Alaska Denies Compensation for Shorter Salmon Season

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SandBar 7:4, January, 2009 Alaska Denies Compensation for Shorter Salmon Season Vanek v. State of Alaska, Board of Fisheries, 2008 Alas. LEXIS 132 (Alaska Sept. 19, 2008). Jonathan Proctor, 2L, University of Mississippi School of Law The Supreme Court of Alaska recently decided that commercial fishing permits are not property and, therefore, not subject to compensation under federal or Alaska takings law. Background When a federal or state government takes or damages a property owner’s rights of use and enjoyment of that property, traditionally the owner is entitled to compensation for his or her loss. At first glance, this appears to be the case of commercial salmon fishermen in Alaska, who saw their season shortened by more than two weeks as a result of a change in policy of the State of Alaska Board of Fisheries (Board). The key question is whether the commercial fishermen’s permits are property. If so, then the fishermen would be entitled to compensation for their losses. In 1978 the Board enacted the Upper Cook Inlet Salmon Management Plan to regulate gillnet and recreational salmon fishing in the area. At the time, commercial gillnet and recreational fishermen were allowed to fish from July 1 through August 15 each year in the Kenai, Kasilof, and Susitna rivers.1 From 1982 to 1996, commercial drift gillnet salmon fishing was allowed in the Upper Cook Inlet from June 25 to December 31. In 1996, the creation of the Northern District Salmon Management Plan closed the season for drift gillnet fishing on August 9 and barred those fishermen from operating in restricted areas of Cook Inlet.2 Finally, in 1997 the Board changed the gillnet season dates for the Kenai and East Forelands sections of the Central District from June 25 to July 8 and from August 15 to August 10.3 The net result of these changes was the gillnet season being shortened by more than two weeks. The salmon fishers sued in 2005, asking an Alaska state court to either overturn the Board’s changes to the season or to compensate them for what would surely be a loss in productivity. The Alaska Supreme Court accepted their appeal after their case was dismissed in 2006 for lack of legally recognized property interests. Taking Due to extensive amendments in 2005 to the regulations in question, the State’s primary argument was that the fishermen’s claim was moot. A case is considered moot when there is no longer any actual controversy. Typically, a moot case is dismissed; however, Alaska law permits such a case to continue if “the issues presented are so important to the public interest as to justify overriding the mootness doctrine.”4 To determine if a case meets the public interest exception to the mootness doctrine, the court looks at three factors: (1) whether the disputed issues are capable of repetition, (2) whether the mootness doctrine, if applied, would allow the issue to evade review, and (3) whether the issues presented are so important to the public interest to warrant the exception. The fishermen’s claim met the public interest exception because the Board could further amend the regulations and the court had the opportunity to decide a matter which could potentially reappear. On appeal, the fishermen argued that the regulations effected a taking of entry permits requiring just compensation. The fishermen’s claim that the permits are property was largely based on the fact that they may be transferred to other parties and may be used as collateral for loans,5 just as a homeowner can sell or mortgage his property. Permits have been treated as property in other situations. For example, the Alaska Supreme Court has held permits are property for inheritance, tax, and child support purposes.6 The fishermen argued that if the costs of property attach to permits, then logically they should also entitle their owners to the benefits of property. The fishermen argued specifically that permit holders should be compensated for their losses resulting from the decrease in the length of the salmon season. At the very least such reasoning would place strict limitations on the government’s ability to regulate the fishing industry as a whole. Despite these arguments, the court adopted the State’s contention that a permit allows its owner to fish subject to the Board’s regulations. Essentially, the permits have no more value than any other government-approved license, the terms of which may be amended at any time. Though the permits are transferable, those transfers are still subject to approval by the Alaska Commercial Fishing Entry Commission (CFEC) and permits may not be leased by their holders. The fishermen’s claim that the permits may be used as collateral for loans is true, but only in very limited and highly regulated circumstances. Permit holders are not free to use those permits in any manner they see fit; the CFEC and the Board of Fisheries define the conditions and terms of how permits may be used. The high level of government oversight lends weight to the notion that the permits are more similar to licenses than the tradition concept of property. The fishermen further argued that the applicable statute only allows the state legislature to modify or revoke a permit without compensation,7 not the Board. The Court was not persuaded by this reasoning, focusing instead on the first clause of that statute explicitly stating that an entry permit is a “use privilege” and not property.8 Additionally, in delegating the authority to regulate fishing to the Board, the legislature essentially approved of and adopted the Board’s decisions in advance. Alaska law specifically permits the Board to “[establish] open and closed seasons and areas for the taking of fish.”9 Conclusion Though the Supreme Court of Alaska agreed to hear the case under the public interest exception to the mootness doctrine, it declined to apply takings law to the fishermen’s permits. In doing so, the court made clear that such permits are not property in the traditional sense, and, therefore, their holders are not entitled to compensation due to changes in government regulation. It is important to note that the Alaskan fishermen in this case held traditional fishing permits and not Individual Fishing Quotas (IFQs), which have stronger property characteristics. If the Court had agreed with the fishermen’s argument and deemed these permits to be property, the precedent would allow for the possibility of any number of claims seeking to curb the government’s role in commercial fishing. One of the chief difficulties that would surely have arisen had the fishermen been allowed to continue their suit and won would be the implication that permit owners have an exclusive right to fish. The government would have a difficult, if not impossible, time trying to regulate fishing seasons, establishing permissible zones in which to allow fishing, etc. This runs contrary to the Alaska Constitution, which provides that “in their natural state, fish, wildlife, and waters are reserved to the people for common use.”10 Taken to its logical end, the fishermen’s claim of just compensation would create a new classification of property, the boundaries of which would be prohibitively difficult to define. Endnotes 1. ALASKA ADMIN. CODE 5, A7 21.363. 2. Id. at A7 21.358. 3. Id. at A7 21.310. 4. Akpik v. State of Alaska, Office of Mgmt. & Budget, 115 P.3d 532, 535 (Alaska 2005). 5. Vanek v. State of Alaska, Board of Fisheries, 2008 Alas. LEXIS 132, at 12 (Alaska Sept. 19, 2008). 6. Id. at 20. 7. ALASKA STAT. A7 16.43.150(e). 8. Id. 9. ALASKA STAT. A7 16.05.251(a)(2). 10. AK Const. Art. 8, A7 3.
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SandBar 7:4, January, 2009

Vanek v. State of Alaska, Board of Fisheries, 2008 Alas. LEXIS 132 (Alaska Sept. 19, 2008).

Jonathan Proctor, 2L, University of Mississippi School of Law

The Supreme Court of Alaska recently decided that commercial fishing permits are not property and, therefore, not subject to compensation under federal or Alaska takings law.

Background
When a federal or state government takes or damages a property owner’s rights of use and enjoyment of that property, traditionally the owner is entitled to compensation for his or her loss. At first glance, this appears to be the case of commercial salmon fishermen in Alaska, who saw their season shortened by more than two weeks as a result of a change in policy of the State of Alaska Board of Fisheries (Board). The key question is whether the commercial fishermen’s permits are property. If so, then the fishermen would be entitled to compensation for their losses.
In 1978 the Board enacted the Upper Cook Inlet Salmon Management Plan to regulate gillnet and recreational salmon fishing in the area. At the time, commercial gillnet and recreational fishermen were allowed to fish from July 1 through August 15 each year in the Kenai, Kasilof, and Susitna rivers.1 From 1982 to 1996, commercial drift gillnet salmon fishing was allowed in the Upper Cook Inlet from June 25 to December 31. In 1996, the creation of the Northern District Salmon Management Plan closed the season for drift gillnet fishing on August 9 and barred those fishermen from operating in restricted areas of Cook Inlet.2 Finally, in 1997 the Board changed the gillnet season dates for the Kenai and East Forelands sections of the Central District from June 25 to July 8 and from August 15 to August 10.3 The net result of these changes was the gillnet season being shortened by more than two weeks.
The salmon fishers sued in 2005, asking an Alaska state court to either overturn the Board’s changes to the season or to compensate them for what would surely be a loss in productivity. The Alaska Supreme Court accepted their appeal after their case was dismissed in 2006 for lack of legally recognized property interests.

Taking
Due to extensive amendments in 2005 to the regulations in question, the State’s primary argument was that the fishermen’s claim was moot. A case is considered moot when there is no longer any actual controversy. Typically, a moot case is dismissed; however, Alaska law permits such a case to continue if “the issues presented are so important to the public interest as to justify overriding the mootness doctrine.”4
    To determine if a case meets the public interest exception to the mootness doctrine, the court looks at three factors: (1) whether the disputed issues are capable of repetition, (2) whether the mootness doctrine, if applied, would allow the issue to evade review, and (3) whether the issues presented are so important to the public interest to warrant the exception. The fishermen’s claim met the public interest exception because the Board could further amend the regulations and the court had the opportunity to decide a matter which could potentially reappear.
    On appeal, the fishermen argued that the regulations effected a taking of entry permits requiring just compensation. The fishermen’s claim that the permits are property was largely based on the fact that they may be transferred to other parties and may be used as collateral for loans,5 just as a homeowner can sell or mortgage his property. Permits have been treated as property in other situations. For example, the Alaska Supreme Court has held permits are property for inheritance, tax, and child support purposes.6 The fishermen argued that if the costs of property attach to permits, then logically they should also entitle their owners to the benefits of property. The fishermen argued specifically that permit holders should be compensated for their losses resulting from the decrease in the length of the salmon season. At the very least such reasoning would place strict limitations on the government’s ability to regulate the fishing industry as a whole.
    Despite these arguments, the court adopted the State’s contention that a permit allows its owner to fish subject to the Board’s regulations. Essentially, the permits have no more value than any other government-approved license, the terms of which may be amended at any time. Though the permits are transferable, those transfers are still subject to approval by the Alaska Commercial Fishing Entry Commission (CFEC) and permits may not be leased by their holders. The fishermen’s claim that the permits may be used as collateral for loans is true, but only in very limited and highly regulated circumstances. Permit holders are not free to use those permits in any manner they see fit; the CFEC and the Board of Fisheries define the conditions and terms of how permits may be used. The high level of government oversight lends weight to the notion that the permits are more similar to licenses than the tradition concept of property.
    The fishermen further argued that the applicable statute only allows the state legislature to modify or revoke a permit without compensation,7 not the Board. The Court was not persuaded by this reasoning, focusing instead on the first clause of that statute explicitly stating that an entry permit is a “use privilege” and not property.8 Additionally, in delegating the authority to regulate fishing to the Board, the legislature essentially approved of and adopted the Board’s decisions in advance. Alaska law specifically permits the Board to “[establish] open and closed seasons and areas for the taking of fish.”9

Conclusion
Though the Supreme Court of Alaska agreed to hear the case under the public interest exception to the mootness doctrine, it declined to apply takings law to the fishermen’s permits. In doing so, the court made clear that such permits are not property in the traditional sense, and, therefore, their holders are not entitled to compensation due to changes in government regulation. It is important to note that the Alaskan fishermen in this case held traditional fishing permits and not Individual Fishing Quotas (IFQs), which have stronger property characteristics.
If the Court had agreed with the fishermen’s argument and deemed these permits to be property, the precedent would allow for the possibility of any number of claims seeking to curb the government’s role in commercial fishing. One of the chief difficulties that would surely have arisen had the fishermen been allowed to continue their suit and won would be the implication that permit owners have an exclusive right to fish. The government would have a difficult, if not impossible, time trying to regulate fishing seasons, establishing permissible zones in which to allow fishing, etc. This runs contrary to the Alaska Constitution, which provides that “in their natural state, fish, wildlife, and waters are reserved to the people for common use.”10 Taken to its logical end, the fishermen’s claim of just compensation would create a new classification of property, the boundaries of which would be prohibitively difficult to define.

Endnotes
1. ALASKA ADMIN. CODE 5, A7 21.363.
2. Id. at A7 21.358.
3. Id. at A7 21.310.
4. Akpik v. State of Alaska, Office of Mgmt. & Budget, 115 P.3d 532, 535 (Alaska 2005).
5. Vanek v. State of Alaska, Board of Fisheries, 2008 Alas. LEXIS 132, at *12 (Alaska Sept. 19, 2008).
6. Id. at *20.
7. ALASKA STAT. A7 16.43.150(e).
8. Id.
9. ALASKA STAT. A7 16.05.251(a)(2).
10. AK Const. Art. 8, A7 3.