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					                             ADMINISTRATIVE LAW SECTION

                                   PROFESSIONAL UPDATE
                                            3/24/00 – 4/13/01



        This professional update covers Alaska Supreme Court cases decided from March 24, 2000,
through April 13, 2001, as well as significant legislative matters as of April 4, 2001. The case synopses
do not attempt to be exhaustive but, instead, highlight the procedural issues that may be of interest to all
practitioners in the field of administrative law.

       Thanks to Deborah Behr for putting together the legislative materials.


                                                                     David A. Ingram
                                                                     Section Chair
                                                                     April 16, 2001



Executive Committee:

Martha Beckwith
Deborah E. Behr
Kristen F. Bomengen
John B. Chenoweth
Elizabeth J. Hickerson
David A. Ingram
Robert M. Johnson
Michael S. Marsh
Susan W. Mason
James A. Parrish
Arthur H. Peterson




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                           TABLE OF CONTENTS


PART I: CASES

    A.   BY ISSUE

                Appeals…………………………………………………………………….. 4
                Due Process………………………………………………………………… 4
                Duty to Warn………………………………………………………………. 6
                Employees…………………………………………………………………. 6
                Exhaustion of Administrative Remedies…………………………………... 6
                Hearings……………………………………………………………………. 7
                Immunity…………………………………………………………………… 8
                Jurisdiction…………………………………………………………………. 8
                Licenses, Revocation and Suspension…………..…………………………. 9
                Public Records……………………………………………………………... 10
                Regulations, Agency Compliance and Interpretation……………………… 10
                Regulations, Need For……………………………………………………... 12
                Regulations, Validity of……………………………………………………. 12
                Res Judicata/Estoppel/Laches……………………………………………… 13
                Substantial Evidence………………………………..……………………… 15
                Taxes……………………………………………………………………….. 16



    B.   BY AGENCY
                City of Anchorage………………………………………………………….. 17
                City of Dillingham…………………………………………………………. 17
                City of Kodiak………………………………………………………………18
                Commission on Judicial Conduct………………………………………….. 18
                Department of Administration……………………………………………... 18
                        Division of Motor Vehicles………………………………………... 19
                        Oil and Gas Conservation Commission……………………………. 19
                        Public Employees‟ Retirement System…………………………….. 19
                Department of Community and Economic Development………………….. 20
                        Division of Insurance………………………………………………. 20
                        Public Utilities Commission (former)……………………………… 20
                        Real Estate Commission…………………………………………… 20
                Department of Fish and Game……………………………………………... 21
                        Board of Game………………………………….………………….. 21


                                       2
                         Commercial Fisheries Entry Commission…………………………. 21
                  Department of Health and Social Services………………………………… 21
                         Division of Family and Youth Services……………………………. 21
                  Department of Labor……………………………………………………….. 22
                         Workers‟ Compensation Board …………………………………….22
                  Department of Natural Resources………………………………………….. 23
                  Department of Public Safety……………………………………………….. 25
                  Department of Revenue……………………………………………………. 25
                         Child Support Enforcement Division……………………………….26
                  Fairbanks North Star Borough……………………………………………... 27
                  Office of the Governor……………………………………………………... 27
                  Office of the Lieutenant Governor…………………………………………. 28
                         Division of Elections………………………………………………..28




PART II:   LEGISLATIVE MATERIALS

           I.     Structure of State Government……………………………………………...28
           II.    Delivery of State Services………………………………………………….. 29
           III.   Administrative Adjudication and Claims…………………………………...29
           IV.    State Employees……………………………………………………………. 29
           V.     Courts………………………………………………………………………. 29
           VI.    State Budget………………………………………………………………... 30




APPENDIX: ALPHABETICAL LISTING OF CASES




                                        3
PART I: CASES

           A:      BY ISSUE

APPEALS


Allen v. State, Department of Revenue, 15 P.3d 743 (Alaska 2000)

        The court held that the superior court erred in dismissing Allen‟s appeal from two decisions by
the Child Support Enforcement Division as untimely because, although they were filed more than 30
days following the agency‟s decisions, the agency failed to advise him that the decisions were final. The
court also held that, contrary to CSED‟s assertions, one of the decisions was appealable even though he
could have sought relief in the courts because it blocked access to an agency-sponsored process
(modification of a child support order).


DUE PROCESS


Halliburton Energy Services v. State, Department of Labor, 2 P.3d 41 (Alaska 2000)

       The Court held that a “process safety management regulation” applied to Halliburton‟s assembly
of perforation guns because, even though it does not apply directly to the company‟s manufacturing
processes, it is incorporated by reference in a federal explosives regulation that does apply directly to
those processes. It also held that the regulation was not unconstitutionally vague as applied in the case
at hand.


State, Department of Revenue v. Maxwell, 6 P.3d 733 (Alaska 2000)

        The court held that the Child Support Enforcement Division improperly made involuntary
collections for child support from Maxwell after telling him (when he explained that he was not the
father of the child) that his only recourse was to go to court. Because CSED did not give Maxwell an
opportunity for an administrative hearing to contest paternity before issuing its order, he was denied due
process of law, the child support order was invalid, and he is entitled to a refund of those funds that were
retained buy the state. (He must, however, bring a separate action to recover those funds that were
passed through to the federal government or to the mother.)


Schikora v. State, Department of Revenue, 7 P.3d 938 (Alaska 2000)

        The court upheld a Department of Revenue ruling that Schikora failed to qualify for permanent
fund dividends for several years because he was outside Alaska for more than 180 days each year for
travel and leisure purposes, neither of which constitute allowable absences under the relevant statutes.


                                                     4
Schikora had argued that he qualified as an Alaska resident due to the fact that he was physically present
in the state each year when he applied for the dividends. The court held that, for purposes of qualifying
for permanent fund dividends, a person is a state resident only if he or she was physically present in the
state for the durational requirement during the preceding year (i.e., not gone for more than 180 days for
unallowable reasons). Schikora also claimed that the regulation that established the 180-day rule was
invalid due to procedural errors in its promulgation. The court also held that, assuming he was right and
the regulation was improperly adopted, he still gets no relief because the regulation merely liberalized
the requirements of the statute, which did not allow any of his absences. Finally, the court held that the
regulations did not deny him due process (right to travel) or equal protection of the laws and did not
violate the commerce clause of the federal constitution.


State v. Niedermeyer, 14 P.3d 264 (Alaska 2000)

        The Division of Motor Vehicles‟ administrative revocation of Niedermeyer‟s driver‟s license
following his arrest for underage drinking was held to be punitive. He was not arrested while driving,
there was no evidence that he had ever driven after drinking, and there was no evidence that he intended
to drive on the evening he was arrested. The court rejected a claim that the statute that allowed such
revocation unconstitutionally denied him substantive due process of law, finding that the statute had a
rational (though perhaps “tenuous”) basis. The court held, however, that Niedermeyer was denied
procedural due process because the action taken was punitive, not regulatory, and was taken in the
absence of procedural safeguards. In order to revoke his license, the state would have to afford him
“criminal process” (a trial).


Tlingit-Haida Regional Electrical Authority v. State, Alaska Public Utilities Commission, 15 P.3d 754
(Alaska 2001)

         In this factually complex case, the court held that the Alaska Public Utilities Commission did not
violate due process by failing to give adequate notice of what was at issue in its administrative hearing
and by failing to shift the burden of proof to another party. If the commission actually failed to do either
act, it was at most harmless error.


Whitesides v. State, Department of Public Safety, No. 5388, April 13, 2001

        The Department denied a request by Whitesides for an in-person hearing in his driver‟s license
revocation proceedings and, instead, conducted the hearing by telephone. In doing so, the court held, it
violated his due process rights because his credibility was material to the proceedings. A driver‟s
license is an important property interest, said the court, in-person testimony is a valuable tool in
assessing credibility, and added costs do not outweigh the benefits of in-person hearings. The court
noted that there is a statute that requires the Department to conduct the hearings by telephone unless the
hearing officer finds that such a hearing would substantially prejudice the rights of the person involved
or that an in-person hearing is necessary to decide the issues in the case. The court found that statute to
be constitutional by construing it to require in-person hearings “where a party requests such a hearing
and material questions depend on the credibility of the party‟s testimony.”



                                                     5
Brown v. State, Department of Public Safety, No. 5389, April 13, 2001

        Based on the authority of Whitesides, which was handed down the same day, the court held that
the Department violated Brown‟s due process rights by giving him a telephonic hearing in his driver‟s
license revocation proceedings. Like Whitesides, Brown requested an in-person hearing, and his
credibility was material to the case.


DUTY TO WARN


P.G. v. State, Department of Health and Human Services, 4 P.3d 326 (Alaska 2000)

         This is another case in which the court holds that a state agency has an affirmative duty to warn
or take other steps to protect someone from harm. Here, the Division of Family and Youth Services
failed to warn foster parents about the nature of a 13-year-old boy who physically and sexually assaulted
the foster parents‟ natural children, a son and daughter, aged eight and ten. The factors to be considered
in deciding whether a duty attaches are set forth, as is a review of other cases in which the court has held
that a state agency owes a duty.


EMPLOYEES


Cassel v. State, Department of Administration, 14 P.3d 278 (Alaska 2000)

        The court held that, under the State-APEA collective bargaining agreement in effect at the time,
the State of Alaska could only terminate a probationary employee for just cause based on the employee‟s
failure to satisfy objective standards, not subjective standards, used in evaluating his performance. On
the other hand, the court noted that just cause is not per se required for termination of a probationary
employee and that the state is not precluded from negotiating a contract that would establish an at-will
relationship.


EXHAUSTION OF ADMINISTRATIVE REMEDIES


Grant v. Anchorage Police Department, No. 5377, March 30, 2001

        The court held that the superior court correctly found that Grant had failed to exhaust his
administrative remedies on his contract claim against the City of Anchorage following his termination
due to his inability to perform his duties after he accidentally shot himself in the hand. The court noted
that his contract claims were grievable under the collective bargaining agreement and that he had the
right to pursue the grievance himself even though the union refused to pursue it in his behalf. Under
those circumstances, said the court, he was required to file a grievance, which he failed to do. The court
also held, however, that the superior court erred in dismissing Grant‟s claim that the city unlawfully



                                                     6
discriminated against him based on his disability. The superior court dismissed that claim based on the
doctrine of collateral estoppel, holding that Grants assertion to a retirement board (he claimed and was
given disability retirement) that he was “occupationally disabled” precluded him from later claiming that
he can perform the duties of a police officer. Collateral estoppel does not apply, said the court, because
the issues were not the same in the two proceedings. Grant never conceded that he was incapable of
performing his duties if the city made reasonable accommodations for his disability, and that is the issue
in the disability action.


HEARINGS


Allen v. Alaska Oil and Gas Conservation Commission, 1 P.3d 699 (Alaska 2000)

        One day before his oil and gas leases were to expire, Allen petitioned the Alaska Oil and Gas
Conservation Commission for compulsory unitization of his interests with those held by Phillips
Petroleum Company and Arco Alaska. The Commission at first refused to accept the petition but did so
after Allen appealed. The Commission then decided that it would not accept the petition because the
leases had expired, leaving it without jurisdiction over the matter. On appeal, the court held that (1) the
Commission has the power to issue a retroactive order granting unitization, which would have the effect
of reviving the leases, and (2) the Commission erred in failing to provide a hearing on the merits of
Allen‟s application.


State, Department of Revenue v. Maxwell, 6 P.3d 733 (Alaska 2000)

        The court held that the Child Support Enforcement Division improperly made involuntary
collections for child support from Maxwell after telling him (when he explained that he was not the
father of the child) that his only recourse was to go to court. Because CSED did not give Maxwell an
opportunity for an administrative hearing to contest paternity before issuing its order, he was denied due
process of law, the child support order was invalid, and he is entitled to a refund of those funds that were
retained buy the state. (He must, however, bring a separate action to recover those funds that were
passed through to the federal government or to the mother.)


State, Department of Commerce and Economic Development v. Schnell, 8 P.3d 351 (Alaska 2000)

        The court held that neither equitable estoppel nor laches barred the Alaska Division of Insurance
from sanctioning a real estate agent (based on a felony conviction and its underlying acts evidencing
untrustworthiness) where almost three years passed between the time a hearing officer issued a proposed
decision in the matter and the division director issued a final agency decision (after rejecting the hearing
officer‟s proposal) and where the Division renewed the agent‟s license twice in the interim. The fact
that a statute stated that the director “shall make an order on hearing” within 30 days after the
termination of the hearing is also not a bar to the sanction, said the court, citing authority to the effect
that “in the absence of injury to the defendant and in the absence of a penalty for failure to comply with
the statute, „shall‟ denotes simple futurity rather than a command.” While Schnell failed to prove that



                                                     7
the agency should be barred from imposing any sanctions against him under the facts of the case, the
court held that, due to the passage of time, the agency must provide him with another hearing so he can
submit updated evidence pertinent to the issue of sanctions.


IMMUNITY


Samaniego v. City of Kodiak, 2 P.3d 78 (Alaska 2000)

       In this case, the court announced an objective standard based on the privilege to use force in
making arrests. The plaintiff claimed that officers used excessive force in arresting her, and the officers
claimed privilege to rebut that allegation. The superior court used a qualified immunity rule that
emphasized the arresting officers‟ subjective beliefs in deciding the matter. In doing so, it erred. The
proper analysis to use, said the court, is to examine the objective reasonableness of the officers‟ use of
force. The reasonableness of the officers‟ actions is to be assessed “in light of all the relevant
circumstances of the case at hand.”


JURISDICTION


Allen v. Alaska Oil and Gas Conservation Commission, 1 P.3d 699 (Alaska 2000)

        One day before his oil and gas leases were to expire, Allen petitioned the Alaska Oil and Gas
Conservation Commission for compulsory unitization of his interests with those held by Phillips
Petroleum Company and Arco Alaska. The Commission at first refused to accept the petition but did so
after Allen appealed. The Commission then decided that it would not accept the petition because the
leases had expired, leaving it without jurisdiction over the matter. On appeal, the court held that (1) the
Commission has the power to issue a retroactive order granting unitization, which would have the effect
of reviving the leases, and (2) the Commission erred in failing to provide a hearing on the merits of
Allen‟s application.


In re Johnstone, 2 P.3d 1226 (Alaska 2000)

         The court held that the Alaska Commission on Judicial Conduct retains jurisdiction over a judge
for six years from the time of the alleged misconduct even though the judge has retired in the interim.
Johnstone argued that the Commission only had jurisdiction over judges on active duty. The court
rejected those arguments, noting that the plain language of relevant statutes provided that the
Commission had jurisdiction over any “judge” who is “the subject of an investigation.” Since Johnstone
was on active duty when the alleged misconduct occurred and the investigation was begun before he
retired, the Commission had jurisdiction both before and after he retired.




                                                    8
White v. State, Department of Natural Resources, 14 P.3d 956 (Alaska 2000)

        White failed to raise breach of contract and inverse condemnation claims in his earlier DNR
administrative proceedings, alleging only that a “force majeure” entitled him to extend his oil and gas
leases. Those proceedings were ultimately resolved by the court in an MOJ. The court held that his two
new claims are barred by the doctrine of res judicata because they were obviously ripe and could have
been raised in the earlier proceedings. He alleged that DNR was without jurisdiction to resolve his
claim that it breached a contract with him, but the court held that it has such authority because its
regulations require oil and gas lessees to pursue all grievances through administrative proceedings.


LICENSES, REVOCATION AND SUSPENSION


State, Department of Public Safety v. Shakespeare, 4 P.3d 322 (Alaska 2000)

        The court held that the Department erred in administratively revoking Shakespeare‟s driver‟s
license due to her refusal to take a breath test following her arrest for driving while intoxicated because
she subsequently agreed and took the test within 30 minutes of her refusal. If, as here, the police agree
to give the person the test even though it was initially refused and the police obtain “potentially
probative results,” the person‟s license may not be administratively revoked.


Stosh‟s I/M v. Fairbanks North Star Borough, 12 P.3d 1180 (Alaska 2000)

        Stoshu “Stosh” Solski challenged the suspension of his license to perform vehicle emissions
testing under an I/M (inspection and maintenance) program administered by the Fairbanks North Star
Borough Pollution Control Commission. The court held that, contrary to Stolski‟s assertions, the
agency‟s regulations provided for covert audits of mechanics and that the covert audit that resulted in the
suspension was properly conducted on an “as needed” basis under the regulation for various reasons,
including the fact that he was under heightened scrutiny due to five previous violations and because such
actions were consistent with other agency provisions and with Alaska Department of Environmental
Conservation regulations.


State v. Niedermeyer, 14 P.3d 264 (Alaska 2000)

        The Division of Motor Vehicles‟ administrative revocation of Niedermeyer‟s driver‟s license
following his arrest for underage drinking was held to be punitive. He was not arrested while driving,
there was no evidence that he had ever driven after drinking, and there was no evidence that he intended
to drive on the evening he was arrested. The court rejected a claim that the statute that allowed such
revocation unconstitutionally denied him substantive due process of law, finding that the statute had a
rational (though perhaps “tenuous”) basis. The court held, however, that Niedermeyer was denied
procedural due process because the action taken was punitive, not regulatory, and was taken in the
absence of procedural safeguards. In order to revoke his license, the state would have to afford him
“criminal process” (a trial).



                                                    9
Whitesides v. State, Department of Public Safety, No. 5388, April 13, 2001

        The Department denied a request by Whitesides for an in-person hearing in his driver‟s license
revocation proceedings and, instead, conducted the hearing by telephone. In doing so, the court held, it
violated his due process rights because his credibility was material to the proceedings. A driver‟s
license is an important property interest, said the court, in-person testimony is a valuable tool in
assessing credibility, and added costs do not outweigh the benefits of in-person hearings. The court
noted that there is a statute that requires the Department to conduct the hearings by telephone unless the
hearing officer finds that such a hearing would substantially prejudice the rights of the person involved
or that an in-person hearing is necessary to decide the issues in the case. The court found that statute to
be constitutional by construing it to require in-person hearings “where a party requests such a hearing
and material questions depend on the credibility of the party‟s testimony.”


Brown v. State, Department of Public Safety, No. 5389, April 13, 2001

        Based on the authority of Whitesides, which was handed down the same day, the court held that
the Department violated Brown‟s due process rights by giving him a telephonic hearing in his driver‟s
license revocation proceedings. Like Whitesides, Brown requested an in-person hearing, and his
credibility was material to the case.


PUBLIC RECORDS


Gwich‟in Steering Committee v. State, Office of the Governor, 10 P.3d 572 (Alaska 2000)

         The court held that the governor did not have to produce documents requested under the Alaska
Public Records Act relating to his lobbying efforts to open ANWR for oil exploration and drilling
because (1) the documents are predecisional and deliberative and (2) the requesting organization failed
to prove that that its need for the documents outweighed the governor‟s interest in nondisclosure. As a
result, the documents are exempt from disclosure under the deliberative process privilege, which exists
to protect the quality of governmental decisionmaking.


REGULATIONS, AGENCY COMPLIANCE AND INTERPRETATION


Halliburton Energy Services v. State, Department of Labor, 2 P.3d 41 (Alaska 2000)

       The Court held that a “process safety management regulation” applied to Halliburton‟s assembly
of perforation guns because, even though it does not apply directly to the company‟s manufacturing
processes, it is incorporated by reference in a federal explosives regulation that does apply directly to
those processes. It also held that the regulation was not unconstitutionally vague as applied in the case
at hand.




                                                    10
Northern Alaska Environmental Center v. State, Department of Natural Resources, 2 P.3d 629 (Alaska
2000)

         The court held that DNR erred in issuing a right-of-way permit for the construction of an electric
transmission line across 65 miles of state land without first finding that it was in the best interests of the
state to do so. DNR argued that a best interest finding was not required because it was a revocable
permit and because it did not dispose of an interest in land. The court noted that a DNR regulation
stated exactly the opposite, that such grants of right-of-way are disposals of an interest in land that do
require best interest findings. The court also held, however, that, independent of the regulation, the
right-of-way in this case is a disposal of an interest in land and is not revocable. It is not revocable
because, even though it is revocable by the terms of the agreement, it is not “functionally revocable.” It
is not “functionally revocable” because there is a negligible likelihood that the permit will be revoked
since it involves an expenditure of over $40 million of state funds and because it is likely that the
construction will cause irreversible ecological changes.


Kachemak Bay Conservation Society v. State, Department of Natural Resources, 6 P.3d 270 (Alaska
2000)

        The court held that DNR did not commit error in deciding that an oil and gas lease sale was in
the best interests of the state and that it was consistent with the state‟s coastal management program. A
group of citizens and environmental groups claimed that the agency impermissibly “phased” its review
of the proposed sale and also challenged the substantive basis for the agency‟s decision. “Phasing” a
project involves dividing a proposal into distinct parts and examining each part for compliance rather
than examining the project as a whole. Following an analysis of statutory authority for phasing that was
enacted following earlier decisions of the court disallowing the practice, as well as a review of those
portions of their earlier decisions that survived the legislative process, the court concluded that phasing
is permissible in this instance because it does not allow DNR to avoid thorough review of the project or
to avoid consideration of potential future environmental, sociological, or economic effects. The court
also upheld the agency‟s best interest finding by concluding that DNR had a reasonable basis for making
the finding and that the plaintiffs failed to prove that the agency‟s decision was arbitrary, unreasonable,
or an abuse of discretion. Finally, the court upheld the agency‟s determination that the lease sale was
consistent with the Alaska Coastal Management Plan because it was not arbitrary or capricious and
because it was based on what the agency knew and what was presented to it in building the record for
consistency review. Due to recent statutory changes, the agency is under no duty to seek out all
available information in reaching such decisions. It is enough that it consider what is known to it and
what is presented to it.


Stosh‟s I/M v. Fairbanks North Star Borough, 12 P.3d 1180 (Alaska 2000)

        Stoshu “Stosh” Solski challenged the suspension of his license to perform vehicle emissions
testing under an I/M (inspection and maintenance) program administered by the Fairbanks North Star
Borough Pollution Control Commission. The court held that, contrary to Stolski‟s assertions, the
agency‟s regulations provided for covert audits of mechanics and that the covert audit that resulted in the
suspension was properly conducted on an “as needed” basis under the regulation for various reasons,



                                                     11
including the fact that he was under heightened scrutiny due to five previous violations and because such
actions were consistent with other agency provisions and with Alaska Department of Environmental
Conservation regulations.


Bullock v. State, Department of Community and Regional Affairs, No. 5376, March 23, 2001

        The Alaska Department of Revenue was also a defendant in this case. The court upheld
Revenue‟s interpretation of a statute because it was “continuous, long-standing, and not arbitrary or
capricious.” The court found that Revenue had interpreted the provision in a letter to a taxpayer in 1978,
that it made other identical interpretations in later years, and that a span of 23 years “easily qualifies as
long-standing.”


REGULATIONS, NEED FOR


Jerrel v. State, Department of Natural Resources, 999 P.2d 138 (Alaska 2000)

        The court held that DNR‟s past failure to enforce a regulation requiring that livestock be marked
does not estop the agency from enforcing it now. It also held, however, that the agency‟s newly-
announced requirement that the markings be visible from 20 feet were not contained in the marking
regulation, that it should have been adopted as a regulation itself since it met the definition of a
regulation under the APA, and that because it wasn‟t adopted as a regulation, it was unenforceable. The
court rejected the dissent‟s argument that the distance requirement merely specified how a person was to
comply with the regulation, noting that the APA requires adoption procedures be followed for any such
“ad hoc interpretation” that amends, supplements, or revises a rule or regulation in order to “make
specific” the law enforced, as did the distance requirement imposed by DNR.


REGULATIONS, VALIDITY OF


O‟Callaghan v. State of Alaska, 6 P.3d 728 (Alaska 2000)

        The court held that the Alaska Division of Elections properly adopted emergency regulations to
implement a primary election because (1) less than two months before Alaska‟s primary election, the
Alaska statute that created a blanket primary election process in Alaska was rendered unconstitutional
by a U.S. Supreme Court decision on a similar law from California and (2) the Alaska legislature was
not in session and unable to deal with the problem in an expeditious manner.


Schikora v. State, Department of Revenue, 7 P.3d 938 (Alaska 2000)

       The court upheld a Department of Revenue ruling that Schikora failed to qualify for permanent
fund dividends for several years because he was outside Alaska for more than 180 days each year for



                                                     12
travel and leisure purposes, neither of which constitute allowable absences under the relevant statutes.
Schikora had argued that he qualified as an Alaska resident due to the fact that he was physically present
in the state each year when he applied for the dividends. The court held that, for purposes of qualifying
for permanent fund dividends, a person is a state resident only if he or she was physically present in the
state for the durational requirement during the preceding year (i.e., not gone for more than 180 days for
unallowable reasons). Schikora also claimed that the regulation that established the 180-day rule was
invalid due to procedural errors in its promulgation. The court also held that, assuming he was right and
the regulation was improperly adopted, he still gets no relief because the regulation merely liberalized
the requirements of the statute, which did not allow any of his absences. Finally, the court held that the
regulations did not deny him due process (right to travel) or equal protection of the laws and did not
violate the commerce clause of the federal constitution.


Lauth v. State, Department of Health and Social Services, 12 P.3d 181 (Alaska 2000)

         The court held that the agency‟s regulatory definition of the term “physical custody” is a
reasonable interpretation of the governing statutes and is therefore consistent with the statutes. Lauth
argued that the agency merely copied the definition from the defunct AFDC program without any
deliberation or careful thought. The court said that it saw “no reason to assume that the agency adopted
it arbitrarily, without any careful consideration or thought” and that there is no reason why the agency
couldn‟t borrow methods from the old AFDC program.


Interior Alaska Airboat Association, Inc. v. State, Board of Game, 18 P.3d 686 (Alaska 2001)

        Plaintiffs challenged various regulations of the Board of Game designating two controlled use
areas as being beyond the statutory authority of the board, as being not authorized by statute, as being
prohibited by other regulations, and as being arbitrary, unreasonable, and unnecessary. The court
rejected all those claims as well as several constitutional attacks on the regulations as well and found
them all to be valid.


RES JUDICATA/ESTOPPEL/LACHES


Jerrel v. State, Department of Natural Resources, 999 P.2d 138 (Alaska 2000)

        The court held that DNR‟s past failure to enforce a regulation requiring that livestock be marked
does not estop the agency from enforcing it now. It also held, however, that the agency‟s newly-
announced requirement that the markings be visible from 20 feet were not contained in the marking
regulation, that it should have been adopted as a regulation itself since it met the definition of a
regulation under the APA, and that because it wasn‟t adopted as a regulation, it was unenforceable. The
court rejected the dissent‟s argument that the distance requirement merely specified how a person was to
comply with the regulation, noting that the APA requires adoption procedures be followed for any such
“ad hoc interpretation” that amends, supplements, or revises a rule or regulation in order to “make
specific” the law enforced, as did the distance requirement imposed by DNR.



                                                   13
Alaska Contracting & Consulting, Inc. v. Alaska Department of Labor, 8 P.3d 340 (Alaska 2000)

        In this complicated case, the court held that neither res judicata nor collateral estoppel barred the
Department from deciding that the employer was required to make contributions under the Alaska
Employment Security Act for later years after it decided that it was not liable for 1990. It also held that
substantial evidence supported the agency‟s findings that the employer was liable for such contributions
and that the employer failed to provide sufficient evidence to satisfy the “ABC test,” a three-part test
used to determine whether a person is an employee or an independent contractor.


State, Department of Commerce and Economic Development v. Schnell, 8 P.3d 351 (Alaska 2000)

        The court held that neither equitable estoppel nor laches barred the Alaska Division of Insurance
from sanctioning a real estate agent (based on a felony conviction and its underlying acts evidencing
untrustworthiness) where almost three years passed between the time a hearing officer issued a proposed
decision in the matter and the division director issued a final agency decision (after rejecting the hearing
officer‟s proposal) and where the Division renewed the agent‟s license twice in the interim. The fact
that a statute stated that the director “shall make an order on hearing” within 30 days after the
termination of the hearing is also not a bar to the sanction, said the court, citing authority to the effect
that “in the absence of injury to the defendant and in the absence of a penalty for failure to comply with
the statute, „shall‟ denotes simple futurity rather than a command.” While Schnell failed to prove that
the agency should be barred from imposing any sanctions against him under the facts of the case, the
court held that, due to the passage of time, the agency must provide him with another hearing so he can
submit updated evidence pertinent to the issue of sanctions.


White v. State, Department of Natural Resources, 14 P.3d 956 (Alaska 2000)

        White failed to raise breach of contract and inverse condemnation claims in his earlier DNR
administrative proceedings, alleging only that a “force majeure” entitled him to extend his oil and gas
leases. Those proceedings were ultimately resolved by the court in an MOJ. The court held that his two
new claims are barred by the doctrine of res judicata because they were obviously ripe and could have
been raised in the earlier proceedings. He alleged that DNR was without jurisdiction to resolve his
claim that it breached a contract with him, but the court held that it has such authority because its
regulations require oil and gas lessees to pursue all grievances through administrative proceedings.


Grant v. Anchorage Police Department, No. 5377, March 30, 2001

        The court held that the superior court correctly found that Grant had failed to exhaust his
administrative remedies on his contract claim against the City of Anchorage following his termination
due to his inability to perform his duties after he accidentally shot himself in the hand. The court noted
that his contract claims were grievable under the collective bargaining agreement and that he had the
right to pursue the grievance himself even though the union refused to pursue it in his behalf. Under
those circumstances, said the court, he was required to file a grievance, which he failed to do. The court
also held, however, that the superior court erred in dismissing Grant‟s claim that the city unlawfully



                                                     14
discriminated against him based on his disability. The superior court dismissed that claim based on the
doctrine of collateral estoppel, holding that Grants assertion to a retirement board (he claimed and was
given disability retirement) that he was “occupationally disabled” precluded him from later claiming that
he can perform the duties of a police officer. Collateral estoppel does not apply, said the court, because
the issues were not the same in the two proceedings. Grant never conceded that he was incapable of
performing his duties if the city made reasonable accommodations for his disability, and that is the issue
in the disability action.


SUBSTANTIAL EVIDENCE


Doyon Universal Services v. Allen, 999 P.2d 764 (Alaska 2000)

        The court held that substantial evidence supported the finding of the Alaska Workers‟
Compensation Board that Allen‟s small bowel obstruction (two bezoars!) was work-connected and that
his act of eating Brussels spouts at Doyon‟s facility was a substantial factor in causing that disability. In
deciding as it did, the court applied its “remote site” doctrine, which holds that everyday activities that
are not normally considered to be work-related are deemed to be part of an employee‟s job when they
take place at a remote work site because the requirement of living at that site limits the employee‟s
choices.


Steffey v. Municipality of Anchorage, 1 P.3d 685 (Alaska 2000)

      The court affirmed the decision of the Alaska Workers‟ Compensation Board because the
employer presented substantial evidence that work did not aggravate Steffey‟s symptoms.


Alaska Contracting & Consulting, Inc. v. Alaska Department of Labor, 8 P.3d 340 (Alaska 2000)

        In this complicated case, the court held that neither res judicata nor collateral estoppel barred the
Department from deciding that the employer was required to make contributions under the Alaska
Employment Security Act for later years after it decided that it was not liable for 1990. It also held that
substantial evidence supported the agency‟s findings that the employer was liable for such contributions
and that the employer failed to provide sufficient evidence to satisfy the “ABC test,” a three-part test
used to determine whether a person is an employee or an independent contractor.


Yoon v. Alaska Real Estate Commission, 17 P.3d 779 (Alaska 2001)

     The court held that substantial evidence existed to support the finding of the Alaska Real Estate
Commission that Yoon committed promissory fraud.




                                                     15
Leuthe v. State, Commercial Fisheries Entry Commission, No. 5379, March 30, 2001

        The court held that Leuthe failed to prove that he was misadvised about his eligibility to apply
for a commercial fishing entry permit. Accordingly, said the court, CFEC properly refused to accept his
application filed three years after the 1975 deadline.


Lopez v. Administrator, Public Employees‟ Retirement System, No. 5383, April 6, 2001

        The court upheld the decision of the Public Employees‟ Retirement Board to deny Lopez‟s claim
for occupational disability benefits, finding that substantial evidence supported the Board‟s conclusion
that her disability was caused by a condition unrelated to her work, that the Board had correctly
considered all factors in arriving at its conclusion, and that the Board did not abuse its discretion in
refusing to admit into evidence a compromise and release agreement that Lopez had entered into with
the State of Alaska. The case contains a good discussion of the rules surrounding admissibility of
settlement agreements, explaining why the Board did not abuse its discretion in allowing this agreement
into evidence even though it contained an admission by the State that Lopez‟s disability was caused by a
work-related injury.


TAXES


United Parcel Service Co. v. State, Department of Revenue, 1 P.3d 83 (Alaska 2000)

       Although not agreeing with the agency‟s precise legal theory, the court held that the Department
of Revenue correctly imposed a tax upon United Parcel Service for jet fuel it purchased in Alaska even
though it did not consume all that fuel in Alaska.


Fairbanks North Star Borough v. Golden Heart Utilities, Inc., 13 P.3d 263 (Alaska 2000)

        The court held that the Fairbanks North Star Borough Assessor‟s Office used a “recognized and
appropriate method of valuation to assess Golden Heart‟s possessory interest in tax-exempt property.”
The method at issue was the “reversionary method,” which had been upheld by the court in two earlier
cases involving the North Star Borough.


State, Department of Revenue v. Dyncorp and Subsidiaries, 14 P.3d 981 (Alaska 2000)

       In this case, the court held that the Office of Tax Appeals properly applied de novo review to a
matter before it and, just like a superior court, did not owe special deference to the Department of
Revenue‟s decision because no agency expertise or specialized knowledge or experience was involved;
however, the court also found that the Office of Tax Appeals erred in its findings, thus reinstating the
agency decision.




                                                  16
McCormick v. City of Dillingham, 16 P.3d 735 (Alaska 2001)

        McCormick failed to pay Dillingham‟s business license fee and failed to collect and pay its sales
tax, arguing that they were both invalid because of the way the relevant ordinances were enacted.
Although he was able to prove that there were “anomalies” in the process, the court held that he failed to
present sufficient evidence to overcome the presumption of regularity that attaches to the city‟s actions.



       B.      BY AGENCY

CITY OF ANCHORAGE


Grant v. Anchorage Police Department, No. 5377, March 30, 2001

        The court held that the superior court correctly found that Grant had failed to exhaust his
administrative remedies on his contract claim against the City of Anchorage following his termination
due to his inability to perform his duties after he accidentally shot himself in the hand. The court noted
that his contract claims were grievable under the collective bargaining agreement and that he had the
right to pursue the grievance himself even though the union refused to pursue it in his behalf. Under
those circumstances, said the court, he was required to file a grievance, which he failed to do. The court
also held, however, that the superior court erred in dismissing Grant‟s claim that the city unlawfully
discriminated against him based on his disability. The superior court dismissed that claim based on the
doctrine of collateral estoppel, holding that Grants assertion to a retirement board (he claimed and was
given disability retirement) that he was “occupationally disabled” precluded him from later claiming that
he can perform the duties of a police officer. Collateral estoppel does not apply, said the court, because
the issues were not the same in the two proceedings. Grant never conceded that he was incapable of
performing his duties if the city made reasonable accommodations for his disability, and that is the issue
in the disability action.


CITY OF DILLINGHAM


McCormick v. City of Dillingham, 16 P.3d 735 (Alaska 2001)

        McCormick failed to pay Dillingham‟s business license fee and failed to collect and pay its sales
tax, arguing that they were both invalid because of the way the relevant ordinances were enacted.
Although he was able to prove that there were “anomalies” in the process, the court held that he failed to
present sufficient evidence to overcome the presumption of regularity that attaches to the city‟s actions.




                                                   17
CITY OF KODIAK


Samaniego v. City of Kodiak, 2 P.3d 78 (Alaska 2000)

       In this case, the court announced an objective standard based on the privilege to use force in
making arrests. The plaintiff claimed that officers used excessive force in arresting her, and the officers
claimed privilege to rebut that allegation. The superior court used a qualified immunity rule that
emphasized the arresting officers‟ subjective beliefs in deciding the matter. In doing so, it erred. The
proper analysis to use, said the court, is to examine the objective reasonableness of the officers‟ use of
force. The reasonableness of the officers‟ actions is to be assessed “in light of all the relevant
circumstances of the case at hand.”


COMMISSION ON JUDICIAL CONDUCT


In re Johnstone, 2 P.3d 1226 (Alaska 2000)

         The court held that the Alaska Commission on Judicial Conduct retains jurisdiction over a judge
for six years from the time of the alleged misconduct even though the judge has retired in the interim.
Johnstone argued that the Commission only had jurisdiction over judges on active duty. The court
rejected those arguments, noting that the plain language of relevant statutes provided that the
Commission had jurisdiction over any “judge” who is “the subject of an investigation.” Since Johnstone
was on active duty when the alleged misconduct occurred and the investigation was begun before he
retired, the Commission had jurisdiction both before and after he retired.


DEPARTMENT OF ADMINISTRATION


Cassel v. State, Department of Administration, 14 P.3d 278 (Alaska 2000)

        The court held that, under the State-APEA collective bargaining agreement in effect at the time,
the State of Alaska could only terminate a probationary employee for just cause based on the employee‟s
failure to satisfy objective standards, not subjective standards, used in evaluating his performance. On
the other hand, the court noted that just cause is not per se required for termination of a probationary
employee and that the state is not precluded from negotiating a contract that would establish an at-will
relationship.




                                                    18
       DIVISION OF MOTOR VEHICLES


State v. Niedermeyer, 14 P.3d 264 (Alaska 2000)

        The Division of Motor Vehicles‟ administrative revocation of Niedermeyer‟s driver‟s license
following his arrest for underage drinking was held to be punitive. He was not arrested while driving,
there was no evidence that he had ever driven after drinking, and there was no evidence that he intended
to drive on the evening he was arrested. The court rejected a claim that the statute that allowed such
revocation unconstitutionally denied him substantive due process of law, finding that the statute had a
rational (though perhaps “tenuous”) basis. The court held, however, that Niedermeyer was denied
procedural due process because the action taken was punitive, not regulatory, and was taken in the
absence of procedural safeguards. In order to revoke his license, the state would have to afford him
“criminal process” (a trial).


       OIL AND GAS CONSERVATION COMMISSION


Allen v. Alaska Oil and Gas Conservation Commission, 1 P.3d 699 (Alaska 2000)

        One day before his oil and gas leases were to expire, Allen petitioned the Alaska Oil and Gas
Conservation Commission for compulsory unitization of his interests with those held by Phillips
Petroleum Company and Arco Alaska. The Commission at first refused to accept the petition but did so
after Allen appealed. The Commission then decided that it would not accept the petition because the
leases had expired, leaving it without jurisdiction over the matter. On appeal, the court held that (1) the
Commission has the power to issue a retroactive order granting unitization, which would have the effect
of reviving the leases, and (2) the Commission erred in failing to provide a hearing on the merits of
Allen‟s application.


       PUBLIC EMPLOYEES’ RETIREMENT SYSTEM


Lopez v. Administrator, Public Employees‟ Retirement System, No. 5383, April 6, 2001

        The court upheld the decision of the Public Employees‟ Retirement Board to deny Lopez‟s claim
for occupational disability benefits, finding that substantial evidence supported the Board‟s conclusion
that her disability was caused by a condition unrelated to her work, that the Board had correctly
considered all factors in arriving at its conclusion, and that the Board did not abuse its discretion in
refusing to admit into evidence a compromise and release agreement that Lopez had entered into with
the State of Alaska. The case contains a good discussion of the rules surrounding admissibility of
settlement agreements, explaining why the Board did not abuse its discretion in allowing this agreement
into evidence even though it contained an admission by the State that Lopez‟s disability was caused by a
work-related injury.




                                                    19
DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT


       DIVISION OF INSURANCE


State, Department of Commerce and Economic Development v. Schnell, 8 P.3d 351 (Alaska 2000)

        The court held that neither equitable estoppel nor laches barred the Alaska Division of Insurance
from sanctioning a real estate agent (based on a felony conviction and its underlying acts evidencing
untrustworthiness) where almost three years passed between the time a hearing officer issued a proposed
decision in the matter and the division director issued a final agency decision (after rejecting the hearing
officer‟s proposal) and where the Division renewed the agent‟s license twice in the interim. The fact
that a statute stated that the director “shall make an order on hearing” within 30 days after the
termination of the hearing is also not a bar to the sanction, said the court, citing authority to the effect
that “in the absence of injury to the defendant and in the absence of a penalty for failure to comply with
the statute, „shall‟ denotes simple futurity rather than a command.” While Schnell failed to prove that
the agency should be barred from imposing any sanctions against him under the facts of the case, the
court held that, due to the passage of time, the agency must provide him with another hearing so he can
submit updated evidence pertinent to the issue of sanctions.


       PUBLIC UTILITIES COMMISSION (former)


Tlingit-Haida Regional Electrical Authority v. State, Alaska Public Utilities Commission, 15 P.3d 754
(Alaska 2001)

         In this factually complex case, the court held that the Alaska Public Utilities Commission did not
violate due process by failing to give adequate notice of what was at issue in its administrative hearing
and by failing to shift the burden of proof to another party. If the commission actually failed to do either
act, it was at most harmless error.


       REAL ESTATE COMMISSION


Yoon v. Alaska Real Estate Commission, 17 P.3d 779 (Alaska 2001)

     The court held that substantial evidence existed to support the finding of the Alaska Real Estate
Commission that Yoon committed promissory fraud.




                                                    20
DEPARTMENT OF FISH AND GAME


       BOARD OF GAME


Interior Alaska Airboat Association, Inc. v. State, Board of Game, 18 P.3d 686 (Alaska 2001)

        Plaintiffs challenged various regulations of the Board of Game designating two controlled use
areas as being beyond the statutory authority of the board, as being not authorized by statute, as being
prohibited by other regulations, and as being arbitrary, unreasonable, and unnecessary. The court
rejected all those claims as well as several constitutional attacks on the regulations as well and found
them all to be valid.


       COMMERCIAL FISHERIES ENTRY COMMISSION


Leuthe v. State, Commercial Fisheries Entry Commission, No. 5379, March 30, 2001

        The court held that Leuthe failed to prove that he was misadvised about his eligibility to apply
for a commercial fishing entry permit. Accordingly, said the court, CFEC properly refused to accept his
application filed three years after the 1975 deadline.


DEPARTMENT OF HEALTH AND SOCIAL SERVICES


Lauth v. State, Department of Health and Social Services, 12 P.3d 181 (Alaska 2000)

         The court held that the agency‟s regulatory definition of the term “physical custody” is a
reasonable interpretation of the governing statutes and is therefore consistent with the statutes. Lauth
argued that the agency merely copied the definition from the defunct AFDC program without any
deliberation or careful thought. The court said that it saw “no reason to assume that the agency adopted
it arbitrarily, without any careful consideration or thought” and that there is no reason why the agency
couldn‟t borrow methods from the old AFDC program.


       DIVISION OF FAMILY AND YOUTH SERVICES


P.G. v. State, Department of Health and Human Services, 4 P.3d 326 (Alaska 2000)

        This is another case in which the court holds that a state agency has an affirmative duty to warn
or take other steps to protect someone from harm. Here, the Division of Family and Youth Services
failed to warn foster parents about the nature of a 13-year-old boy who physically and sexually assaulted



                                                   21
the foster parents‟ natural children, a son and daughter, aged eight and ten. The factors to be considered
in deciding whether a duty attaches are set forth, as is a review of other cases in which the court has held
that a state agency owes a duty.


DEPARTMENT OF LABOR


Halliburton Energy Services v. State, Department of Labor, 2 P.3d 41 (Alaska 2000)

       The Court held that a “process safety management regulation” applied to Halliburton‟s assembly
of perforation guns because, even though it does not apply directly to the company‟s manufacturing
processes, it is incorporated by reference in a federal explosives regulation that does apply directly to
those processes. It also held that the regulation was not unconstitutionally vague as applied in the case
at hand.


Alaska Contracting & Consulting, Inc. v. Alaska Department of Labor, 8 P.3d 340 (Alaska 2000)

                In this complicated case, the court held that neither res judicata nor collateral estoppel
barred the Department from deciding that the employer was required to make contributions under the
Alaska Employment Security Act for later years after it decided that it was not liable for 1990. It also
held that substantial evidence supported the agency‟s findings that the employer was liable for such
contributions and that the employer failed to provide sufficient evidence to satisfy the “ABC test,” a
three-part test used to determine whether a person is an employee or an independent contractor.


       WORKERS’ COMPENSATION BOARD


Doyon Universal Services v. Allen, 999 P.2d 764 (Alaska 2000)

        The court held that substantial evidence supported the finding of the Alaska Workers‟
Compensation Board that Allen‟s small bowel obstruction (two bezoars!) was work-connected and that
his act of eating Brussels spouts at Doyon‟s facility was a substantial factor in causing that disability. In
deciding as it did, the court applied its “remote site” doctrine, which holds that everyday activities that
are not normally considered to be work-related are deemed to be part of an employee‟s job when they
take place at a remote work site because the requirement of living at that site limits the employee‟s
choices.


Deyonge v. NANA/Marriott, 1 P.3d 90 (Alaska 2000)

       The court held that the Alaska Workers‟ Compensation Board erred by declining to apply the
presumption of compensability and by incorrectly distinguishing between aggravation of symptoms and
aggravation of the underlying condition. Deyonge successfully triggered the presumption of



                                                     22
compensability by presenting some evidence that the claim arose out of her employment, and, as the
court has held in the past, the Board may not distinguish between aggravation of symptoms and
aggravation of the underlying condition because both are compensable.


Steffey v. Municipality of Anchorage, 1 P.3d 685 (Alaska 2000)

      The court affirmed the decision of the Alaska Workers‟ Compensation Board because the
employer presented substantial evidence that work did not aggravate Steffey‟s symptoms.


American International Group v. Carriere, 2 P.3d 1222 (Alaska 2000)

        The court held that the Alaska Workers‟ Compensation Board erred in refusing to impose a
statutory penalty for late payment of a settlement where the employer‟s insurer mailed the first check in
a timely manner (within 14 days), cancelled that check when the employee reported that he hadn‟t
received it, and failed to mail the replacement check within 14 days following the cancellation of the
first check. The 14-day rule applies at each point that a payment becomes due.


Bloom v. Tekton, Inc., 5 P.3d 235 (Alaska 2000)

        The court held that the Alaska Workers‟ Compensation Board erred in denying Bloom‟s request
that he be allowed to have a substitute physician after his own physician refused to treat him any longer.
When a physician becomes unwilling or unable to continue care, said the court, concerns over “doctor
shopping” are outweighed by the need for the patient to find a new doctor.


DEPARTMENT OF NATURAL RESOURCES


Jerrel v. State, Department of Natural Resources, 999 P.2d 138 (Alaska 2000)

        The court held that DNR‟s past failure to enforce a regulation requiring that livestock be marked
does not estop the agency from enforcing it now. It also held, however, that the agency‟s newly-
announced requirement that the markings be visible from 20 feet were not contained in the marking
regulation, that it should have been adopted as a regulation itself since it met the definition of a
regulation under the APA, and that because it wasn‟t adopted as a regulation, it was unenforceable. The
court rejected the dissent‟s argument that the distance requirement merely specified how a person was to
comply with the regulation, noting that the APA requires adoption procedures be followed for any such
“ad hoc interpretation” that amends, supplements, or revises a rule or regulation in order to “make
specific” the law enforced, as did the distance requirement imposed by DNR.




                                                   23
Northern Alaska Environmental Center v. State, Department of Natural Resources, 2 P.3d 629 (Alaska
2000)

         The court held that DNR erred in issuing a right-of-way permit for the construction of an electric
transmission line across 65 miles of state land without first finding that it was in the best interests of the
state to do so. DNR argued that a best interest finding was not required because it was a revocable
permit and because it did not dispose of an interest in land. The court noted that a DNR regulation
stated exactly the opposite, that such grants of right-of-way are disposals of an interest in land that do
require best interest findings. The court also held, however, that, independent of the regulation, the
right-of-way in this case is a disposal of an interest in land and is not revocable. It is not revocable
because, even though it is revocable by the terms of the agreement, it is not “functionally revocable.” It
is not “functionally revocable” because there is a negligible likelihood that the permit will be revoked
since it involves an expenditure of over $40 million of state funds and because it is likely that the
construction will cause irreversible ecological changes.


Kachemak Bay Conservation Society v. State, Department of Natural Resources, 6 P.3d 270 (Alaska
2000)

        The court held that DNR did not commit error in deciding that an oil and gas lease sale was in
the best interests of the state and that it was consistent with the state‟s coastal management program. A
group of citizens and environmental groups claimed that the agency impermissibly “phased” its review
of the proposed sale and also challenged the substantive basis for the agency‟s decision. “Phasing” a
project involves dividing a proposal into distinct parts and examining each part for compliance rather
than examining the project as a whole. Following an analysis of statutory authority for phasing that was
enacted following earlier decisions of the court disallowing the practice, as well as a review of those
portions of their earlier decisions that survived the legislative process, the court concluded that phasing
is permissible in this instance because it does not allow DNR to avoid thorough review of the project or
to avoid consideration of potential future environmental, sociological, or economic effects. The court
also upheld the agency‟s best interest finding by concluding that DNR had a reasonable basis for making
the finding and that the plaintiffs failed to prove that the agency‟s decision was arbitrary, unreasonable,
or an abuse of discretion. Finally, the court upheld the agency‟s determination that the lease sale was
consistent with the Alaska Coastal Management Plan because it was not arbitrary or capricious and
because it was based on what the agency knew and what was presented to it in building the record for
consistency review. Due to recent statutory changes, the agency is under no duty to seek out all
available information in reaching such decisions. It is enough that it consider what is known to it and
what is presented to it.


White v. State, Department of Natural Resources, 14 P.3d 956 (Alaska 2000)

        White failed to raise breach of contract and inverse condemnation claims in his earlier DNR
administrative proceedings, alleging only that a “force majeure” entitled him to extend his oil and gas
leases. Those proceedings were ultimately resolved by the court in an MOJ. The court held that his two
new claims are barred by the doctrine of res judicata because they were obviously ripe and could have
been raised in the earlier proceedings. He alleged that DNR was without jurisdiction to resolve his



                                                     24
claim that it breached a contract with him, but the court held that it has such authority because its
regulations require oil and gas lessees to pursue all grievances through administrative proceedings.


DEPARTMENT OF PUBLIC SAFETY


State, Department of Public Safety v. Shakespeare, 4 P.3d 322 (Alaska 2000)

        The court held that the Department erred in administratively revoking Shakespeare‟s driver‟s
license due to her refusal to take a breath test following her arrest for driving while intoxicated because
she subsequently agreed and took the test within 30 minutes of her refusal. If, as here, the police agree
to give the person the test even though it was initially refused and the police obtain “potentially
probative results,” the person‟s license may not be administratively revoked.


Whitesides v. State, Department of Public Safety, No. 5388, April 13, 2001

        The Department denied a request by Whitesides for an in-person hearing in his driver‟s license
revocation proceedings and, instead, conducted the hearing by telephone. In doing so, the court held, it
violated his due process rights because his credibility was material to the proceedings. A driver‟s
license is an important property interest, said the court, in-person testimony is a valuable tool in
assessing credibility, and added costs do not outweigh the benefits of in-person hearings. The court
noted that there is a statute that requires the Department to conduct the hearings by telephone unless the
hearing officer finds that such a hearing would substantially prejudice the rights of the person involved
or that an in-person hearing is necessary to decide the issues in the case. The court found that statute to
be constitutional by construing it to require in-person hearings “where a party requests such a hearing
and material questions depend on the credibility of the party‟s testimony.”


Brown v. State, Department of Public Safety, No. 5389, April 13, 2001

        Based on the authority of Whitesides, which was handed down the same day, the court held that
the Department violated Brown‟s due process rights by giving him a telephonic hearing in his driver‟s
license revocation proceedings. Like Whitesides, Brown requested an in-person hearing, and his
credibility was material to the case.


DEPARTMENT OF REVENUE


United Parcel Service Co. v. State, Department of Revenue, 1 P.3d 83 (Alaska 2000)

       Although not agreeing with the agency‟s precise legal theory, the court held that the Department
of Revenue correctly imposed a tax upon United Parcel Service for jet fuel it purchased in Alaska even
though it did not consume all that fuel in Alaska.



                                                    25
Schikora v. State, Department of Revenue, 7 P.3d 938 (Alaska 2000)

        The court upheld a Department of Revenue ruling that Schikora failed to qualify for permanent
fund dividends for several years because he was outside Alaska for more than 180 days each year for
travel and leisure purposes, neither of which constitute allowable absences under the relevant statutes.
Schikora had argued that he qualified as an Alaska resident due to the fact that he was physically present
in the state each year when he applied for the dividends. The court held that, for purposes of qualifying
for permanent fund dividends, a person is a state resident only if he or she was physically present in the
state for the durational requirement during the preceding year (i.e., not gone for more than 180 days for
unallowable reasons). Schikora also claimed that the regulation that established the 180-day rule was
invalid due to procedural errors in its promulgation. The court also held that, assuming he was right and
the regulation was improperly adopted, he still gets no relief because the regulation merely liberalized
the requirements of the statute, which did not allow any of his absences. Finally, the court held that the
regulations did not deny him due process (right to travel) or equal protection of the laws and did not
violate the commerce clause of the federal constitution.


State, Department of Revenue v. Dyncorp and Subsidiaries, 14 P.3d 981 (Alaska 2000)

       In this case, the court held that the Office of Tax Appeals properly applied de novo review to a
matter before it and, just like a superior court, did not owe special deference to the Department of
Revenue‟s decision because no agency expertise or specialized knowledge or experience was involved;
however, the court also found that the Office of Tax Appeals erred in its findings, thus reinstating the
agency decision.


Bullock v. State, Department of Community and Regional Affairs, No. 5376, March 23, 2001

        The Alaska Department of Revenue was also a defendant in this case. The court upheld
Revenue‟s interpretation of a statute because it was “continuous, long-standing, and not arbitrary or
capricious.” The court found that Revenue had interpreted the provision in a letter to a taxpayer in 1978,
that it made other identical interpretations in later years, and that a span of 23 years “easily qualifies as
long-standing.”


       CHILD SUPPORT ENFORCEMENT DIVISION


State, Department of Revenue v. Maxwell, 6 P.3d 733 (Alaska 2000)

        The court held that the Child Support Enforcement Division improperly made involuntary
collections for child support from Maxwell after telling him (when he explained that he was not the
father of the child) that his only recourse was to go to court. Because CSED did not give Maxwell an
opportunity for an administrative hearing to contest paternity before issuing its order, he was denied due
process of law, the child support order was invalid, and he is entitled to a refund of those funds that were



                                                     26
retained buy the state. (He must, however, bring a separate action to recover those funds that were
passed through to the federal government or to the mother.)


Allen v. State, Department of Revenue, 15 P.3d 743 (Alaska 2000)

        The court held that the superior court erred in dismissing Allen‟s appeal from two decisions by
the Child Support Enforcement Division as untimely because, although they were filed more than 30
days following the agency‟s decisions, the agency failed to advise him that the decisions were final. The
court also held that, contrary to CSED‟s assertions, one of the decisions was appealable even though he
could have sought relief in the courts because it blocked access to an agency-sponsored process
(modification of a child support order).


FAIRBANKS NORTH STAR BOROUGH


Stosh‟s I/M v. Fairbanks North Star Borough, 12 P.3d 1180 (Alaska 2000)

        Stoshu “Stosh” Solski challenged the suspension of his license to perform vehicle emissions
testing under an I/M (inspection and maintenance) program administered by the Fairbanks North Star
Borough Pollution Control Commission. The court held that, contrary to Stolski‟s assertions, the
agency‟s regulations provided for covert audits of mechanics and that the covert audit that resulted in the
suspension was properly conducted on an “as needed” basis under the regulation for various reasons,
including the fact that he was under heightened scrutiny due to five previous violations and because such
actions were consistent with other agency provisions and with Alaska Department of Environmental
Conservation regulations.


Fairbanks North Star Borough v. Golden Heart Utilities, Inc., 13 P.3d 263 (Alaska 2000)

        The court held that the Fairbanks North Star Borough Assessor‟s Office used a “recognized and
appropriate method of valuation to assess Golden Heart‟s possessory interest in tax-exempt property.”
The method at issue was the “reversionary method,” which had been upheld by the court in two earlier
cases involving the North Star Borough.


OFFICE OF THE GOVERNOR


Gwich‟in Steering Committee v. State, Office of the Governor, 10 P.3d 572 (Alaska 2000)

       The court held that the governor did not have to produce documents requested under the Alaska
Public Records Act relating to his lobbying efforts to open ANWR for oil exploration and drilling
because (1) the documents are predecisional and deliberative and (2) the requesting organization failed
to prove that that its need for the documents outweighed the governor‟s interest in nondisclosure. As a



                                                    27
result, the documents are exempt from disclosure under the deliberative process privilege, which exists
to protect the quality of governmental decisionmaking.


OFFICE OF THE LIEUTENANT GOVERNOR


       DIVISION OF ELECTIONS


O‟Callaghan v. State of Alaska, 6 P.3d 728 (Alaska 2000)

        The court held that the Alaska Division of Elections properly adopted emergency regulations to
implement a primary election because (1) less than two months before Alaska‟s primary election, the
Alaska statute that created a blanket primary election process in Alaska was rendered unconstitutional
by a U.S. Supreme Court decision on a similar law from California and (2) the Alaska legislature was
not in session and unable to deal with the problem in an expeditious manner.




PART II:       LEGISLATIVE MATERIALS


            LEGISLATION PENDING BEFORE THE ALASKA STATE LEGISLATURE
                       OF INTEREST IN ADMINISTRATIVE LAW



I.     Structure of State Government
       A.      E.O. 102: Transfer the long-term care ombudsman from the Department of
               Administration to the Mental Health Trust Authority. Effective 3/10/01.


       B.      CSSB 105(FIN): Creates the Office of Victims' Rights
               Current Status: (H) JUD then FIN              Status Date: 3/22/01
               TITLE: "An Act relating to victims' rights; relating to establishing an office of victims'
               rights; relating to the authority of litigants and the court to comment on the crime victim's
               choice to appear or testify in a criminal case; relating to compensation of victims of
               violent crimes; relating to eligibility for a permanent fund dividend for persons convicted
               of and incarcerated for certain offenses; relating to notice of appropriations concerning



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                victims' rights; amending Rules 16 and 30, Alaska Rules of Criminal Procedure, Rule 9,
                Alaska Delinquency Rules, and Rule 501, Alaska Rules of Evidence; and providing for
                an effective date."


II.    Delivery of State Services
       A.       HB 195: Free Exercise of Religion and Governmental Entities
                Current Status: (H)STA then JUD, FIN          Status Date: 3/19/01
                TITLE: "An Act requiring governmental entities to meet certain requirements before
                placing a burden on a person's free exercise of religion."


       B.       SB 147: Contracting for Not Inherently State Governmental Activities
                Current Status: (S)FIN                        Status Date: 3/30/01
                TITLE: "An Act relating to nongovernmental activities of state departments; and
                providing for an effective date."


III.   Administrative Adjudication and Claims
       A.       SB 152: DOTPF-Related Contract Claims
                Current Status: (S) TRA                       Status Date: 3/20/01
                TITLE: "An Act relating to the handling of interest on contract controversies involving
                the Department of Transportation and Public Facilities or state agencies to whom the
                Department of Transportation and Public Facilities delegates the responsibility for
                handling the controversies."


IV.    State Employees
       A.       SB 65: Pay Equity Study For Certain State Employees
                Current Status: (H)STA then FIN               Status Date: 3/26/01
                TITLE: "An Act requiring a study regarding equal pay for equal work of certain state
                employees."


V.     Courts
       A.       HB 172: Therapeutic Drug And Alcohol Courts



                                                     29
             Current Status: (H)FIN                          Status Date: 3/26/01
             TITLE: "An Act relating to therapeutic courts for offenders and to the authorized
             number of superior court judges."


      B.     CSSB 159(RES): Retention Election Every Fourth Year for Judges of the Court of
             Appeals
             Current Status: (H)O&G                          Status Date: 04/04/01
             TITLE: "An Act relating to retention elections for judges of the court of appeals."


      C.     SB 161: Withhold Pay For Judges if Timely Decision Not Made
             Current Status: (S)JUD                          Status Date: 3/23/01
             TITLE: "An Act relating to the withholding of salary of justices, judges, and
             magistrates; relating to requiring prompt decisions by justices, judges, and magistrates;
             and relating to judicial retention elections for judicial officers."


      D.     SJR 22: Const. Am.: Shortens Time for Retention Elections for Judges of the Supreme
             Court and Superior Court
             Current Status: (S)JUD                          Status Date: 3/23/01
             TITLE: "Proposing an amendment to the Constitution of the State of Alaska relating to
             the retention elections for justices of the Alaska supreme court and judges of the superior
             court."


VI.   State Budget
      A.     HJR 2: Const. Am.: Biennial State Budget
             Current Status: (H)STA then JUD, FIN                    Status Date: 1/8/01
             TITLE: "Proposing amendments to the Constitution of the State of Alaska relating to
             the duration of regular sessions of the legislature and to a biennial state budget."




                                                    30
                                          APPENDIX

Alaska Contracting & Consulting, Inc. v. Alaska Department of Labor, 8 P.3d 340
(Alaska 2000)………………………………………………………………………………. 4, 15, 22

Allen v. Alaska Oil and Gas Conservation Commission, 1 P.3d 699 (Alaska 2000)……… 7, 8, 19

Allen v. State, Department of Revenue, 15 P.3d 743 (Alaska 2000)……………………… 4, 27

American International Group v. Carriere, 2 P.3d 1222 (Alaska 2000)…………………… 23

Bloom v. Tekton, Inc., 5 P.3d 235 (Alaska 2000)…………………………………………. 23

Brown v. State, Department of Public Safety, No. 5389, April 13, 2001………………….. 10, 25

Bullock v. State, Department of Community and Regional Affairs, No. 5376,
March 23, 2001…………………………………………………………………………….. 12, 26

Cassel v. State, Department of Administration, 14 P.3d 278 (Alaska 2000)……………… 6, 18

Deyonge v. NANA/Marriott, 1 P.3d 90 (Alaska 2000)……………………………………. 22

Doyon Universal Services v. Allen, 999 P.2d 764 (Alaska 2000)…………………………. 15, 22

Fairbanks North Star Borough v. Golden Heart Utilities, Inc., 13 P.3d 263
(Alaska 2000)………………………………………………………………………………. 16, 27

Grant v. Anchorage Police Department, No. 5377, March 30, 2001………………………. 6, 14, 17

Gwich‟in Steering Committee v. State, Office of the Governor, 10 P.3d 572
(Alaska 2000)………………………………………………………………………………. 10, 27

Halliburton Energy Services v. State, Department of Labor, 2 P.3d 41 (Alaska 2000)…….4, 10, 22

In re Johnstone, 2 P.3d 1226 (Alaska 2000)……………………………………………….. 8, 18

Interior Alaska Airboat Association, Inc. v. State, Board of Game, 18 P.3d 686
(Alaska 2001)………………………………………………………………………………. 13, 21

Jerrel v. State, Department of Natural Resources, 999 P.2d 138 (Alaska 2000)…………... 12, 13, 23

Kachemak Bay Conservation Society v. State, Department of Natural Resources,
6 P.3d 270 (Alaska 2000)…………………………………………………………………...11, 24

Lauth v. State, Department of Health and Social Services, 12 P.3d 181 (Alaska 2000)……13, 21


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Leuthe v. State, Commercial Fisheries Entry Commission, No. 5379, March 30, 2001……16, 21

Lopez v. Administrator, Public Employees‟ Retirement System, No. 5383, April 6, 2001.. 16, 19

McCormick v. City of Dillingham, 16 P.3d 735 (Alaska 2001)…………………… ……... 17

Northern Alaska Environmental Center v. State, Department of Natural Resources,
2 P.3d 629 (Alaska 2000)………………………………………………………………….. 11, 24

O‟Callaghan v. State of Alaska, 6 P.3d 728 (Alaska 2000)………………………………... 12, 28

P.G. v. State, Department of Health and Human Services, 4 P.3d 326 (Alaska 2000)……. 6, 21

Samaniego v. City of Kodiak, 2 P.3d 78 (Alaska 2000)…………………………………… 8, 18

Schikora v. State, Department of Revenue, 7 P.3d 938 (Alaska 2000)……………………. 4, 12, 26

State v. Niedermeyer, 14 P.3d 264 (Alaska 2000)…………………………………………. 5, 9, 19

State, Department of Commerce and Economic Development v. Schnell, 8 P.3d 351
(Alaska 2000)………………………………………………………………………………. 7, 14, 20

State, Department of Public Safety v. Shakespeare, 4 P.3d 322 (Alaska 2000)…………… 9, 25

State, Department of Revenue v. Dyncorp and Subsidiaries, 14 P.3d 981 (Alaska 2000)… 16, 26

State, Department of Revenue v. Maxwell, 6 P.3d 733 (Alaska 2000)……………………. 4, 7, 26

Steffey v. Municipality of Anchorage, 1 P.3d 685 (Alaska 2000)………………………… 15, 23

Stosh‟s I/M v. Fairbanks North Star Borough, 12 P.3d 1180 (Alaska 2000)……………… 9, 11, 27

Tlingit-Haida Regional Electrical Authority v. State, Alaska Public Utilities Commission,
15 P.3d 754 (Alaska 2001)………………………………………………………………… 5, 20

United Parcel Service Co. v. State, Department of Revenue, 1 P.3d 83 (Alaska 2000)……16, 25

White v. State, Department of Natural Resources, 14 P.3d 956 (Alaska 2000)…………….9, 14, 24

Whitesides v. State, Department of Public Safety, No. 5388, April 13, 2001………………5, 10, 25

Yoon v. Alaska Real Estate Commission, 17 P.3d 779 (Alaska 2001)……………………. 15, 20




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