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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State, Commercial Fisheries Entry Commission v. Carlson (1/20/2012) sp-6645

State, Commercial Fisheries Entry Commission v. Carlson (1/20/2012) sp-6645

        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, email 
        corrections@appellate.courts.state.ak.us. 

                THE SUPREME COURT OF THE STATE OF ALASKA 

STATE OF ALASKA,                              ) 
COMMERCIAL FISHERIES                          )       Supreme Court No. S-13818 
ENTRY COMMISSION,                             ) 
                                              )       Superior Court No. 3AN-84-05790 CI 
                       Appellant,             ) 
                                              )       O P I N I O N 
        v.                                    ) 
                                              )       No. 6645 - January 20, 2012 
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.             )
 
                                              )
 

               Appeal from the Superior Court of the State of Alaska,  Third 
                Judicial District, Anchorage, Peter A. Michalski, Judge. 

               Appearances: Michael W. Sewright, Lance B. Nelson, and 
               Ruth Botstein, Assistant Attorneys General, Anchorage, and 
                John   J.  Burns,   Attorney   General,    Juneau,   for  Appellant. 
                Loren Domke, Loren Domke, P.C., Juneau, for Appellees. 

               Before:   Carpeneti,   Chief   Justice,   Fabe,   Winfree,   Christen, 
                and Stowers, Justices. 

               FABE, Justice. 

----------------------- Page 2-----------------------

I.      INTRODUCTION 

                We decide one primary issue in this fifth appeal in this case.  After our last 

remand, the superior court entered a judgment awarding the class a principal refund of 

$12.4 million with prejudgment interest exceeding $62 million.  The question presented 

is whether one of our previous decisions in this case, Carlson III, incorrectly decided that 

the   rate   of   prejudgment   interest   for   unconstitutional   commercial   fishing   license   and 

limited entry permit fee overpayments is the statutorily imposed punitive interest rate for 

underpaid and overpaid taxes under Title 43 of the Alaska Statutes.   Because the statute 

establishing prejudgment interest for underpayment and overpayment of taxes does not 

apply to the refund of overpayment of the commercial fishing fees involved in this case, 

and because our earlier incorrect holding on this issue resulted in a manifest injustice, we 

now conclude that our earlier decision on this issue must be overruled.   We accordingly 

remand this case for a new prejudgment interest calculation. 

II.     FACTS AND PROCEEDINGS 

                This is the fifth time this case has come before us. The case started in 1984 

when the class sued the State, Commercial Fisheries Entry Commission (CFEC) on 
behalf of all nonresident Alaska commercial fishers.1            The class included "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."2              Arguing 

that the State was illegally charging nonresidents more than it charged residents for 

commercial fishing permits and licenses, the class demanded a refund of the difference 

        1       Carlson v. State, Commercial Fisheries Entry Comm'n, 798 P.2d 1269, 

1270 (Alaska 1990) (Carlson I). 

        2       Id. 

                                                  -2-                                              6645 

----------------------- Page 3-----------------------

between what they paid and what residents paid.3         Between 1984 and 2002, nonresident 

commercial fishers paid three times as much as resident fishers for licenses and permits.4 

        3      Id.  License fees are no longer at issue in this case; only limited entry fees 

are. 

        4      From 1977 to 2001, AS 16.43.160(b) stated: 

                       Annual fees established under this section shall be no 
                       less   than  $10   and   no   more   than   $750   and   shall 
                       reasonably     reflect  the  different  rates  of  economic 
                       return for different fisheries. The amount of an annual 
                      fee for a nonresident shall be three times the amount 
                       of the annual fee for a resident. 

(Emphasis added.) 

               The legislature repealed this section in 2001 and added a new section on 
nonresident fees.    Ch. 27,  5, 7, SLA 2001.        Effective 2002, nonresident fees were 
covered by AS 16.43.160(e): 

                       For an entry permit or an interim-use permit issued for 
                       calendar year 2002   and   following   years, the   annual 
                       base fee may not be less than $10 or more than $300. 
                       The    annual   base   fee  must   reasonably     reflect  the 
                       different    rates  of   economic     return   for  different 
                       fisheries.  The fee for a nonresident entry permit or a 
                       nonresident interim-use permit shall be higher than 
                       the annual base fee by an amount, established by the 
                       commission      by  regulation,    that  is  as  close  as  is 
                       practicable   to   the   maximum   allowed   by   law.   The 
                       amount of the fee for a nonresident entry permit or a 
                       nonresident   interim-use   permit   may   reflect   [various 
                       costs associated with fisheries management]. 

Ch. 27,  5, SLA 2001 (emphasis added). 

               In 2005 the statute was amended to provide: 

                       In addition to the annual base fee established by the 
                                                                                    (continued...) 

                                                -3-                                           6645
 

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Understanding the prejudgment interest issue in this appeal requires a brief review of the 

earlier appellate decisions in this case. 

        A.      Carlson I 

                In Carlson I we held that the different fees for residents and non-residents 

implicated, but did not necessarily violate, the Privileges and Immunities Clause of the 
United States Constitution.5        We concluded that under United States Supreme Court 

precedent,   the   State   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."6                We then remanded to 

the   superior    court  to  determine     whether    the  three-to-one     fee  differential   met   this 
standard.7 

        4       (...continued) 

                        commission under this subsection, a nonresident shall 
                        pay an annual nonresident surcharge for the issuance 
                        or renewal of one or more entry permits or interim-use 
                        permits.   The   commission   shall   establish   the   annual 
                        nonresident surcharge by regulation at an amount that 
                        is as close as is practicable to the maximum allowed 
                        by law. 

 AS 16.43.160(c); Ch. 16,  3, SLA 2005. 

        5       Carlson   I, 798   P.2d   at   1274-76;   U.S. CONST.   art.   IV,      2,   cl.   1   ("The 

Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the 
several States."). 

        6       Carlson I, 798 P.2d at 1274-75 (quoting Toomer v. Witsell, 334 U.S. 385, 

399 (1948) (internal quotation marks omitted) (emphasis in original omitted)). 

        7       Id. at 1276-78. 

                                                   -4-                                             6645
 

----------------------- Page 5-----------------------

                We     conducted      a  similar   analysis    of  the   class's   Commerce       Clause8 

challenge, and while we did not determine that the Clause was implicated, we similarly 

remanded for a determination whether fees paid by non-residents were substantially 

equal to the pro-rata shares of fees and taxes devoted to fisheries management paid by 
residents.9 

                Next we addressed the question whether class members would be entitled 

to a refund of overpaid fees if they prevailed on their constitutional claims.                 Although 
we did not explicitly determine that the fees at issue here were taxes,10 we nonetheless 

held that the tax refund statute codified at AS 43.15.010(a) (subsequently renumbered 
AS 43.10.210(a))11 provided the basis for a potential refund for the class.12             We therefore 

remanded to determine   whether the class had met the statutory protest requirement, 

thereby providing sufficient notice to the State, or whether the State had waived that 
requirement.13      Finally,   we   noted,   sua   sponte,   that   there   was   "a   specific   statute   of 

        8       U.S. CONST. art. I,  8, cl. 3 ("The Congress shall have Power . . . [t]o 

regulate Commerce with foreign Nations, and among the several States, and with the 
Indian Tribes . . . ."). 

        9        Carlson I, 798 P.2d at 1276-78.   We also held that, assuming the three-to- 

one    ratio  was    constitutional,    the  CFEC     was   authorized     by   statute  to  impose    the 
differential fees.  Id. at 1278-79. 

        10      Id. at 1280 ("[I]n the abstract, the class might avail itself of [the tax refund] 

statute to recover any unconstitutionally extracted fees."). 

        11      See State, Commercial Fisheries Entry Comm'n v. Carlson, 65 P.3d 851, 

870 n.119 (Alaska 2003) (Carlson III). 

        12       Carlson I, 798 P.2d at 1279-80 (reversing superior court's ruling that a 

refund was not an available remedy). 

        13      Id. 

                                                   -5-                                              6645
 

----------------------- Page 6-----------------------

limitations applicable to claims for tax refunds," AS 43.05.275, which applied to the 
class's refund claim.14 

        B.       Carlson II 

                 In Carlson II we concluded that the class's challenge to differential fees 
based   on   residency   did   not   implicate   the   Commerce   Clause.15        We   reaffirmed   our 

conclusions from Carlson I on the applicability of the Privileges and Immunities Clause 

and set out a formula for determining whether the fee differential passed muster under 
that Clause.16     We remanded for the superior court to apply this formula.17                We further 

confirmed that AS 43.10.210 was the statute governing refund eligibility and that the 

class had to satisfy the protest requirement of AS 43.10.210 in order to succeed on the 
merits.18   We concluded by directing the superior court to determine "whether the filing 

of   this   suit   constituted   notice   sufficient   to   comply   with   the   protest   requirement   of 

AS 43.10.210(a), and whether[, as the class contended,] prejudgment interest is due 
under AS 45.45.010."19 

        14      Id. 

        15       Carlson v. State, Commercial Fisheries Entry Comm'n, 919 P.2d 1337, 

1340-41 (Alaska 1996) (Carlson II). 

        16      Id. at 1341-43. 

        17      Id. at 1344. 

        18      Id. 

        19      Id. 

                                                    -6-                                              6645
 

----------------------- Page 7-----------------------

        C.      Carlson III 

                Carlson III dealt with four sets of issues.          First, we declined to readdress 
the constitutional issues decided in  Carlson I and II.20            We reasoned that two United 

States Supreme Court decisions issued subsequent to our  Carlson decisions did not 
require   us   to   reevaulate   our   earlier   decisions.21 Second,   we   dealt   with   a   series   of 

questions concerning what state expenditures and revenues were to be included in the 

formula for determining whether the three-to-one fee differential produced substantial 
equality of payment between residents and non-residents.22             Third, we concluded that the 

class met the protest requirement - and thus provided sufficient notice to the State - 

by filing its complaint, and that at this point in the litigation it was too late for the State 
to claim that sovereign immunity protected it from this particular suit.23 

                Finally, and most importantly for this appeal, we held that because we had 

applied Title 43's statutory limitations period and refund provision, Title 43's interest 

provision for overpayment of taxes - AS 43.05.280 - applied to any refund that might 
be due to the class.24 

        20      Carlson III, 65 P.3d 851, 859-60 (Alaska 2003). 

        21      Id. at 859-63. 

        22      Id. at 863-69. 

        23      Id. at 870-72, 873-74. 

        24      Id. at 874-75. 

                                                   -7-                                             6645
 

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        D.       Carlson IV 
                In Carlson IV25 we finally reached the question whether the three-to-one fee 

differential violated the Privileges and Immunities Clause.               We held that it did.26      We 

therefore remanded to the superior court to determine whether the inequality in a given 

year   was   "incidental,"   thus   affording     no   refund,   or   "substantial,"   thus   allowing    a 
recovery.27    We directed the superior court to calculate any refund owed to the class on 

that basis.28 

        E.      Remand Following Carlson IV 

                After determining the acceptable amount of inequality in the fee structure, 

the superior court on remand found, based on calculations performed by the State, that 

the principal refund that the State owed the class totaled $12,443,959.18.                    Using the 

punitive   interest   rate   for   underpayments   and   overpayments   of   taxes   under   Title   43, 

AS     43.05.280      and   43.05.225(a),      prejudgment      interest    was    calculated    at  11% 

compounded quarterly, totaling $62,356,738.10 through January 31, 2010.  The superior 

court then determined after the substantive issues were settled that the State owed the 

class attorney's fees under Alaska Civil Rule 82.               It awarded fees under the schedule 

provided in Rule 82(b)(1) for cases involving money judgments that have been contested 
with a trial.29  Under the schedule, attorney's fees were calculated to be $7,482,569.73. 

        25      State,   Commercial   Fisheries   Entry   Comm'n   v.   Carlson,   191   P.3d   137 

(Alaska 2008) (Carlson IV). 

        26      Id. at 145. 

        27      Id. at 148.
 

        28      Id.
 

        29
     Only one trial took place in this case, over three days in June 2000. 

                                                   -8-                                              6645
 

----------------------- Page 9-----------------------

With a cost award of $7,028.93, the total judgment against the State, including principal, 

equaled $82,290,295.94. 

                The State appealed this judgment, requesting that we reconsider our holding 

in Carlson III that prejudgment interest should be calculated under AS 43.05.280 and 

AS   43.05.225.     The   State   also   argued   that   the   superior   court   erred   in   its   award   of 

attorney's fees. 

                Following oral argument in this case, we issued an order for supplemental 

briefing, asking the parties to address three issues that we had previously either decided 

or   assumed:    "(1)   whether   limited   entry   permit   fees   under   Title   16   are   taxes   under 

AS 43.10.210, (2) whether AS 43.05.275 provides the applicable statute of limitations 

for refund of those fees, and (3) what statutory provision for prejudgment interest, if any, 

applies to refunds of unconstitutionally extracted limited entry permit fees." 

                We decline to readdress the first two issues as it is unnecessary to reach 

them.    But we conclude that our previous holding in  Carlson III that AS 43.05.280 

provides   the   proper   rate   of   prejudgment   interest   was   incorrect   and    that   this   error 

produced a manifestly unjust result which requires us to take the extraordinary step of 

reversing our previous holding.          We therefore remand for a new interest calculation 

applying the proper rate of interest as provided by AS 09.30.070. 

III.    STANDARD OF REVIEW 

                The     law   of  the  case   doctrine,    which    applies   even   to  "questionable 
decisions,"30 provides that "issues previously adjudicated can only be reconsidered where 

there exist exceptional circumstances presenting a clear error constituting a manifest 

        30      Beal v. Beal, 209 P.3d  1012, 1016 (Alaska 2009) (Beal II) (citing Austin 

v. Fulton Ins. Co., 498 P.2d 702, 704 (Alaska 1972)). 

                                                   -9-                                               6645 

----------------------- Page 10-----------------------

injustice."31  The doctrine applies not only to issues explicitly addressed and decided on 

appeal,   but   also   to   those   "directly   involved   with   or   necessarily   inhering   in   a   prior 
appellate decision" and those "that could have been part of a prior appeal but were not."32 

                We review attorney's fees awards for an abuse of discretion, reversing if 

the award is "arbitrary, capricious, manifestly unreasonable, or [if it] stemmed from 
improper motive."33       "Attorney's fees awards made pursuant to the schedule in Civil 

Rule 82(b)(1) are presumptively correct."34 

IV.	    DISCUSSION 

        A.	     Carlson III's Holding That AS 43.05.280 Provided The Appropriate 
                Rate Of Prejudgment Interest Was Clearly Erroneous And Led To A 
                Manifestly Unjust Result. 

                Carlson III was one of the most complex of our decisions in this case.            Our 

discussion of prejudgment interest was not the primary focus of that decision; before 

addressing prejudgment interest, we decided three sets of issues with ten separate sub- 

issues,   turning   only   to  prejudgment     interest  for  three   paragraphs    of  our   25-page 
decision.35 

        31      Carlson     III,  65  P.3d  851,   859   (Alaska    2003)   (internal   citations  and 

quotations omitted). 

        32	     Beal II, 209 P.3d at 1017 (internal quotation marks and emphasis omitted). 

        33      Wagner v. Wagner, 183 P.3d 1265, 1266-67 (Alaska 2008) (quoting Ware 

v. Ware, 161 P.3d 1188, 1192 (Alaska 2007)). 

        34      Byars v. Byars, 945 P.2d 792, 795 (Alaska 1997). 

        35      Carlson III, 65 P.3d at 874-75. 

                                                 -10-	                                          6645
 

----------------------- Page 11-----------------------

                Because there was no statute directly providing for prejudgment interest for 
a refund upon overpayment of Title 16 fishing permit fees,36 we looked to the statute 

providing for a refund of tax overpayments under Title 43, AS 43.05.280: 

                        The introductory language of AS 43.05.275, applied to 
                the present case in  Carlson I, 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.  This statutory section should therefore apply 
                to the provisions for recovery of overpayments laid out in 
                AS     43.10.210.      Because     AS    [43.10.210]    serves   as  the 
                primary justification for providing the class with a refund, the 
                prejudgment interest available under AS [43.05.280] 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.[37] 

In short, we held that because Title 43's statute of limitations was parallel in structure to 

Title 43's interest rate provision, the adoption of the former compelled the adoption of 

the   latter. Further,   because   we   had   relied   on   Title   43's   procedures   for   recovering 

overpayment, we concluded that Title 43's interest rates for overpayment must apply. 

Although it was not discussed in our decision, as a result of this conclusion, the State was 
required to pay the punitive38  interest rate of 11% compounded quarterly that is due for 

        36      Compare AS 16.43.160(b) providing that the CFEC "may charge interest 

at a rate not to exceed the legal rate of interest established in AS 45.45.010 on fees more 
than 60 days overdue." 

        37      Carlson III, 65 P.3d at 875 (footnotes omitted). 

        38      In North Slope Borough v. Sohio Petroleum Corp., 585 P.2d 534, 546 

(Alaska 1978), we noted that "[t]he assessment of interest for late payment [of taxes] has 
                                                                                        (continued...) 

                                                  -11-                                            6645
 

----------------------- Page 12-----------------------

overpayments   and   underpayments   of   taxes   under   Title   43.39        We   conclude   that   our 

decision on this issue was wrong because the statutory language, intent, and purpose of 

Title   43's   interest   provision   do   not   countenance   its   application   to   overpayment   of 

Title 16 fees. 

                 As   we   noted   in  Carlson   III, prejudgment   interest   may   not   be   awarded 
against   the   State   unless   the   legislature   or   constitution   has   authorized   it.40 But   we 

determined that Title 43's interest rate applied not because it was applicable by its own 

terms, but because we had already relied on two other provisions of Title 43 in prior 

decisions and it seemed consistent to apply the interest rate from that title.                 But by its 

plain language, Title 43's interest provision does not apply to the fees at issue here. 

Alaska   Statute   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)."41        The State argues that the phrase "under this title" modifies "tax," 

        38       (...continued) 

no punitive element."  But that case interpreted prior versions of AS 43.05.225 and .280 
which provided a lower rate of interest than the current versions (8% versus 11%) and 
did not compound quarterly. Id.; Ch. 94,  1, SLA 1976; Ch. 166,  2, SLA 1976.  The 
legislature subsequently increased the rate and made it compound to punish taxpayers 
who chose to hold out rather than paying under protest. Ch. 23,  2-3, SLA 1991; see 
also 1991 Senate Journal 405 and discussion infra. 

        39       This is significantly higher than the general rate of prejudgment interest 

provided by AS 09.30.070 which through the life of this case has varied between 3.5% 
and   10.5%   and   which   is   not   compounded.        See  How   to   Determine   Pre-and   Post- 
Judgment        Interest   Rates     -   2012,     ALASKA     COURT      SYSTEM        (Jan.   3,   2012), 
http://www.courts.alaska.gov/int.htm. 

        40       65 P.3d at 875. 

        41       AS 43.05.225(1), in turn, assesses interest at a rate five points above the 

Federal Reserve Discount Rate or 11% (whichever is higher), compounded quarterly. 

                                                   -12-                                              6645
 

----------------------- Page 13-----------------------

so that the tax must be imposed by Title 43 in order to permit interest payments on an 

overpayment.       Because the fees at issue here were imposed under Title 16, the State 

argues   that   Title   43's   interest   provision    does   not   apply.   The   class   responds   that 

AS 43.05.280(a) "applies uniformly to all state tax refunds and to interest on refunds." 

The class relies on Governor Jay Hammond's transmittal letter to the state legislature, 

describing the bill that included the future section .280 and stating an intent to provide 

for   "uniform     administrative      and   enforcement      provisions    for  all   of  the  State's  tax 

statutes." 

                 The State's reading of the statute is the most natural reading.                The State 

argues that because Title 43 does not authorize overpayments, it is illogical to read 

"under this title" as modifying "overpayment."               We agree:      Because Title 43 does not 

authorize overpayments but does authorize a number of taxes, the phrase "under this 

title" should be read as modifying "taxes" rather than "overpayment." 

                 Read against other, related provisions in Title 43, the State's proposed 

interpretation becomes even stronger.            Alaska Statute 43.05.225(1), the section cross- 

referenced by AS 43.05.280 as providing the appropriate interest rate for overpayment, 

assesses     interest   against   taxpayers     only   "when     a  tax levied    in  this  title   becomes 

delinquent."   (Emphasis   added.)         It   would   be   anomalous   for   the   legislature   to   have 

assessed interest against the State for any overpayment   of   any   tax, regardless of its 

authorizing title, but to have assessed interest owed to the State only for underpayments 

of those taxes specifically levied by Title 43. 

                 Similarly,   AS   43.05.280(c)   provides   that   there   is   no   interest   due   to   a 

taxpayer "[i]f an overpayment of a tax imposed by this title is refunded within 90 days." 

(Emphasis   added.)   Under   the   class's   view   that   AS   43.05.280(a)   applies   to   all   taxes 

regardless     of   authorizing    title,   section  .280(c)   would    create   a   90-day   interest-free 

window for refunds of taxes levied under Title 43, but allow for no such window for 

                                                    -13-                                              6645
 

----------------------- Page 14-----------------------

those levies scattered throughout the rest of the Alaska statutes.   We can see no rationale 

for why the legislature would   have   held the State to a stricter payment window for 

Title 16 fees than for Title 43 taxes.   Accordingly, we conclude that the legislature must 

have meant subsections (a) and (c) to have the same reach.  The unambiguous language 

of   subsection     (c)  (as  well   as  AS 43.05.225(1))        clarifies  any   arguable     ambiguity     in 

subsection (a):     The punitive interest rate provided by AS 43.05.280(a) applies only to 

overpayment of taxes levied under Title 43. 

                When interpreting a statute, we do not stop with the plain meaning of the 

text.   Instead,   we   apply   a   sliding   scale   approach,   where   "[t]he   plainer   the   statutory 

language is, the more convincing the evidence of contrary legislative purpose or intent 
must     be."42   "We     apply   this  sliding   scale   approach    even    if  a  statute  is  facially 

unambiguous."43 

                The class rests its argument about the applicability of section .280 largely 

on legislative intent.  The class points to Governor Jay Hammond's transmittal letter as 

providing for "uniform administrative and enforcement provisions for all of the State's 
tax statutes."44   The letter, the class notes, points out that prior to the bill the State only 

paid interest on overpayment of income taxes, but that passage of the bill "would set a 
fair and uniform system for all taxes."45 

        42      Gov't Emps. Ins. Co. v. Graham-Gonzalez, 107 P.3d 279, 284 (Alaska 

2005)   (quoting Muller   v.   BP   Exploration   (Alaska)   Inc.,   923   P.2d   783,   788   (Alaska 
1996)). 

        43      State, Dep't of Commerce, Cmty. & Econ. Dev., Div. of Ins. v. Alyeska 

Pipeline Serv. Co., 262 P.3d 593, 597 (Alaska 2011). 

        44       1976 Senate Journal 45. 

        45      Id. 

                                                  -14-                                             6645
 

----------------------- Page 15-----------------------

                While the letter refers to "all taxes," it is doubtful that Governor Hammond 

or the legislature meant section .280 to apply to commercial fishing fees.                   Governor 

Hammond's   letter   notes that the new bill required the State to "pay interest . . . on 
overpayments if they are not refunded within 90 days after the overpayment arose."46 

In other words, Governor Hammond's language suggests that subsection (c), which 

establishes a 90-day interest-free window, is coextensive with subsection (a), which sets 

the rate of interest.  But subsection (c), as described above, is explicitly limited to taxes 

under   Title   43.  If   the   legislature   had   truly   intended   section   .280(a)   to   apply   to   all 

overpayments, and not merely all taxes levied under Title 43, it would not have been 

reasonable to have explicitly applied the parallel, limiting provision in .280(c) only to 
those taxes "imposed by [Title 43]."47         The class makes no argument to explain why the 

legislature may have done this, and we accordingly conclude that it did not. 

                Further, as Governor Hammond's letter makes clear, the bill that included 

section .280 was offered largely to bring uniformity to the enforcement provisions of the 
State tax codes.48     As part of this goal, section .280, as written at the time of its initial 

passage, set the interest rate owed by the State for overpayment at eight percent,49 the 

same rate then owed to the State for delinquency.50           It therefore created uniform interest 

rates for overpayment and underpayment. The current version of section .280 continues 

this goal, specifically pegging the overpayment rate to the underpayment rate. 

        46      Id. 

        47      AS 43.05.280(c). 

        48       1976 Senate Journal 45. 

        49      Ch. 94,  1, SLA 1976. 

        50      Ch. 166,  2, SLA 1976. 

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----------------------- Page 16-----------------------

                But any conclusion that section .280 applies to overpayment of commercial 

fishing fees runs contrary to this goal.         Notably, Title 16 provides that if a fisher is late 

in paying a fee, the State may charge interest as provided by AS 45.45.010 (currently 
                     51 Our holding in Carlson III therefore created a system in which the 
10.5% annually). 

rate   of  interest   owed    to  the  fishers  for  overpayments       of  Title  16   fishing   fees  is 

substantially higher than the rate of interest owed to the State for underpayments by the 

fishers. 

                In  Carlson   III,   we   focused   on   the   partial   structural   congruity   between 

Title 43's statute of limitations and Title 43's interest provision.             But in doing so, we 

undermined   the   goal   of   uniformity   and   created   a   massive   incongruity   between   the 

interest rate the State owed for overpayment and the interest rate a fisher would owe for 

underpayment. It was therefore inconsistent with the legislature's goal of uniformity for 
us to hold that the State owed the class the high, punitive interest rate of section .280.52 

                Our   decision   in   Carlson   I,   which   came   more   than   a   decade   after   the 

legislature first adopted section .280, held that certain remedial provisions of Title 43 

        51      AS 16.43.160(b). 

        52      Although      today    we   do   not  address    our  statement     in Carlson     I   that 

AS 43.05.275 set out the statute of limitations for the class's refund claims, Carlson I, 
798 P.2d 1269, 1280 (Alaska 1990), we recognize that today's holding determining that 
section .280 does not apply to the class's refund claims calls that statement into question. 
The State argues that AS 43.05.275 is not a statute of limitations for court actions, but 
rather sets out procedural time limits for administrative proceedings regarding disputes 
over Title 43 taxes.      But revisiting the statute of limitations is not necessary to today's 
decision because the class first protested the overpayment when it filed this lawsuit and 
thus the refund claims arose as of that date. See Carlson II, 919 P.2d 1337, 1344 (Alaska 
1996) (noting that the class did not satisfy the protest requirement for a tax refund before 
filing its complaint and remanding to determine whether the complaint met the protest 
requirement of AS 43.10.210); Carlson III, 65 P.3d 851, 871 (Alaska 2003) (concluding 
that the filing of a complaint satisfied the protest requirement). 

                                                  -16-                                             6645
 

----------------------- Page 17-----------------------

could   be applied   to   an   overpayment of fees under Title 16.53     This does not   mean, 

however, that the governor's earlier reference to section .280 as applying to "all taxes" 

prospectively brings Title 16 fees under the ambit of section .280. 

               Nor does an examination of the legislature's purpose in adopting the high, 

punitive interest rate of section .280 support applying that provision to the fees at issue 

in this case.  In 1991, sections .225 and .280 were amended to establish their current 
interest rates.54 In his transmittal letter, Governor Walter Hickel wrote that the current 

               interest rate chargeable on certain unpaid and overpaid taxes 
               is a simple interest rate of 12 percent.  Because the interest is 
               not compounded, taxpayers have an incentive to under-report 
               and prolong disputes over back taxes, since the longer that 
               back taxes remain unpaid, the lower the effective interest rate 
               becomes.     As a result, the state ends up loaning billions of 
               dollars to its taxpayers at very low interest rates.[55] 

In order to eliminate the incentive for delinquent taxpayers to hold out, the legislature 

made interest compound.       The purpose was to encourage delinquent taxpayers to pay 

under protest, rather than refusing to pay at all. 

               As the State points out, though, with commercial fishing permit fees, a 

fisher does not have an incentive to withhold payments, as the fees are generally paid in 

advance and the desire for a permit will be sufficient motivation to pay.  The legislative 

purpose of the high interest rate thus does not support applying it in this case. 

               Neither     legislative  intent   nor   legislative   purpose    contradicts   the 

unambiguous statutory language limiting AS 43.05.280(a) to taxes levied under Title 43. 

        53     Carlson I, 798 P.2d at 1279-80. 

        54     Ch. 23,  2-3, SLA 1991. 

        55     1991 Senate Journal 405 (emphasis in original). 

                                              -17-                                           6645 

----------------------- Page 18-----------------------

Section .280 therefore does not apply to overpayment of Title 16 fishing fees.                    It was 

clear error for us to hold otherwise in Carlson III. 

                We thus turn to the question whether our erroneous prior holding created 
a "manifest injustice."56       We conclude   that it did.      Under our erroneous decision in 

Carlson     III   the  State  is  liable  for  an  interest   payment   of   more   than   $62   million, 

approximately five times the principal amount of refund damages in   this case.                     This 

overpayment represents a windfall to the class at the State's expense.                 It is manifestly 

unjust to require the State to pay this massive punitive interest award when the clear 

directive of the legislature was to limit the punitive interest rate only to overpayment and 

underpayment of those taxes levied by Title 43.   Thus, the interests of justice compel us 

to correct our mistake.        When, 22 years ago, we made the seemingly uncontroversial 

assumption that overpaid fishing fees could be refunded through AS 43.10.210, we were 

deciding only whether the class would be entitled to a refund of overpayments.  But 

following that ruling, we continued down a jurisprudential path that today finds the State 

liable for more than $60 million in interest under a punitive interest rate statute that did 

not even exist when we decided Carlson I. 

                The law of the case doctrine guides a court's discretion, but does not serve 
as an absolute bar to reopening issues.57           The strong policy reasons for the doctrine 

include "(1) avoidance of indefinite litigations; (2) consistency of results in [the] same 
litigation; (3) essential fairness between the parties; and (4) judicial efficiency."58           In this 

        56      Carlson III, 65 P.3d 851, 859 (Alaska 2003). 

        57      See, e.g., Note, Successive Appeals and the Law of the Case, 62 HARV . L. 

REV . 286,  287   (1948)   ("[T]he   doctrine   should   be   treated   as   a   guide   to   the   court's 
discretion rather than as a limitation on the power of the court."). 

        58      Beal II, 209 P.3d 1012, 1017 (Alaska 2009) (quoting Petrolane, Inc. v. 

                                                                                         (continued...) 

                                                  -18-                                             6645
 

----------------------- Page 19-----------------------

case, these policy considerations do not weigh strongly against overruling our previous 

decision.  First, there is no reason to suspect our decision today will cause undue delay. 

Any delay that might have sprung from our reconsideration of issues - including the 

delay occasioned by our request for supplemental briefing and reargument - has already 

occurred. Application of a new interest rate now requires only a new set of mathematical 

calculations, not a new trial.  Similarly, because our reconsideration does not create the 

need for a new trial, concerns of judicial efficiency are only minimally implicated. 

                As to essential fairness, it is manifestly unfair to require the State to pay a 

punitive interest award that is erroneous.  Although the class may have had a reasonable 

expectation of receiving prejudgment interest based on our holding in Carlson III, the 

amount of that interest did not become clear until the remand immediately preceding this 

appeal.    Further,   as   discussed   below,   the   class   will   still   be   entitled   to   an   award   of 

prejudgment interest, albeit at a lower rate.  And considerations of essential fairness are 

served     by   respecting    the   constitutional     separation    of  powers     by   protecting    the 

legislature's prerogative to determine when the State owes prejudgment interest. 

                Finally, we recognize that reconsidering a prior decision undermines the 

goal of consistency, and we do not do so lightly.  But loyalty to consistency alone should 

not stop us from correcting this major error. We therefore partially overrule our decision 

in Carlson III and hold that the prejudgment interest rate provision in AS 43.05.280 does 
not apply to the class's refund in this case.59 

        58      (...continued) 

Robles, 154 P.3d 1014, 1026 (Alaska 2007)). 

        59      We leave the rest of our holdings in Carlson III undisturbed. 

                                                   -19-                                               6645 

----------------------- Page 20-----------------------

        B.	     The Class Is Entitled To Prejudgment Interest Under The Doctrine Of 
                Assumpsit And AS 09.30.070. 

                The question becomes, then, whether the class is owed any prejudgment 

interest at all.  We conclude that it is at the rate established by AS 09.30.070. 

                In State v. Wakefield Fisheries, Inc., we concluded   that one seeking to 

recover an overpayment "is [not] limited to recovery according to the statutory provision, 

AS [43.10.210].      The common law has long recognized a cause of action in assumpsit 
to recover overpayments of taxes . . . ."60          We reasoned that "[b]ecause the statutory 

remedies do not explicitly super[s]ede the common-law remedies . . . they are intended 
as a supplement, and . . . the earlier remedy in assumpsit is still available."61 

                In Principal Mutual Life Insurance Co. v. State, Division of Insurance, 

Department of Commerce & Economic Development, we cast doubt on that holding, 

"question[ing]   whether   the   common   law   remedy   of   a   cause   of   action   in   assumpsit 
survived the enactment of AS [43.10.210]."62           We did not, however, overrule Wakefield 

Fisheries on that point.       We decline now to decide the question whether the tax refund 

statute at AS 43.10.210 supersedes the common law cause of action of assumpsit or 

whether it merely codifies the right to recover on an assumpsit action for wrongfully 
imposed taxes or fees.63     But under the unique circumstances before us, we conclude that 

        60      495 P.2d 166, 172 (Alaska 1972), overruled on other grounds by Principal 

Mut. Life Ins. Co. v. State, Div. of Ins., Dep't of Commerce & Econ. Dev., 780 P.2d 1023, 
1030 (Alaska 1989). 

        61	     Id. 

        62      780 P.2d at 1030. 

        63      We also need not decide the question whether AS 43.10.210 was correctly 

applied to the limited entry permit fees involved in this case.              Both parties agree that 
AS    43.10.210     provides    the  basis  for  the   class's  refund    in  this  case.  And     in  its 
                                                                                        (continued...) 

                                                  -20-	                                           6645
 

----------------------- Page 21-----------------------

this particular action should be considered as a common law action in assumpsit.64                    And 

as   the   State  concedes     in  its  brief,  in  an  action    for  assumpsit     the  class   is  owed 

prejudgment interest under AS 09.30.070. 
                 Assumpsit is a quasi-contract cause of action.65           Under AS 09.50.250, the 

State has waived sovereign immunity for actions sounding in quasi-contract.66                      Alaska 

Statute     09.50.280     provides    that   for  actions    brought    pursuant     to  AS    09.50.250, 

prejudgment        interest   may     be   assessed     against    the   State   "as    provided     under 

        63       (...continued) 

supplemental briefing, the State not only retreated from its position in Carlson I that the 
class was not entitled to a refund but also argued that citizens must have the right to 
recoup wrongfully imposed taxes and fees (without distinction).                   We therefore do not 
need   to   delve   further   into   the   relationship,   if   any,   among   limited   entry   permit   fees, 
assumpsit, and AS 43.10.210. 

        64       The State concedes this point in its brief. 

        65       The United States Supreme Court has described assumpsit as follows: 

                 The    action,   brought     to  recover    a  tax  erroneously      paid, 
                 although an action at law, is equitable in its function.  It is the 
                 lineal    successor     of  the   common       count     in  indebitatus 
                 assumpsit for money had and received.  Originally an action 
                 for the recovery of debt, favored because more convenient 
                 and flexible than the common law action of debt, it has been 
                 gradually   expanded as a medium for recovery upon every 
                 form of quasi-contractual obligation in which the duty to pay 
                 money is imposed by law, independently of contract, express 
                 or implied in fact. 

Stone v. White, 301 U.S. 532, 534 (1937). 

        66       AS    09.50.250     provides:   "A    person    or  corporation     having    a  contract, 

quasi-contract, or tort claim against the state may bring an action against the state in a 
state court that has jurisdiction over the claim." 

                                                   -21-                                              6645
 

----------------------- Page 22-----------------------

AS 09.30.070."67     The class is therefore entitled to prejudgment interest at a rate provided 

by AS 09.30.070. 

        C.	     The     Superior     Court    Did   Not   Abuse     Its  Discretion    By   Awarding 
                Attorney's       Fees   Under      The    Rule   82(b)(1)     Schedule     For    Cases 
                Contested With Trial. 

                The superior court awarded the class attorney's fees under Alaska Civil 

Rule 82(b)(1).      It found that a three-day trial   held   in   June 2000, the only trial held 

throughout the history of the case, "constituted sufficient 'trial' to trigger the 'contested 

with trial' provision."     Fees calculated under this Rule were $7,482,569.73. 

                The State argues that the approximately $7.5 million attorney's fee award 

was   an   abuse   of   discretion   because:   (1)   the   superior   court   should   have   applied   the 

formula for cases contested without trial; (2) a large fraction of the class did not receive 

an award and the State prevailed on many issues; and (3) the fee award far exceeded full 

reasonable attorney's fees.       Because our decision today requires a new attorney's fees 
calculation using the proper rate and amount of prejudgment interest,68 it is unnecessary 

to address the last of the State's contentions.69       We address in turn the State's remaining 

arguments. 

        67      We     note  that  applying     this  interest  rate  is  more   consistent    with   the 

legislature's stated intention of bringing uniformity to the enforcement provisions of the 
State's    revenue     statutes.   Even     if  the  interest  rate  owed     to  class  members      for 
overpayments occurring on or after August 7, 1997 may be lower than that provided by 
AS   16.43.160(b),   it   will   nonetheless   more   closely   approximate   AS   16.43.160(b)'s 
effective interest rate than will the compound interest rate required by AS 43.05.280. 

        68      Civil Rule 82(b)(1) outlines a schedule of attorney's fees as a percentage 

of the "judgment and, if awarded, prejudgment interest." 

        69      We note, however, that "[a]ttorney's fees awards made pursuant to the 

schedule in Civil Rule 82(b)(1) are presumptively correct."               Byars v. Byars, 945 P.2d 
792, 795 (Alaska 1997). 

                                                  -22-	                                           6645
 

----------------------- Page 23-----------------------

                 1.	     It was not an abuse of discretion to apply the "contested with 
                         trial" formula. 

                 The   superior   court   held   a   three-day   non-jury   trial   in   June   2000.   The 

purpose of the trial was to "examine the [S]tate's methodology for implementing the 

Carlson II formula" for calculating the appropriate fee differential between residents and 

nonresidents. 

                 The State argues that the trial was actually an evidentiary hearing  that did 

not dispose of all the essential facts of the case.  It argues that the hearing consequently 

should   not   be   considered   a   "trial."    The   State    points   out   that   we   referred   to   this 
proceeding as an evidentiary hearing in Carlson III.70 

                 But the trial court has broad discretion and is usually in the best position 

to determine the nature of the proceeding before it.             Moreover, during the proceeding, 

the State referred to it as a "trial."  And even if the proceeding could be characterized as 

an   evidentiary   hearing,   we   have   held   that   evidentiary   hearings   may   be   sufficient   to 
trigger a "contested with trial" Rule 82 award.71             The fact that the trial did not resolve 

every   issue   in   the   case   is   not   determinative.   The   superior   court   did   not   abuse   its 

discretion in finding that the 2000 trial allowed for the award of Rule 82 attorney's fees 

under the schedule for cases "contested with trial." 

                 The State also argues that the "contested without trial" schedule should be 

used because the issues determined at trial "could just as easily have been submitted to 

the court on the written record."   Even taking this as true, the superior court did not base 

its attorney's fee award on what could have happened - it based the award on what 

actually happened.        It was not an abuse of discretion for the superior court to award 

        70       Carlson III, 65 P.3d 851, 858 (Alaska 2003). 

        71       See, e.g.,  Ward v. Urling, 167 P.3d 48, 57 (Alaska 2007) (child support 

case). 

                                                   -23-                                                 6645 

----------------------- Page 24-----------------------

attorney's fees based on the actual proceedings in the case instead of on what the State 

now asserts could have happened. Finally, the State argues that the trial lasted "just three 

days."     But "[w]hether the trial lasts two days or twenty, the rule presumes the same 
award."72 

                2.	      It was not an abuse of discretion to name the class the prevailing 
                         party. 

                The State argues that the superior court abused its discretion by failing to 

adjust the attorney's fee award to reflect the "mixed results achieved by class counsel." 

It   argues   that   most   of   the   plaintiffs   did   not   prevail   in   this   case   because   they   were 

excluded from the class and that the State prevailed on a number of key issues, including 

whether the fishing fees violated the Commerce Clause and calculation of "significant 

components of the fisheries budget."            It also argues that when each party prevails on 

some issues, the trial court does not have to award fees. 

                It is true that the trial court has discretion not to award attorney's fees when 
"each   party   prevails on   a 'main   issue.' "73     But the superior court did   not   abuse   its 

discretion here in finding that the class was the prevailing party and was thus entitled to 

an award of attorney's fees. 

                Civil Rule 82 provides that "the prevailing party in a civil case shall be 

awarded   attorney's   fees."      The   prevailing   party   is   "the   party   who   has   successfully 

prosecuted or defended against the action, the one who is successful on the 'main issue' 

of the action and in whose favor the decision or verdict is rendered and the judgment 

        72      Reid v. Williams, 964 P.2d 453, 461 (Alaska 1998). 

        73      Shepherd v. State, Dep't of Fish & Game, 897 P.2d 33, 44 (Alaska 1995) 

(citing Tobeluk v. Lind, 589 P.2d 873, 877 (Alaska 1979)). 

                                                  -24-                                                6645 

----------------------- Page 25-----------------------

entered."74     The    class   successfully    prosecuted     the  action   and   was    successful    in 

establishing that the State violated the constitutional rights of the class members75 and 

that the members are entitled to a refund.  The class will receive a substantial judgment. 

Although some original class members will not receive a refund, the prevailing party 

here is the class itself, which won a substantial award. 

                Moreover,      the  issues   that  the  State   prevailed    on  do   not  lead   to  the 

conclusion that the superior court abused its discretion in not using them to adjust the 

award.     Although in Carlson II we agreed with the State that the fee differential should 

not   be   analyzed   under   the   Commerce   Clause,   we   did   hold   that   it   should   instead   be 
analyzed     under    the  Privileges   and   Immunities     Clause.76    And    we   later  found   the 

differential to be unconstitutional.77      The main issue here was the unconstitutionality of 

the fee, and the State lost.      Similarly, although in Carlson III we agreed with the State 
on some of its calculations regarding its budget,78 we still determined that the State owed 

the class a refund, which was the main issue.   The class was clearly the prevailing party, 

and the superior court did not abuse its discretion by failing to adjust the award based on 

"mixed results" in this case. 

V.      CONCLUSION 

                We     REVERSE        our  holding    in Carlson     III   as  to  the  proper   rate  of 

prejudgment interest and REMAND for the superior court to determine a new interest 

        74      Id. (internal quotation marks omitted) (citingAdoption of V.M.C., 528 P.2d 

788, 795 n.14 (Alaska 1974)). 

        75      Carlson IV, 191 P.3d 137, 145 (Alaska 2008). 

        76      Carlson II, 919 P.2d 1337, 1340-41 (Alaska 1996). 

        77      Carlson IV, 191 P.3d at 142-44. 

        78      Carlson III, 65 P.3d 851, 867 (Alaska 2003). 

                                                  -25-                                            6645
 

----------------------- Page 26-----------------------

award under AS 09.30.070 and to adjust the attorney's fee award under Rule 82(b)(1) 

accordingly. 

                                        -26-                                   6645
 
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