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Municipality of Anchorage v. Police Dept. Employees Assoc. (10/23/92), 839 P 2d 1080
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NOTICE: This opinion is subject to
formal correction before publication in the
Pacific Reporter. Readers are requested to
bring typographical or other formal errors to
the attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
MUNICIPALITY OF ANCHORAGE, )
) Supreme Court Nos. S-4044,
Appellant, ) S-4151
)
v. ) Superior Court No.
) 3AN-89-10124 CIVIL
ANCHORAGE POLICE DEPARTMENT )
EMPLOYEES ASSOCIATION, and ) O P I N I O N
INTERNATIONAL ASSOCIATION OF )
FIRE FIGHTERS, LOCAL 1264, )
)
Appellees. )
______________________________) [No. 3893 - October 23, 1992]
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Victor D. Carlson, Judge.
Appearances: David T. Jones, Perkins
Coie, Anchorage, for Appellant. R. Brooke
Holstedt, Aitchison, Hoag, Vick & Tarantino,
Salem, Oregon, and Mary-Ellen Zalewski, Lane,
Powell, Spears & Lubersky, Anchorage, for
Appellee, Anchorage Police Department
Employees Association. Charles A. Dunnagan,
and James A. Gasper, Jermain, Dunnagan &
Owens, P.C., Anchorage, for Appellee,
International Association of Fire Fighters,
Local 1264.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
Justices.
RABINOWITZ, Chief Justice.
INTRODUCTION
The primary question raised in this appeal is whether
the Municipality of Anchorage's Code, which provides for final
and binding interest arbitration,1 constitutes an
unconstitutional delegation of the Municipality's legislative
power to an arbitrator.2
FACTS AND PROCEEDINGS
The facts are undisputed. In 1975, the Municipality of
Anchorage (Municipality) opted out of coverage under the Public
Employment Relations Act, enacting instead a comprehensive labor
ordinance in the Anchorage Municipal Code (AMC) in 1976. See
Anch. Ord. 69-75, at 2.300.010-.170. Since the labor ordinance
was enacted, the AMC has included a binding arbitration
provision. The version of Chapter 3.70 of the AMC, governing
employee relations, that is at issue in the instant case most
recently was amended by the Anchorage Assembly by the passage of
Anchorage Ordinance 89-46(S-1) (1989).3
Anchorage Municipal Code 3.70.110(A)(1) defines three
classes of employees.4 Relevant to this appeal is the class
referred to as "A.1 employees,"whose services "may not be given
up for even the shortest period of time." AMC 3.70.110(A)(1).
Employees in the A.1 category are the police, fire protection and
emergency medical services. AMC 3.70.110(B). If the
Municipality and employees of an A.1 bargaining unit are unable
to reach a contract agreement at least seven days before the
existing agreement expires, the parties are required by AMC
3.70.110(C)(1) and (9) to submit to mandatory binding interest
arbitration. The Code also prohibits employees whose positions
are within the A.1 category from engaging in a strike or
slowdown. AMC 3.70.120(A). Rather, in the event of impasse in
the contract negotiation procedure, the parties must invoke the
mediation and impasse resolution procedures of AMC 3.70.100 and
.110.
For A.1 employees, the Code requires that the
bargaining unit and the Municipality negotiate at least 90 days
before the expiration of the contract. AMC 3.70.90(C). If the
parties have not reached an agreement 60 days before the
expiration date, the Municipality's Employee Relations Board
shall select a neutral mediator to mediate further negotiation
sessions. AMC 3.70.100(A). If, within 30 days of the contract
expiration, the parties have not arrived at an agreement, the
parties must select a fact-finder as provided in AMC 3.70.100(B).5
The fact finder must "conduct a hearing and return findings of
fact concerning the specific issue in question." AMC
3.70.100(B). After the fact finder transmits the findings, the
parties have fourteen days to reach an agreement before all
unresolved issues must be submitted to arbitration. AMC
3.70.100(B). The Code further provides that if A.1 employees and
the Municipality fail to reach an agreement within seven days of
the contract expiration, all unresolved issues must be submitted
for binding arbitration before the same individual who served as
fact finder. AMC 3.70.110(C)(1).6
The Code provides that:
The decision of the arbitrator for
bargaining units or portions of bargaining
units within category A.1 shall be reduced to
writing and shall be final and binding upon
the parties. The collective bargaining agree
ment, in compliance with the arbitrator's
decision, shall be prepared and executed by
the parties. Decisions of the arbitrator may
be appealed to the Superior Court for the
State of Alaska only for abuse of discretion,
fraud, or misconduct on the part of the arbi
trator.
AMC 3.70.110(C)(9).
However, the Code does limit the scope of the arbi
trator's authority in AMC 3.70.110(C)(7),
Scope of arbitrator's authority. The
arbitrator shall be limited in his authority
to:
A. Selection on an article-by-
article basis of either party's last
best offer submitted to him by each of
the parties to the collective bargaining
process; and
B. In exercising his discretion,
the arbitrator shall base his decisions
solely on the facts determined in
accordance with 3.70.100(B) and
applicable law.
In December 1989, the Municipality filed a complaint
for declaratory relief in superior court, seeking to have the
binding arbitration provision of the Code declared
unconstitutional. At the time the complaint was filed, the
Municipality and the Anchorage Police Department Employees
Association (APDEA) were in the process of negotiating a new
collective bargaining agreement. Negotiations between the
Municipality and the International Association of Fire Fighters,
Local 1264 (IAFF) were also anticipated in January, 1990. The
Municipality argued that the compulsory binding interest
arbitration provisions constituted an impermissible delegation of
the Anchorage Assembly's legislative authority to a politically
unaccountable private third party. Additionally, the
Municipality alleged that the provisions in question were
unconstitutional because they provided no meaningful standards to
guide the arbitrator and did not provide for meaningful judicial
review.
The Municipality moved for summary judgment, as did
APDEA and IAFF. The superior court, concluding that the binding
interest arbitration provisions of the Code were constitutional,
granted summary judgment in favor of APDEA and IAFF. The
superior court also awarded 100% of requested attorney's fees,
totalling $22,634.50, to APDEA and 70% of IAFF's requested
attorney's fees, totalling $6,309.75. The Municipality appeals
the grants of summary judgment in favor of APDEA and IAFF and the
award of full attorney's fees to APDEA.
DISCUSSION
I. Does AMC 3.70.110, providing for binding interest
arbitration, constitute an unconstitutional delegation
of legislative authority?
The Municipality argues that the Code's binding
interest arbitration provisions, delegating legislative authority
to a politically unaccountable arbitrator, violate the Alaska
Constitution. Alternatively, the Municipality contends that the
Code is unconstitutional because its provisions fail to provide
standards to guide the arbitrator.
We begin our analysis with the presumption that the
Code provisions at issue are constitutional.7 State v. Fairbanks
North Star Borough, 736 P.2d 1140, 1142 (Alaska 1987); City of
Anchorage v. Richardson Vista Corp., 242 F.2d 276, 285 (9th Cir.
1957) ("where an ordinance is passed relating to a matter within
the legislative power of the municipality all presumptions are in
favor of its constitutionality, and reasonableness"). Further,
as we stated in Fairbanks North Star Borough, "[t]his court is
under a duty to construe a statute to avoid constitutional
infirmity where possible."736 P.2d at 1142.
Our analysis of this issue addresses three subsidiary
questions.
A. Is it permissible for the Municipal Assembly
to delegate its legislative power?
The Municipal Assembly's delegation of its legislative
power is not unconstitutional per se. The Alaska Constitution,
Article X, 2 provides in part that "[a]ll local government
powers shall be vested in boroughs and cities." This grant of
powers is broad, as evidenced by the Alaska Constitution, Article
10, 1, which states that "[a] liberal construction shall be
given to the powers of local government units."
The powers of the Municipal Assembly are defined by the
Alaska Constitution, Art. X, and the Home Rule Charter of the
Municipality of Anchorage. Neither the Municipal Charter nor the
Alaska Constitution expressly limit the Assembly's authority to
delegate its legislative authority. Rather, the Alaska Constitu
tion, Art. X, 11 states, "[a] home rule borough or city may
exercise all legislative powers not prohibited by law or
Charter." It follows that the right of the Assembly to delegate
powers to govern the affairs of the municipality will not be
strictly construed, for "[w]ithout the power to delegate duty and
discretion the affairs of the [c]ity could not be carried on."
City of Anchorage v. Richardson Vista Corp., 242 F.2d 276, 285
(9th Cir. 1957).
The Municipality asserts that the Code delegates the
Assembly's legislative power to a private individual who is not
politically accountable. In support of this position, the
Municipality relies on the preamble to the Municipal Charter
which states one purpose of the establishment of the Municipality
was "to form more responsive government and to secure maximum
local control of local affairs." However, we have rejected the
non-delegation doctrine in Kenai Peninsula Borough School
District v. Kenai Peninsula Education Ass'n where we noted:
While courts in an earlier era often
held laws unconstitutional on the ground that
they delegated legislative power to private
persons or groups . . . the trend has been to
uphold such delegations, even when the power
is delegated to a group with an economic
interest in the decisions to be made.
572 P.2d 416, 420 (Alaska 1977) (citations omitted).
Kenai Peninsula comports with earlier cases in which we
upheld delegations of legislative authority. See Boehl v. Sabre
Jet Room, Inc., 349 P.2d 585, 588 (Alaska 1960) (declaring that
the delegation of state legislative powers is not unconstitu
tional; "a strict theory of separation of powers ignores [the]
realities and the practical necessities of government. . . . The
real question, then, is not whether there may be delegation.
Rather it is how far the legislature may go in delegating power
to an agency. . . ."); Walker v. Alaska State Mortgage Ass'n, 416
P.2d 245, 254 (Alaska 1966) (holding that creation of Alaska
State Mortgage Association was not an unconstitutional delegation
of legislative authority to provide for public health and
welfare); DeArmond v. Alaska State Dev. Corp., 376 P.2d 717, 722-
23 (Alaska 1962) (finding that creation of the Alaska State
Development Corporation which provided development loans to
businesses was not an improper delegation of legislative
authority).
The Supreme Judicial Court of Massachusetts focused on
what we believe is the principal consideration, explaining "[w]e
are less concerned with the labels placed on arbitrators as
public or private, as politically accountable or independent,
than we are with the totality of the protection against
arbitrariness provided in the statutory scheme." Town of
Arlington v. Board of Conciliation and Arbitration, 352 N.E.2d
914, 920 (Mass. 1976) (citation omitted). This general approach
is supported by a majority of courts which have addressed the
question. These courts have held that the delegation of
municipal power to an arbitrator is not an unconstitutional
delegation of legislative power. See, e.g. Fire Fighters Union,
Local 1186 v. City of Vallejo, 526 P.2d 971, 981 n.13 (Cal.
1974); Town of Arlington v. Bd. of Conciliation and Arbitration,
352 N.E.2d 914 (Mass. 1976); City of Biddeford v. Biddeford
Teachers Ass'n, 304 A.2d 387 (Me. 1973); City of Detroit v.
Detroit Police Officers Ass'n, 294 N.W.2d 68 (Mich. 1980), appeal
dismissed, 450 U.S. 903 (1981); City of Richfield v. Local No.
1215, Int'l Ass'n of Fire Fighters, 276 N.W.2d 42 (Minn. 1979);
City of Amsterdam v. Helsby, 332 N.E.2d 290 (N.Y. 1975); City of
Rocky River v. State Employment Relations Bd., 539 N.E.2d 103,
111 (Ohio 1989); Harney v. Russo, 255 A.2d 560 (Pa. 1969); City
of East Providence v. Local 850, Int'l Ass'n of Fire Fighters,
AFL-CIO, 366 A.2d 1151 (R.I. 1976); City of Spokane v. Spokane
Police Guild, 553 P.2d 1316 (Wash. 1976) (en banc); State ex
rel. Fire Fighters Local No. 946 v. Laramie, 437 P.2d 295 (Wyo.
1968).8
Thus, we conclude that the questioned delegation of the
Assembly's legislative power to an arbitrator is not unconstitu
tional per se.9
B. Do Sufficient Standards Exist to Guide the
Arbitrator's Decision and to Guard Against
Arbitrary Action on the Arbitrator's Part?
1) The Theory
A significant component of our analysis of the
delegation issue presented in this appeal centers on the question
whether sufficient standards exist to guide the arbitrator's
exercise of the authority delegated by the Assembly. "The
essential inquiry is whether the specified guidance 'sufficiently
marks the field within which the administrator is to act so that
it may be known whether he has kept within it in compliance with
the legislative will.'" State v. Fairbanks North Star Borough,
736 P.2d 1140, 1143 (Alaska 1987) (quoting Synar v. United
States, 626 F. Supp. 1374, 1383-89 (D.D.C. 1986) (quoting Yakus
v. United States, 321 U.S. 414, 426 (1944))).10 This question
involves a sliding-scale analysis: "When the scope increases to
immense proportions . . . the standards must be correspondingly
more precise." Fairbanks North Star Borough, 736 P.2d at 1143
(quoting Synar, 626 F. Supp. at 1386).
In Fairbanks North Star Borough, we struck down a statu
tory provision allowing the governor to withhold or reduce appro
priations to a state agency at any time during the fiscal year if
the governor determined that estimated receipts and surpluses
would be insufficient to provide for appropriations. We found
that "[t]he legislature has articulated no principles,
intelligible or otherwise, to guide the executive. . . . Most
importantly, the executive is provided with no policy guidance as
to how the cuts should be distributed." 736 P.2d at 1143. We
contrasted the delegation in Fairbanks North Star Borough with
that in Synar. In Synar, the statute permitted administrators to
affect spending levels over a specified range of federal
programs, yet only to a limited degree. The Act provided
explicit direction as to the procedures to be followed and
established basic assumptions, definitions, and criteria to guide
administrators.11
Review of our decisions which have addressed delegation
issues leads to the observation that whether one employs explicit
or implicit standards, "[t]he basic purpose behind the nondelega
tion doctrine is sound: Administrators should not have unguided
and uncontrolled discretionary power to govern as they see fit."
1 K. Davis, Administrative Law, 3:15, at 206.12
2) The Relevant Facts Pertaining to
Standards Providing Decision Making Guidance
and Safeguards
Here the Municipality has delegated its legislative
authority in a fairly narrow area, albeit an important one, to
provide for binding interest arbitration for a limited number of
public sector employees. The choice of an arbitrator is limited
by Code to "a fact-finder from a list of nine names . . .
submitted by the American Arbitration Association unless
otherwise mutually agreed to by the parties. . . ." AMC
3.70.100(B). Further, AMC 3.70.110(C)(5) allows preemptory
challenges by the respective parties. The fact-finder must
"conduct a hearing and return findings of fact concerning the
specific issue in question."AMC 3.70.100(B). See New Jersey
Bell Tel. Co. v. Communication Workers of America, 75 A.2d 721,
731 (N.J. 1950) (citing Federal Communications Comm'n v.
Pottsville Broadcasting Co., 309 U.S. 134 (1940)) ("The
requirement of findings is far from a technicality and is a
matter of substance. It has been said that it is a fundamental
of fair play that an administrative judgment express a reasoned
conclusion.").
The arbitrator can only determine "relevant" facts,
which include "workload, productivity economic feasibility, cost
of living, the parties' bargaining history, relevant market com
parisons in the public sector and relevant market comparisons in
the private sector taking into account the cost of living in the
markets compared, employer's past practice and impact on
personnel or work place morale." AMC 3.70.100(B).
As to this enumeration, the Municipality argues that
consideration of these factors is discretionary since although
the fact-finder has the power to determine all relevant facts, it
need not do so. We reject this contention because the
arbitrator's decision is required to be based on relevant facts.
AMC 3.70.110(c)(7)(b). It follows therefore that the
arbitrator's consideration of the "relevant facts"includes at a
minimum, consideration of the factors enumerated in AMC
3.70.110(B).13
Further, the arbitrator's authority is clearly limited
to selecting, article-by-article, either party's last best offer,
and the arbitrator's decision must be based "solely on the facts
determined in accordance with 3.70.100(B) and applicable law."
AMC 3.70.110(C)(7)(b).14 "When . . . the statute requires arbi
trators to use final offer arbitration, arbitrators exercise much
more limited discretion than they do when the statute or
agreement provides for conventional arbitration of both economic
and non-economic issues."15
Moreover, the term "and applicable law,"as used in AMC
3.70.110(C)(7)(B), includes the mandates of due process and the
enabling legislation. The term may also include the evolving
common law standards relating to an arbitrator's behavior:
[T]he ever widening use of arbitration
in labor disputes, particularly in the public
sector, has resulted in the evolution of
criteria which have become inherent in
today's labor arbitration process. . . .
[T]he arbitrator must act within the scope of
the authority delegated to him. He must
consider the public interest and the impact
of his decision on the public welfare. He
must act fairly and reasonably to the end
that labor peace between the public employer
and its employees will be stabilized or
promoted.
Superintending School Comm'n v. Bangor Educ. Ass'n, 433 A.2d 383,
387 (Me. 1981) (quoting Division 540, Amalgamated Transit Union,
AFL-CIO v. Mercer County Improvement Auth., 386 A.2d 1290, 1294
(N.J. 1978)).16
It is further provided that the arbitration must be
conducted according to the Voluntary Rules of Labor Arbitration
published by the American Arbitration Association (AAA Rules),
unless modified by agreement of the parties. AMC 3.70.110(C)(6).17
Additionally, it is provided that the arbitrator's decision must
be reduced to writing and is subject to judicial review for abuse
of discretion, fraud, or misconduct on the part of the
arbitrator. AMC 3.70.110(C)(9). While the Municipality terms
this standard of review "too limited,"this arguably is a broader
standard of review than the one that currently exists for
arbitration decisions. Nizinski v. Golden Valley Elec. Ass'n,
Inc., 509 P.2d 280, 283 (Alaska 1973) (holding that non-statutory
standard of review of labor-management arbitration award
necessitates showing of arbitrator's gross negligence, fraud,
corruption, gross error or misbehavior). See also State v. Pub.
Safety Employees Ass'n, 798 P.2d 1281, 1287 (Alaska 1990) ("we
believe it appropriate to apply the arbitrary and capricious
standard when reviewing awards in compulsory interest
arbitrations"); Dep't of Pub. Safety v. Pub. Safety Employees
Ass'n, 732 P.2d 1090, 1093 n.5 (Alaska 1987). Other courts have
recognized that broader grounds exist for vacating interest
arbitration awards than grievance awards.18
The Municipality contends that while the arbitrator's
decision is reviewable, the fact finder's findings are not and,
thus the arbitrator's decision is insulated under the abuse of
discretion standard, even if the findings are clearly erroneous
or fail to include relevant facts. We find this criticism
unpersuasive. Applying an abuse of discretion standard involves
reviewing the whole record. Peter Pan Seafoods, Inc. v.
Stepanoff, 650 P.2d 375 (Alaska 1982). Therefore, a review of
the arbitrator's decision includes review of the factual
findings.19
The Municipality's expression of its intent in enacting
its binding interest arbitration ordinance also provides a
"standard" limiting the arbitrator's discretion. See City of
East Providence v. Local 850, 366 A.2d 1151, 1155 (R.I. 1976)
(concluding that legislative statement of public policy to be
served constitutes a standard to guide arbitrators); Harney v.
Russo, 255 A.2d 560, 563 (Pa. 1969) (finding that legislative
purpose to foster peaceful relations and to protect the public
from police and fire fighters strikes provided sufficient
standards); DeArmond v. Alaska State Dev. Corp., 376 P.2d 717,
723 (Alaska 1962) (holding that statement of act's purpose is a
standard to guide the board); City of Richfield v. Local No.
1215, Int'l Ass'n of Fire Fighters, 276 N.W.2d 42, 45 (Minn.
1979) (finding that policy statement to promote good
employer/employee relations and to secure guarantees for general
welfare provides an adequate standard to guide arbitrators).
Here definite and certain policies guide the arbitrator. For
example, the Municipality desires to provide "appropriate
compensation in line with prevailing practices and pay in the
Anchorage area and municipal governments generally," see AMC
3.30.011(E), and "[t]o provide security of tenure for municipal
employees subject to need for work done, availability of funds,
and continued effective performance and acceptable personal
conduct of the employees." AMC 3.30.011(D). Also, the
Municipality states that, "[t]he municipality declares that it is
its policy to promote harmonious and cooperative relations
between the municipality and its employees and to protect the
public by assuring orderly and effective operations of
government." AMC 3.70.020(A).
In light of the elaborate and detailed structure which
guides the arbitrator's decisions and guards against arbitrary
action we conclude that the Code's delegation of legislative
authority is constitutional.20
C. Does the Potential for Judicial Enforcement
of an Arbitrator's Award under AMC 3.70.110(C)(9)
Constitute an Unconstitutional Delegation of the
Assembly's Power to Appropriate Funds?
The crux of this subsidiary issue is set out in the
following question which we posed to the parties for supplemental
briefing:
Do the provisions of 3.70.110(C)(9) of
the Anchorage Municipal Code constitute an
unconstitutional delegation of the Assembly's
legislative authority insofar as the arbitra
tor's decision "shall be final and binding on
the parties,"and such decision is thereafter
enforceable in the courts of Alaska with the
potential consequence of an allocation of the
municipality's resources without a prior
Assembly appropriation?
In response to our request for supplemental briefs on
this point, the Municipality contends that AMC 3.70.110(C)(9) is
unconstitutional because the arbitrator's decision binds the
Assembly "regardless of whether the arbitrator's decision calls
for wages or other economic terms that would exceed the
appropriations that the Assembly has made."
In its supplemental brief, APDEA primarily argues that
the arbitrator's award does not amount to an appropriation and
thus does not offend any constitutional or statutory provision
because it neither sets the size of the police force nor
determines job classification assignments of the various
bargaining unit members.21
IAFF, in its supplemental brief, takes the position
that "an action to enforce an award does not obligate the court
to order appropriation of municipal funds, but only to mandate
that the executive branch observe the wage rates, hours, and
terms and conditions of employment established under the award."22
In its supplemental reply brief, the Municipality con
cedes that if there were adequate controls over the arbitrator's
exercise of authority, then there might not be a question as to
the constitutionality of the delegation provided for in AMC
3.70.110(C)(9). Since adequate standards and controls are
lacking, however, the Municipality reasserts its initial
contention that the ordinance permits the allocation of municipal
resources without Assembly appropriations. The Municipality
asserts that the ordinance constitutes an improper delegation of
authority and violates Anchorage's Home Rule Charter.23 As to
IAFF's suggestion that the arbitrator's award is binding on the
Executive but not upon the Assembly the Municipality responds:
However, if that were the case, it would
certainly eliminate the problem of making
allocations without appropriations. It would
also eliminate the delegation defects, at
least as to the economic terms of the agree
ments, since those terms would be subject to
Assembly approval. However, this interpreta
tion would also eliminate the portion of the
ordinance that makes the arbitration awards
"final and binding" for police and fire
fighters.
Although the question posed to the parties for supple
mental briefing presents a close and difficult issue we conclude
that the possibility of judicial enforcement of a final and
binding arbitration decision does not constitute an
unconstitutional delegation of the Assembly's legislative powers.24
Given the fact that the Anchorage Municipal Charter does not
contain any express limitation upon the Assembly's power to
delegate its legislative functions; the fact that the delegation
in question is relatively narrow and relates to the complex and
potentially volatile subject of labor relations in the public
sector; the fact that adequate standards to guide the
arbitrator's decision making are part of the delegation; and the
fact that the arbitrator's decision is subject to discrete
procedures and to judicial review; we conclude that the
provisions of AMC 3.70.110(C)(9) do not constitute an unconstitu
tional delegation of the Assembly's legislative power, nor are
the provisions violative of the Charter. More specifically, we
conclude that the constitutionality of the delegation embodied in
AMC 3.70.110(C)(9) is not negated by the fact that the
arbitrator's final decision is reviewable and enforceable in the
courts of Alaska. In fact, we note that the enforcement of an
arbitration award by the court and the resultant need to allocate
resources to satisfy the award does not differ materially from
the need to allocate resources to satisfy a court's award of
damages in a tort action against a municipality. The latter
situation does not raise the spector of improper delegation of
the legislative power of appropriation. See generally AS
09.65.070; City of Kotzebue v. McLean, 702 P.2d 1309, 1311
(Alaska 1985).
As was pointed out by the authors of Interest Arbitra
tion: The Alternative to the Strike:25
Opponents of interest arbitration argue
that, since an arbitration panel may issue an
award which raises the cost of municipal
services, the enabling statute is an
inappropriate delegation of taxing power.
Courts have rejected this argument, finding
that a tax does not derive from an act merely
because it "may result in the need for . . .
taxation." Judge Fuchsberg of the New York
Court of Appeals clarified this distinction
by observing that, although arbitration
awards may impact on the cost of municipal
services the municipality remains free to
choose the method of meeting these costs.
This observation accords with the
obvious fact that, in the public sector,
neither arbitration awards nor collective
bargaining agreements are self-implementing.
If legislative authorization to finance a
contract or an arbitration award does not
already exist, the executive must secure
funding from the legislature, reduce
services, decline to fill vacancies, or take
other management action to implement the
agreement. The important point remains that
the legislature must, either before or after
contract negotiations, determine the
appropriate level for government operations
and provide the required funding.26
(Footnotes omitted, emphasis added.)
Additionally, we think the following authorities
support the conclusion we reach today. In Town of Arlington v.
Board of Conciliation and Arbitration, 352 N.E.2d 914 (Mass.
1976) the court, in holding that the delegation to an arbitration
panel was not unconstitutional, stated:
Nor do we view the act as setting up the
members of the arbitration panel as an appro
priating authority. To establish salaries is
not to appropriate the funds for them . . .
"[E]stablishment of salaries of municipal
officers and employees is an act that is
legislative in nature and may be . . . dele
gated to the board or officer who appoints
them or to some other board or officer."
. . . Furthermore, it is settled that the
Legislature has the power to create a numer
ical obligation requiring the outlay of funds
and that this power may be delegated if the
delegation is otherwise proper and lawful.
See Board of Health of North Adams v. Mayor
of North Adams, 334 N.E.2d 34 (Mass. 1975).
Id. at 920 (citations omitted).27 See also, City of Amsterdam v.
Helsby, 332 N.W.2d 290, 307 (N.Y. 1975) (Fuchsberg, J., concur
ring); County of Allegheny v. Allegheny Court Ass'n of
Professional Employees, 539 A.2d 348 (Penn. 1988).28
II. WAS AN AWARD OF FULL ATTORNEY'S FEES AN ABUSE OF DISCRETION?
The superior court awarded full attorney's fees to
APDEA. No findings were made to support this award and it
differed from IAFF's award of only 70% of its attorney's fees.
We conclude that the attorney's fees award issue must be remanded
to the superior court for explanatory findings of fact.
Where there is no recovery of attorney's fees, Civil
Rule 82 provides that the court may use its discretion in fixing
attorney's fees in a reasonable amount. However, "[t]he purpose
of Civil Rule 82 is to partially compensate a prevailing party
for the costs and fees incurred where such compensation is
justified and not to penalize a party for litigating a good faith
claim." Malvo v. J.C. Penney Co., Inc., 512 P.2d 575, 588
(Alaska 1973) (emphasis added). We have held "an award of full
attorney's fees is 'manifestly unreasonable' in the absence of a
bad faith defense or vexatious conduct by the losing party."
State v. Univ. of Alaska, 624 P.2d 807, 817 (Alaska 1981). While
a deviation from the schedule of fees must be explained, see
Stefano v. Coppock, 705 P.2d 443, 446 (Alaska 1985), if the fee
schedule does not apply, the trial court need not set forth its
reasons for its award. Wickwire v. Arctic Circle Air Servs., 722
P.2d 930, 935 (Alaska 1986). However, full attorney's fees must
generally be explained. Moses v. McGarvey, 614 P.2d 1363, 1368-
69 (Alaska 1980).
Here the superior court noted the anomaly of the
plaintiff asserting that "one of its ordinances is
unconstitutional and that the municipality cannot follow its own
law. . . . " Assuming this explains the award of full attorney's
fees, it is error. While the Municipality challenged its own
ordinance in a declaratory action, this does not constitute bad
faith or vexatious conduct. A city has standing to contest the
constitutional validity of a provision of its own charter. Doyle
v. City of Troy, 380 N.Y.S.2d 789 (Sup. Ct. 1976) (city has
standing to contest the constitutionality of its own charter
provision providing minimum salaries for fire department
employees). Moreover, public officers can raise a question of
"general and vital interest,"State ex rel. Bruestle v. Rich, 110
N.E.2d 778, 783-84 (Ohio 1953).
The disparate awards of attorney's fees in themselves
are an additional reason to support a remand. See Irving v.
Bullock, 549 P.2d 1184, 1190 (Alaska 1976), modified on other
grounds, Elisovsky v. State, 592 P.2d 1221, 1228 (Alaska 1979).
APDEA argues that Irving v. Bullock does not apply because it
relates to the first paragraph of Civil Rule 82(A)(1), not the
last paragraph. However, when two parties who are aligned
together are awarded differing percentages of attorney's fees
under Rule 82(A)(2) we think such a disparate amount constitutes
an abuse of discretion, unless fully explained.
Before the superior court IAFF and APDEA made
essentially the same arguments in their motions for attorney's
fees and costs, stressing the relative importance of the
litigation to the parties and the difficulty of the issue. The
superior court gave no reason for the different awards of
attorney's fees. APDEA attributes the difference to a reduction
of various expenses by the superior court from IAFF's award.
Yet, IAFF's ultimate award does not reflect exactly a reduction
of the contested amounts. Moreover, the superior court did not
explain its reduction of IAFF's award in terms of a reduction for
certain expenses.
CONCLUSION
The superior court's grant of summary judgment is
AFFIRMED. The superior court's grants of attorney's fees are
VACATED and the matter REMANDED for the purpose of permitting the
superior court to enter appropriate findings of fact and/or
explanation and to make whatever redetermination of attorney's
fees it deems appropriate in the circumstances.
_______________________________
1. Interest arbitration is a process in which
the terms and conditions of the employment
contract are established by a final and
binding decision of the arbitration panel.
It differs from grievance arbitration, which
involves the interpretation of the employment
contract to determine whether the conditions
of employment have been breached.
Arvid Anderson & Loren A. Krause, Interest Arbitration: The
Alternative to the Strike, 56 Fordham L. Rev. 153, 153 (1987)
(footnotes omitted).
2. Of equal significance is whether the ordinance in
question violates 13.08 of the Municipal Charter. See
discussion infra.
3. The differences between the earlier ordinance and the
most recent version are not relevant for the purposes of this
appeal. Both the earlier version of the ordinance, Ord. 69-75,
2.300.100(c)(6), and the amended code, AMC 3.70.110(c)(9),
provided that the arbitrator's decision "shall be final and
binding upon the parties."
4. AMC 3.70.110 provides, in relevant part:
A. For purposes of this section,
employees perform services in one of the
following three classes:
1. services which may not be given
up for even the shortest period of time;
2. services which may be
interrupted for a limited period but not for
an indefinite period of time; and
3. services in which, absent extra
ordinary circumstances which affect the
health, safety or welfare of the public work
stoppages may be sustained for extended
periods without serious effects on the
public.
B. The class in A.1 of this
section is composed of police, fire
protection and emergency medical
services. . . .
5. AMC 3.70.100(B) provides:
If, on the 30th day prior to the
contract expiration date, a collective
bargaining agreement has not been executed
between the parties, the parties shall select
a fact-finder from a list of nine names,
three names from Alaska and six names from
outside, submitted by the American
Arbitration Association unless otherwise
mutually agreed to by the parties, to conduct
a hearing and return findings of fact
concerning the specific issue in question.
The fact-finder shall have the power to
determine all relevant facts including but
not limited to workload, productivity,
economic feasibility, cost of living, the
parties' bargaining history, relevant market
comparisons in the public sector and relevant
market comparisons in the private sector
taking into account the cost of living in the
markets compared, employer's past practice
and impact on personnel or work place morale.
The cost of the fact-finder shall be shared
equally by the parties. The fact-finder
shall within seven days of appointment
conduct informal hearings and return his find
ings to the employer and bargaining represent
ative. If, within 14 days after transmission
of the findings of fact to the parties, an
agreement has not been reached, the parties
shall submit all unresolved matters to arbi
tration. Findings shall be made public upon
delivery to the employer and bargaining repre
sentative. . . .
6. AMC 3.70.110(C)(1) states:
For bargaining units or portions of
bargaining units within category A.1, if the
parties have not reached agreement seven days
prior to expiration of the contract, the
issue in dispute shall be submitted to
arbitration before the party selected as fact-
finder in accordance with Section
3.70.100(B).
7. In deciding the constitutionality of AMC 3.70.110, this
court is presented with a question of law concerning which we
will exercise independent judgment. See 8,960 Square Feet v.
Dept. of Transp., 806 P.2d 843, 845 (Alaska 1991).
8. There are court decisions holding that the determination
of salaries is a legislative function which is not delegable to
an arbitrator. Greely Police Union v. City Council of Greely,
553 P.2d 790 (Colo. 1976); Salt Lake City v. Int'l Ass'n of Fire
fighters, Locals 1645, 593, 1654, and 2064, 563 P.2d 786 (Utah
1977); City of Sioux Falls v. Sioux Falls Firefighters, 234
N.W.2d 35 (S.D. 1975). See also Chief Justice Moyers' opinion in
Rocky River v. Employment Relations Board, 530 N.E.2d 1 (Ohio
1988), rev'd, 539 N.E.2d 103 (Ohio 1989) (court held binding
mandate was not an unconstitutional delegation as it serves the
purpose of promoting orderly public sector labor relations).
9. The Municipality has virtually conceded this point.
Before the superior court, the Municipality stated,
Now our problem is not with binding
interest arbitration as a concept. It isn't
necessary for the court to find that binding
interest arbitration per se is invalid. Our
problem is with the way it has been done with
this ordinance. The ordinance simply does
not provide the necessary standards and
safeguards to make that delegation of
authority valid.
The Municipality also contends that AMC 3.70.110(C)(9)
violates the appropriate limits allowed by the Charter. In this
regard subsection (a) of 13.08 of the Charter provides in part:
No payment shall be made, or obligation
incurred except in accordance with appropri
ations. Obligations otherwise incurred are
void.
However, subsection (b) of 13.08 of the Charter
further provides in relevant part that:
The Assembly by ordinance may authorize
a contract, lease, or obligation requiring
funds from future appropriations.
We think that subsection (b) is dispositive and thus
agree with APDEA's persuasive argument that ". . . the assembly
may, following an arbitrator's final and binding decision on the
terms of a collective bargaining contract, meet that obligation
through future appropriations if necessary. . . . Given the
unequivocal language of section 13.08(b) and given that the
Assembly may authorize a contract requiring funds from future
appropriations, AMC 3.70.110(c)(9) is not in conflict with the
Charter and, therefore, is a constitutional delegation of the
Assembly's legislative authority."
10. Recognizing that the delegation doctrine developed in
the federal courts, we have relied on relevant federal case law
and analysis. See State v. Fairbanks North Star Borough, 736
P.2d 1140, 1143 (Alaska 1987).
11. See Fairbanks North Star Borough, 736 P.2d at 1143 (quot
ing Synar, 626 F. Supp. at 1386-89). See also Walker v. Alaska
State Mortgage Ass'n, 416 P.2d 245, 254 (Alaska 1966) ("The act's
purpose is explicitly stated and the Association's powers and
limitations are provided for specifically. The complexity of the
subject of secondary marketing facilities for housing mortgages
precludes a more detailed delegation."); Suber v. Alaska State
Bond Comm'n, 414 P.2d 546 (Alaska 1966) (delegation of
legislative power where adequate standards are provided is
permissible).
Compare: Boehl v. Sabre Jet Room, Inc., 349 P.2d 585
(Alaska 1960). In Boehl, the legislature delegated to the
Alcoholic Beverage Control Board the "full power, authority and
control to regulate the manufacture, barter, sale and possession
of intoxicating liquors." In upholding the Board's regulations
prescribing standard closing hours for liquor establishments, we
said:
The legislature was dealing with a
business which, unlike other commercial
enterprises, possesses the capacity for grave
and harmful effects upon the public welfare
. . . . It is because of this close relation
to public welfare that fewer specific
standards or criteria for the guidance of
administrative officials are required. Where
the police power of the state is so vitally
involved, as it is here, it becomes
imperative that those who are charged with
the duty of regulating the industry have a
freedom of action not restricted by
limitations that may be required where other
types of businesses are involved.
Id. at 589.
12. In calling for protection against unnecessary and
uncontrolled discretionary power, Professor Davis continues:
The focus should not be exclusively on
standards; it should be on the totality of
protections against arbitrariness, including
both safeguards and standards. The key
should no longer be statutory words; it
should be the protections the administrators
in fact provide, irrespective of what the
statutes say or fail to say. The focus of
judicial inquiries thus should shift from
statutory standards to administrative
safeguards and administrative standards. As
soon as that shift is accomplished, the
protections should grow beyond the
nondelegation doctrine to a much broader
requirement, judicially enforced, that as far
as is practicable administrators must struc
ture their discretionary power through appro
priate safeguards and must confine and guide
their discretionary power through standards,
principles, and rules.
1 K. Davis, Administrative Law, 3:15, at 206-07.
13. If a measure of discretion does exist in determining the
relevant factors then we further conclude that "the vesting of
such authority is within the legislative power." New Jersey Bell
Telephone, 75 A.2d at 730, citing State Bd. of Milk Control v.
Newark Milk Co., 179 A. 116, 125 (E. & A. 1935).
14. The Municipality argues the findings of fact may prove
irrelevant to the last best offers as the parties may change
their positions between fact-finding and arbitration. The
Municipality believes the arbitrator will have "unrestricted and
unreviewable"discretion because the arbitrator does not have to
explain his or her ultimate choice.
This argument is flawed. First, because the arbitrator
and the fact finder are the same individual, the chances are
minimized that a final choice will be based on an incomplete
factual assessment. Moreover, both parties have an incentive to
provide a complete factual foundation for their last best offer,
otherwise a party may suffer the peril of an adverse decision.
Also, a party who modifies its proposals so that they are
substantially less than those which were first offered may commit
an unfair labor practice. See Cuyamaca Meats, Inc. v. San Diego
& Imperial Counties Butchers' & Food Employers' Pension Trust
Fund, 827 F.2d 491, 496 (9th Cir. 1987), cert. denied, 485 U.S.
1008 (1988). This minimizes the chance that an offer will not
have a factual foundation.
The requirement for a written decision answers the
Municipality's contention that judicial review is illusory
because the arbitrator need not explain its choice. AMC
3.70.110(C)(9). Merely providing a written list of the choices
made without explanation would be an abuse of discretion.
While APDEA asserts that the parties' "last best offer"
will be made prior to arbitration, there is nothing in the Code
mandating this, and the ability to negotiate after the start of
arbitration, AMC 3.70.110(C)(3), seems to indicate otherwise.
Yet, the reasons above indicate that a factual basis will exist
even for a "new"last best offer.
15. Anderson & Krause, supra note 1, at 160.
16. See, e.g., City of Washington v. Police Dep't, 259 A.2d
437, 442 (Pa. 1969) ("panels may not mandate that a governing
body carry out an illegal act"); State v. Pub. Safety Employees
Ass'n, 798 P.2d 1281, 1287-88 (Alaska 1990) (common law allows
court to use arbitrary and capricious standard of review for
interest arbitration); City of Buffalo v. New York State Pub.
Employment Relations Bd., 363 N.Y.S.2d 896 (Sup. Ct. 1975)
(courts have the inherent power to review an action to determine
if it was ultra vires). Also, the statute plainly contemplates
that the arbitrator will act reasonably and fairly. See Park
Ave. Clinical Hosp. v. Kramer, 266 N.Y.S.2d 145, 152 (Sup. Ct.
1966).
17. The AAA Rules provide additional procedural standards to
control discretion. For example, the AAA Rules provide for noti
fication of the time and place for the hearing, see Rule 19, for
representation by counsel, see Rule 20, for stenographic
recording, see Rule 21, for testimony under oath, see Rule 24,
and for a written decision, see Rule 38. See Fairview Hosp.
Ass'n v. Pub. Bldg. Serv., 64 N.W.2d 16 (Minn. 1954). In the
instant case, the arbitrator has no personal interest in the
subject of the arbitration, nor can the arbitrator have a
personal interest under AAA Rules. See AAA Rule 11, 17.
18. The cases cited by the Municipality to support its argu
ment that the standard of review is inadequate involved grievance
arbitration, not interest arbitration. See Anderson & Krause,
supra note 1, at 166.
19. The AAA rules guarantee the availability of a record for
the court. See AAA Rule 21, 28, 29, 41.
20. We note that this is a subject matter area of complexity
(i.e. guidance of arbitrators in dealing with the complex and
potentially volatile issues that might arise during labor negotia
tions) which has the capacity for grave and harmful effects on
the public welfare. City of Detroit v. Detroit Police Officers
Ass'n, 294 N.W.2d 68, 94 (Mich. 1980); Superintending School
Comm. v. Bangor Educ. Ass'n, 433 A.2d 383, 387 (Me. 1981); City
of Richfield v. Local No. 1215, IAFF, 276 N.W.2d 42, 47 (Minn.
1979).
21. APDEA further argues that the arbitrator's award does
not equate to an authorization for the dispersal of any certain
sum of the municipality's resources since "[i]t has never been
pled by the . . . [Municipality] that there was or is a minimum
manning requirement within any of the contracts submitted under
the process outlined in AMC 3.70.110(C)(9)."
22. IAFF elaborates on this contention in the following
manner:
While an interest arbitration award may
set wage scales for particular municipal
employees, it imposes no obligation upon the
Municipality to continue the employee
complement in existence at the time the award
is issued in order to fund the award at that
employee total. In other words rates are
final and binding; an appropriation by the
Assembly which does not fund the award as to
all employees does not render the award
unenforceable. It merely requires the
Municipality's executive branch to implement
personnel decisions that will accommodate the
wage rate against the appropriated amount by
laying off employees, reducing the hours of
employees, or shifting resources from other
areas within the discretion of the executive
to make up for the budgetary shortfall.
23. On this point the Municipality further argues that
retained discretion would prove illusory since "[t]here is no
assurance that an arbitrator's award would not both increase
wages and through other contract provisions, limit the
Municipality's ability to respond to the increases without
staffing changes."
24. The fact that the arbitration decision is enforceable in
the courts of Alaska is not violative of the separation of powers
doctrine. The separation of powers doctrine has been recognized
in Alaska. See Pub. Defender Agency v. Superior Court, Third
Judicial Dist., 534 P.2d 947 (Alaska 1975); Continental Ins. Cos.
v. Bayless & Roberts, Inc., 548 P.2d 398, 410-11 (Alaska 1976);
Bradner v. Hammond, 553 P.2d 1 (Alaska 1976); Abood v. Gorsuch,
703 P.2d 1158 (Alaska 1985). It is within the judicial power to
review and enforce arbitration awards. Uniform Arbitration Act,
AS 09.43.010-.180; see Alaska State Hous. Auth. v. Riley Pleas,
Inc., 586 P.2d 1244, 1247 (Alaska 1978); see generally, Willis
Flooring, Inc. v. Howard S. Lease Constr. Co. & Assocs., 656 P.2d
1184 (Alaska 1983); Anchorage Med. & Surgical Clinic v. James,
M.D., 555 P.2d 1320, 1322 (Alaska 1976); Univ. of Alaska v.
Modern Constr., Inc., 522 P.2d 1132, 1139 (Alaska 1974).
25. Anderson & Krause, supra note 1, at 171-72.
26. See also Dearborn Fire Fighters Union v. City of
Dearborn, 231 N.W.2d 226, 230 (Mich. 1975) (holding that arbitra
tion awards may be implemented by an increase in taxes or a
decrease in municipal expenditures); City of Spokane v. Spokane
Police Guild, 553 P.2d 1316, 1319 (Wash. 1976) (en banc) (stating
that an award which "may result in the need for local taxation,
does not itself impose any 'burden or charge'").
27. The Arlington case involved a binding arbitration award
which established wages, vacation pay, sick leave, and other
conditions of employment for police and fire fighters. The town
refused to proceed in accordance with the award and suit was
instituted to enforce the award.
28. In Pub. Employees Local 71 v. State, 775 P.2d 1062, 1064
(Alaska 1989), we addressed the question whether a collective bar
gaining agreement was subject to legislative approval of its mone
tary terms. We answered the question in the affirmative based on
the terms of the statute. In so doing we went beyond statutory
interpretation and suggested that legislative approval was
mandated by the constitution, stating:
Additionally, under Alaska's
constitutional system, funding of an
agreement is constitutionally relegated to
the legislature. Alaska Const. art. IX,
13. The Public Employment Relations Act
recognizes this constitutional requirement in
AS 23.40.250(9).
Id. at 1064.
We now believe that this statement was unnecessary to
the decision in Local 71, constitutes overbroad dictum, and is
hereby disapproved.
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