropriated each
year." In fiscal year 1996 this resulted in a calculation that
seventy-four percent of the state budget came from oil revenues.
From these figures, a maximum fee differential of $155.64 was
calculated for fiscal year 1996. The parties were then ordered
to use the methodologies adopted by the superior court to
calculate the allowable fee differential back to December 13,
1984 and any corresponding refund that may be necessary. This
accounting has not yet been made. The State appealed and Carlson
cross-appealed.
III. STANDARD OF REVIEW
The constitutionality of a statute and matters of
constitutional or statutory interpretation are questions of law
to which we apply our independent judgment.42 We adopt the rule
of law "that is most persuasive in light of precedent, reason,
and policy."43 Findings of fact are reviewed for clear error,44 a
standard that requires that great deference be given to the
findings of the superior court.45
IV. DISCUSSION
A. We Decline To Readdress the Constitutional Issues
Already Raised and Resolved in Carlson II.
The constitutionality of charging nonresidents more for
commercial fishing licenses and permits has already been
addressed, first in Carlson I 46 and then reaffirmed in Carlson
II.47 Whether we should readdress the issue here is a threshold
question. In Pratt & Whitney Canada, Inc. v. Sheehan, we noted
the importance of stare decisis but also recognized the need
occasionally to deviate from existing precedent.48 We stated that
we "will overrule a prior decision only when `clearly convinced
that the rule was originally erroneous or is no longer sound
because of changed conditions, and that more good than harm would
result from a departure from precedent.' "49 A prior ruling may
be "originally erroneous" if it proves to be "unworkable in
practice."50 Changed conditions exist where "related principles
of law have so far developed as to have left the old rule no more
than a remnant of abandoned doctrine, [or] facts have so changed
or come to be seen so differently, as to have robbed the old rule
of significant application."51 This law of the case doctrine52
maintains that issues previously adjudicated can only be
reconsidered where there exist "exceptional circumstances"53
presenting a "clear error constituting a manifest injustice."54
Once a case has been heard,55 there are strong policy reasons for
refusing to rehear it.56
The State accuses the class of rearguing the same case
they brought in 1996, particularly with regard to the class's
interpretation of Oregon Waste Systems, Inc. v. Department of
Environmental Quality, which the United States Supreme Court
decided in 1994.57 The State dismisses the only two post-Carlson
II cases cited by the class - Fulton Corp. v. Faulkner58 and Camps
Newfound/Owatonna, Inc. v. Town of Harrison, Maine59 - as
inapplicable to the present case.60 The class counters that there
is no final judgment necessary to invoke the law of the case
doctrine as delineated in Wolff.61 The class further asserts that
the law of the case doctrine is only a general principle and not
an unyielding prohibition on revisiting prior decisions.62 We
agree with the State that our previous decisions on this issue
preclude its reconsideration.63
The question before us is whether any legal precedent
has arisen subsequent to Carlson II to indicate that that
decision was somehow in error. A United States Supreme Court
decision contradicting our holding in Carlson II would indicate a
clear error and require us to revisit the issue of the
constitutionality of the fee differentials. We interpret Fulton
and Camps Newfound as clarifying the Supreme Court's position in
Oregon Waste Systems; these two cases do not, however, alter the
law in a way that would cause us to rethink our decision in
Carlson II. We therefore do not believe that such a
contradiction exists, nor do we find any other reason to revisit
our holding in Carlson II.
1. Fulton Corp. v. Faulkner64
Fulton Corp. v. Faulkner addressed an intangibles tax
by the state of North Carolina on corporate stock. The tax was
assessed on the fair market value of corporate stock owned by
North Carolina residents.65 However, residents were allowed to
take a tax deduction equal to the percentage of the corporation's
income that was subject to tax in North Carolina.66 This resulted
in an inverse relationship between the tax that North Carolina
residents were required to pay and the extent to which the
company did its business in North Carolina, such that, for
example, if the company did all of its business within the state,
a resident owning its stock would not be required to pay any
intangibles tax on that stock.67 The Court rejected this tax as a
violation of the Commerce Clause.68 The Court explicitly
recognized the applicability of the dormant Commerce Clause to
the case,69 but further acknowledged that a tax that facially
discriminates against interstate commerce may be constitutional
if the effect on interstate commerce is incidental70 or if the tax
is designed to make those engaged in interstate commerce bear the
same economic burden as those engaged in intrastate commerce.71
The Court then outlined a three-part test for determining if a
compensatory tax was constitutional: (1) the State must identify
the intrastate tax burden being compensated; (2) the tax must be
shown to approximate but not exceed the burden on intrastate
commerce; and (3) the events which are being taxed must be shown
to be substantially equivalent between interstate and intrastate
commerce.72
Although Fulton will be relevant in our analysis of
what expenses can be included in the "fisheries budget," it has
no bearing on the basic allowability of fee differentials for
nonresidents because commercial fishing licenses are not objects
of interstate commerce. We held in Carlson II that "[u]nlike the
fee differentials in Oregon Waste Systems and Chemical Waste,73
the fee differentials at issue in this case are not predicated
upon the movement of articles of commerce across state lines, but
rather upon the residency status of those applying for permits."74
Consequently, we held that the negative or dormant Commerce
Clause did not apply to the present case, but rather that the fee
differentials were properly analyzed under the Privileges and
Immunities Clause.75 Nothing in Fulton causes us to abandon this
position. The tax in Fulton was tied directly to whether the
corporation in question engaged in interstate or intrastate
commerce.76 It was therefore clearly "predicated upon the
movement of articles of commerce across state lines."77 No
similar situation exists here, with the fee differential for
nonresident commercial fishers relating not to commerce but
rather to the opportunity to utilize Alaska's natural resources.
Consequently, Fulton does not provide a reason to revisit an
issue decided in Carlson II.78
2. Camps Newfound/Owatonna, Inc. v. Town of Harrison,
Maine79
In Camps Newfound, the United States Supreme Court
struck down a local Maine property tax exemption for a charitable
camp that primarily served state residents.80 A Maine town had
attempted to argue that the business of the camp did not involve
articles of commerce because the services of the camp were
"delivered and `consumed' entirely within Maine."81 The Court
noted that "[t]he attendance of these campers necessarily
generates the transportation of persons across state lines that
has long been recognized as a form of `commerce.' "82 We find
there to be no direct analogy between the campers in Camps
Newfound and the movement of commercial fishers into Alaska. The
Court in Camps Newfound drew a comparison of the summer camps to
hotels.83 This comparison indicates a sufficient distinction from
commercial fishing licenses and permits to allay concerns about
the constitutionality of the fee differential.
The Court in Camps Newfound further compared the summer
camps to a natural resource.84 The Court pointed out that there
is a long history of allowing residents and nonresidents alike
equal access to natural resources in a state.85 Quoting from New
England Power Co. v. New Hampshire,86 a case in which the Court
struck down a New Hampshire law attempting to place restrictions
on a public utility's sales of hydroelectric energy generated in
the state to out-of-state consumers, the Court stated that "[w]e
have `consistently . . . held that the Commerce Clause . . .
precludes a state from mandating that its residents be given a
preferred right of access, over out_of_state consumers, to
natural resources located within its borders or to the products
derived therefrom.' "87 The Court considered the two situations
analogous because in both cases "the burden fell on out_of_state
access both to a natural resource, and to related services
provided by state residents."88 The Court explained that "[b]y
encouraging economic isolationism, prohibitions on out_of_state
access to in_state resources serve the very evil that the dormant
Commerce Clause was designed to prevent."89
The law in the present case, however, does not hinder
or deny access to Alaska's natural resources, which in this case
are the fisheries. Rather, the law merely allows the State to
recoup from nonresidents the amount spent on maintaining the
natural resource of the fisheries that it would be able to
recover from nonresidents were they instead residents of Alaska.
Nonresidents are being provided with equal access to the resource
on the condition that they make a contribution to the maintenance
of the resource equal to that made by state residents.90 The
situation in the present case can therefore be distinguished from
that in Camps Newfound. Thus, there is no reason to revisit our
decision in Carlson II.
B. The Formula for Calculating the Allowable Fee
Differential for Nonresident Commercial Fishing Fees
In Carlson II, we held the per capita formula advanced
by the class to be, in comparison to the pro rata formula
proposed by the State, "the correct method for calculating the
contribution made by residents."91 The formula calculates the per
capita resident contribution to the cost of fisheries management,
regardless of whether this person is a fisher, as follows:
(Fisheries Budget/Alaska Population) X (percentage of State
Budget from oil revenues/1.0).92 The figure determined by this
formula for any given year is then compared to the actual fee
differential charged. If the fee differential paid by the
nonresident commercial fishers, i.e., the nonresident fee minus
the resident fee for the same access, exceeds the resident
contribution as calculated by the formula, then "the State will
have failed to demonstrate that the means employed by its statute
have a substantial enough relationship to the legitimate interest
of the statute to survive Privileges and Immunities Clause
review."93
It should be noted that the formula advanced by the
class and adopted in Carlson II is not the only conceivable means
for calculating an allowable fee differential for nonresidents.
The United States Supreme Court requires only a "reasonable
relation between the higher fees and the higher cost."94 In
Carlson II, we found the per capita formula advanced by the class
to be an acceptable method for calculating the resident
contribution to fisheries management and hence the allowable
nonresident fee differential.95 We continue to uphold the
applicability of this formula.
We should clarify, however, that a refund will only be
necessary if the difference between the actual fees charged to
resident and nonresident commercial fishers is substantially in
excess of the allowable fee differential indicated by the
formula, such that the actual fees do not bear a reasonable
relationship to costs not otherwise paid by nonresidents.96 We
leave to the superior court on remand to determine whether
proportionality exists in any particular instance and whether a
refund is due. These determinations are subject to review using
an abuse of discretion standard.97
1. Components of the fisheries budget
The findings of fact and conclusions of law by the
superior court describe the fisheries budget as being comprised
of the State's "direct operating expenditures" and the State's
"indirect operating expenditures." The State in its pre-trial
brief contended that the fisheries budget consists of six
components: "(1) direct operating expenditures; (2) indirect
operating expenditures; (3) general government expenditures; (4)
capital costs; (5) hatchery loan fund subsidy; and (6) foregone
revenues from fishery resources." Judge Michalski only accepted
the first two of these items.
The concept of a fisheries budget goes well beyond what
any particular agency requests from the State. It is necessary,
then, to determine what the State spends from its general funds
on its commercial fisheries. The record must support the belief
that a rational relationship exists between the fee differential
and the average cost of fisheries management to the resident.98
In determining the fisheries budget, Judge Michalski
found that the figures the State provided for direct operating
expenditures were justifiable and should be included in the final
calculations. This figure totaled $126,099,100 for fiscal year
1996. Judge Michalski also held that indirect operating
expenditures could be included in the fisheries budget as "based
upon the federal formula for identifying indirect operating
expenses[.]" The class does not challenge these indirect costs,
which totaled $1,189,900 in fiscal year 1996.99 Judge Michalski
rejected the State's proposed inclusion of general government
expenditures, capital costs, the hatchery loan fund, and forgone
revenue from fisheries resources in the fisheries budget. The
State challenges each of these exclusions.
The class challenged the list of fisheries expenditures
provided by the State for direct operating expenditures as overly
broad. The State sought to include in direct operating
expenditures all those expenditures which go directly to support
the commercial fishing industry as a whole. The Carlson cases
hold that nonresidents can be made to pay for their share of the
costs of fisheries management.100 There is no precedent for
determining if direct costs, indirect costs, general government
expenditures, capital costs, the hatchery loan fund, and forgone
revenue from fisheries resources in the fisheries budget are
properly to be included in the expenses for fisheries management.
Because this issue turns upon the legality of including different
types of expenses in the budget for fisheries management, we
decide the issue as a question of law.101 Once the parameters of
these budget components are established, the issue of calculating
the exact amount of each component is a question of fact which is
reviewed for clear error.
a. Judge Michalski was not
clearly erroneous in adopting the State's
budget figures for direct and indirect costs.
Judge Michalski held that both direct and indirect
operating expenditures should be included in the fisheries
budget. We agree with this conclusion. In Carlson I, we stated
that the State may "equalize the economic burden of fisheries
management" by recovering from nonresidents the forgone revenues
that residents pay for this expense.102 The direct operating
expenditures of fisheries management are implicitly included in
this holding. The indirect operating expenditures are also
contemplated by this holding because without the direct operating
expenditures the indirect operating expenditures would not have
been generated.103
The class does not challenge the general validity of
either direct or indirect operating expenditures. Rather, it
challenges the State's methodology for determining these figures
by arguing that some of the amounts claimed by the State as
direct operating expenses are not in fact directly associated
with the costs of fisheries management.104 However, following
arguments by the parties on the appropriateness of the inclusion
of different sub-components within the direct operating
expenditures, Judge Michalski found that "the State's
methodologies for valuing [direct and indirect operating
expenditures] are appropriate." The class presents no persuasive
argument on cross-appeal that this determination by the superior
court is clearly erroneous. Judge Michalski agreed with the
testimony by the State's expert witness that the disputed costs
were directly related to the costs of fisheries management.105 The
testimony was sufficient to show that Judge Michalski was not
clearly erroneous in his findings. Therefore, we affirm the
findings of the superior court with regard to the methodology for
determining direct and indirect operating expenditures and the
corresponding calculations.
b. General governmental
expenditures cannot be included in the
fisheries budget.
The State argues that it should be able to include
"general governmental expenditures," such as "corrections, health
care, and education," in determining the fisheries budget because
if these services were not provided "the commercial fishing
industry would either be inefficient or could not exist." The
State further argues that these figures are tied to population
and economic growth in the sense that an increase in commercial
fishing leads to an increase in population, which results in a
corresponding growth in state expenditures on basic services.106
Toomer v. Witsell, a United States Supreme Court case
on which the prior Carlson decisions rely, stated hypothetically
that a fee differential allowing the State to recover
conservation expenditures from taxes which only residents pay
would be permissible.107 Carlson I and Carlson II discussed
allowing a fee differential to "equalize the economic burden of
fisheries management."108 Neither conservation expenditures nor
fisheries management is as expansive as the general governmental
expenditures that the State contends should be included in the
fisheries budget. Judge Michalski noted that "the laws that
relate to a particular case or the laws of the state are not
necessarily the same as the economic laws and the rules that
apply to things." While in economic terms the State may bear
much of the cost of government generated by the fishing industry,
this does not translate into a legal justification for including
these costs in the fisheries expenditures.
There is clear precedent against including the general
costs of government in any fee differential for nonresidents as
part of a compensatory tax scheme. Citing Oregon Waste Systems,
Fulton noted "the danger of treating general revenue measures as
relevant intrastate burdens for purposes of the compensatory tax
doctrine."109 And Camps Newfound described Chemical Waste as
holding that "special fees assessed on nonresidents directly by
the State when they attempt to use local services impose an
impermissible burden on interstate commerce."110 The Supreme
Court, rejecting the State's claim that its surcharge on out-of-
state garbage was compensatory in nature, stated in Oregon Waste
Systems that
permitting discriminatory taxes on interstate
commerce to compensate for charges
purportedly included in general forms of
intrastate taxation "would allow a state to
tax interstate commerce more heavily than
in_state commerce anytime the entities
involved in interstate commerce happened to
use facilities supported by general state tax
funds." We decline respondents' invitation
to open such an expansive loophole in our
carefully confined compensatory tax
jurisprudence."[111]
Nonresident commercial fishers may be expected to
reimburse the State for a share of the costs of fisheries
management. But to include general governmental costs in the
manner in which the State suggests would expand the scope of the
fisheries budget beyond the bounds of constitutionality.
c. Capital costs directly
supporting the commercial fishing industry
can be included in the fisheries budget.
The State claims that both those capital expenditures
that directly support the commercial fishing industry and general
capital expenditures driven by population growth should be
included in the fisheries budget. Judge Michalski rejected the
inclusion of all capital costs in the fisheries budget, and the
State has appealed.
The general capital expenditures are rejected for the
reasons given in the previous section. As for the capital
expenditures directly related to the commercial fishing industry,
such as for boat harbors and salmon hatcheries, those costs
should be included in the fisheries budget to the extent that
they are not already included in the direct operating
expenditures. These direct capital expenditures are a clearly
identifiable result of the costs of fisheries management and as
such justify the contribution of nonresidents to their payment
thereof. Because the superior court rejected outright the
inclusion of all capital costs, no differentiation was made
between general capital costs and those directly supporting the
commercial fishing industry. Such a determination will be
necessary upon remand. If these costs are already included in
the direct operating expenditures, the State will not be allowed
to count them twice.
d. The hatchery loan fund subsidy
should be included in the fisheries
expenditures.
The State operates a revolving loan fund to support
investments in developing and operating fish hatcheries and other
fish enhancement projects. The legislature created the Fishing
Enhancement Revolving Loan Fund in 1977 to provide loans with
favorable interest rates and repayment terms to private fishing
corporations. By subtracting the present value of the future
loan returns from the amount presently loaned, the State's expert
was able to calculate what he considered a subsidy for the
hatchery loan fund. However, testimony also was given that the
funds collected in loan repayments do not go into the general
fund but rather are used for new loans. Judge Michalski held
that the supposed deficit incurred by the hatcheries loan fund
was not a budgetary item "within the meaning of Carlson II" and
thus could not be included in the fisheries expenditures for the
purpose of determining nonresident contributions.
The State contends that the loan subsidy represents
forgone revenues that the State could otherwise spend at present
value. We agree. The hatcheries loan fund certainly benefits
the commercial fishing industry. As such, it can be included in
the costs of maintaining commercial fisheries. The State's
expert at trial calculated the cost to the State attributed to
the hatcheries loan fund to be approximately $2.3 million for
1996. Because there appears to be some confusion as to whether
the State is presently transferring any funds to the hatcheries
loan fund and because the superior court did not make a ruling on
what this amount would be, we remand on this issue for a
determination of the yearly amount expended by the State to
support this program. As with the capital costs, the expenditure
for the hatcheries loan fund must not already have been included
in the direct operating expenditures.
e. Forgone revenues from
commercial fishery resources cannot be
included in the fisheries expenditures.
The State argues that because Alaska has the authority
to manage its fish resources and could manage them in a way that
is more profitable than the current method of fish management, it
incurs an opportunity cost that should be included in the
fisheries expenditures. The State cites a District of Columbia
Circuit case in which the court remanded for consideration of
whether a city could include "the value [the City] could have
obtained in the best alternative use" in its calculation of the
fair market value of the airfield land for the purpose of
calculating user airplane landing fees.112 That same court also
held that opportunity costs can be used in setting utility rates.113
Both of these property or energy rate value assessments, however,
are fundamentally different from the State making a policy
decision to allocate and utilize its resources in a particular
way. The State has consciously chosen the manner in which it
manages its fish, and has therefore decided to forgo any revenues
that could be obtained from alternate forms of management. The
State cannot recoup from nonresidents the possible revenue it
forgoes in making policy decisions regarding its fisheries
management. We therefore affirm the holding of Judge Michalski
to exclude forgone revenues from the cost of commercial fisheries
management.
2. What can be included in oil revenues?
The class argues that the trial court erred by
including interest income deposited into state savings accounts
as a part of oil revenues. The class contends that because
nonresidents do not benefit from deposits into the permanent fund
and the constitutional budget reserve, those amounts should not
be included in the calculation of oil revenues. However, because
the class proposes including deposits into the permanent fund and
the constitutional budget reserve in the figure for the total
state budget, by which the oil revenues would be divided, its
recommended calculation of the percentage of the state budget
derived from oil revenues is clearly unworkable. One cannot
exclude deposits into state savings accounts from the numerator
of the formula determining the percentage of the state budget
that is derived from oil revenues but include such deposits in
the denominator, as this would inappropriately and dramatically
reduce the percentage of the state budget derived from oil
revenues.114 Apples must be divided by apples, not oranges.
The class alternately proposes that investment earnings
be removed from both the oil revenues and the total state budget
expenditures by which the oil revenues are divided to determine
the percentage of the budget funded by oil revenues. The class
supports its position by noting that we have previously relied
upon budget figures that included a variety of petroleum taxes,
royalties, and rents, but not any interest income, in determining
petroleum-related income.115 Furthermore, the State, in its bi-
yearly Revenue Source Book, uses this methodology in determining
the percentage of unrestricted petroleum revenue as compared to
unrestricted general funds.116
The State counters by arguing that because the source
of the funds that generates the interest income is ultimately
petroleum-derived, it should be included in the oil revenues
component. It should not matter, the State contends, how these
funds are spent, only how they are derived, even if the
expenditure of the funds is of no benefit to nonresidents. The
State proceeds to demonstrate how the 74% figure was calculated
by including the petroleum-derived revenues deposited in state
savings accounts in both the numerator and denominator of the
percentage of the state budget derived from oil revenues.
Judge Michalski accepted the State's methodology for
calculating the percentage of the state budget derived from oil
revenues, resulting in a figure of 74%. This calculation includes
the interest income and permanent fund expenditures in both the
numerator and the denominator. As with the basic formula for
maximum allowable fee differential, there is no single correct
method by which to calculate the percentage of the state budget
derived from oil revenues. The key inquiry is that the
methodology adopted bear a reasonable relationship to the figure
to be calculated. The decision of the superior court to adopt
the State's method of calculation is therefore reviewed for an
abuse of discretion.117 Because the State's methodology provides a
reasonable means for calculating the percentage of the state
budget derived from oil revenues, we find there to be no abuse of
discretion and accordingly affirm the superior court.
C. The State Has Previously Conceded that the Class
Met the Protest Requirement.
The class filed suit on June 22, 1984, questioning the
"legality of the State of Alaska's discriminatory fees for
nonresident commercial fishing permits and licenses." The class
on behalf of which the suit was filed was defined as "all persons
who participated in one or more Alaska commercial fisheries at
any time who paid nonresident assessments to [the] State for
commercial or gear licenses or permits." On December 10, 1984,
the State entered its nonopposition to certification of the case
as a class action, though it did reserve the right to request
that the class be divided into subclasses. On December 13, 1984,
Superior Court Judge Milton M. Souter entered an order certifying
the class. A later motion to decertify the class was denied by
Judge Michalski on July 17, 1998. Judge Michalski held that the
elements of numerosity, commonality, typicality, and adequacy of
representation existed to justify continued certification of the
class.
Alaska Statute 43.10.210(a) requires that in order for
a refund to be given on an illegal tax, the tax must have been
paid under protest. We held in Carlson I that a license was a
tax within the meaning of the refund statute and that therefore
the protest requirement applied to the class.118 In Principal
Mutual Life Insurance Co. v. State, Division of Insurance, we
held that "[t]he protest requirement called for by AS
43.15.010(a)[119] serves . . . as proof that the payment of the tax
in question was involuntarily made and it provides notice to the
taxing authority that the tax is claimed to be illegal as well as
the basis of the taxpayer's assertion."120 A requirement of
protest provides the state with notice of more than mere
opposition to the tax - it provides the state with notice that it
may soon be facing a lawsuit to recover the allegedly illegal
amount. Once on notice, the state can budget accordingly to
prepare for the possibility of losing at trial and being forced
to refund the disputed amount.121
Judge Michalski held that the purpose of the notice
requirement was met by the certification of the class action
suit. The certification of a lawsuit over allegedly illegal
taxes puts the state on notice that the taxes are being protested
and that future tax recovery may be subject to being refunded.
The State, however, argues that notice of named plaintiffs does
not translate into notice of the entire class of plaintiffs and
that at the very least the class should not be entitled to
retrospective relief.122 Judge Michalski held that the expansive
definition of the class as containing all fee-paying commercial
fishers gave the state sufficient notice of the potential scope
of the recovery. Judge Michalski further held that the
certification of a class action suit obviated the need for
individual protest by each class member, reasoning that
"[r]equiring individual protest for each class member would do
nothing to further inform the state. Instead, it would be merely
an exercise in formality and technicality."
The State has long since conceded that, as to fees paid
after June 22, 1984, the protest requirement was met by the
filing of the class action suit and that sufficient notice had
been given "for purposes of AS 43.10.210(a)." In its reply brief
in the superior court, dated September 2, 1992, the State
asserted:
Plaintiffs are wrong when they assert
that the State has conceded the right to a
refund of any unconstitutional fees paid
after the date plaintiffs filed their
lawsuit. While this point is irrelevant to
the issue immediately before the court, the
State concedes only that the lawsuit serves
as an adequate notice of protest for purposes
of AS 43.10.210(a). In other words, all fees
paid after June 22, 1984, by nonresident
commercial fishers who ultimately elect to
join the class, in excess of fees paid by
similarly situated resident commercial
fishers, are deemed to have been paid under
protest. The protest requirement of AS
43.10.210(a), however, is merely one
precondition to the "[r]ecovery of
overpayments and protested payments." [citing
an earlier memorandum] The State does not
concede that plaintiffs have satisfied any
other procedural or substantive requirements
that may apply.[123]
This admission that the protest requirement had been met is
consistent with the State's earlier admissions that it was
provided with sufficient notice. In an opposition to plaintiff's
motion for a preliminary injunction, dated February 19, 1991, the
State asserted that
[w]ith regard to any nonresident
differentials which have been received by the
state since this class action was filed, the
state views the lawsuit itself as a protest
giving the state the contemplated notice.
Thus, for any differentials received between
now and the conclusion of this case, should
any portion of those be determined to be
invalid, plaintiffs can avail themselves of
the statutory refund remedy identified by the
supreme court to obtain damages.
The State presently contends that prior to Judge
Michalski's ruling in 1998 it had no reason to believe that it
would be required to pay a refund and thus should not be required
to pay a refund retrospectively all the way back to 1984.
However, the purpose of the protest requirement, as stated above,
is to give the state notice that it may eventually be required to
pay a refund.124 The fact that the litigation may take a long time
to resolve and that the refund may thus grow increasingly large
does not absolve the State of its eventual responsibility to pay.
Thus, the only relevant question is whether the filing of a class
action gives the State sufficient notice that every member of the
class may be due a refund.125 We agree with Judge Michalski that
it does.
The State cites Era Aviation in support of its claim
that a separate protest must be attached to each separate
complaint.126 Era Aviation involved a suit by several air carriers
to protest increased landing fees at rural airports.127 After the
original set of plaintiffs were granted summary judgment, a
different set of air carriers tried to join the suit and recover
fees retroactively.128 We held that the second set of air carriers
did not satisfy the necessary protest requirement at the time of
the payment of the fees, even though they had stated their
opposition to the landing fees on numerous occasions and even
though the suit by the original set of air carriers put the state
on notice that the fees might be illegal.129 As the State is
careful to point out, however, in Era Aviation we expressly
declined to answer the question whether a class action suit would
satisfy the protest requirement.130 Era Aviation is thus not
dispositive of the present situation.
In a further attempt to prove that the protest
requirement would not be satisfied by a class action, the State
cites a series of cases where class status has been denied for
failure to satisfy the proper administrative procedures for
protest.131 These cases, however, are not applicable to the
present case, where the class has already been certified. The
present class satisfied the necessary procedural hurdles, and the
State did not object to the certification of the class.
Furthermore, the State, because it was the entity issuing the
commercial fishing licenses and permits, had ample opportunity to
keep records of those to whom these licenses and permits were
being issued. It is therefore disingenuous for the State to
claim that it was somehow caught unaware as to the ultimate size
of the class or the potential recovery. For this reason, we
affirm the holding of Judge Michalski that the protest and notice
requirement was satisfied.
As to the date from which the fees can be measured,
Judge Michalski selected December 13, 1984, which was the day the
class was certified.132 The class does not challenge the date of
certification as the date from which fees can be measured. We
therefore affirm December 13, 1984 as the date from which fees
can be measured.
1. Named class members can sue for tax
relief on behalf of unnamed class members.
Even if a class action suit constitutes notice, there
is a separate question as to whether the named class members can
sue on behalf of the unnamed class members without the unnamed
class members themselves protesting the increased nonresident
fees. Judge Michalski held that the class was to be treated as a
unified legal entity and that therefore absent and non-protesting
(i.e., unnamed) class members could not be excluded from the
recovery of excess fees. This is consistent with both Carlson I
and Carlson II, both of which speak of the class as a whole and
neither of which mentions the possibility that only the named
class members will be able to receive a refund.133
The State asserts that named class members should not
be allowed to sue for unnamed class members because there are too
many variables that determine exactly what each nonresident
commercial fisher is to recover. Because individual interests in
recovery are so unique, the State argues, only the individual
taxpayers should be allowed to sue for their own recovery. The
State also cites two cases where class status was denied to a
taxpayer attempting to sue on behalf of a similarly situated
taxpayer who had not protested the tax.134
These arguments would be appropriate in a motion to
decertify the class, but the State lost on its bid to decertify
the class and does not challenge that holding on appeal.
Instead, the State attempts to circumvent the class certification
issue by arguing that named class members cannot sue on behalf of
unnamed class members. Yet, this is precisely the purpose of
forming a class in the first place. Indeed, in Nolan v. Sea
Airmotive, Inc., we stated that one of the reasons for revising
Alaska Civil Rule 23, the rule for establishing class actions,
into its current form was "to end the `perverse anomaly' by which
there could `be such a thing as a class action that did not run
fully for or against the class.' "135 Class action suits, in which
the result for one becomes the result for many in the same legal
predicament, are necessary to avoid a multiplicity of duplicative
lawsuits.136 Requiring that each nonresident commercial fisher
file suit on his or her own behalf, which is what the State seems
to be advocating, would produce exactly that result. Therefore,
Judge Michalski's decision that named class members may sue on
behalf of unnamed class members is affirmed.
2. The State's "sovereign immunity" defense
cannot first be raised at this late date and was
outside the scope of remand.
The State asserts that it "has not waived its sovereign
immunity" from class actions for fee refunds. Although the State
frames its argument in terms of sovereign immunity, it is not
making a core sovereign immunity claim that the State is immune
from suit on a particular claim or issue. Rather, the State
appears to be arguing that based on its interpretation of the
language of AS 43.10.210(a), plaintiffs are precluded from using
one particular means of seeking a tax refund - a class action.
Therefore, the State's argument addresses a question of statutory
interpretation of the requirements of AS 43.10.210(a), an
analysis which necessarily has some sovereign immunity overtones.
We reject the State's argument that it has not waived
its "sovereign immunity" claim for two reasons. First, the State
failed to raise this argument when the issue of the class's right
to a refund was being litigated in the trial court and before us
in the first appeal. Prior to the appeal leading to Carlson I,
the class filed a cross-motion for partial summary judgment
seeking a declaration, in principle, that the class was entitled
to a refund. The State opposed this cross-motion on several
grounds, but not on the ground that AS 43.10.210(a) did not allow
refund class actions. After the trial court declined to grant
the class's motion, the class appealed the court's refusal to
rule that the class was entitled to a refund. Again, the State
did not defend on the basis that the statute did not allow class
actions for refund claims. We agreed with the class in Carlson I
that in principle it would be entitled to a refund if there were
unconstitutional discrimination, subject to the condition that
the statutory protest requirement had to be either satisfied or
waived.137 Thus, in Carlson I, the class prevailed on its argument
that it was entitled to a refund if unconstitutional
discrimination were found. The State's failure to raise its
immunity argument before the superior court and before this court
at the time this issue was being litigated precludes the State
from raising this defense now.138
Second, the State's defense is outside the scope of
Carlson II's remand. The State maintains that its argument was
properly raised because it falls within Carlson II's remand order
that the superior court "decide whether the filing of this suit
constituted notice sufficient to comply with the protest
requirement of AS 43.10.210(a)[.]"139 The State's argument,
however, does not address the adequacy of notice or protest.
Rather, what the State argues is that the word "taxpayer" in AS
43.10.210(a) does not include a class and that therefore the
statute does not permit a class to sue for a tax refund. "When
an appellate court issues a specific mandate a trial court has no
authority to deviate from it."140 The State's defense could not
have fallen within the scope of Carlson II's remand because the
State did not argue it before the trial court prior to the final
judgment that led to Carlson II, nor did the State appeal on this
ground in Carlson II.
Successive appeals should narrow the issues in a case,
not expand them.141 Other jurisdictions have explicitly ruled that
all matters that were or might have been determined in a former
appeal may not be presented in a subsequent appeal of the same
case.142 The basis for this rule is that "[j]udicial economy and
the parties' interests in the finality of judgments are in no way
furthered if parties are allowed to engage in piecemeal appeals."143
We have expressed a similar rule in the context of res judicata,
which involves subsequent suits rather than subsequent appeals.144
Because it could have been raised in earlier appeals but was not,
and because it therefore falls outside the scope of our specific
remand in Carlson II, we decline to address the State's
"sovereign immunity" defense that AS 43.10.210(a) does not permit
class actions for fee refunds.
To the extent that the State is arguing that sovereign
immunity bars class actions in which the class includes taxpayers
who have not met the administrative prerequisite of providing
notice via protest, we have already addressed the issues of
protest, notice, and division of the class in this opinion.
Because the State conceded notice and protest, there was no need
for the trial court to address the "sovereign immunity" defense
in considering these arguments. Moreover, we have already upheld
in this opinion the superior court's treatment of the class as a
unified legal entity. Accordingly, we need not address the
State's argument in the context of absent class members' refund
claims.
D. The Class May Recover Prejudgment Interest on Any
Refund that May Be Due.
In Carlson II, we directed the superior court to
determine on remand whether prejudgment interest is due under AS
45.45.010.145 As the superior court correctly noted, AS 45.45.010
"merely sets the maximum rate of interest that may be charged."
Consequently, the superior court looked to related statutory
provisions to address the prejudgment interest issue. The
superior court concluded that because Carlson I applied Title 43
as it relates to the allowable statute of limitations,146 Title 43
should also apply to the question of prejudgment interest. The
superior court reasoned that because AS 43.05.280 allows for
prejudgment interest for an overpayment of taxes, prejudgment
interest should be allowed in the present case.
The State argues that while prejudgment interest is
allowed for taxes derived under Title 43, it is not allowed for
taxes derived under Title 16, which is the title authorizing the
commercial fishing fees. Noting again the importance of
construing waivers of sovereign immunity strictly, the State
proceeds to discuss a wide range of cases holding that waivers of
sovereign immunity imposing monetary liability on the federal or
state government must be narrowly interpreted.147 We have
expressed similar sentiments, holding that "only the legislature
has the power to direct the assessment of interest against the
sovereign"148 and that "except where the constitution directs
otherwise, interest may not be assessed against the State except
where interest is specifically authorized by the legislature."149
However, we have also held that "it would be unduly technical to
deny [a claimant bringing suit against the state] interest based
on a mere matter of form."150 Furthermore, the Ninth Circuit
allowed prejudgment interest under the territorial predecessor to
AS 43.10.210(a).151
The introductory language of AS 43.05.275, applied to
the present case in Carlson I,152 is fundamentally the same as the
introductory language at issue here in AS 43.05.280 in that both
apply to a tax under this title. It is hard to imagine applying
section .275 and not section .280 to the present case even if one
interprets the latter more strictly than the former. Alaska
Statute 43.05.280 applies to all overpayment of taxes under Title
43.153 This statutory section should therefore apply to the
provisions for recovery of overpayments laid out in AS 43.10.210.
Because AS 43.05.280 serves as the primary justification for
providing the class with a refund, the prejudgment interest
available under AS 43.10.210 in other actions extends to the
recovery of prejudgment interest for overpayment of commercial
fishing fees, even though these are ostensibly created under
Title 16.154
V. CONCLUSION
We have previously addressed the constitutionality of
charging nonresidents more than residents for commercial fishing
licenses and entry permits. The class has failed to present any
valid arguments as to why we should reconsider this position. We
therefore AFFIRM the formula adopted in Carlson II for
calculating the maximum allowable fee differential for
nonresidents. We further AFFIRM the holding of the superior
court adopting the State's methodology for calculating direct and
indirect costs associated with fisheries management. We AFFIRM
the exclusion of general government expenditures and forgone
revenues from fishing, but we REVERSE and REMAND on the issue of
the hatcheries loan fund subsidy, and we partially REMAND on the
issue of capital costs. We conclude that the State has waived
its objection to the protest and notice requirement of AS
43.10.210(a), as well as a related sovereign immunity claim. We
AFFIRM the decision of Judge Michalski that the refund applies to
unnamed class members. Finally, we hold that the class may
recover prejudgment interest if it obtains a refund on remand.
_______________________________
1Carlson v. State, Commercial Fisheries Entry Comm'n (Carlson I),
798 P.2d 1269, 1270 (Alaska 1990).
2"Crewmember fishing license" and "commercial fishing license"
are used interchangeably in AS 16.05.480 with no apparent
distinction made between the two. A "commercial fisherman" is
elsewhere defined to include crewmembers. AS 16.05.940(4).
3This amount is to be set by the Alaska Commercial Fisheries
Entry Commission. AS 16.43.100(16) (authorizing commission to
"establish reasonable user fees for services").
4See generally AS 16.43.200-.225.
5The relevant sections of former 20 Alaska Administrative Code
(AAC) 05.240(a)(1), (2), (4) (2002) provide:
(a) For 2001, the commission will
determine the annual fee for the issuance or
renewal of an entry permit or interim_use
permit according to the following:
(1) the resident annual fee for the
issuance or renewal of an entry permit or
interim_use permit in a limited fishery is
.25 percent of the estimated value of the
entry permit, rounded to the nearest fee
class amount established in (4) of this
subsection; the non_resident annual fee is
three times this amount, as set out in (4) of
this subsection; . . .
(2) the resident annual fee for the
issuance or renewal of an interim_use permit
in an unlimited fishery is .25 percent of the
estimated average gross earnings per permit
in the most recent three years for which data
are available, rounded to the nearest fee
class amount established in (4) of this
subsection; the non_resident fee is three
times this amount, as set out in (4) of this
subsection;
. . . .
(4) the resident and non_resident annual fees
are:
FEE CLASS ANNUAL FEE
Resident Non_resident
I $250
$750
II 200
600
III 150
450
IV 100
300
V 50
150
6See AS 16.43.140(b) ("A permit is not required of a crewmember
or other person assisting in the operation of a unit of gear
engaged in the commercial taking of fishery resources as long as
the holder of the entry permit or the interim_use permit for that
particular unit of gear is at all times present and actively
engaged in the operation of the gear."); AS 16.05.480(a) (2001)
("A person engaged in commercial fishing shall obtain a
commercial fishing license and shall retain the license in
possession and readily available for inspection during fishing
operations. An entry permit or interim_use permit entitles the
holder to participate as a gear operator in the fishery for which
the permit is issued and to participate as a crewmember in any
fishery."); AS 16.05.940(4) (" `[C]ommercial fisherman' means an
individual who fishes commercially for, takes, or attempts to
take fish, shellfish, or other fishery resources of the state by
any means, and includes every individual aboard a boat operated
for fishing purposes who participates directly or indirectly in
the taking of these raw fishery products, whether participation
is on shares or as an employee or otherwise."); AS 16.05.940(5)
(" `[C]ommercial fishing' means the taking, fishing for, or
possession of fish, shellfish, or other fishery resources with
the intent of disposing of them for profit, or by sale, barter,
trade, or in commercial channels.").
7Carlson I, 798 P.2d at 1270.
8Id. at 1274-78.
9Id. at 1274 (quoting Supreme Court of Virginia v. Friedman, 487
U.S. 59, 64_65 (1988) (citations omitted)).
10Carlson I, 798 P.2d at 1274.
11Id. at 1274-75 (quoting Toomer v. Witsell, 334 U.S. 385, 399
(1948)).
12Carlson I, 798 P.2d at 1276, 1278.
13Id. at 1277 (quoting Maine v. Taylor, 477 U.S. 131, 137 (1986)).
14Carlson I, 798 P.2d at 1277 (quoting Maine v. Taylor, 477 U.S.
at 138).
15414 A.2d 943 (N.J.), cert. denied, 449 U.S. 874 (1980).
16Carlson I, 798 P.2d at 1278.
17414 A.2d at 953.
18Carlson I, 798 P.2d at 1278.
19Id.
20Id.
21Id.
22Id.
23Id. We made two other rulings in Carlson I: We held that the
Commercial Fisheries Entry Commission was authorized by statute
to impose different commercial fishing fees, assuming that the
ratio itself was constitutional. Id. at 1278-79. We also
remanded on the issue of whether the protest requirement in AS
43.15.010(a) had been met. Id. at 1279-80. We further noted on
this issue that a two-year statute of limitations from the time
the tax was paid governed instead of the six-year limit assumed
by the superior court. Id. at 1280.
24Carlson v. State, Commercial Fisheries Entry Comm'n (Carlson
II), 919 P.2d 1337 (Alaska 1996). Certiorari was subsequently
requested but denied. 519 U.S. 1101 (1997).
25Id. at 1340-42.
26Carlson II, 919 P.2d at 1340 (citing Oregon Waste Sys., Inc. v.
Dep't of Envtl. Quality, 511 U.S. 93, 99 (1994); Chemical Waste
Mgmt., Inc. v. Hunt, 504 U.S. 334, 340-41 (1992)).
27Carlson II, 919 P.2d at 1340 (citing Oregon Waste Sys., 511 U.S.
at 98).
28Carlson II, 919 P.2d at 1340.
29Id. at 1342-43.
30The State had advocated the following pro rata formula: "(1)
calculate the expenditures or costs of the commercial fisheries
(enforcement and conservation); (2) determine the resident and
nonresident commercial fishers' respective pro rata shares of
those expenditures; and (3) compare the percentage of its
respective pro rata share each group is paying." Id. at 1343.
31A similar plan was rejected by the Fourth Circuit, which
overturned a Virginia law that required all fishers to pay a fee
determined by dividing the state costs of fishing funded by all
taxpayers by the number of fishers in the state, requiring as a
result that nonresident fishers pay an additional $1,150 fee.
Tangier Sound Waterman's Ass'n v. Pruitt, 4 F.3d 264, 268 (4th
Cir. 1993).
32Carlson II, 919 P.2d at 1343.
33Id. at 1344.
34Id.
35Id.
36Id.
37The statute provides:
The Department of Administration shall,
with the approval of the attorney general and
the Department of Revenue, refund to a
taxpayer the amount of a tax paid to the
Department of Revenue under protest and
deposited in the treasury if
(1) the taxpayer recovers judgment
against the Department of Revenue for the
return of the tax; or
(2) in the absence of a judgment, it is
obvious to the Department of Revenue that the
taxpayer would obtain judgment if legal
proceedings were prosecuted by the taxpayer.
38Carlson II, 919 P.2d at 1344.
39780 P.2d 1023, 1030-31 (Alaska 1989).
40919 P.2d at 1344.
41798 P.2d at 1280.
42Tesoro Petroleum Corp. v. State, 42 P.3d 531, 535 (Alaska 2002);
Sampson v. State, 31 P.3d 88, 91 (Alaska 2001).
43State v. Planned Parenthood of Alaska, 35 P.3d 30, 34 (Alaska
2001) (quoting Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska
1979)).
44See Vezey v. Green, 35 P.3d 14, 19-20 (Alaska 2001) (citations
omitted) ("We review the trial court's findings of fact under the
clearly erroneous standard. Under this standard, we will reject
a factual finding only if we are `left with the definite and firm
conviction on the entire record that a mistake has been
committed.' In addition, we have stated that `[w]hen a trial
court's decision of a factual issue depends largely on
conflicting oral testimony, the trial court's competence to judge
credibility of witnesses provides even a stronger basis for
deference by the reviewing court.' "); see also Rockstad v.
Global Fin. & Inv. Co., Inc., 41 P.3d 583, 586 (Alaska 2002)
("[W]hen the trial court relies on extrinsic testimonial evidence
to provide a factual basis for its interpretation of a contract,
we apply the clearly erroneous standard in reviewing the court's
background findings of fact.").
45See Matanuska Elec. Ass'n, Inc. v. Rewire the Bd., 36 P.3d 685,
700-01 (Alaska 2001) (noting that use of clearly erroneous
standard of review for factual findings in contempt proceedings
"is consistent with the deferential review used by courts in
other jurisdictions").
46798 P.2d at 1274-78.
47919 P.2d at 1340-42.
48852 P.2d 1173, 1175 (Alaska 1993) ("When a common law court is
asked to overrule one of its prior decisions, the principle of
stare decisis is implicated. . . . [S]tare decisis is a
practical, flexible command that balances our community's
competing interests in the stability of legal norms and the need
to adapt those norms to society's changing demands.").
49Id. at 1176 (quoting State v. Dunlop, 721 P.2d 604, 610 (Alaska
1986)).
50Pratt & Whitney Canada, 852 P.2d at 1176.
51Id. (quoting Planned Parenthood v. Casey, 505 U.S. 833, 855
(1992)).
52Wolff v. Arctic Bowl, Inc., 560 P.2d 758, 763 (Alaska 1977)
("The doctrine of the law of the case prohibits the
reconsideration of issues which have been adjudicated in a
previous appeal in the same case. Even issues not explicitly
discussed in the first appellate opinion, but directly involved
with or `necessarily inhering' in the decision will be considered
the law of the case. This doctrine is akin to the doctrine of
res judicata, in that it requires that a final judgment be
rendered with respect to the issues at hand.") (citations
omitted).
53Patrick v. Sedwick, 413 P.2d 169, 173-74 (Alaska 1966).
54Alaska Diversified Contractors, Inc. v. Lower Kuskokwim Sch.
Dist., 778 P.2d 581, 583 (Alaska 1989).
55U.S. v. Hatter, 532 U.S. 557, 566 (2001) ("The law of the case
doctrine presumes a hearing on the merits.").
56See Pratt & Whitney Canada, 852 P.2d at 1175 ("[N]o judicial
system could do society's work if it eyed each issue afresh in
every case that raised it.") (quoting Planned Parenthood, 505
U.S. at 854).
57511 U.S. 93 (1994).
58516 U.S. 325 (1996).
59520 U.S. 564 (1997).
60The State further argues that if there were anything
questionable about the constitutionality of the fee
differentials, the United States Supreme Court could have taken
the case on certiorari but refused to do so. 519 U.S. 1101
(1997). However, the United States Supreme Court can deny
certiorari for a variety of reasons. Therefore, denial of
certiorari should not be taken as a judgment on the merits of the
case. See Bridgers v. Texas, 532 U.S. 1034 (2001). It is easily
conceivable that the Court refused certiorari because Carlson II
was partially remanded and the Court wanted to wait to see what
the final resolution of that case would be.
61The class asserts that the law of the case doctrine is meant
primarily as a restraint on trial courts. While this may be one
of the functions, it is certainly not the exclusive purpose of
the doctrine.
62See Smith v. Cleary, 24 P.3d 1245, 1248 (Alaska 2001) ("The
doctrine of the law of the case is a matter of judicial policy
and describes `the practice of courts generally to refuse to
reopen what has been decided,' but does not limit their power to
do so.") (quoting West v. Buchanan, 981 P.2d 1065, 1067 (Alaska
1999)) (citations omitted).
63See Smith, 24 P.3d at 1248 ("[T]he policy against reconsidering
issues adjudicated in a prior appeal or issues `directly involved
with or necessarily inhering' in a prior decision applies only if
there has been `a final judgment . . . with respect to the issues
at hand.' ") (citations omitted); Brandon v. State, 839 P.2d 400,
403-04 (Alaska App. 1992) ("The doctrine of the law of the case
prohibits the reconsideration of issues that this court has
adjudicated in a previous appeal in the same case.").
64516 U.S. 325 (1996).
65Id. at 327.
66Id. at 328.
67Id.
68Id. at 346.
69Id. at 330 ("In its negative aspect, the Commerce Clause
prohibits economic protectionism - that is, regulatory measures
designed to benefit in_state economic interests by burdening
out_of_state competitors.") (internal quotations omitted).
70Id. at 331 ("In evaluating state regulatory measures under the
dormant Commerce Clause, we have held that the first step . . .
is to determine whether it regulates evenhandedly with only
incidental effects on interstate commerce, or discriminates
against interstate commerce.") (quoting Oregon Waste Sys., Inc.
v. Dep't of Envtl. Quality, 511 U.S. 93, 99 (1994) (internal
quotations and citation omitted)).
71Fulton, 516 U.S. at 331 ("[A] facially discriminatory tax may
still survive Commerce Clause scrutiny if it is a truly
compensatory tax designed simply to make interstate commerce bear
a burden already borne by intrastate commerce.") (internal
quotations and citation omitted).
72Id. at 333. The Court, however, found that none of these
conditions was satisfied by North Carolina's intangibles tax.
Id. at 333-44. North Carolina attempted to argue that the
intangibles tax "compensates for the burden of the general
corporate income tax paid by corporations doing business in North
Carolina." Id. at 334. North Carolina further argued that one of
the services supported through a general corporate income tax "is
the maintenance of a capital market for corporations wishing to
sell stock to North Carolina residents." Id. at 335. The Court
found this argument to be "unconvincing." Id. Drawing on Oregon
Waste Systems, the Court found the use of a tax on interstate
commerce to compensate for general revenues to be an "expansive
loophole." Id. (quoting Oregon Waste Sys., Inc. v. Dep't of
Envtl. Quality, 511 U.S. 93, 105 n.8 (1994)). The Court
proceeded to reject the specific application of the intangibles
tax because of doubts that North Carolina used the tax proceeds
to maintain an intrastate capital market, and the state's failure
to detail the proportion of the corporate income tax used to
support the capital market, as well as a lack of equivalence
between out-of-state corporations and resident shareholders.
Fulton, 516 U.S. at 336-40.
73Chemical Waste Mgmt., Inc. v. Hunt, 504 U.S. 334 (1992).
74919 P.2d at 1340.
75Id. at 1340-41. The Privileges and Immunities Clause does allow
for nonresidents to be taxed on their business enterprises within
a state. See Shaffer v. Carter, 252 U.S. 37, 52-53 (1920) ("That
a state, consistently with the federal Constitution, may not
prohibit the citizens of other states from carrying on legitimate
business within its borders like its own citizens, of course is
granted; but it does not follow that the business of nonresidents
may not be required to make a ratable contribution in taxes for
the support of the government. On the contrary, the very fact
that a citizen of one state has the right to hold property or
carry on an occupation or business in another is a very
reasonable ground for subjecting such nonresident, although not
personally, yet to the extent of his property held, or his
occupation or business carried on therein, to a duty to pay taxes
not more onerous in effect than those imposed under like
circumstances upon citizens of the latter state.").
76Fulton, 516 U.S. at 327-28.
77Carlson II, 919 P.2d at 1340.
78Even if we were to reach this issue, the fee differential would
fall under the exception listed in Fulton whereby states can
impose a facially discriminatory tax as long as it "make[s]
interstate commerce bear a burden already borne by intrastate
commerce." 516 U.S. at 331. We reached this conclusion in
Carlson I, where we stated that "the state may equalize the
economic burden of fisheries management; where residents pay
proportionately more by way of foregone benefits than
nonresidents for fisheries management, nonresidents may be
charged higher fees to make up the difference." 798 P.2d at
1278. We affirmed this decision in Carlson II. 919 P.2d at 1341-
42. Furthermore, the fee differential satisfies the three-part
test laid out in Fulton: (1) the fee differential is
compensating for a clearly defined intrastate burden; (2) the fee
differential is limited such that it does not exceed the burden
borne by state residents; and (3) the event being taxed, namely
the license to use state fisheries, is the same for residents and
nonresidents. See Fulton, 516 U.S. at 333; Carlson II, 919 P.2d
at 1342-44. Therefore, even if the fee differential were held to
bear on interstate commerce, it would fall under one of the
exceptions to the negative Commerce Clause.
79520 U.S. 564 (1997).
80Id. at 568-95.
81Id. at 572.
82Id. at 573.
83Id. at 573.
84Id. at 576-77; see also Hughes v. Oklahoma, 441 U.S. 322, 337-38
(1979) (striking down as violation of Commerce Clause Oklahoma
law that placed no limits on number of minnows that could be
caught and used within state but prohibited transportation of
minnows out of state for sale because regulation of natural
resources does not allow state to circumvent Commerce Clause).
85Camps Newfound, 520 U.S. at 576.
86455 U.S. 331, 338 (1982).
87Camps Newfound, 520 U.S. at 576.
88Id. at 577.
89Id. at 578.
90Oregon Waste Systems v. Department of Environmental Quality
specifically distinguishes the situation in that case, where a
higher fee was charged for the disposal of out-of-state waste
than for in-state waste even though the cost of disposal of waste
was the same no matter where the waste was generated, from a
situation such as the present one where, absent a higher
nonresident fee, the use of the fisheries and the cost of
maintaining them imposes a higher cost on residents than on
nonresidents. 511 U.S. 93, 101 (1994). Because the present case
is properly analyzed as a Privileges and Immunities case, the
primary concern is "to insure to a citizen of State A who
ventures into State B the same privileges which the citizens of
State B enjoy." Toomer v. Witsell, 334 U.S. 385, 395 (1948).
While nonresidents cannot be disadvantaged by their movement
across state lines, there is nothing requiring that they benefit
by such movement either. Nonresidents can therefore be required
to compensate the state for the state resources they use.
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 281 (1977)
("[T]he Court consistently has indicated that `interstate
commerce may be made to pay its way,' and has moved toward a
standard of permissibility of state taxation based upon its
actual effect rather than its legal terminology."). The holding
in Carlson II accomplishes this by limiting the fee differential
to the per capita resident contribution. Carlson II, 919 P.2d at
1343.
91919 P.2d at 1342.
92Id. at 1343.
93Id. at 1344.
94Mulaney v. Anderson, 342 U.S. 415, 418 (1952). It is worth
noting in passing that a multitude of other states allow
nonresident commercial fishers to be charged higher fees than
resident commercial fishers without any apparent reliance upon a
formula to calculate the allowable fee differential. Delaware
charges $150 for a resident commercial food fishing license and
$1,500 for a comparable nonresident license. Del. Code Ann. tit.
7, 914 (2001). Florida requires residents to pay $50 for a
saltwater products license for an individual and $100 for a boat.
Nonresidents are required to pay twice these amounts. Fla. Stat.
370.06(2)(a) (West 2001). Georgia charges $12 for a resident
commercial fishing or crabbing license and $118 for a nonresident
fishing or crabbing license. Ga. Code 27-2-23 (2001). Maine
establishes a fee of $89 for a commercial fishing license for a
resident operator and all crewmembers and $334 for a commercial
fishing license for a nonresident operator and all crewmembers.
Me. Rev. Stat. Ann. tit. 12, 6501 (West 2001). Michigan
charges nonresidents five times the amount charged a resident for
the same license. Mich. Comp. Laws ANN. 324.47330 (West 2001).
For commercial eel fishing licenses New Jersey charges
nonresidents the greater of the New Jersey fee or the amount that
the nonresident would pay in their state of residence. N.J.
Stat. Ann. 23:3-72 (West 2001). In Oregon, a resident
commercial fishing license costs $50 and a nonresident commercial
fishing license costs $100. Or. Rev. Stat. 508.285(d), (e)
(2001). South Carolina charges nonresidents five times the
amount it charges residents for a variety of commercial equipment
licenses. S.C. Code Ann. 50-5-325 (Law Co-op 2001). Texas
charges nonresidents $100 for a general commercial fisherman's
license as compared to $15 for residents and $125 as compared to
$65 for a commercial finfish fisherman's license. Tex. Parks and
Wild. Code Ann. 47.002-03 (Vernon 2001).
95919 P.2d at 1342-43.
96See Lunding v. New York Tax Appeals Tribunal, 522 U.S. 287, 297
(1998) ("[A]s a practical matter, the Privileges and Immunities
Clause affords no assurance of precise equality in taxation
between residents and nonresidents of a particular State. Some
differences may be inherent in any taxing scheme, given that,
`[l]ike many other constitutional provisions, the privileges and
immunities clause is not an absolute,' and that `[a]bsolute
equality is impracticable in taxation.' Because state
legislatures must draw some distinctions in light of `local
needs,' they have considerable discretion in formulating tax
policy. Thus, `where the question is whether a state taxing law
contravenes rights secured by [the federal Constitution], the
decision must depend not upon any mere question of form,
construction, or definition, but upon the practical operation and
effect of the tax imposed.' " (citations omitted)); Maxwell v.
Bugbee, 250 U.S. 525, 543 (1919) ("[I]nequalities that result not
from hostile discrimination, but occasionally and incidentally in
the application of a system that is not arbitrary in its
classification, are not sufficient to defeat the law."); see also
Shaffer v. Carter, 252 U.S. 37, 55 (1920) ("[W]here the question
is whether a state taxing law contravenes rights secured by that
instrument, the decision must depend not upon any mere question
of form, construction, or definition, but upon the practical
operation and effect of the tax imposed."); Travelers' Ins. Co.
v. Connecticut, 185 U.S. 364, 371 (1902) ("It is enough that the
state has secured a reasonably[] fair distribution of burdens,
and that no intentional discrimination has been made against
nonresidents.").
97See Breck v. Moore, 910 P.2d 599, 606 (Alaska 1996) ("This court
reviews an award of damages for an abuse of discretion and
independently reviews the law applied by the trial court.").
98See Tangier Sound Waterman's Ass'n v. Pruitt, 4 F.3d 264, 267
(4th Cir. 1993) ("[T]he record does not disclose that the
Commonwealth of Virginia has shown that it created any credible
method of allocating costs as between residents and nonresidents
which places the burden equally or approximately equally upon
residents and nonresidents.").
99The class at trial did raise some objections to the way in which
the State calculated indirect expenditures, mostly having to do
with a blurring of the line between direct and indirect
expenditures. On its cross-appeal, the class seems satisfied
with the stipulated indirect expenditures in the findings of
fact. However, if the amount of direct fisheries expenditures is
adjusted, the indirect expenditures will have to be adjusted
accordingly.
100Carlson I, 798 P.2d at 1278; Carlson II, 919 P.2d at 1342-43.
101See Moody v. Delta Western, Inc., 38 P.3d 1139, 1140 (Alaska
2002) (holding that in question of law that is coming to court as
case of first impression, de novo standard of review is applied).
102Carlson I, 798 P.2d at 1278.
103See State v. Northwestern Constr., Inc., 741 P.2d 235, 240
(Alaska 1987) (allowing inclusion of overhead costs in breach of
contract suit against state).
104As the class notes, the State in Carlson I identified four
sources as the "aggregate cost of fisheries management" - the
annual operating budget of the Commercial Fisheries Entry
Commission, 40.6% of the annual operating budget of the
Department of Public Safety, the annual operating budget of the
Division of Commercial Fisheries of the Department of Fish and
Game, and the annual operating budget of the Fisheries
Rehabilitation Enhancement and Development Division of the
Department of Fish and Game. 798 P.2d at 1272. In Carlson II,
the State similarly provided a chart in defense of its proposed
pro rata formula listing "Expenditures By Four Agencies For
Commercial Fishery Management." 919 P.2d at 1346. This chart
goes from 1982 to 1989 and ranges from $29.0 million to $34.8
million; the amount in 1989 was $29.9 million. Id. The State
presently seeks to include in the direct operating costs expenses
beyond those limited to the four agencies it previously advanced.
However, in the previous iterations of this case, the State did
not have the benefit of knowing the formula by which the
allowable fee differential is to be calculated. Therefore, the
State was justified in offering a different definition of the
fisheries budget than the one under which it previously operated
since this earlier definition had effectively been rendered moot.
Judge Michalski was consequently not in error to hear arguments
on this matter.
105For example, the second largest single expense for the direct
operating costs is that of the "shared fish taxes." The class
argues that these funds should not be counted as revenues because
they are provided to local municipalities to defray fisheries-
related impacts. The State responds that the revenue from the
taxes goes to the general fund and is only then appropriated to
municipalities. Judge Michalski did not rule explicitly on this
issue. We hold that there is no difference between the shared
fish taxes and other components of the fisheries budget. Judge
Michalski accepted in whole the State's determination of the
direct operating expenditures, which included the shared fish
taxes. While testimony was offered that the taxes are
essentially just a bookkeeping maneuver, it was not clearly
erroneous for Judge Michalski to find them otherwise.
106The State and the class disagree as to the admissibility of
expert testimony on the issue of the inclusion or exclusion of
general governmental expenditures in the total fisheries
expenditures; this, however, is a question of law and thus does
not turn on expert testimony. We therefore need not address
their dispute.
107334 U.S. 385, 399 (1948).
108Carlson I, 798 P.2d at 1278; see also Carlson II, 919 P.2d at
1342.
109Fulton Corp. v. Faulkner, 516 U.S. 325, 335 (1996).
110Camps Newfound/Owatonna, Inc. v. Town of Harrison, Maine, 520
U.S. 564, 578 (1997) (citing Chemical Waste Mgmt., Inc. v. Hunt,
504 U.S. 334, 342 (1992)).
111Oregon Waste Sys., Inc. v. Dep't of Envtl. Quality, 511 U.S. 93,
105 n.8 (quoting Gov't Suppliers Consolidating Servs., Inc. v.
Bayh, 975 F.2d 1267, 1284 (7th Cir. 1992)).
112City of Los Angeles Dep't of Airports v. United States Dep't of
Transp., 103 F.3d 1027, 1034 (D.C. Cir. 1997).
113See Pa. Elec. Co. v. F.E.R.C., 11 F.3d 207, 209-10 (D.C. Cir.
1993).
114The class approach yields a figure of 29.7%, far less than the
74% adopted by Judge Michalski.
115Trustees for Alaska v. State, Dep't of Natural Res., 795 P.2d
805, 810 (Alaska 1990).
116This calculation yields the 86% figure previously relied upon by
this court in Trustees for Alaska. 795 P.2d at 810.
117See Seattle Master Builders Ass'n v. Pacific Northwest Elec.
Power & Conservation Planning Council, 786 F.2d 1359, 1370 (9th
Cir. 1986) ("The choice of methodology is a highly technical
question which falls within the unique expertise of the Council.
Unless an abuse of discretion is demonstrated, this court will
not substitute its judgment on particular testing methodology.");
United States Steel Group_A Unit of USX Corp. v. United States,
873 F. Supp. 673, 700 (Ct. Int'l Trade 1994) (holding that choice
of methodology by trade commission was subject to review by abuse
of discretion standard); see also Dansereau v. Ulmer, 955 P.2d
916, 919 (Alaska 1998) (holding that superior court did not abuse
its discretion in adopting particular methodology to calculate
number of hours litigants' attorneys worked for purpose of
determining award of attorney's fees); Gallant v. Gallant, 882
P.2d 1252, 1257 (Alaska 1994) (reviewing for abuse of discretion
allocation of child support in novel case involving nonparental
custody).
118798 P.2d at 1280.
119The statute has subsequently been renumbered as AS 43.10.210(a).
120780 P.2d 1023, 1030 (Alaska 1989).
121Id. at 1030-31 ("The burden of requiring a taxpayer to file a
protest at the time of payment of the tax is at most minimal. On
the other hand the requirement of a protest serves the important
function of providing state government with notice of the claimed
tax illegality, the grounds advanced in support of the claimed
illegality, and affords the state the opportunity to fashion
budget appropriations, or expenditures, taking into account the
magnitude of the claimed tax illegality. We think these are
significant considerations which warrant the retention of the
requirement of a protest.").
122The State asserts that an early superior court argument created
an estoppel argument against retroactive fees. The protest issue
of this superior court opinion, however, was remanded for further
inquiry in Carlson I, albeit without specifically addressing the
estoppel argument alluded to by the superior court. 798 P.2d at
1280.
123This statement was given in a reply brief opposing waiver of the
protest issue. The State made a similar statement on March 1,
1991 in a memorandum in support of a motion for summary judgment:
"The state does not dispute here that the differential paid by
nonresidents to engage in commercial fishing since the date that
this class action was filed, June 22, 1984, have been paid under
protest."
124See Principal Mutual Life Ins., 780 P.2d at 1030-31.
125The class argues that federal due process prevents the denial of
retroactive tax recovery under McKesson Corp. v. Division of
Alcoholic Beverages & Tobacco, 496 U.S. 18, 39 (1990) ("To
satisfy the requirements of the Due Process Clause, therefore, in
this refund action the State must provide taxpayers with, not
only a fair opportunity to challenge the accuracy and legal
validity of their tax obligation, but also a `clear and certain
remedy,' for any erroneous or unlawful tax collection to ensure
that the opportunity to contest the tax is a meaningful one.")
(citations omitted). In McKesson, the United States Supreme
Court ordered that a refund be given for an illegal tax even
though Florida claimed this would cause the state serious
economic injury. 496 U.S. at 51 n.35 ("We reject respondents'
intimation that the cost of any refund considered by the State
might justify a decision to withhold it. Just as a State may not
object to an otherwise available remedy providing for the return
of real property unlawfully taken or criminal fines unlawfully
imposed simply because it finds the property or moneys useful, so
also Florida cannot object to a refund here just because it has
other ideas about how to spend the funds."). The class errs,
however, when it invokes Harper v. Virginia Department of
Taxation. 509 U.S. 86, 97 (1989) (holding that federal remedy for
unlawful tax applies not only to case at issue but also to
parties in all other open cases). In the present case, the class
either exists as a whole or it does not exist at all for the
purposes of the protest requirement. There are thus no other
open cases to which a due process concern could apply.
126Era Aviation, Inc. v. Campbell, 915 P.2d 606, 609 (Alaska 1996)
("[U]nder common law as well as under statute, a protest at the
time of payment is a prerequisite for an action to recover
taxes.").
127Id. at 607. The original plaintiffs did not form a class.
128Id. at 607-08.
129Id. at 612.
130Id. at 612-13 (noting that state's ability to determine
accurately its potential liability for fee refunds "would be
undermined if a single lawsuit (which was not even a class
action) were deemed sufficient notice to make all payers under
the regulation eligible for refunds").
131Aronson v. City of Pittsburgh, 510 A.2d 871, 873 (Pa. Commw.
1986); Aronson v. Commonwealth, 516 N.E.2d 137, 144 (Mass.
1987).
132The class action suit was filed on June 22, 1984. In Carlson
II, we held that "the record indicates that the State agrees that
those fees which were paid after June 22, 1984, were paid under
protest sufficient to permit a refund under AS 43.10.210." 919
P.2d at 1344. As noted above, the State several times also
stated that the protest requirement was met as of June 22, 1984.
These prior statements, however, do not require us to reverse the
decision of the superior court, which was not an abuse of
discretion.
133See Carlson I, 798 P.2d at 1279-80; Carlson II, 919 P.2d at 1343-
45.
134Hooks v. Comptroller of Treasury, 289 A.2d 332, 333-34 (Md.
1972); Edisto Fleets, Inc. v. S.C. Tax Comm'n, 182 S.E.2d 713,
714 (S.C. 1971).
135627 P.2d 1035, 1044 (Alaska 1981) (quoting Benjamin Kaplan, "The
Continuing Work of the Civil Committee: 1966 Amendments of the
Federal Rules of Civil Procedure," 81 Harv. L. Rev. 356, 386
(1967)). We therefore struck down a statutory requirement that
an individual be named in a wage and hour suit in order for the
statute of limitations to be tolled. 627 P.2d at 1046-47. The
class correctly notes that AS 43.10.210 does not require
prospective class members to opt into the class.
136Nolan, 627 P.2d at 1044 ("These policies implicate the questions
of when joinder of parties and claims should be allowed, and the
proper procedure for handling cases in which numerous parties or
claims are involved. Absent an ability to provide for these
matters by appropriate rules of procedure, it is possible that
vast amounts of judicial, administrative, and private resources
would be wasted.").
137Carlson I, 798 P.2d at 1279-80.
138Cf. Univ. of Alaska v. Simpson Bldg. Supply Co., 530 P.2d 1317,
1323-24 (Alaska 1975).
139Carlson II, 919 P.2d at 1344.
140Gaudiane v. Lundgren, 754 P.2d 742, 744 (Alaska 1988) (citing
King v. Alaska State Hous. Auth., 571 P.2d 1010, 1011-12 (Alaska
1977)).
141Cf. Watts v. Seward Sch. Bd., 421 P.2d 586, 618 (Alaska 1966)
(Rabinowitz, J., dissenting in part and concurring in part),
vacated, 391 U.S. 592 (1968) (explaining that law of the case
doctrine, which prohibits reconsideration of issues that have
been explicitly or inherently adjudicated in previous appeal,
promotes judicial economy by "narrowing down the issues in
successive stages of litigation"); Hudson v, Wakefield, 711
S.W.2d 628, 630 (Tex. 1986) ("By narrowing the issues in
successive stages of the litigation, the law of the case doctrine
is intended to achieve uniformity of decision as well as judicial
economy and efficiency.").
142E.g., MacKay v. Hardy, 973 P.2d 941, 947 (Utah 1998); Penrich,
Inc. v. Sullivan, 669 A.2d 1363, 1367 (N.H. 1995); Hartford Nat'l
Bank & Trust Co. v. Tucker, 487 A.2d 528, 530 (Conn. 1985); First
Am. Nat'l Bank v. Booth, 606 S.W.2d 70, 71 (Ark. 1980);
Kazubowski v. Kazubowski, 259 N.E.2d 282, 288 (Ill. 1970); E. F.
Prichard Co. v. Heidelberg Brewing Co., 234 S.W.2d 486, 487-88
(Ky. 1950); Montgomery v. Trisler, 771 N.E.2d 1234, 1239 (Ind.
App. 2002); Bike Fashion Corp. v. Kramer, 46 P.3d 431, 436 (Ariz.
App. 2002); Baker v. Nat'l State Bank, 801 A.2d 1158, 1167 (N.J.
Super. A.D. 2002).
143MacKay, 973 P.2d at 947. See also First Am. Nat'l Bank, 606
S.W.2d at 71; Kazubowski, 259 N.E.2d at 288; Bike Fashion Corp.,
46 P.3d at 436.
144Robertson v. Am. Mech., Inc., 54 P.3d 777, 780 (Alaska 2002);
Sengupta v. University of Alaska, 21 P.3d 1240, 1254 (Alaska
2001).
145919 P.2d at 1344.
146See 798 P.2d at 1280.
147See, e.g., Library of Cong. v. Shaw, 478 U.S. 310, 311 (1986)
("The no_interest rule is to the effect that interest cannot be
recovered in a suit against the Government in the absence of an
express waiver of sovereign immunity from an award of
interest."), superseded by statute on other grounds as stated in
Landgraf v. USI Film Products, 511 U.S. 244, 251 (1994)).
148Stewart & Grindle, Inc. v. State, 524 P.2d 1242, 1245 (Alaska
1974).
149Danco Exploration, Inc. v. State, Dep't of Natural Res., 924
P.2d 432, 434 (Alaska 1996).
150Id.
151Mullaney v. Hess, 189 F.2d 417, 420 (9th Cir. 1951).
152798 P.2d at 1280.
153AS 43.05.280(a) provides: "Interest shall be allowed and paid
on an overpayment of a tax under this title at the rate and in
the manner provided in AS 43.05.225(1)."
154We are not here ruling on whether the class will be due a refund
upon remand. Rather, we are only stating that if upon remand it
is determined that a refund is due, prejudgment interest can be
obtained on that refund.
