You can
search the entire site.
or go to the recent opinions, or the chronological or subject indices.
Kachemak Bay Watch, Inc., v. Dept. of Natural Resources (4/11/97), 935 P 2d 816
<![CDATA[
NOTICE: This opinion is subject to formal 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.
THE SUPREME COURT OF THE STATE OF ALASKA
KACHEMAK BAY WATCH, INC., an )
Alaska non-profit corporation, ) Supreme Court No. S-7326
)
Appellant, ) Superior Court No.
) 3AN-94-3062 CI
v. )
) O P I N I O N
HARRY A. NOAH, Commissioner, )
Alaska Department of Natural ) [No. 4805 - April 11, 1997]
Resources, )
)
Appellee. )
_______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Donald D. Hopwood, Judge.
Appearances: Thomas E. Meacham, Anchorage,
for Appellant. Robert C. Nauheim, Assistant
Attorney General, Anchorage, and Bruce M.
Botelho, Attorney General, Juneau, for
Appellee.
Before: Compton, Chief Justice, Rabinowitz,
Eastaugh, and Fabe, Justices. [Matthews,
Justice, not participating.]
RABINOWITZ, Justice.
I. INTRODUCTION
In this appeal Kachemak Bay Watch, Inc. (KBW) seeks to
invalidate the decision of the Department of Natural Resources
(DNR) to accept applications for aquatic farming in Southeast and
Southcentral Alaska. KBW also asks this court to hold that DNR's
regulations setting forth criteria for issuing aquatic farmsite
permits are legally insufficient and, contrary to the superior
court's ruling, that KBW is a public interest litigant. We reverse
DNR's decision to accept applications for aquatic farming in
Southeast and Southcentral Alaska on the ground that DNR failed to
first identify districts as required by statute.
II. FACTS AND PROCEEDINGS
In 1988 the Alaska legislature enacted comprehensive
aquatic farm legislation. Ch. 145, SLA 1988 (the Act). The law
authorized the farming of aquatic plants and shellfish in the
waters of Alaska and requires DNR to regulate these activities.
Section 1 of the Act states that the Act's policy is to
"encourage the establishment and responsible growth of an aquatic
farming industry in the state"and "allocat[e] . . . aquatic
farming sites . . . with full consideration of established and
ongoing activities in an area." Ch. 145 sec. 1, SLA 1988. The
statutes relevant to this case are AS 38.05.855 and .856. They
detail procedures for DNR to follow in identifying farm districts
and sites and issuing individual permits.
In 1988 DNR requested nominations from the public and
interested state and federal agencies for aquatic farm districts as
contemplated by AS 38.05.855(a). The request was published in
local newspapers throughout the state. An informal advisory group
was established to assist DNR in implementing the statute. (EN1)
Former DNR Director Gary Gustafson, the administrator in charge of
implementing the Act, stated that "[t]he high number of nominations
and the variations in ideas regarding the areas to be nominated
underscored the complexity of determining whether a particular
aquatic farm would be appropriate for a particular location."
In the Southcentral Region, DNR received a total of 574
nominations. Eighty-eight areas were nominated for aquatic
farming, seventy-nine areas were proposed for exclusion from
aquatic farming, and DNR received 412 items of information
indicating recreation areas, fishing areas and anchorages. In the
Southeast Region DNR received a total of 1031 nominations. One
hundred sixty-two areas were nominated for aquatic farming, 369
areas were proposed for exclusion and 500 items of information were
received by DNR indicating recreation areas, fishing areas and
anchorages. A number of persons, many of whom were landowners or
fishermen in regions where DNR considered issuing permits,
protested having aquatic farms on particular sites.
Gustafson averred that DNR implemented the Act in the
following manner:
5. . . . DNR staff and participants in an
informal advisory group established to assist
DNR in implementing the statute, were mindful
of existing area land use plans as the primary
planning and management vehicle for these
state lands.
6. DNR staff and myself reasoned that unless
an area plan or an important policy or factual
rationale justified closing a particular area
of the state to aquatic farming, an area would
be opened for the filing of applications and a
response to particularized inquiry would be
undertaken later under AS 38.05.855(c) and (d)
in evaluating any application actually filed.
In general, I found no compelling legal,
policy or factual basis for closing any
particular area of the state to applications.
7. Pursuant to AS 38.05.855(a) . . . in late
January or early February of 1989, I
identified aquatic farm districts in Alaska
within which applications might be filed for
establishing and operating aquatic farms. I
have been informed that staff at DNR have been
unable to locate a formal, written
memorialization of that decision; however, I
did, in fact, make the decision, and it was
communicated to DNR staff.
8. In accordance with AS 38.05.855(a), I
identified five districts in Southcentral
Alaska and six districts in Southeastern
Alaska which roughly corresponded to regions
covered by DNR area plans. I identified no
districts in other regions because little
interest was demonstrated by the public in
those areas and conditions were generally
regarded as unsuitable for aquatic farming.
It was my view, and that of the Department in
general, that since area plans govern the
classification and primary uses for which
lands are managed by DNR, I would identify
districts roughly matching regional areas. It
was our intent that aquatic farm permit
applications would then be reviewed in a
manner that would ensure compatibility with
existing area plans.
9. Kachemak Bay is within one of the five
districts I identified in Southcentral Alaska.
10. After identifying the aquatic farm
districts, I informed members of my staff
responsible for implementing this program of
my decision. My decision was implemented and
the public was informed of the identification
of districts through maps made available at
DNR regional offices together with aquatic
farm applications.
When DNR published notice of district openings in the
fall of 1989, it stated that it would accept applications for
aquatic farms in Kachemak Bay during a sixty-day period in 1990.
The districts drawn in the Southeast and Southcentral Regions of
Alaska corresponded to areas delineated in DNR's general land use
plans.
DNR explained its actions in the following way:
By identifying districts and providing a 60-
day period of time each year for accepting
applications for sites in each district, the
Department could more easily process
applications by "batch"and coordinate
application review and separate agency
permitting by [other agencies for required
review in areas such as district and state
coastal zoning plans] . . . . For these
reasons the former Director of the Division of
Land . . . decided that there was no
compelling reason to close any area of the
state for purposes of filing aquatic farm
applications for consideration by the
Department.[ (EN2)]
(Emphasis in original.)
Robert Halpin, Brian Miller, and George Donart applied
for aquatic farm permits in Kachemak Bay during the 1992
applications period. In October DNR issued preliminary findings
recommending approval of the applications. After public notice and
hearings, DNR issued a final decision approving the permits.
In February 1993 individuals with interests in the
Kachemak Bay area incorporated Kachemak Bay Watch (KBW) as a
nonprofit corporation. KBW appealed DNR's approval of the Kachemak
permits. After additional public hearings and comment, DNR
affirmed its decision to issue the permits. KBW appealed to the
Commissioner, who denied the appeal.
KBW appealed to the superior court. The superior court
sustained DNR, finding that the agency satisfied the Act's
requirements for drawing districts, the districting was not subject
to the Administrative Procedure Act (APA), and DNR's regulations
were sufficient under the Act. The superior court also rejected
KBW's claim of public interest litigant status and awarded DNR
attorney's fees and costs.
KBW appeals, arguing: (1) DNR failed to formally
designate districts for aquatic farmsites as required by AS
38.05.855(a); (2) DNR failed to formally designate districts
pursuant to the APA; (3) DNR made an impermissible de facto
decision to open all coastal areas of Southeast and Southcentral
Alaska to applications; (4) DNR regulation 11 AAC 63.050 is legally
insufficient under AS 38.05.856(e); and (5) KBW is a public
interest litigant.
III. DISCUSSION
A. Standard of Review
We independently review the merits of an administrative
determination. No deference is given to the superior court's
decision when that court acts as an intermediate court of appeal.
Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896,
903 (Alaska 1987).
We have four standards of review for appeals of
administrative decisions. For questions of law not involving
agency expertise, we apply the "substitution of judgment"standard.
Handley v. State, Dep't of Revenue, 838 P.2d 1231, 1233 (Alaska
1992); Kjarstad v. State, 703 P.2d 1167, 1170 (Alaska 1985). For
questions of law involving agency expertise, we apply the
"reasonable basis"test. Rose v. Commercial Fisheries Entry
Comm'n, 647 P.2d 154, 161 (Alaska 1982). The "reasonable and not
arbitrary"standard is applied to administrative regulations.
Handley, 838 P.2d at 1233. The "substantial evidence"test is
applied to questions of fact. Id.
We review the superior court's determination of KBW's
public interest litigant status and the award of attorney's fees
only for abuse of discretion. Citizens Coalition for Tort Reform,
Inc. v. McAlpine, 810 P.2d 162, 171 (Alaska 1991).
B. Applicable Law
Alaska Statute 38.05.855 provides:
(a) The commissioner shall identify districts
in the state within which sites may be
selected for the establishment and operation
of aquatic farms and related hatcheries
required to have a permit under AS 16.40.100.
(b) The commissioner shall schedule at
least one 60-day period each year during which
a person may submit an application that
identifies a site in a district for which the
person wishes to be issued a permit under AS
38.05.856.
(c) Based on applications received under
(b) of this section, and after consultation
with the commissioner of fish and game and the
commissioner of environmental conservation,
the commissioner shall make a preliminary
written finding under AS 38.05.035(e) that
proposes sites in each district for which
permits may be issued under 38.05.856.
(d) After notice is given under AS
38.05.945 and a hearing is held under AS
38.05.946(b), the commissioner shall issue a
final written finding under AS 38.05.035(e)
that identifies sites in each district for
which permits shall be issued under AS
38.05.856 and that specifies conditions and
limitations for the development of each site.
Alaska Statutes 38.05.945 and .946(b) require DNR to give
notice and hold hearings before making site proposals. AS
38.05.946(b) states, "The commissioner shall hold a public hearing
in each district identified under AS 38.05.855 within 30 days after
giving notice of a preliminary finding under AS 38.05.035(e) and
38.05.855(c) concerning sites for aquatic farms and related
hatcheries."
Alaska Statute 38.05.856 provides for the issuance of
permits. It states in part:
(a) The commissioner may issue a tideland or
land use permit for the establishment and
operation of an aquatic farm and related
hatchery operations. . . .
. . . .
(c) Before issuing or renewing a permit
under this section, the commissioner shall
consider all relevant testimony submitted
under this section or AS 38.05.946(b). The
commissioner may deny the application for
issuance or renewal for good cause, but shall
provide the applicant with written findings
that explain the reason for the denial.
. . . .
(e) The commissioner shall adopt
regulations establishing criteria for the
approval or denial of permits under this
section and for limiting the number of sites
for which permits may be issued in an area in
order to protect the environment and natural
resources of the area. The regulations must
provide for the consideration of upland
management policies and whether the proposed
use of a site is compatible with the
traditional and existing use of the area in
which the site is located.
C. District Identification
Alaska Statute 38.05.855(a) requires DNR to "identify
districts in the state within which sites may be selected"for
aquatic farming. KBW argues that DNR failed to implement this
first requirement. Whether DNR properly "identified districts"
turns on competing interpretations of the statute. We conclude
that DNR failed to comply with the provisions of AS 38.05.855(a)
when identifying farm districts.
DNR argues that AS 38.05.855(a) is a procedural rather
than substantive measure. It likens "the district identification
requirement to a management tool to smooth the aquatic farm
application paper flow." Under this reasoning, districts are drawn
for "administrative convenience;"classifying incoming applications
by geographic areas enables DNR to process numerous applications
for the same area at one time. This interpretation of AS
38.05.855(a) relegates any substantive decisions about which areas
are suitable for aquatic farming to a post-districting stage. DNR
concludes that its publication of maps of farm districts in
Southcentral and Southeast Alaska satisfied the requirements of AS
38.05.855(a).
By contrast, KBW argues that the Act requires a four-step
process (sections (a)-(d)) and that each step is a distinct
decision. It reasons that the first step, district identification,
requires a formal determination of what areas may appropriately be
devoted to aquatic farming.
1. The language of the Act
Alaska Statute 38.05.855 uses the term "identify"to
direct action that shall be taken by the Commissioner regarding
districts and sites. AS 38.05.855(a), (d). Identification
suggests a conscious act and determination.
DNR simply designated all of Southcentral and Southeast
Alaska as districts. It failed to explicitly close any portion of
these regions to aquatic farming. In reality it relied on existing
general land use plans, which were created without consideration of
aquatic farming, and delegated specifying which areas are suitable
for farming to the permitting stage. Further, DNR chose to open
all of both regions despite extensive testimony from various groups
that particular areas should be closed to farming. (EN3) There is
no documentary proof that this decision was reached after weighing
and analyzing the evidence presented. (EN4)
District identification pursuant to AS 38.05.855(a) is
both a procedural and substantive step. It has a procedural aspect
because it allows DNR to categorize applications for permits
according to geographic region. It also involves an important
substantive policy decision because it requires DNR to "identify"
districts within which farmsites "may be selected." The "may be
selected"language indicates that DNR must distinguish between
those areas of Alaska that will be open to farming and those that
will be closed. DNR cannot reasonably make this decision without
analyzing facts relevant to the suitability of various areas of
Alaska to aquatic farming. By simply publishing maps of aquatic
farm districts based on general land use plans, DNR neglected its
responsibilities under AS 38.05.855(a).
2. The need for a substantive districting decision
DNR's actions implicate concerns similar to those raised
in Thane Neighborhood Ass'n v. City & Borough of Juneau, 922 P.2d
901 (Alaska 1996). In Thane Neighborhood, the City and Borough of
Juneau Planning Commission (Commission) used a phased approach in
approving a large mine permit. First, the Commission withheld
approval of certain parts of the project pending further
information and approved the remainder of the project. Second, the
Commission approved the permit but required further information on
certain matters. Third, the Commission imposed a condition that
the permittee obtain necessary permits from other agencies. Thane
Neighborhood, 922 P.2d at 905. We concluded that the Commission
should not have granted the mine permit while excepting major
portions of the project. Id. at 909. Phasing was disfavored
because (1) "it can result in disregard of the cumulative potential
environmental impacts of a project,"and (2) "permit conditions may
not serve as a substitute for an initial pre-permitting analysis
that can be conducted with reasonably obtainable information." Id.
at 908 (citing Kuitsarak Corp. v. Swope, 870 P.2d 387, 396 n.27 &
30 (Alaska 1994); Trustees for Alaska v. State, Dep't of Natural
Resources, 851 P.2d 1340, 1344, 1346 (Alaska 1993); Trustees for
Alaska v. Gorsuch, 835 P.2d 1239, 1246 (Alaska 1992)).
The reasoning of Thane Neighborhood applies to this case.
DNR identified five districts in Southcentral Alaska and six in
Southeast Alaska. In contravention of AS 38.05.855, it made no
other district identifications and no site identifications. In
addition, it used existing DNR area plans to delineate the
districts, rather than develop a plan specific to aquatic farming.
DNR pursued no other steps in the farmsite identification process,
leaving all remaining determinations to the permitting stage.
Such action effectively merged the provisions of AS
38.05.855, which were then merged with AS 38.05.856's rules for
evaluating permit applications. The statutes mandate
identification of districts pursuant to subsection 855(a) and a
subsequent determination of appropriate site locations under
subsections 855(b)-(d) and 856(e). Because sites are a subset of
districts, siting decisions can be made only once the district is
identified.
In short, DNR collapsed the identification and permit
processes. As with phasing, such combination of the statutes
precludes any analysis of the overall impact on the affected areas;
it limits in-depth consideration of possible negative consequences
to the evaluation individual permit applications. The result is
that cumulative potential environmental and economic impacts cannot
be weighed. See Gorsuch, 835 P.2d at 1246 ("DNR may not ignore
cumulative effects of mining and related support facilities by
unreasonably restricting its jurisdiction or by permitting
facilities separately. . . . If DNR determines that the cumulative
impact is problematic, the problems must be resolved before the
initial permit is approved.").
We construe AS 38.05.855 as requiring DNR to make
discrete decisions about the appropriateness of aquatic farming in
certain areas before considering any individual permit
applications. While the enabling legislation seeks to promote
aquatic farming, (EN5) it also protects other important interests
by placing statutory limits on development. To comply with the
statute, DNR must identify districts and then consider, pursuant to
agency consultations, preliminary findings, notice, hearings, and
final written findings, what sites within those districts can be
developed for aquatic farming. AS 38.05.855(c)-(d). Only once DNR
examines the needs of the communities and the state, identifies
districts and sites based on those needs, and imposes appropriate
restrictions can the agency consider issuing individual permits
pursuant to AS 38.05.856. Alaska Statute 38.05.856(e) states that
"the commissioner shall adopt regulations . . . [that provide] for
the consideration of . . . whether the proposed use of a site is
compatible with the traditional and existing use of the area in
which the site is located." Logically, such regulations can be
implemented only after sites have been identified. (EN6)
In Trustees for Alaska v. State, Department of Natural
Resources, while examining a state decision to issue oil and gas
leases for compliance with coastal management regulations, we
emphasized the dangers of limiting environmental impact review to
the individual permitting stage:
[D]eferring a careful and detailed look at
particularized geophysical hazards to later
stages of the development process, as DNR
evidently intends, entails certain practical
risks. First . . . [it] means that
particularized geophysical hazards will be
considered on a lease-site-by-lease-site
basis. This may tend to mask appreciation of
any cumulative environmental threat that would
otherwise be apparent if DNR began with a
detailed and comprehensive identification of
those hazards. Second, . . . the more
segmented an assessment of environmental
hazards, the greater the risk that prior
permits will compel DNR to approve later,
environmentally unsound permits.
851 P.2d at 1344. Both concerns are raised by DNR's implementation
of the aquatic farm legislation. Restricting the review and
investigation process to individual applications precludes
cumulative impact analysis. In addition, because "allocation of
aquatic farming sites [is to] be made with full consideration of
established and ongoing activities in an area,"DNR's segmented
process, by only considering the past use of the relevant limited
area, would have resulted in a tendency toward reissuance. Ch. 145
sec. b(2), SLA 1988.
3. DNR is not required to comply with the APA in
identifying the districts.
KBW also argues (EN7) that the identification of aquatic
farm districts under the Act constitutes a regulation subject to
the APA. (EN8) The APA establishes the minimum procedural
requirements for the adoption of administrative regulations. See
AS 44.62.280. Whether the agency action is a regulation is a
question of law that does not involve agency expertise.
We have repeatedly rejected agencies' attempts to avoid
the strictures of the APA by claiming their actions were general
guidelines or policy statements, rather than regulations. See
Gilbert v. State, Dep't of Fish & Game, 803 P.2d 391, 395-97
(Alaska 1990); Kenai Peninsula Fisherman's Co-Op. v. State, 628
P.2d 897, 904-06 (Alaska 1981). Nonetheless, while the definition
of "regulation"under the APA is broad, it does not encompass every
agency practice or decision. Indicia of a "regulation"include:
(1) whether the practice implements, interprets or makes specific
the law enforced or administered by the state agency, and (2)
whether the practice affects the public or is used by the agency in
dealing with the public. Kodiak Seafood Processors Ass'n v.
State, 900 P.2d 1191, 1197 (Alaska 1995); Gilbert, 803 P.2d at 396.
In Batterton v. Marshall, 648 F.2d 694, 707 (D.C. Cir.
1980), the Court of Appeals for the District of Columbia observed:
[M]any merely internal agency practices affect
parties outside the agency -- often in
significant ways. . . . [E]ven office hours
. . . necessarily require conformity on the
part of the public. A useful articulation of
the exemption's critical feature is that it
covers agency actions that do not themselves
alter the rights or interests of the parties,
although it may alter the manner in which the
parties present themselves or their viewpoints
to the agency.
(Footnotes and internal quotations omitted.) The Batterton court
also stated, "The essential purpose of according . . . notice and
comment opportunities is to reinforce public participation and
fairness to affected parties after governmental authority has been
delegated to unrepresentative agencies." Id. at 703.
DNR's district identification decision affects the public
in the limited manner discussed in Batterton. Whether DNR's
identification of aquatic farm districts constituted a regulation
as that term is defined in the APA presents a close question. As
noted above, districting pursuant to AS 38.05.855(a) has both
procedural and substantive aspects. However, district
identification does not alter the rights of the parties, does not
deprive any party of a fair opportunity for public participation,
embodies no finding as to a particular application and does not
establish criteria by which particular applications should be
evaluated.
"Agencies often make discretionary decisions not
requiring formal procedures." Olson v. State, Dep't of Natural
Resources, 799 P.2d 289, 292 (Alaska 1990). "We have described an
agency's discretionary decision that does not require formal
procedures as 'quasi-executive[.]'" Kodiak Seafood Processors, 900
P.2d at 1197. We review such decisions only for an abuse of
discretion. Id.
DNR regularly makes decisions that are quasi-executive in
nature and do not constitute regulation under the APA even when one
or more indices of a regulation are present. See Olson, 799 P.2d
at 292. For instance, the Commissioner does not identify by
regulation those lands made available for oil and gas leases,
mineral leases, or timber sales. See AS 38.05.180(b), AS
38.05.135-175, and AS 38.05.115. The legislature's assignment of
a task to an agency, such as the identification of districts at
issue here, invariably involves the exercise of agency discretion.
District identification is the first step in a lengthy,
detailed public process of determining what aquatic farm will be
allowed in what location. The legislature's established procedures
under the Act do not include requiring the identification of
districts by regulation. By contrast, in 1988 the legislature
expressly required the Commissioner to "adopt regulations
establishing criteria for the approval or denial of [aquatic farm]
permits,"thereby addressing the last stage of the process. AS
38.05.865(e). No similar express requirement for regulations
exists for the district identification process and we have no
reason to believe such a requirement was intended. See Croft v.
Pan Alaska Trucking, Inc., 820 P.2d 1064, 1066 (Alaska 1991)
("where certain things are designated in a statute þall omissions
should be understood as exclusionsþ") (citation omitted).
The superior court therefore correctly determined that
the identification of aquatic farm districts under AS 38.05.855(a)
does not constitute a regulation under the APA.
D. The Regulations
Alaska Statute 38.05.856 governs the procedures for
issuing aquatic farming permits. In keeping with its directives
the Department promulgated the regulations codified at 11 AAC
63.050. (EN9)
KBW argues that these regulations do not satisfy the
requirements of AS 38.05.856(e) because they "in effect authorize
the exercise of unfettered administrative discretion in approving
or denying a farmsite permit." This argument is without merit.
Our review of regulations adopted by an agency in its
quasi-legislative capacity, if enacted according to APA procedures
and within the discretion vested by the legislature, is limited to
determining: (1) whether the regulation is consistent with the
statute and reasonably necessary to its purposes, and (2) whether
the regulation is reasonable and not arbitrary. Kenai Peninsula
Fisherman's Co-Op., 628 P.2d at 906.
DNR's permitting regulations are consistent with the
statute's directives. They provide substantial guidance to the
agency in exercising its judgment and applying its expertise to
accomplish the goals established by the legislature.
E. Public Interest Litigant Status
We have articulated four criteria for determining whether
a party qualifies as a public interest litigant: (1) is the case
designed to effectuate strong public policies?; (2) if the
plaintiff succeeds will numerous people receive benefits from the
lawsuit?; (3) can only a private party have been expected to bring
the suit?; and (4) would the purported public interest litigant
have sufficient economic incentive to file suit even if the action
involved only narrow issues lacking general importance? McAlpine,
810 at 171 (citing Anchorage Daily News v. Anchorage School Dist.,
803 P.2d 402, 404 (Alaska 1990)). The party claiming public
interest litigant status carries the burden of satisfying all four
criteria. Id.
The superior court ruled that KBW was not a public
interest litigant because "its principals had a substantial
personal economic interest in the outcome of the litigation. This
interest, and not the interests of the public at large, was the
motivation for [KBW's] action."
In deciding whether a party's interest in a suit can be
characterized as economic, the determinative question is "whether
the [litigant] is motivated primarily by private as opposed to
public interests." Sisters of Providence v. Dep't of Health &
Social Servs., 648 P.2d 970, 979 n.27 (Alaska 1982). We have said
that the fourth criterion in the analysis
may be expressed as whether the litigant
claiming public interest status would have had
sufficient economic incentive to bring the
lawsuit even if it involved only narrow issues
lacking general public importance. Such a
litigant is less apt than a party lacking this
incentive to be deterred from bringing a good
faith claim by the prospect of an adverse
award of attorney's fees.
Id. at 979-80 (citation omitted). A court must weigh the
individual facts of the case to determine if the litigant's primary
motivation for filing suit was economic. Eyak Traditional Elders
Council v. Sherstone, Inc., 904 P.2d 420, 426 (Alaska 1995).
KBW argues that it meets the fourth criterion because a
successful suit would not have resulted in a monetary recovery for
the corporation or its individual members, and the litigation was
not motivated by an economic incentive. KBW contends that it seeks
to invalidate the aquatic farm permits because they would interfere
with traditional uses of the bay by local residents, set netters,
commercial fishermen and tour operators. KBW is a non-profit
corporation, with Articles of Incorporation that identify its broad
policy concerns as preventing detrimental environmental impact from
aquatic farming in the Kachemak Area.
To succeed on appeal, KBW must show that the superior
court abused its discretion in making its public interest litigant
determination. McAlpine, 810 P.2d at 171. Evidence was presented
that three KBW directors had sufficient economic incentive to bring
the lawsuit. Two directors owned property in the area and
expressed concern that property values would decrease as a result
of DNR's actions. The third director operates a commercial kayak
guiding and fishing charter and acknowledged that aquatic farming
in the area could interfere with his business.
KBW did not provide the superior court with detailed
information about its membership and their interests. KBW bore the
burden of providing evidence sufficient for the court to determine
its public interest litigant status. It failed to meet this
burden. The superior court reasonably based its decision on the
economic incentives of the KBW members about whom it had more
detailed information. See Municipality of Anchorage v. Citizens
for Representative Governance, 880 P.2d 1058, 1061 (Alaska 1994)
("When a group does not reveal the identity of its members, a court
may not be able to determine the group's public interest status.").
We therefore hold that the superior court did not abuse
its discretion in ruling that KBW is not a public interest
litigant.
IV. CONCLUSION
DNR failed to properly identify districts for aquatic
farming, in violation of AS 38.05.855. We REVERSE on this ground.
(EN10) We therefore invalidate DNR's decision to accept
applications for aquatic farming throughout Southeast and
Southcentral Alaska and remand this case for implementation of AS
38.05.855 in conformity with this opinion. We affirm the superior
court's rulings that (1) the APA does not govern the district
identification process; (2) DNR's permitting regulations are
sufficient; and (3) KBW is not a public interest litigant.
ENDNOTES:
1. The advisory group included representatives of conservation
organizations, commercial fishermen, state and federal agencies,
and the public.
2. A Natural Resource Manager for DNR affied that the advisory
group also did not "favor[] a blanket prohibition of aquatic
farming in any district or any component part being considered."
3. DNR created an informal commission and appropriately solicited
public and expert responses to the creation of aquatic farm
districts. It received recommendations to leave over 400 sites
closed to farming, yet the Director decided to open all areas,
testifying by affidavit that no reason existed for the closure of
any area. The record provides no explanation of how he reached
this conclusion despite the nominations for closure of 79 areas in
the Southcentral Region and 369 areas in the Southeast Region. DNR
and Gustafson indicate that the decision to leave both regions
entirely open was based on administrative efficiency.
4. "Where, as here, the question is as to the merits of agency
action on matters committed to agency discretion, our scope of
review is limited to whether the decision was arbitrary,
unreasonable or an abuse of discretion." North Slope Borough v.
LeResche, 581 P.2d 1112, 1115 (Alaska 1978). Where an agency fails
to consider an important factor, its decision is regarded as
arbitrary. Southeast Alaska Conservation Council v. State, 665
P.2d 544, 548-49 (Alaska 1983).
In Southeast Alaska Conservation, this court stated:
[T]he role of the court is to
ensure that the agency "has given
reasoned discretion to all the material
facts and issues." The court exercises
this aspect of its supervisory role with
particular vigilance if it "becomes
aware, especially from a combination of
danger signals, that the agency has not
really taken a 'hard look' at the salient
problems and has not genuinely engaged in
reasoned decision making."
. . . .
A decisional document, done carefully and
in good faith, serves several salutary
purposes. It facilitates judicial review by
demonstrating those factors which were
considered. . . . And it tends to restrain
agencies from acting beyond the bounds of
their jurisdiction.
Id. at 549 (citations and footnote omitted).
"[I]f a statute requires reasoned decisions, and the
legislature has not expressly or by implication limited judicial
authority to decide how to review administrative action, courts may
and should require agencies to explain their actions." Ship Creek
Hydraulic Syndicate v. State, 685 P.2d 715, 718 (Alaska 1984). In
this case, we are presented with no decisional document indicating
how the Director arrived at the conclusion that no reason exists to
close any areas in the state to aquatic farming, despite the fact
the agency received over 400 area closure requests. We are left
with no basis to determine that the Director's decision was not
arbitrary.
5. The Findings state:
(a) The legislature finds that
(1) aquatic farming in the state would
(A) provide a consistent source of
quality food;
(B) provide new jobs;
(C) increase state exports;
(D) create new business opportunities;
and
(E) increase the stability and
diversity of the state's economy;
and
(2) development of aquatic farming in the
state would increase the availability of fresh
seafood to Alaskans and would strengthen the
competitiveness of Alaska seafood in the world
marketplace by broadening the diversity of
products and providing year-round supplies of
premium quality seafood.
Ch. 145 sec. 1, SLA 1988.
6. In other words, the statutes contemplate a three-step process:
(1) Pre-application: DNR solicits and receives public comment on
what areas should be closed because of competing uses or otherwise.
Based on this information and cumulative environmental impact
analysis, DNR designates districts (the total area suitable for
aquatic farming). (2) After districts have been designated, DNR
accepts applications for sites within the districts. Based on the
applications and the mandates of sections 855(c)-(d) and 856(e),
DNR proposes sites. (3) Finally, pursuant to public hearings and
comment and other requirements of sections 856(c), (d), and (e),
DNR issues permits.
7. KBW argues that DNR's decision to accept applications in
Southeast and Southcentral Alaska should be reversed on the ground
that the Commissioner failed to make the districting decision in
accordance with APA rules for the adoption of regulations. As set
forth above, we hold that DNR did not properly identify the
districts as required under AS 38.05.855 and reverse DNR's actions
on that ground. We address the APA issue here to provide direction
to DNR and the superior court on remand of the district
identification process.
8. The APA defines "regulation"as
every rule, regulation, order, or standard of
general application or the amendment,
supplement, or revision of a rule, regulation,
order, or standard adopted by a state agency
to implement, interpret, or make specific the
law enforced or administered by it, or to
govern its procedure, except one that relates
only to the internal management of a state
agency; "regulation"does not include a form
prescribed by a state agency or instructions
relating to the use of the form, but this
provision is not a limitation upon a
requirement that a regulation be adopted under
this chapter when one is needed to implement
the law under which the form is issued;
"regulation"includes "manuals,""policies,"
"instructions,""guides to enforcement,"
"interpretive bulletins,""interpretations"
and the like, that have the effect of rules,
orders, regulations, or standards of general
application, and this and similar phraseology
may not be used to avoid or circumvent this
chapter; whether a regulation, regardless of
its name, is covered by this chapter depends
in part on whether it affects the public or is
used by the agency in dealing with the
public[.]
AS 44.62.640(a)(3).
9. 11 AAC 63.050 provides in part:
(b) The commissioner will prepare a
preliminary best interest finding that
proposes sites for which permits may be
issued. . . . The finding will consider both
advantages and disadvantages of the proposal.
Criteria that will be considered in the
finding include:
(1) whether the Department of Fish and
Game considers the proposed aquatic farm or
hatchery to meet the criteria of AS 16.40.105;
(2) whether the Department of Environ-
mental Conservation determines that the
proposed aquatic farmsite is protected from
pollution from adjacent floating and upland
support activities, to ensure product
wholesomeness, and that effective pollution
control measures can be implemented to protect
land and water at the site from pollution
caused by the proposed aquatic farm or
hatchery;
(3) whether the coordinating state agency
proposes to find the proposed aquatic farm or
hatchery consistent with the Alaska Coastal
Management Program;
(4) whether aquatic farming is compatible
with official land management policies
applicable to the proposed aquatic farmsite
and nearby upland, including legislative or
congressional designations such as parks or
wilderness areas and adopted federal, state,
and local land use plans, land
classifications, and zoning;
(5) whether aquatic farming conflicts
with existing uses, or with pending uses, as
that term is defined in 11 AAC 63.900, of the
site and of nearby land, whether or not the
nearby land is in state ownership, including
consideration of
(A) impacts on nearby communities or
residential land;
(B) traditional and existing uses of the
site, including commercial fishing, sport
fishing, subsistence activities, use as a
primary anchorage, navigation, seaplane
landing area, recreation, sightseeing, and
tourism; consideration of this criterion will,
in the commissioner's discretion, be combined
with a traditional use finding if such a
finding is required by AS 38.05.830;
(C) historic and cultural resources;
(D) commercial or industrial facilities,
such as log transfer facilities, salmon
hatcheries, seafood processing plants, or
harbor development, that would be incompatible
with aquatic farming;
(6) how public access to and along public
waters, and the upland owner's right of
reasonable access to tidewater, will be
ensured by reserving easements under 11 AAC 53
or by other means; if upland access to the
water is limited to a specific point by
topography, existing improvements, or other
factors, the commissioner will ensure that
aquatic farming facilities do not obstruct
water access to that point;
(7) how the interests served by the
public trust doctrine, specifically the
public's right to use navigable waters and the
land beneath them for navigation, commerce,
fishing, and other purposes, will be
protected;
(8) whether special permit provisions or
other measures are needed to mitigate
identified conflicts; for this purpose the
commissioner will consult guidelines set out
in an applicable land use plan, zoning
ordinance, or coastal management program, or,
if no such document or guidelines exist or if
it would otherwise be appropriate, will
consult the guidelines set out on pp. 80 - 85
of the final 1988 Etolin Island Area
Mariculture Pilot Project;
(9) other significant social, economic,
and environmental effects of the proposed
aquatic farming.
(c) In general, the commissioner will not
grant aquatic farmsite permits that would
encumber more than a third of the surface area
estimated to exist at mean lower low water of
a bay, bight, or cove, unless the commissioner
finds that (1) it is in the state's best
interest to concentrate permits in one such
bay, bight, or cove so as to keep other
specified water bodies completely
unencumbered, (2) the cumulative impacts will
not be excessive, and (3) the upland owner
will retain a right of reasonable access to
tidewater. Such a finding will be included in
the best interest finding, as well as in the
land use plan if one is being prepared.
11 AAC 63.050(b)-(c).
We specifically note that nothing in this opinion is intended
to abrogate the provisions of 11 AAC 63.050(c).
10. This holding requires that the superior court's award of costs
and attorney's fees against KBW be VACATED and costs and attorney's
fees be redetermined on remand.
]]>
