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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Vanek v. State, Board of Fisheries (09/19/2008) sp-6308

Vanek v. State, Board of Fisheries (09/19/2008) sp-6308, 193 P3d 283

     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

STEPHEN VANEK, TEAGUE )
VANEK, DAVID MARTIN, and )
STEVE TVENSTRUP, in a )
representative capacity on behalf of )
a class and for all others similarly )
situated; TIM KEENER, KENNETH )
COLEMAN, DOUGLAS BLOSSOM, )
and MARK DUCKER, in a )
representative capacity on behalf of )
a class and for all others similarly )
situated, )
) Supreme Court No. S- 12579
Appellants, )
) Superior Court No.
v. ) 3AN-05-12647 CI
)
STATE OF ALASKA, BOARD OF )
FISHERIES, ) O P I N I O N
)
Appellee. ) No. 6308 - September 19, 2008
)
          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Sen K. Tan, Judge.

          Appearances: Arthur S. Robinson,  Robinson  &
          Associates, Soldotna, for Appellants.  Steven
          A.  Daugherty,  Assistant  Attorney  General,
          Anchorage,  and  Talis J.  Colberg,  Attorney
          General, Juneau, for Appellee.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, and Carpeneti, Justices.

          CARPENETI, Justice.

I.   INTRODUCTION
          Commercial  salmon  fishers holding  Cook  Inlet  entry
permits  and  shore  fishery  leases brought  this  class  action
requesting a declaratory judgment that regulations promulgated by
the Alaska Board of Fisheries since 1996 have caused a taking  or
damaging  of  their property interests without just compensation.
The superior court granted the states motion to dismiss the case.
The  salmon fishers appeal the superior courts decision,  arguing
that   their   entry  permits  and  shore  fishery   leases   are
constitutionally protected property and that the  regulations  at
issue  effect  a  taking  or damaging of  their  property  rights
requiring just compensation.  Because the entry permits  are  not
property  interests  for purposes of takings analysis  under  the
Federal  or Alaska Constitutions, and because even if the permits
or  leases  are  property, the property interests have  not  been
taken  or damaged through the regulations, we affirm the superior
courts decision to dismiss the case.
II.  FACTS AND PROCEEDINGS
          The  plaintiffs  in  this case  are  commercial  salmon
fishers  who have held Alaska Commercial Fishing Entry Commission
(CFEC)  Cook Inlet drift gillnet permits or set gillnet  permits.
They  all harvest pacific salmon in Cook Inlet for sale into  the
international  seafood market.  The defendant,  State  of  Alaska
Board  of  Fisheries is the state agency authorized to promulgate
commercial   fishing  regulations  for  Cook   Inlet   under   AS
16.05.251(a).
          This case arises out of changes to the Upper Cook Inlet
Salmon  Management Plan.  That plan, put into place by the  board
through  5  Alaska Administrative Code 21.363 in 1978,  allocated
Upper Cook Inlet salmon among Upper Cook Inlet commercial gillnet
fishers  and recreational in-river anglers in the Kenai, Kasilof,
and  Susitna rivers.  Under the plan, salmon stocks were  managed
primarily  for  commercial users from July 1 to  August  15  each
year.   After  August  15,  salmon stocks  moving  to  the  Kenai
Peninsula drainage were managed for recreational uses, but salmon
stocks  other  than  those spawning on the Kenai  Peninsula  were
still managed for commercial uses.  As a result of the plan,  the
set  net  salmon season in the Kasilof, Kenai, and East  Foreland
sections of the Central District of Cook Inlet ran from  June  25
to  August 15 each year.  From 1982 to 1996, the season for Upper
Cook  Inlet commercial drift gillnet salmon fishing ran from June
25 to December 31 each year.
          In  1996  the  board  promulgated  5  AAC  21.358,  the
Northern District Salmon Management Plan, which closed the  drift
gillnet  fishing  season on August 9 in order to allocate  silver
salmon  to  in-river  recreational fisheries  in  the  Matanuska-
Susitna   drainage   areas.   The  regulation   also   restricted
commercial  drift gillnet permit holders from operating  gear  in
certain  areas  of  Cook  Inlet during what  otherwise  would  be
priority commercial fishing times.
          In 1997 the board adopted 5 AAC 21.357, the Kenai River
Coho  Salmon  Conservation Management Plan,  which  directed  the
Upper  Subdistrict  of Upper Cook Inlet to  close  following  the
first  regularly scheduled set gillnet fishing period on or after
August 10.  That year, the period was closed before August 15 for
the  first time since 1978.  The board also adopted 5 AAC 21.310,
which changed the opening date for the set gillnet season in  the
Kenai  and  East Forelands sections of the Central District  from
June  25  to  July  8 and changed the closing date  for  the  set
gillnet season from August 15 to August 10.
          In  1999,  2000,  and 2002, the board adopted  numerous
other regulations revising the Upper Cook Inlet Salmon Management
Plan.   These  regulations  limited the  harvest  of  salmon  and
shortened  the seasons for commercial drift gillnet  fishing  and
set gillnet fishing.
          These various regulations had the cumulative impact  of
reducing  the  amount of fish the drift gillnet and  set  gillnet
fishers  were  able to catch and thus reducing the value  of  the
commercial  fishers  entry permits and the  set  gillnet  fishers
shore fishery leases.
          The  salmon  fishers filed a complaint on  October  25,
2005,  alleging that the regulations constitute unlawful  takings
or damage to [their] property interest in violation of the United
States and Alaska Constitutions.  They sought a declaration  that
these  government actions are unconstitutional and  unenforceable
without just compensation paid to the plaintiffs for a taking  or
damage to their property.
          On  December  12,  2005, the state filed  a  motion  to
dismiss  pursuant  to  Alaska Rule of Civil  Procedure  12(b)(6),
arguing that the salmon fishers complaint fails to state a  claim
for  which relief can be granted.  On December 1, 2006,  Superior
Court  Judge Sen K. Tan entered an order granting the  motion  to
dismiss.  Judge Tan entered final judgment dismissing the  salmon
fishers claims on December 29, 2006.
          The salmon fishers appeal.
III. STANDARD OF REVIEW
          I.   We review de novo an order dismissing a complaint on the
basis  of  Rule 12(b)(6) for failure to state a claim upon  which
relief  can  be  granted.1  Generally,  motions  to  dismiss  for
failure  to  state  a claim are disfavored and should  be  rarely
granted.2   To  survive a motion to dismiss, the  complaint  must
allege  a  set of facts consistent with and appropriate  to  some
cause of action.3  For purposes of reviewing an order on a motion
to dismiss, we deem all facts in the complaint true and provable.4
The complaint can be dismissed under Rule 12(b)(6) only where  it
appears  beyond  doubt that the plaintiffs can prove  no  set  of
facts  in  support  of  their claim that would  entitle  them  to
relief.5
IV.  DISCUSSION
     A.   The Request for a Declaratory Judgment Is Moot, but the
          Public Interest Exception to the Mootness Doctrine Applies.
          
          The  state argues that the salmon fishers claims do not
present a current live controversy and are therefore moot because
          the challenged regulations were extensively amended in 2005.  The
salmon  fishers respond that the controversy is not moot  because
even   the  newer  regulations  so  substantially  restrict   the
appellants activities under their permits and leases, in the same
manner  as  the  former  regulations, that  the  unconstitutional
taking  and damaging of property is ongoing.  The salmon  fishers
also argue that even if the claims are moot, we should decide the
issues  under  the  public  interest exception  to  the  mootness
doctrine.
          We   apply  our  independent  judgment  in  determining
mootness because mootness is a question of law.6  We refrain from
deciding  a  question  where the facts have  rendered  the  legal
issues moot.7  A claim is moot if it has lost its character as  a
present,  live controversy,8 or if the plaintiffs  would  not  be
entitled to relief even if they were to prevail.9  However,  even
when  a  case is moot we may decide certain issues if  they  fall
within  the public interest exception to the mootness doctrine.10
The exception consists of three factors: (1) whether the disputed
issues  are  capable  of  repetition, (2)  whether  the  mootness
doctrine,  if  applied, may cause review  of  the  issues  to  be
repeatedly circumvented, and (3) whether the issues presented are
so  important to the public interest as to justify overriding the
mootness doctrine.11
          We   have   addressed  mootness  claims   in   previous
challenges to board regulations.  In Peninsula Marketing Assn  v.
State,12 we held that even though a challenged regulation placing
a  cap on the number of chum salmon to be taken in a fishery  had
been amended to raise the cap, rendering questions regarding  the
validity of the regulation moot, we would still consider  whether
the  statute delegating fishery management authority to the board
applied  to intra-commercial fishery resource allocations.13   We
reasoned  that the public interest exception applied because  the
board  could  easily  evade review of one of its  regulations  by
amending  it  annually,  and  the  question  presented   was   of
considerable public importance.14  Also, in Grunert v. State15 we
held  that the validity of a challenged board regulation was moot
because  the  regulation was amended but chose  to  consider  the
issue  under  the  public  interest  exception  to  the  mootness
doctrine  because  there  would likely  be  a  continued  dispute
concerning the interpretation of the amended regulation.16
          Here,  as  in Grunert, the challenged board regulations
have  been  amended, which likely makes the declaratory  judgment
action  concerning the prior regulations moot.   However,  as  in
Grunert  and  Peninsula  Marketing, an  analysis  of  the  public
interest factors reveals that it is appropriate in this  case  to
apply  the  exception to the mootness doctrine  and  address  the
underlying  takings  issue.   First,  this  case  is  capable  of
repetition  in  the  form  of  a new  suit  challenging  the  new
regulations  because the salmon fishers allege that  the  amended
regulations restrict their fishing in the same way as  the  prior
regulations.   Second, application of the mootness  doctrine  may
cause  review of the issues to be repeatedly circumvented because
the  board  could  easily  evade review  of  the  regulations  by
          amending them annually.  Finally, the issues presented are so
important  to  the public interest as to justify  overriding  the
mootness  doctrine17 because they involve constitutional  takings
claims  affecting  one of this states most important  industries:
commercial  fishing.  Thus, although the 2005 amendments  to  the
board  regulations  at issue may have mooted the  salmon  fishers
claims, we address the claims under the public interest exception
to the mootness doctrine.18
     B.   The Superior Court  Correctly Concluded that the Board of
          Fisheries Regulations Did Not Effect a Taking of CFEC Entry
          Permits Requiring Just Compensation.
          
          In  its order granting the states motion to dismiss the
fishers complaint, the superior court held that the Plaintiffs do
not  have  a cognizable property interest in their entry  permits
sufficient  to support a takings claim.  The fishers  argue  that
the  CFEC  permits are constitutionally protected property  under
the takings clauses of the United States and Alaska Constitutions
requiring  compensation when involuntarily  divested.  The  state
responds that there are no cognizable property interests in  CFEC
permits  that  could  be taken or damaged by regulations  of  the
board.
          Under  the  Fifth Amendment of the Federal Constitution
private property shall not be taken for public use, without  just
compensation.   The  Alaska  Constitution  contains   a   broader
conception  of  compensable takings.   According  to  article  I,
section 18, [p]rivate property shall not be taken or damaged  for
public  use without just compensation.  Article VIII, section  16
states, [n]o person shall be involuntarily divested of his  right
to  the  use  of waters, his interests in lands, or  improvements
affecting either, except for a superior beneficial use or  public
purpose and then only with just compensation and by operation  of
law.
          1.   The superior court correctly concluded that the CFEC permits
               are not compensable property under the takings clauses of the
               Federal and Alaska Constitutions.
               
          The fishers argue that their entry permits are property
for  purposes of takings analysis.  They contend that  the  board
has  no  regulatory  power  to suspend,  modify,  or  revoke  the
permits;  that the permits confer exclusive fishing rights;  that
the  permits are valuable and transferable; that the permits  can
be used as collateral for loans; and that even applicants for the
permits  have protected property interests that entitle  them  to
due  process  protections.   The state  responds  that  the  CFEC
permits  provide permit holders nothing more than a use privilege
or license to fish, subject to all applicable regulations adopted
by the board of Fisheries.
               a.   The Limited Entry Act says that entry permits are not
                    property for purposes of the takings clauses.
                    
          a.   Alaska Statute 16.43.150(e) provides that [a]n entry permit
constitutes  a use privilege that may be modified or  revoked  by
the legislature without compensation.  An August 6, 1979 Attorney
General  Opinion explained that a limited entry [fishing]  permit
          has not acquired the status of a property right such that
otherwise constitutional legislative changes to the nature  of  a
limited entry permit would require the payment of compensation.19
After  first enacting the Limited Entry Act in 1973,20 the Alaska
Senate re-examined the statute in 1990 and rejected the idea that
an  entry  permit  represents a property right belonging  to  the
permit  holder.21   Nevertheless, we have  not  yet  definitively
stated  whether the permits are property for purposes of  takings
analysis.
          The  plain  language of the Limited Entry Act  supports
the  superior  courts  conclusion that an  entry  permit  is  not
property  but  a  mere  use  privilege  that  does  not   require
compensation  when  modified.   The  legislatures  use  privilege
language establishes that the permits are merely licenses to fish
that  are  subject to government regulation.  The salmon  fishers
argument focuses heavily on the second clause of AS 16.43.150(e):
may   be   modified   or  revoked  by  the  legislature   without
compensation.  They argue that this language indicates  that  the
legislature, but not the board, can modify or revoke the  permits
without  paying  just  compensation.  Under  the  salmon  fishers
argument,  board regulations affecting the value of  the  permits
require  just  compensation.   The  salmon  fishers  argument  is
unconvincing  for  three  reasons: (1) the  first  clause  of  AS
16.43.150(e) makes clear that an entry permit is a use privilege,
not  a property right; (2) the fact that the provision explicitly
provides  for modification or revocation by the legislature  does
not  mean  that  the  board  cannot also  promulgate  regulations
modifying  the  allowable  use of  entry  permits;  and  (3)  the
legislature  has  explicitly  delegated  the  power  to  regulate
fishery resources to the board, so board regulations which affect
the   value  of  entry  permits,  like  direct  actions  by   the
legislature, do not require just compensation.22
               b.   A conclusion that the limited entry permits are property for
                    purposes of takings analysis would violate other provisions of
                    the state constitution.
                    
          We addressed the constitutionality of the limited entry
system in State v. Ostrosky.23  We held in Ostrosky that the entry
restrictions and transferability provisions in the Limited  Entry
Act  comport with article VIII, section 3 (common use of  natural
resources),  article  VIII, section 15  (no  exclusive  right  of
fishery), and other provisions in the state constitution.24   The
entry restrictions prohibit operation of commercial fishing  gear
without  a  permit,  and  the  transferability  provisions  allow
limited  transferring  of  a permit if the  transferee  can  show
present  ability to participate actively in the  fishery.25   The
transferability  provisions  also  provide   for   a   right   of
survivorship to the surviving spouse unless the possessor of  the
permit manifests a contrary intent.26
          Article  VIII,  section  3 of the  Alaska  Constitution
provides that [w]herever occurring in their natural state,  fish,
wildlife,  and waters are reserved to the people for common  use.
And the first sentence of article VIII, section 15 bans exclusive
rights in fisheries:
          No  exclusive  right or special privilege  of
          fishery shall be created or authorized in the
          natural waters of the State.
          
The  second  sentence of article VIII, section 15, was  added  by
amendment in 1972 in order to authorize a limited entry system.27
It provides:

          This  section does not restrict the power  of
          the State to limit entry into any fishery for
          purposes of resource conservation, to prevent
          economic  distress among fishermen and  those
          dependent  on  them for a livelihood  and  to
          promote   the   efficient   development    of
          aquaculture in the State.
          
In  Ostrosky,  we upheld the statutory limited entry  system  and
transferability provisions, concluding that they were permissible
under the newly added language of article VIII, section 15.   But
we  recognized  that a tension existed between the  new  language
authorizing  limited entry and the pre-existing language  of  the
common  use  and  no  exclusive right  of  fishery  clauses.   We
accepted  as  logical  the  fishers  argument  in  Ostrosky  that
whatever  system of limited entry is imposed must be  one  which,
consistent  with  a  feasible limited entry system,  entails  the
least  possible impingement on the common use reservation and  on
the no exclusive right of fishery clause.28
          But  granting property status to entry permits for  the
purpose of a constitutional takings analysis would go beyond  our
approval  in Ostrosky of the statutory limited entry system.   If
the  CFEC  permits were given the status of property for purposes
of  a takings challenge based on changes in regulations, then the
waters would not truly be reserved to the people for common  use,
as  required by article VIII, section 3.  Rather, a permit holder
would effectively own the right to fish to the exclusion of other
people in a manner that was not contemplated by the limited entry
amendment  and which is not required by the purposes  of  limited
entry.   Similarly,  giving  a CFEC permit  property  status  for
purposes  of  a  regulatory  takings  challenge  would  grant  an
exclusive right of fishery for the permit holder in violation  of
the  first sentence of article VIII, section 15.  Again,  such  a
status  would go beyond that contemplated by the second  sentence
of  section 15 and is not required to accomplish the purposes  of
limited  entry.  Providing for a system of entry  permits   which
allows  the  board discretion to promulgate and amend regulations
for  resource conservation, prevent[ion] [of] economic  distress,
and  the efficient development of aquaculture  on the other hand,
clearly  falls  within  the contemplation of  both  sentences  in
article VIII, section 15.
          Because it would imply an exclusive right of access  to
the  fishery, which is not needed for the purposes of  a  limited
entry  system,  a conclusion that the permits are property  under
takings  analysis would violate the common use and  no  exclusive
right  of  fishery  provisions of  the  state  constitution.   We
construe  statutes  if  reasonably possible  so  as  to  avoid  a
          conclusion that they are unconstitutional.29  Thus, in order to
ensure that the Limited Entry Act does not violate article  VIII,
sections 3 and 15 of the state constitution, we conclude that the
entry  permits  are  not  property  for  purposes  of  a  takings
challenge.
          The  salmon fishers also argue that they should receive
just  compensation because they have a private property  interest
in   state  waters   that  has  been  involuntarily  divested  in
violation of article VIII, section 16 of the state constitution.30
This  argument  suffers from the same problem  as  their  general
takings  argument:  While the salmon fishers have  water  rights,
they  do  not  have  the  right to an exclusive  fishery  because
recognition of such a right would violate article VIII,  sections
3  and  15.   Thus, article VIII, section 16 does not  grant  the
salmon  fishers an exclusive private property right in the states
waters.
               c.   Case law addressing the nature of CFEC permits and other
                    similar fishing licenses does not support the conclusion that the
                    permits are property for purposes of a takings challenge.
                    
          a.   We have addressed the nature of CFEC permits in the context
of  inheritance, child support, and entitlement  to  due  process
protection.   In  Wik  v.  Wik, we held that  entry  permits  are
ordinary  personal property for inheritance purposes.31  However,
we  were  careful  not to make a broader proclamation  about  the
nature  of the entry permits.  We stated, [t]he question  is  not
whether  permits  have  all the inherent attributes  of  personal
property, but rather whether the legislature intended permits  to
be treated as property for purposes of inheritance.32  In Anderson
v.  Anderson,  we held that the permits are subject to  execution
for  past  due  child  support claims.33   In  Miners  Estate  v.
Commercial  Fisheries Entry Commission, we held that a  qualified
applicant for an entry permit has a property interest entitled to
due   process   protection  because  of  the   statutes   linking
entitlement  to  past license-holding, because the  standards  by
which applications are judged are specific and non-discretionary,
and  because the statute regulates individuals pursuits of  their
livelihoods.34   However, in Miners Estate  we  also  approvingly
quoted  a  passage from Commercial Fisheries Entry Commission  v.
Apokedak, which states that a gear license holder has a privilege
and  a  license.35  We have never held that CFEC permits grant  a
property interest for purposes of a takings challenge.
          Various  federal  cases have addressed  takings  claims
involving regulation of the fishing industry.36  Conti v.  United
States  involved  the  federal governments prohibition  of  sword
fishing  using  drift  gillnet gear  in  the  Atlantic  Swordfish
Fishery  under  a statutory scheme that explicitly  provided  for
fishery  regulation  by the Secretary of  Commerce.37   Conti,  a
possessor  of  a swordfishing permit, brought a lawsuit  alleging
that  the  regulation effected a taking of his  permit  requiring
just  compensation.38  The Federal Circuit Court of Appeals  held
that  Contis  swordfishing  permit fell  short  of  conferring  a
cognizable  property  interest.39   The  court  explained,  [t]he
Constitution  neither creates nor defines the scope  of  property
          interests compensable under the Fifth Amendment.40  Rather,
existing  rules  and  understandings  and  background  principles
derived  from an independent source, such as state,  federal,  or
common  law,  define  the  dimensions of the  requisite  property
rights.41   The  court reasoned that courts  have  held  that  no
property rights are created in permits and licenses.42 The  court
also  emphasized the fact that Conti did not have  the  right  to
assign,  sell, or otherwise transfer the permit and  stated  that
such rights are traditional hallmarks of property.43  Finally, the
court  recognized  that  the permits  did  not  confer  exclusive
fishing privileges and that the government retained the right  to
suspend, revoke, or modify the permit.44  Another similar federal
case,  which was relied on by the superior court in its  decision
below,  is  American Pelagic Fishing Co. v. United States.45   In
American  Pelagic,  the Federal Circuit held  that  a  commercial
fishing vessel owner and permit holder did not suffer the  taking
of  a  property  interest  legally  cognizable  under  the  Fifth
Amendment  when  previously issued permits were  revoked  through
special legislation and regulations.46  The court refused to find
a  compensable  property interest because the  permits  were  not
transferable or assignable, they did not confer exclusive fishing
privileges, and they could be revoked, suspended, or modified  by
the government.47  In American Pelagic, the court emphasized that
property rights only exist against the framework of existing laws
and  regulations, and that there was no property  right  in  this
case  because the right to fish implicates the governments  power
over conservation and management of fishery resources.48
          Although  we  have  treated limited  entry  permits  as
property  for  other  purposes  such  as  inheritance  and  child
support, the federal cases are persuasive in their reasoning that
fishing permits do not confer property interests for the purposes
of  takings  claims.  An examination of background principles  of
state  law  reveals that the permits are not property but  rather
use  privileges49 or licenses subject to the police power of  the
state.   Further, limited entry permits came into existence  only
as part of a framework of laws that allowed for regulation of the
Alaska fishery and authorized continuing amendment and adjustment
of the permit system.50  Alaska Statute 16.43.950 explicitly makes
entry permits subject to board regulation:
          Nothing in this chapter limits the powers  of
          the  Board of Fisheries, including the  power
          to  determine  legal types of  gear  and  the
          power  to establish size limitations or other
          uniform  restrictions applying to  a  certain
          type of gear.  Holders of interim-use permits
          or  entry  permits issued under this  chapter
          are subject to all regulations adopted by the
          Board of Fisheries.
          
Also, AS 16.05.251(a)(2) allows the board to adopt regulations it
considers advisable for establishing open and closed seasons  and
areas  for  the taking of fish.  These statutory provisions  show
that  CFEC permits are fully subject to board regulation and thus
not  entitled to protection as property under the takings clauses
of the state and federal constitutions.
          American  Pelagic  and  Conti examined  three  factors:
transferability, exclusivity, and the ability of  the  government
to  revoke  or modify the permits.51  An analysis of those  three
factors  in  the  present case provides further support  for  the
conclusion that CFEC permits are not property for the purpose  of
takings analysis.
          First,  while  the CFEC permits at issue  have  limited
transferability,  unlike  those in American  Pelagic  and  Conti,
transfer  of  the permits is subject to approval by  the  CFEC.52
Permit holders may not lease their permits53 and permits cannot be
encumbered  except to secure a purchase money loan  under  highly
regulated conditions.54  If a permit holder attempts to transfer a
permit  in a manner inconsistent with state statute, the transfer
is void.55  Further, the pool of eligible transferees is limited.
The  proposed transferee must demonstrate the present ability  to
participate  actively  in the fishery  and  must  show  that  the
transfer  does not violate any state law or regulations.56   Only
natural  persons may be permit holders.57  Certain permit holders
are  completely  prohibited  from transferring  their  permits.58
Based  on  these  factors,  the limited  transferability  of  the
permits  does not reach the requisite level for consideration  as
property.59
          Second,  as  discussed  above, a CFEC  permit  provides
exclusive  rights  only to the extent necessary  to  achieve  the
purposes of limited entry.  Imbuing permits with protection  from
government  takings  is  not necessary  for  those  purposes  and
therefore  would  violate article VIII, section  3,  and  article
VIII, section 15, of the state constitution.
     Finally,  the  legislation creating the CFEC  permit  system
explicitly  reserves the power for the legislature to  revoke  or
modify the permits60 and for the board to regulate fishing.61  In
delegating  to  the  board  the right to  regulate  fishing,  the
legislature  also  delegated the power to allocate  fish  between
competing  uses  in a manner that can affect the  value  of  CFEC
permits.  In  sum,  analysis of the three  factors  discussed  in
American  Pelagic and Conti leads to the conclusion that  a  CFEC
permit  is  not  a property interest requiring just  compensation
when regulations affect its value.
          The salmon fishers argue that because we held in Miners
Estate that applicants for entry permits have a property interest
for  due  process  purposes,62 entry  permits  are  property  for
purposes of a takings claim.  While we held in Miners Estate that
an  applicant for a CFEC permit has a property interest  entitled
to due process protection,63 it does not necessarily follow that a
CFEC permit is property that requires just compensation when  its
value decreases due to valid state regulation.  The United States
Supreme Court, in Lingle v. Chevron U.S.A. Inc., emphasized  that
takings  analysis  is  not  the same as due  process  analysis.64
Further,  there are other examples of licenses that are  entitled
to  due process protections but not takings protections.  We have
held  that  [a] drivers license represents an important  property
interest which is protected under the due process clause  of  the
          Alaska Constitution,65 but we have never recognized such an
interest under the takings clause.  If drivers licenses were also
given  property status for takings purposes, then  drivers  could
potentially  bring regulatory takings claims for the effect  that
typical  traffic regulations, such as speed limits, have  on  the
value  of their licenses.  Similarly, a CFEC permit may convey  a
property  interest  for  due process  purposes,  but  a  thorough
analysis  of  the  factors cited in American  Pelagic  and  Conti
reveals  that they should not be considered property for purposes
of a takings challenge.
          For  these  reasons, the superior court was correct  to
conclude that a CFEC permit is not property for purposes  of  the
takings clauses of the Alaska and Federal Constitutions.
          2.   Because the CFEC permits are not property, it is unnecessary
               to engage in per se or de facto takings analysis.
               
          The  salmon fishers argue that they have valid  inverse
condemnation claims notwithstanding the states police powers over
fishing.   The  state  argues that CFEC permits  are  subject  to
regulations of the board, that the states valid exercise  of  its
traditional police power does not create a right to compensation,
and  that appellants cannot allege facts to support either a  per
se  or  de facto takings claim.  As discussed above, CFEC permits
are  not property for purposes of a takings claim.  Thus, because
the first prong of the takings test is not met, it is unnecessary
to proceed with a full takings analysis.
     C.   The  Superior  Court  Did Not Err  in  Concluding  that
          Regulations Affecting the Value of Shore Fishery Leases Did Not
          Result in a Compensable Taking of the Leases.
          A.   The superior court concluded that the shore fishery leases
confer  a  limited property interest in submerged land  but  that
there  was  no  taking  because the  salmon  fishers  waived  any
compensation  right  when  they entered  into  the  leases.   The
superior court also reasoned that the salmon fishers would  still
not  be  entitled to compensation under takings analysis even  if
they  had  not  waived  the claim in their  leases.   The  salmon
fishers  argue  that they did not waive their right  to  bring  a
regulatory  takings claim because no part of  the  shore  fishery
leases  .  .  .  can reasonably be construed as a waiver  of  the
lessees  right to bring an action asserting inverse condemnation.
The  state  responds that the shore fishery leases grant  only  a
limited  interest in land subject to all board regulations,  that
fisheries management represents a traditional police power rather
than  an eminent domain power, and that the salmon fishers cannot
allege  facts to support a per se or de facto takings claim.   We
agree with the state.
          1.   The superior court did not err in concluding that the shore
               fishery leases convey only a limited interest in submerged land.
               
          The  superior  court concluded that the  shore  fishery
leases  convey a property interest in submerged land but  not  in
the water above the land or the fish in the water.  The state and
the  salmon  fishers  appear to agree with  the  superior  courts
conclusion, but they seem to disagree on the implications of that
          conclusion.  The state reasons that lease holders have never
obtained a property interest that guarantees any level of fishing
opportunity   or   allows  violation  of   the   Boards   fishery
regulations.
          Alaska  Statute  38.05.082(e) states,  [t]he  lease  of
submerged land conveys no interest in the water above the land or
in  the  fish in the water.  This language indicates  that  shore
fishery leases convey a property interest in submerged land which
must  be  justly compensated if physically taken from the lessee.
However,  the  language  also states that  the  lease  grants  no
property  right  in the water or in the harvest of  fish.   Shore
fishery  leases were never intended to convey more than a limited
property  interest.  Rather, they were intended  to  provide  the
mere right to exclude other set net fishers.  They are issued  at
a  nominal cost and the annual rent is also nominal, with  annual
rent  set  at  a  rate  only  equal to the  administrative  costs
involved in processing the leasehold applications.66  Furthermore,
no permanent improvements are allowed on a shore fishery lease.67
If  a  shore fishery lease is taken by another government entity,
all  the  lessee is entitled to is an abatement of rents.   Thus,
the   superior  court  correctly  recognized  that  the  property
interest  granted in the shore fishery leases is  limited  to  an
interest  in  submerged land and does not include  the  right  to
harvest  fish  free  of  state regulation. Therefore,  a  takings
analysis  must  focus solely on the effects the  regulations  may
have had on an interest in the submerged land alone.
          2.   The superior court did not err in concluding that the
               regulations did not effect a taking of the shore fishery leases
               because the leases contain language permitting the regulations at
               issue.
               
          The  superior  court concluded that the salmon  fishers
contracted away their ability to bring a successful takings claim
involving  the  regulations at issue when they signed  the  shore
fishery lease agreements.  The salmon fishers argue that they did
not  expressly  nor  implicitly waive  their  takings  claims  by
signing  the leases.  The state responds that the salmon  fishers
never  had  a  property right (the right to use  leased  land  in
violation  of  valid  Board regulations) to waive,  but  that  if
waiver  analysis is used, the terms of the lease would constitute
an   express  waiver  of  any  takings  claim  challenging  valid
regulations of the board.
          Under  Alaska  law,  the right to  compensation  for  a
taking can validly be waived or contracted away in the terms of a
lease.68  In determining what rights were conveyed with  a  shore
fishery lease, it is necessary to examine the actual language  of
the lease.  The lease agreement states:
          This  lease does not limit the power  of  the
          State  of Alaska, its political subdivisions,
          or  the United States of America to enact and
          enforce  legislation or to adopt and  enforce
          regulations or ordinances affecting, directly
          or  indirectly, the activities of the  lessee
          or  its agents in connection with this  lease
          or  the value of the interest held under this
          lease.
          
The terms of the lease agreement indicate that the superior court
was  correct in finding that the salmon fishers entered  into  an
agreement that contracted away their right to compensation for  a
non-physical taking and agreed to a lease that did not limit  the
power of the Board to enforce regulations that affected the value
of the interest.  The lease itself explicitly gives the state the
power  to  adopt regulations affecting the value of  the  lessees
property  interest.   The language is clear  and  unambiguous  in
allowing  state  regulations to affect the  value  of  the  lease
without  limitation.  Thus, based on the plain  language  of  the
lease,  the salmon fishers lack a valid takings claim challenging
the  effect  the  regulations have on the value  of  their  shore
fishery leases.
V.   CONCLUSION
          Because the entry permits are not property for purposes
of  constitutional  takings analysis and because  no  compensable
taking  of  the shore leases occurred, we AFFIRM the decision  of
the superior court in all respects.
_______________________________
     1     Kollodge  v.  State, 757 P.2d 1024, 1026  n.4  (Alaska
1988).

     2    Id. at 1026.

     3    Catholic Bishop of N. Alaska v. Does 1-6, 141 P.3d 719,
722 (Alaska 2006).

     4    Id.

     5    Id.

     6    Akpik v. State, Office of Mgmt. & Budget, 115 P.3d 532,
534 (Alaska 2005).

     7    Id. at 535.

     8    Id.

     9    OCallaghan v. State, 920 P.2d 1387, 1388 (Alaska 1996).

     10    Akpik, 115 P.3d at 535.

     11    Id. (internal citations omitted).

     12    817 P.2d 917 (Alaska 1991).

     13    Id. at 920.

     14    Id.

     15    109 P.3d 924 (Alaska 2005).

     16    Id. at 931.

     17    Akpik v. State, Office of Mgmt. & Budget, 115 P.3d 532,
534 (Alaska 2005).

     18     The  state also argues that the salmon fishers claims
are  barred  by the AS 09.10.070 two year statute of  limitations
for  the  taking  or  injuring of personal property.   The  shore
fishery  leases in this case grant an interest in  real  property
submerged  land.   We  have held that the  ten  year  statute  of
limitations for ejectment actions, AS 09.10.030, applies in cases
of  inverse  condemnation involving real property.  See  City  of
Kenai  v.  Burnett, 860 P.2d 1233, 1240 n.13 (Alaska  1993).  The
regulations  at  issue first went into effect in  1996,  and  the
complaint  in this case was filed less than ten years  later,  on
October  25, 2005, so the claim based on damage to the  value  of
the  shore  fishery leases is not barred.  The   claim  based  on
damage to the value of the entry permits does not fall under  the
two year statute of limitations because AS 09.10.070 applies only
to  situations  in  which a private party takes  or  injures  the
personal  property  of  another  private  party,  and  this  case
involves not private action but state action.  Further, [w]e look
upon the defense of statute of limitations with disfavor and will
strain  neither the law nor the facts in its aid.  Fred Meyer  of
Alaska,  Inc.  v. Adams, 963 P.2d 1025, 1027 n.6  (Alaska  1998).
Because the state fails to present a convincing argument that any
applicable  statute of limitations bars the salmon fishers  entry
permit takings claim, we address the merits of the claim.

     19    1979 Formal Op. Atty Gen. 19.

     20    Ch. 79,  1, SLA 1973.

     21    See Jon David Weiss, A Taxing Issue: Are Limited Entry
Fishing  Permits Property?, 9 Alaska L. Rev. 93, 96,  112  (1992)
(noting that state senate rejected idea that entry permits confer
property  rights  but  concluding that permits  are  property  or
rights to property for federal tax purposes).

     22     See AS 16.05.251(a)(2) (stating that board may  adopt
regulations  it  considers advisable for  establishing  open  and
closed seasons and areas for the taking of fish); AS 16.05.251(e)
(stating that board may allocate fishery resources among personal
use, sport, guided sport, and commercial fisheries).

     23    667 P.2d 1184 (Alaska 1983).

     24    Id. at 1185-86.

     25    AS 16.43.170(b).

     26    AS 16.43.150(h).

     27    Ostrosky, 667 P.2d at 1189.

     28     Id.  at 1191.  See also Johns v. Commercial Fisheries
Entry Commn, 758 P.2d 1256, 1266 (Alaska 1988), where we observed
that in Ostrosky

          we  noted that there is a tension between the
          limited    entry   clause   of   the    state
          constitution   and   the   clauses   of   the
          constitution which guarantee open  fisheries.
          We  suggested  that  to be constitutional,  a
          limited entry system should impinge as little
          as  possible  on  the  open  fishery  clauses
          consistent  with the constitutional  purposes
          of   limited  entry,  namely  prevention   of
          economic  distress to fishermen and  resource
          conservation.
In Johns we accepted the least impingement possible approach as a
basis for requiring the Commercial Fisheries Entry Commission  to
proceed forthwith to determine the optimum number of permits  for
the fishery there in question.  Johns, 758 P.2d at 1266.

     29    Sonneman v. Hickel, 836 P.2d 936, 940 (Alaska 1992).

     30     Article VIII, section 16 provides: No person shall be
involuntarily  divested of his right to the use  of  waters,  his
interests in lands, or improvements affecting either, except  for
a  superior beneficial use or public purpose and then  only  with
just compensation and by operation of law.

     31    681 P.2d 336, 337 (Alaska 1984).

     32    Id. at 338 n.4 (emphasis in original).

     33    736 P.2d 320, 324 (Alaska 1987).

     34    635 P.2d 827, 832 (Alaska 1981).

     35     Id. at 830-31 (quoting 606 P.2d 1255, 1266-67 (Alaska
1981)).

     36     The  federal cases involve the Federal  Constitutions
takings clause, which is less protective than the takings  clause
found  in the Alaska Constitution.  See Ehrlander v. State,  Dept
of  Transp.  &  Pub. Facilities, 797 P.2d 629, 633 (Alaska  1990)
(The  inclusion  of the term damage [in the Alaska  Constitutions
takings  clause]  affords the property owner  broader  protection
than  that  conferred  by  the Fifth  Amendment  to  the  Federal
Constitution.).

     37    291 F.3d 1334, 1336-37 (Fed. Cir. 2002).

     38    Id. at 1337.

     39    Id. at 1341.

     40    Id. at 1340.

     41     Id. (quoting Lucas v. South Carolina Coastal Council,
505 U.S. 1003, 1030 (1992)).

     42    Id. at 1340.

     43    Id. at 1341.

     44    Id. at 1341-42.

     45    379 F.3d 1363 (Fed. Cir. 2004).

     46    Id. at 1366, 1374.

     47    Id. at 1374.

     48    Id. at 1379-80.

     49    AS 16.43.150(e).

     50    See AS 16.43.010-.970; AS 16.05.251.

     51     American Pelagic, 379 F.3d at 1374; Conti  v.  United
States, 291 F.3d 1334, 1341-42 (Fed. Cir. 2002).

     52    See AS 16.43.170.

     53    Grunert v. State, 109 P.3d 924, 934 (Alaska 2005).

     54    See AS 16.43.150(g).

     55    AS 16.43.170(a).

     56    AS 16.43.170(b).

     57    State, Bd. of Fisheries v. Grunert, 139 P.3d 1226, 1239
(Alaska 2006).

     58    See AS 16.43.170(e) (The holder of an entry permit who
qualified  for  that  entry permit in a  priority  classification
designated under AS 16.43.250(c) may not transfer that permit.).

     59     The  fishers  assertion that  the  CFEC  permits  are
property because they can be used as collateral for certain loans
is  unavailing  for  these same reasons,  because  if  there  are
limitations  on the transferability of CFEC permits,  then  there
must be similar limits on their use as collateral.

     60    AS 16.43.150(e).

     61    AS 16.43.950; see also AS 16.05.251(a)(2).

     62    Miners Estate v. Commercial Fisheries Entry Commn, 635
P.2d 827, 832 (Alaska 1981).

     63    Id.

     64     544  U.S.  528, 540-43 (2005) (holding  that  formula
inquiring whether government regulation substantially advances  a
legitimate  state interest is a due process inquiry  and  not  an
appropriate test for determining whether a taking has occurred).

     65     Javed v. Dept of Pub. Safety, Div. of Motor Vehicles,
921 P.2d 620, 622 (1996).

     66    AS 38.05.082(c).

     67    11 AAC 64.060 (2008).

     68     Wessells v. State, Dept of Highways, 562  P.2d  1042,
1045 (Alaska 1977).

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