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Chalovich v. State, Dept. of Natural Resources (12/30/2004) sp-5857
Chalovich v. State, Dept. of Natural Resources (12/30/2004) sp-5857
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 ALASKA
TOM CHALOVICH, )
) Supreme Court No. S-10977
Appellant, )
) Superior Court No.
v. ) 3AN-02-9530 CI
)
STATE OF ALASKA, ) O P I N I O N
DEPARTMENT OF NATURAL )
RESOURCES, TOM IRWIN, ) [No. 5857 - December
30, 2004]
COMMISSIONER, and HAROLD F. )
PARKER, )
)
Appellees. )
_______________________________ )
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, John Reese, Judge.
Appearances: J.P. Tangen, Anchorage, for
Appellant. Lawrence Z. Ostrovsky, Assistant
Attorney General, Anchorage, and Gregg D.
Renkes, Attorney General, Juneau, for
Appellee State of Alaska. Harold F. Parker,
pro se, Anchorage.
Before: Bryner, Chief Justice, Eastaugh,
Fabe, and Carpeneti, Justices. [Matthews,
Justice, not participating.]
CARPENETI, Justice.
I. INTRODUCTION
Tom Chalovich appeals a final decision by the
Department of Natural Resources (DNR) finding that he abandoned
his state mining claims by failing to timely make a payment in
lieu of annual labor as required by 11 Alaska Administrative Code
(AAC) 86.220(h). Chalovich attacks the validity of this
regulation on the grounds that it is inconsistent with the Alaska
Land Act,1 arbitrary, and unconstitutional. He also claims that
11 AAC 86.107(g), which prevents DNR from refunding cash payments
made in lieu of annual labor, has resulted in an unconstitutional
taking because the department has not refunded payments made
since his claims were deemed abandoned. Because we find that
Chalovich timely paid cash in lieu of annual labor by placing
payment in the mail by the regulatory deadline, we reverse the
determination that he abandoned his claims.
II. FACTS AND PROCEEDINGS
Tom Chalovich purchased five mining claims in November
1997 from Carol Brown. Two of these claims, Akland 2-3, were
staked over claims previously held by Dennis Brown, Carol's
husband, and his mining partner, Harold Parker, that were deemed
abandoned by DNR. Another claim, Akland 8, covered a previous
claim staked by Dennis Brown and Parker and never abandoned.
Because Parker asserted a competing interest in Akland 2 and 8,
Chalovich filed suit to quiet title in August 1998. Through
decisions by the superior court in October 1999 and July 2002,
Chalovich successfully quieted title in Akland Nos. 2-5, though
his complaint regarding Akland No. 8 was dismissed without
prejudice on Chalovich's motion pending his appeal of DNR's
determination that he did not perform annual labor2 for this
claim in 2000. The department had initially determined that
Chalovich abandoned3 all five claims because he made the 2000
cash-in-lieu-of-labor payment on November 29, 2000, nearly three
months after the September 1 deadline, but the department later
determined that a survey conducted on Akland claims Nos. 2-5
would qualify as annual labor for those claims.
While the quiet title litigation was pending in the
superior court, Parker went to the DNR offices in January 2002 to
review Chalovich's annual labor affidavits for the contested
claims, and he discovered that the 1999 cash-in-lieu payment for
these claims was also received by DNR after the September 1
deadline. The payment was postmarked on that date, but it was
not received by DNR until September 3. Parker related this
information to DNR Mineral Property Manager Kerwin Krause, who
informed Chalovich in January 2002 that his claims were deemed
abandoned by operation of law as of September 1, 1999 pursuant to
11 AAC 86.145(a)(2) and (4), because his payment was received
after the regulatory deadline.4 Though DNR does not usually
allow administrative appeals of events that occur by operation of
law, such as abandonment of mining claims under AS 38.05.265,5
Krause permitted Chalovich to appeal his decision to the
commissioner. Both Chalovich and Parker appealed Krause's
decision.
While Chalovich claimed that DNR should treat his
payment as timely, he also argued that 11 AAC 86.220(h) was
arbitrary and inconsistent with other regulatory deadlines, that
forfeiture was an unreasonably harsh penalty for late payment,
and that DNR would be unjustly enriched if it did not refund
payments he made after his claims were forfeited on September 1,
1999. He requested a hearing on his appeal. Parker objected
that Chalovich had no right to appeal Krause's decision because
his claims were forfeited by operation of law. Commissioner Pat
Pourchot issued a final decision in July 2002 denying both
appeals. Pourchot upheld the department's decision because it
was made pursuant to a validly adopted regulation, and he
rejected Chalovich's request for a hearing because there were no
disputed questions of fact. He did not address Chalovich's claim
that the department had no right to retain the annual labor
payments made since September 1, 1999. While Pourchot agreed
with Parker that the department's January 2002 decision should
not have been appealable, he noted that no harm resulted since he
was denying Chalovich's appeal.
Chalovich appealed the commissioner's decision to the
superior court in August 2002, and Parker filed a motion to
dismiss the appeal on the grounds that DNR should have rejected
Chalovich's appeal since forfeiture occurs as a matter of law.
The superior court granted Parker's motion in January 2003,
holding that because Chalovich failed to comply with the
provisions of AS 38.05.265, his claims were forfeited by
operation of law and he had no right to an administrative appeal.
The superior court denied Chalovich's motion for reconsideration
in February 2003. Chalovich appeals.
III. STANDARD OF REVIEW
When the superior court acts as an intermediate court
of appeal, we independently review the underlying administrative
decision.6 This case presents no disputed questions of fact
since the parties agree that Chalovich mailed payment to DNR on
September 1 and that it was received on September 3. We review
questions of law, including the interpretation of statutes and
regulations, using our independent judgment.7 When an agency has
adopted regulations under a delegation of authority from the
legislature using the process prescribed by the Administrative
Procedures Act, we presume that the regulations are valid and
place the burden of proving otherwise on the challenging party.8
We limit our inquiry to whether the regulation is consistent with
and reasonably necessary to carry out the purposes of the
statutory provisions, and whether the regulation is reasonable
and not arbitrary.9
In making the consistency determination, we apply our
independent judgment unless the issue involves agency expertise
or the determination of fundamental policy questions on subjects
committed to an agency's discretion, in which case we employ a
rational basis standard and defer to an agency's determination so
long as it is reasonable.10 "Whether the regulation is necessary
to implement the statute involves fundamental policy
determinations which we review on a rational basis standard."11
We also use a deferential standard to conduct the "reasonable and
not arbitrary review."12
IV. DISCUSSION
A. 11 AAC 86.220(h) Validly Requires Payment in Lieu of
Annual Labor by September 1, but a Postmark Is Evidence
of Timely Payment.
DNR found that Chalovich abandoned his claims because
it received his 1999 payment two days after the regulatory
deadline of September 1, 1999. Chalovich acknowledges that his
payment was not received by DNR by September 1, but he claims
that the deadline is arbitrary and that the penalty of forfeiture
is unduly harsh and unconstitutional.13 Because Chalovich has not
challenged the procedure by which this regulation was adopted,
our inquiry is limited to whether the regulation is consistent
with and reasonably necessary to carry out the purposes of the
statutory provisions, and whether the regulation is reasonable
and not arbitrary.14
Chalovich challenges the validity of three separate
aspects of 11 AAC 86.220(h): he challenges the date for payment
of cash-in-lieu of labor as being inconsistent with AS
38.05.210(a); he claims that the penalty for late payment is
excessive; and he argues that the requirement that payment be
received, rather than postmarked, by the deadline is arbitrary.
While we uphold the challenged regulation to the extent that it
requires performance of labor by September 1, we agree with
Chalovich that it is unreasonable to require actual receipt of
payment rather than treating a postmark as the date of payment.
1. Annual labor is required to maintain a state
mining claim.
As noted, in order to maintain a state mining claim,
each claim holder must perform annual labor valued at $100 on or
for the benefit of each claim or make a cash-in-lieu payment
instead of performing labor.15 By statute, DNR has authority to
"establish the date of the commencement of the year during which
the labor or improvements are to be performed."16 The department
determined that the labor year begins on September 1 and it
requires performance of all required labor by that date.17 Cash
payments in lieu of labor must be received by that date.18 Within
ninety days after the end of the labor year each claim holder
must file an affidavit19 with the department describing, among
other things, the dates and character of labor performed or
improvements made, and the amount of any cash payment made in
lieu of annual labor.20 An affidavit that does not include this
required information is considered void and the mining claim is
deemed abandoned.21 The contested regulation, 11 AAC 86.220(h),
states that a claim is forfeited if payment is not received by
September 1. Because DNR did not receive Chalovich's 1999
payment until September 3, 1999, it determined that he had
abandoned his claims under the terms of 11 AAC 86.220(h).
Abandonment of mining claims is governed by AS
38.05.265, which states that the
[f]ailure to properly record . . . a
statement of annual labor . . . constitutes
abandonment of all rights acquired under the
mining claim, leasehold location, or
prospecting site involved. . . . A statement
of annual labor that does not accurately set
out the essential facts is void and of no
effect.
Chalovich claims that he did not violate AS 38.05.265
because he properly recorded a statement of annual labor within
ninety days of the end of the labor year, and he cites as proof
the fact that DNR received his payment-in-lieu and affidavit of
annual labor on September 3, 1999. Chalovich separates the
requirement to perform labor from the requirement to submit an
affidavit describing such labor, and he reads AS 38.05.265
narrowly to impose forfeiture only for failure to record the
affidavit by November 30 - not for failure to perform the labor
the affidavit must describe. He also claims that payment of cash
in lieu of labor should be timely if received by November 30, the
deadline for receipt of affidavits of labor, rather than the
September 1 deadline for performance of labor. In short,
Chalovich argues that those paying cash rather than performing
labor should receive an additional three months for performance,
and that, in any event, forfeiture is an inappropriate penalty
for mere tardiness.
The department responds that labor must be performed by
September 1 because a statement of annual labor cannot be
properly recorded if the required labor is not performed by that
date. Alaska Statute 38.05.265 would be meaningless, it argues,
if a miner did not complete annual labor but could nonetheless
avoid forfeiture by filing an affidavit by November 30 stating
that no labor was performed or payment made, or that performance
was late. Because AS 38.05.210(a) requires annual labor, and
because AS 38.05.265 deems claims abandoned if a statement of
labor is not recorded, the department argues that 11 AAC
86.220(h) fills a statutory gap by requiring payment of the labor
substitute by the end of the mining year. We agree with DNR that
all labor must be performed by September 1 and that forfeiture is
an appropriate penalty for late performance. We disagree only on
the department's standard for timely performance of labor.
1. Annual labor must be performed by September 1.
1. DNR has authority to define the labor year for mining
claims. Alaska Statute 38.05.210(a) grants authority to DNR to
"establish the date of the commencement of the year during which
labor or improvements are to be performed" and, through
regulations, DNR established that the labor year runs from noon
on September 1 through noon the following September 1.22 The
mining year is the same regardless of whether a miner performs
labor or makes a cash payment. Federal mining law defines the
mining year using the same dates.23 There is no question that DNR
acted within its delegated authority to establish a deadline for
annual labor, and the fact that federal and state mining law
define the mining year using the same dates demonstrates that the
state's choice of September 1 is reasonable and not arbitrary.
Even Chalovich concedes that "DNR is well within its rights to
set a September 1 deadline for the receipt of cash-in-lieu
payments." His concern is not with the deadline for labor but
with the definition of timeliness and the penalty for late
performance.
2. A mining claim is abandoned if labor is not performed by
September 1.
1. Alaska Statute 38.05.210 requires both that miners perform
$100 of annual labor and that they file a signed statement
confirming that they performed the required labor "[d]uring the
year in which annual labor is required or within 90 days after
the close of that year."24 The requirement to file an affidavit
of annual labor has been a feature of Alaska mining law since
196125 and of federal mining law applicable to federal lands in
Alaska since 1907.26 Chalovich claims that, even if he is
required to submit an affidavit of annual labor, nothing in the
statute clearly states that the labor must be completed before
the affidavit can be submitted. According to this argument,
because AS 38.05.265 does not state that claims are abandoned if
labor is not performed, but rather that a "[f]ailure to properly
record . . . a statement of annual labor . . . constitutes
abandonment," Chalovich's claims would only be forfeited if he
failed to record a statement of annual labor by the November 30
deadline - irrespective of whether he even performed annual labor
or paid cash-in-lieu. According to Chalovich, since abandonment
technically follows from the failure to properly document the
performance of annual labor, and not from the failure to actually
perform the required labor, "DNR just made this rule up out of
whole cloth. It is the very definition of an arbitrary mandate
and is no more appropriate than a requirement that the claim
owner hop on his left foot by September 1." This argument misses
the point - and it undermines the intent of AS 38.05.210(a) -
that all miners must perform annual labor.
While AS 38.05.265 does not state that claims are
abandoned if labor is not performed by September 1, a regulation
to that effect implements the intent of that statute,
particularly since "[a] statement of annual labor that does not
accurately set out the essential facts is void and of no effect."27
Since the labor performed or cash paid are essential facts,28 a
claim holder cannot properly set out these facts if they are not
actually performed. The challenged regulation implements AS
38.05.210 by requiring payment by the end of the labor year as a
necessary precondition to filing a statement of annual labor, and
the penalty for non-compliance is consistent with AS 38.05.265.
If a claim holder fails to properly record a statement of annual
labor he forfeits his claims.
Chalovich also argues that forfeiture is inappropriate
because the dual deadlines - September 1 for performance of labor
and November 30 for filing a statement of labor - create an
"unfair trap for the unwary." According to Chalovich, the use of
two deadlines is confusing, particularly since DNR requires that
payment-in-lieu be accompanied by "a copy of the affidavit of
annual labor or a statement containing the name and [Alaska
Division of Land] number for the mining claim."29 He claims that
the implication of this regulation is that cash-in-lieu need not
be paid until November 30, when the affidavit of annual labor is
due. But DNR's regulations are clear and unambiguous: Labor
must be performed by September 1. If a miner performs actual
labor, it must be completed by September 1 but he need not submit
an affidavit affirming its completion until November 30. If a
miner opts to make a cash payment, such payment must be received
by September 1, and it must be accompanied by documentation
sufficient to identify the claims for which payment is made -
either the statement of annual labor or the name and ADL number
of the claim. The affidavit need not be submitted by September 1
so long as payment is accompanied by the name and ADL number for
the relevant claim. Additionally, the deadline for payment-in-
lieu is clearly noted on the form affidavit of annual labor
provided by DNR. As the commissioner explained in his written
decision, while a claim holder does have to keep track of two
different deadlines, the overall number of claims abandoned for
late payment is small, with none recorded in 2001. Since 1961
Alaska's miners have had ninety days from the end of the labor
year to submit an affidavit of annual labor,30 and this
requirement is statutory, not regulatory.31 The dual deadlines
are not a trap for the unwary.
The core of Chalovich's argument is that forfeiture is
an "abhorrent" penalty for what he characterizes as petty,
procedural non-compliance. We addressed forfeiture of mining
claims in AU International, Inc. v. State, Department of Natural
Resources,32 and agreed with DNR that the failure to record a
statement of annual labor that includes all essential facts
constitutes abandonment without regard to intent.33 In AU
International, the claim holder actually performed the required
labor to improve its 1,035 claims, but the statement of labor it
filed with DNR listed the name or claim number for only four
claims.34 We held that the remaining 1,031 claims were abandoned
by operation of law because the statement of labor did not
include the "essential facts" for these claims.35 By regulation,
these essential facts include the name or number of the mining
claim, and the dates of performance of labor and the character of
the labor performed, or the amount of cash paid in lieu of annual
labor.36 If a claim is abandoned for failure to properly record
its name or number - even though labor was performed - then
clearly a claim is abandoned if the required labor is not
actually performed within the labor year. Kile v. Belisle,37
cited by Chalovich in support of his argument that abandonment
requires intent, is not to the contrary. In Kile, we noted that
under federal law the failure to perform annual labor does not by
itself constitute abandonment,38 but the question in that case was
whether federal mining claims had been abandoned.39 As we
explained in AU International, Alaska mining law, unlike federal
law, requires no proof that a miner intended to abandon his
claim, and a state mining claim will be deemed abandoned for
failure to comply with the requirements of AS 38.05.265
irrespective of the claim holder's intent.40
Moreover, federal mining regulations have generally
been interpreted to require strict compliance with deadlines and
filing requirements.41 Indeed, when the federal government began
requiring miners to submit affidavits of annual labor in 1976,
the Bureau of Land Management (BLM) routinely found that miners
had abandoned their claims if the affidavits were received after
the filing deadline - even if they were postmarked well in
advance.42 While federal law now requires most miners to pay a
cash "maintenance fee" rather than perform annual labor, the
failure to timely pay this fee still results in forfeiture.43
Chalovich may characterize the Alaska Land Act's
procedural requirements as petty, but it is the system created by
the legislature, and it is consistent with federal law.
Chalovich nonetheless argues that forfeiture violates article
VIII, section 1 of the Alaska Constitution, which states that
"[i]t is the policy of the State to encourage the settlement of
its land and the development of its resources by making them
available for maximum use consistent with the public interest."
But article VIII, section 11 further states that "[c]ontinuation
of [mineral] rights shall depend upon the performance of annual
labor, or the payment of fees, rents, or royalties, or upon other
requirements as may be prescribed by law." Regulations requiring
payment of cash in lieu of labor by September 1 and deeming
claims abandoned if payment is not received by that date are
consistent with the statutes they implement, are reasonable and
not arbitrary, and are consistent with the Alaska Constitution.
Fundamentally, Chalovich seeks preferential treatment
for those who pay cash rather than perform annual labor.
Allowing miners to pay cash-in-lieu until November 30 would
create a fifteen month "year" for some miners and a twelve month
year for others. There is no justification for allowing such
disparate treatment. The legislature requires that claim holders
perform annual labor to maintain their state mining claims. By
regulation, this labor must be performed between September 1 and
the subsequent September 1. If labor is not performed by
September 1 a claim holder cannot properly record a statement of
annual labor because he cannot accurately set out an essential
fact - that he performed annual labor as required to maintain his
claim. Accordingly, a claim is abandoned if labor is not
performed by September 1.
2. A payment-in-lieu of annual labor is timely if
postmarked by September 1.
Our agreement with DNR that miners must perform annual
labor by September 1 or face forfeiture of their claims does not
resolve the issue before us, however, because Chalovich also
argues that 11 AAC 86.220(h) unreasonably and arbitrarily
requires actual receipt of payment by the September 1 deadline
rather than accepting a postmark as the date of payment. DNR
acknowledges that it received payment from Chalovich on September
3, 1999 in an envelope postmarked on September 1. Chalovich
claims that his payment was timely because it was mailed by the
deadline, and he argues that a rigid requirement of receipt
unfairly makes miners dependent upon the efficiency of the postal
service. While the department did not address this issue in its
briefing, the commissioner stated in his July 1, 2002 final
decision that the requirement of actual receipt was enacted to
treat cash payment the same as actual labor.
Whether it is reasonable and not arbitrary for DNR to
require actual receipt of payment in lieu of annual labor is a
close question, but we must resolve it in favor of Chalovich. We
reach this conclusion, despite the deferential standard of review
applicable to this regulation, for two reasons. First, a
requirement of actual receipt is not necessary to achieve DNR's
goal of equal treatment of all claim holders. Second, the
state's deadlines are no longer consistent with federal mining
law, which has adopted a modified postmark rule, and while we do
not require consistency between state and federal mining law, it
is persuasive that BLM does not impose such a rigid requirement.
We address each reason in turn.
DNR argues that it is necessary to require actual
receipt of cash payments by September 1 to ensure that all miners
are treated equally. We agree that since the $100 cash payment
per claim is a substitute for the actual performance of labor,
miners should face the same deadlines regardless of how they
fulfill the labor obligation. But we cannot agree that the
contested regulation is an appropriate way to achieve this goal.
In fact, for reasons that we explain below, the regulation
actually undermines DNR's goal of equal treatment. Further, by
requiring actual receipt of payment by September 1, the
department unnecessarily exposes miners to risk of forfeiture due
solely to the vagaries of the postal service.44
This regulation is starkly different from the one
proposed by DNR in 1989 when it revised the mining regulations in
response to the legislature's amendment of AS 38.05.210 to allow
payment in lieu of labor. As originally proposed, the regulation
treated as timely cash payments made within ninety days after the
end of the labor year.45 After a citizen commented that the
regulation effectively provided some miners with an additional
ninety days to complete annual labor, DNR adopted the current
regulation which requires receipt of payment on September 1.46
The record shows that the department appropriately considered the
public comment and made changes to its proposed regulations in an
effort to ensure that all miners had the same amount of time to
complete their annual labor requirements.
Unfortunately, in attempting to resolve one potential
inequity, DNR created another. There is no apparent reason to
impose forfeiture on a miner who mails a payment of cash in lieu
of labor on September 1 so long as the date of mailing can be
verified through a postmark. Such a miner would receive no
advantage over one who actually performs labor, nor would
acceptance of a postmark as evidence of performance create an
unreasonable delay in notifying DNR that labor was performed.
This is particularly true since miners who physically perform
labor need not inform the state of such performance until
November 30.47 If anything, the department's requirement of
physical receipt means that a miner making a cash-in-lieu payment
must make the payment well in advance of the deadline in case
delivery of his payment is delayed by the postal service. The
likelihood of such an occurrence is non-negligible since most
miners are likely to mail payments or affidavits to DNR rather
than deliver them in person.48 If cash-in-lieu is a substitute
for annual labor, miners who pay it should have the same time to
perform as miners who actually perform annual labor.
Accordingly, we hold that a miner who mails payment on or before
September 1, and who can verify the date of such mailing through
a postmark, has performed annual labor by the end of the mining
year.
We find further support for our decision today in the
law applicable to federal mining claims. While Alaska is not
required to adopt the same regulations as the federal government,
it is persuasive that BLM has adopted a modified postmark rule
precisely to avoid unwarranted forfeiture of mining claims due to
delays by the postal service. In 1982 the BLM amended its
regulations to treat as timely annual filings that were
postmarked by the deadline so long as they were received by DNR
within twenty days of the (then) December 30 filing deadline.49
This amendment did not completely change the receipt rule to a
postmark rule, because filings received after the twenty-day
period were still rejected even if postmarked by December 30.50
These regulations were subsequently amended to provide a fifteen-
day grace period51 and to govern payment of annual maintenance
fees,52 which are due by September 1.53
The legislative history of the 1982 amendments shows
that BLM made the changes to "save a large number of mining
claimants from the loss of their claims due to delays in the
mails over the holiday season."54 BLM noted that strict
application of the existing regulation had led to the loss of
claims due solely to "the heavy volume of holiday mail and
unusual delays in delivery times," with "annual proofs of labor .
. . postmarked two or three weeks prior to the statutory December
30th deadlines [being] delivered to the proper BLM office in
January, which is after the filing deadline."55 But BLM was not
worried solely about holiday-related mail delays because federal
regulations now provide for a fifteen-day grace period for
payment of the annual maintenance fee, which is due on or before
September 1.
Thus when DNR amended its regulations in 1990 to permit
payment in lieu of annual labor and to require actual receipt of
payment by the September 1 deadline,56 federal regulations
permitted a twenty-day "grace period" during which an affidavit
of labor postmarked by the due date of December 30 could be
received by BLM and still be treated as timely filed.57 While
consistency between state and federal mining law is not required,
we find it persuasive that the federal government has recognized
the injustice of allowing a miner's claims to be forfeited due
solely to problems with mail delivery.
Because requiring receipt of payment-in-lieu violates
DNR's stated goal of equal treatment, because DNR's regulations
impose inconsistent and possibly confusing standards for
timeliness, and because the federal government has adopted a less
rigid standard, we find that the challenged regulation
unreasonably fails to treat as timely a payment postmarked by the
regulatory deadline of September 1.
B. Chalovich's Challenge to AS 11 AAC 86.107(g) Is Moot.
Chalovich also challenges the validity of 11 AAC
86.107(g), which prohibits DNR from making a refund of a payment
of cash in lieu of annual labor, and argues that the department
had no right to payment after his claims were abandoned. He
asserts that if he had no interest in these claims after
September 1, 1999 then DNR had no right to retain the payment it
received on September 3 or other payments made since that time.
He concedes that he has not requested a refund, but claims that
the plain language of the regulation would make it fruitless to
do so. He asks that we find that the regulation was not
authorized by the Alaska Land Act, and that it violates the due
process clauses of the Alaska and of the United States
Constitutions, as well as the principles of equity.
We decline to reach this issue in light of our decision
that Chalovich timely
paid cash in lieu of
labor in 1999. In any
event, DNR agrees that
annual labor is required
only for active mining
claims, so any payment
made after a claim is
abandoned is unnecessary
and would be returned to
the miner.58
C. Parker's Claims Are Not Properly Before this Court.
Appellee Parker supports DNR's position and encourages
this court to find that Chalovich abandoned his mining claims on
September 1, 1999. He also raises several additional arguments,
one of which we previously resolved, and the remainder of which
are waived since Parker did not file a cross-appeal.
Parker asks that we strike from the record two superior
court decisions that pertain to his dispute with Chalovich over
ownership of the Akland claims, because he alleges that these
documents were not part of the department's record on appeal.
These decisions are in the agency record. While they provide
relevant background information about the status of these claims,
they are immaterial to the resolution of the legal questions
raised in this case. In any event, we previously denied Parker's
motion to strike these documents, and there is no reason to
address this issue a second time.
Parker also claims that his constitutional rights were
violated because the superior court denied his requests for
attorney's fees and for monetary sanctions against Chalovich.
Because Parker, the appellee in this case, did not file a cross-
appeal, these claims are not properly before us and will not be
considered.59
V. CONCLUSION
DNR determined that Tom Chalovich abandoned his state
mining claims pursuant to AS 38.05.265 because he did not perform
annual labor as required by AS 38.05.210(a). Because Chalovich
timely paid cash-in-lieu by the September 1 deadline, we REVERSE
the agency's decision that he abandoned his claims. Accordingly,
we need not address the validity of 11 AAC 86.107(g). Because
Harold Parker did not file a cross-appeal his claims are not
properly before the court.
_______________________________
1 AS 38.05.
2 Alaska law requires miners to perform $100 worth of
annual labor on or for the benefit of each mining claim. AS
38.05.210(a). Instead of performing this labor, a miner may make
a $100 cash payment to the state. Id.
3 For purposes of state mining claims, the terms
"abandon" and "forfeit" are synonymous. See AU Int'l, Inc. v.
State, Dep't of Natural Res., 971 P.2d 1034, 1038-39 (Alaska
1999) (failure to comply with filing requirements constitutes
abandonment regardless of miner's subjective intent). See also
43 C.F.R. 3833.0-5(z) (2003) (terms synonymous under federal
mining law).
4 This regulation states in relevant part that "[a] cash
payment made instead of performing annual labor must be received
by the department . . . on or before September 1st of each year.
. . . If cash payment . . . is not paid by the end of the labor
year, the mining claim or leasehold location will be considered
abandoned under AS 38.05.265."
5 This statute deems mining claims abandoned if a miner
fails to "properly record a certificate of location or a
statement of annual labor, pay any required annual rental, or pay
any required production royalty . . . ." Because DNR received
Chalovich's payment-in-lieu of annual labor after the regulatory
deadline it deemed his claims abandoned by operation of law.
We note that, after the oral argument in this case, the
legislature amended this statute to allow a defaulting miner to
cure his abandonment. Ch. 26, SLA 2004.
6 Crivello v. Commercial Fisheries Entry Comm'n, 59 P.3d
741, 744 (Alaska 2002).
7 Therchik v. Grant Aviation, Inc., 74 P.3d 191, 193
(Alaska 2003).
8 Lakosh v. Alaska Dep't of Envtl. Conservation, 49 P.3d
1111, 1114 (Alaska 2002).
9 Id. (citing Kelly v. Zamarello, 486 P.2d 906, 911
(Alaska 1971)).
10 Id.
11 O'Callaghan v. Rue, 996 P.2d 88, 94-95 (Alaska 2000).
Under the rational basis standard of review, we will defer to an
agency's determination so long as it is reasonable and not
arbitrary. Mech. Contractors of Alaska, Inc. v. State, Dep't of
Pub. Safety, 91 P.3d 240, 244 (Alaska 2004). "However,
`reasonable necessity is not a requirement separate from
consistency. If it were, courts would be required to judge
whether a particular administrative regulation is desirable as a
matter of policy'; this is a function of the agency." Lakosh, 49
P.3d at 1114 n.14 (quoting State, Bd. of Marine Pilots v.
Renwick, 936 P.2d 526, 531 (Alaska 1997)).
12 O'Callaghan, 996 P.2d at 95.
13 Because we resolve this case in Chalovich's favor on
nonconstitutional grounds, it is unnecessary for us to reach his
constitutional argument.
14 Lakosh, 49 P.3d at 1114.
15 AS 38.05.210(a).
16 Id.
17 11 AAC 86.220(a).
18 11 AAC 86.220(h).
19 Although the statutes require a "statement" of annual
labor, DNR regulations require that the statement be in the form
of an affidavit. See AS 38.05.210(b); 11 AAC 86.220(c). The
terms are synonymous.
20 AS 38.05.210(b); 11 AAC 86.220(c).
21 AS 38.05.265; 11 AAC 86.220(g).
22 11 AAC 86.220(a).
23 30 U.S.C. 28(f) (1993); 43 C.F.R. 3833.1-5 (2003).
24 AS 38.05.210(a), (b).
25 Ch. 123, 5, SLA 1961.
26 Ch. 2559, 1, 34 Stat. 1243 (1907), currently codified
at 30 U.S.C.A. 49e (2004).
27 AS 38.05.265.
28 11 AAC 86.220(c).
29 11 AAC 86.220(h).
30 Ch. 123, 5, SLA 1961.
31 AS 38.05.210(b).
32 971 P.2d 1034 (Alaska 1999).
33 Id. at 1038.
34 Id. at 1036.
35 Id. at 1038.
36 11 AAC 86.220(c).
37 759 P.2d 1292 (Alaska 1988).
38 Id. at 1296 n.13.
39 AU Int'l, Inc., 971 P.2d at 1038.
40 Id. at 1038-39.
41 See United States v. Locke, 471 U.S. 84, 101 (1985) (
"Filing deadlines, like statutes of limitations, necessarily
operate harshly and arbitrarily with respect to individuals who
fall just on the other side of them, but if the concept of a
filing deadline is to have any content, the deadline must be
enforced . . . . A filing deadline cannot be complied with,
substantially or otherwise, by filing late - even by one day.").
42 See 2 Am. L. of Mining 45.03[2][c], 45.05[2][a][iv]
(2d ed. 1984) (noting that BLM regularly rejected submissions
that were timely postmarked but received after deadline). See,
e.g., Don A. Chris Coyne, 52 IBLA 1 (1981) (mining claim
forfeited even though affidavit postmarked in advance of filing
deadline and record showed that delivery delayed due to error of
postal service).
43 2 Am. L. Mining 45.03[2][d].
44 Since abandonment occurs by operation of law, the
actual date of mailing is irrelevant under the regulation and a
miner's claim is forfeited even if late receipt was clearly
caused by an unreasonable delay by the postal service.
45 See Agency Record for 11 AAC 86.220(h).
46 Id.
47 11 AAC 86.220(c).
48 Prior to June 1, 2002 the only offices for in-person
payment were in Anchorage and Fairbanks. 11 AAC 86.107(c).
Payments can now be made at recording district offices. Id. It
is likely that the remote location of many miners requires that
payments be mailed.
49 2 Am. L. of Mining 45.05[2][a][iv].
50 Id. See also 47 Fed. Reg. 56305 (Dec. 15, 1982).
The regulations now reflect a fifteen day "grace period" during
which filings will be treated as timely so long as they are
postmarked by the filing deadline. 43 C.F.R. 3833.0-5(m)
(2003).
51 43 C.F.R. 3830.0-5(m) (2003).
52 43 C.F.R. 3833.1-5 (2003); 2 Am. L. of Mining
45.03[2][d].
53 43 C.F.R. 3833.1-5(b) (2003).
54 47 Fed. Reg. 56300 (Dec. 15, 1982).
55 47 Fed. Reg. 56302 (Dec. 15, 1982).
56 11 AAC 86.220 (amended 5/18/90).
57 See 2 Am. L. of Mining 44.04[12].
58 Although the superior court's decision also found that
Chalovich was not entitled to an administrative appeal, we need
not consider that point because neither Parker nor DNR raises it
in their briefing.
59 See McQueary v. McQueary, 902 P.2d 1326, 1327 n.3
(Alaska 1995) (citing Johnson v. Nangle, 677 P.2d 242, 247 n.3
(Alaska 1984)).
