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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Simpson v. Murkowski (02/10/2006) sp-5984
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| HELEN SIMPSON, ROGER | ) | |
| ANDERSON, ROSE ANDERSON, | ) Supreme Court Nos. S- 11697/117771 | |
| RUTH BOHMS, and HOLGER | ) | |
| (JORGY | ) JORGENSEN, for | ) Superior Court No. |
| themselves and for others similarly | ) 4FA-03- 02917 CI | |
| situated, | ) | |
| ) O P I N I O N | ||
| Appellants/ | ) | |
| Cross-Appellees, | ) [No. 5984 - February 10, 2006] | |
| ) | ||
| v. | ) | |
| ) | ||
| FRANK H. MURKOWSKI, | ) | |
| Governor, State of Alaska, MIKE | ) | |
| MILLER, Commissioner, | ) | |
| Department of Administration, State | ) | |
| of Alaska, and STATE OF ALASKA, | ) | |
| ) | ||
| Appellees/ | ) | |
| Cross-Appellants. | ) | |
| ) | ||
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Charles R. Pengilly, Judge.
Appearances: Joe P. Josephson, Josephson &
Associates, P.C., Anchorage, for Appellants
and Cross-Appellees. Joanne M. Grace,
Assistant Attorney General, Anchorage, and
David W. M rquez, Attorney General, Juneau,
for Appellees and Cross-Appellants.
Before: Bryner, Chief Justice, Matthews,
Fabe, and Carpeneti, Justices. [Eastaugh,
Justice, not participating.]
FABE, Justice.
I. INTRODUCTION
Alaskas longevity bonus program was enacted by the
Alaska Legislature in 1972 for the purpose of providing to
Alaskans age sixty-five years and older an incentive to continue
to live in Alaska. In 1993 Governor Hickel proposed a phase-out
of the longevity bonus program that was designed to accommodate
seniors who had counted on the bonus in planning for their
retirement. This proposal was subsequently enacted into law by
the legislature. In 2003 Governor Murkowski exercised his line
item veto power to eliminate the appropriation for the longevity
bonus for fiscal year 2004.
A group of senior Alaskans who were recipients of the
longevity bonus prior to Governor Murkowskis veto challenged the
veto, arguing that they were entitled to receive the bonuses
under the doctrine of promissory estoppel; that the program
created a contract between them and the State with which Governor
Murkowski unconstitutionally interfered; and that the statute
created a legal entitlement to the longevity bonus. The superior
court granted summary judgment to the State on all of these
claims. This appeal followed. Because the senior Alaskans
claims fail as a matter of law, we affirm.
The State also appeals, challenging the superior courts
determination that the senior Alaskans are public interest
litigants exempt from paying attorneys fees. Because the
superior court did not make findings on the question whether the
senior Alaskans had sufficient economic incentive to bring this
litigation, we remand for further findings.
II. FACTS AND PROCEEDINGS
A. Facts
The Alaska Legislature enacted Alaskas longevity bonus
program in 1972.2 The purpose of the program was to provide to
Alaskans age sixty-five and older who had maintained domicile in
Alaska for at least twenty-five years an incentive to continue
uninterrupted residence in the state.3 Under the program,
qualified Alaskans who did not leave the state for more than
sixty consecutive days received a monthly bonus.4 In 1984 the
statute was amended in accordance with a decision of this court
that the twenty-five-year residency requirement violated the
Equal Protection Clause of the United States Constitution.5 At
that time, the legislature also amended the statute to provide
that the longevity bonus program would be funded by money made
available by appropriations of the . . . legislature from the
general fund.6
In 1993 Governor Hickel proposed a phased reduction and
eventual elimination of the longevity bonus program. Governor
Hickels proposal called for continuing payments at the rate of
$250 per month to people already enrolled in the program and to
people who would turn sixty-five before 1994, $200 per month to
people turning sixty-five in 1994, $150 per month to people
turning sixty-five in 1995, and $100 per month to people turning
sixty-five in 1996.7 Under Governor Hickels proposal, the
longevity bonus would be eliminated altogether for people turning
sixty-five in 1997 and later.8 Governor Hickels transmittal
letter to the Speaker of the House of Representatives explained
that the suggested phase-out was due to budgetary constraints and
that his proposal sought to accommodate seniors who had
considered the bonus as a factor in planning their retirements:
This bill is necessary because the ever-
increasing number of senior citizens in
Alaska, coupled with the projected decline in
state revenue, makes it clear that the state
will not be able to afford the longevity
bonus program over the long term. It is
becoming increasingly necessary to shift
state resources from non-need-based programs
to programs for those truly in need. . . . I
am proposing this phased elimination because
many Alaskans who will be reaching age 65 in
the next four years have counted on the bonus
in planning for their retirement, and an
abrupt termination of the program would not
be fair to them.[9]
The 1993 legislature adopted House Bill 81, which implemented
Governor Hickels phase-out proposal.10
The longevity bonus program continued to be funded
through appropriations until fiscal year 2004. In 2003 Governor
Murkowski submitted a proposed operating budget to the
legislature for fiscal year 2004 that did not include any
appropriation for the longevity bonus. The 2003 legislature
amended the governors proposed budget to include an appropriation
for the longevity bonus program in the fiscal year 2004 operating
budget. Governor Murkowski then exercised his line item veto
power to eliminate the appropriation.
B. Proceedings
On December 17, 2003, Helen Simpson and seven other
plaintiffs (Simpson or senior Alaskans) filed suit in the
superior court challenging Governor Murkowskis decision to
eliminate the longevity bonus program by using the line item
veto.11 The senior Alaskans are senior citizens who received
longevity bonus payments until June 2003, when Governor Murkowski
cancelled the program. Simpsons complaint alleged that (1) the
provisions of AS 47.45.010 et seq., which set forth the longevity
bonus program, create a legal entitlement to the longevity bonus
for those senior Alaskans whose payments were interrupted as a
result of the line item veto; (2) the senior Alaskans were
entitled to receive longevity bonuses under the doctrine of
promissory estoppel because they relied to their legal detriment
upon express and implied promises that the bonuses would continue
for the duration of their lives; (3) the provisions of AS
47.45.010 et seq. constitute a continuing appropriation for state
constitutional purposes; and (4) the longevity bonus program
established a contractual relationship between qualified Alaskan
senior citizens and the state government, and the cessation of
the bonuses violates Article I, Section 10, the Contract Clause,
of the United States Constitution.
The State moved for summary judgment. On September 28,
2004, the superior court granted summary judgment to the State,
concluding that Simpsons promissory estoppel, Contract Clause,
and entitlement claims were without legal merit. In the
alternative, the superior court concluded that Simpson could not
prevail because the State was prohibited under section 13 of
article IX of the Alaska Constitution from providing them with
monetary relief.12 Simpson filed this appeal.
On October 6, 2004, the State moved for attorneys fees
under Civil Rule 82. Simpson opposed the motion, arguing that
the senior Alaskans should be afforded public interest litigant
status and should therefore be exempt from attorneys fees. The
superior court concluded that the senior Alaskans were public
interest litigants and that they were exempt from paying
attorneys fees. The State appeals that determination.
III. DISCUSSION
A. Standard of ReviewA.Standard of Review
We review a grant of summary judgment de novo and will
affirm a grant of summary judgment if there are no genuine issues
of material fact and if the moving party is entitled to judgment
as a matter of law.13 We exercise our independent judgment when
deciding questions of law and adopt the rule of law that is most
persuasive in light of precedent, reason, and policy.14 We decide
constitutional issues of law by applying our independent
judgment.15 In so doing we will adopt a reasonable and practical
interpretation in accordance with common sense based upon the
plain meaning and purpose of the provision and the intent of the
framers. 16 We review a trial courts award of attorneys fees for
abuse of discretion.17
B. The Superior Court Did Not Err in Holding that Simpsons
Promissory Estoppel Claim Fails as a Matter of Law.
Simpson claims that the senior Alaskans are entitled to
the longevity bonus under the doctrine of promissory estoppel.
She claims that Governor Hickels letter, which was well
publicized and became a part of the legislative history of House
Bill 81, constituted an enforceable promise. In order to prevail
on a claim for promissory estoppel, the senior Alaskans must
establish:
1) The action induced amounts to a
substantial change of position;
2) it was either actually foreseen or
reasonably foreseeable by the promisor;
3) an actual promise was made and itself
induced the action or forbearance in
reliance thereon; and
4) enforcement is necessary in the interest
of justice.[18]
The superior court held that Simpson failed to satisfy
the second and third prongs of the promissory estoppel test,
determining that no action by the senior Alaskans could
reasonably have been induced by Governor Hickels letter, which
was not even addressed to them, and that House Bill 81 could not
be construed as a promise. We disagree that as a matter of law
it was not reasonably foreseeable that the senior Alaskans would
rely and act upon Governor Hickels transmittal letter and the
resulting House Bill 81. But we affirm the superior courts grant
of summary judgment on the ground that Simpson has failed to
establish an enforceable promise.
With respect to the first prong of the promissory
estoppel test, [w]hether particular actions represent substantial
changes is a question of all the circumstances and is not
determinable by reference to a set formula.19 Simpson, through
uncontroverted evidence in the form of affidavits accompanying
her opposition to the States motion for summary judgment,
established that the senior Alaskans changed their positions in
reliance upon the longevity bonus. For example, Simpson
presented evidence that the senior Alaskans curtailed their
travel plans to meet the eligibility requirements for receiving
longevity bonuses. Harold Starkel stated (concerning his own and
his late wifes actions):
We had arranged our lives so that we were
both here in Alaska as required when the
checks arrived each month and many times we
curtailed travel plans so that all
requirements on our part were met.
Ruth Bohms stated that she and her late husband
took great care to comply with all the terms
and conditions of the program. For example,
in addition to remaining in Alaska as
residents, we took no trips away from Alaska
which had a duration or expected duration
beyond the number of days permitted for
recipients to be physically elsewhere.
Simpson also offered evidence that the senior Alaskans
made critical decisions about retirement and long-term financial
planning based upon the availability of the longevity bonus.
The late Helen Simpson noted:
My qualification for the Longevity Bonus has
influenced other decisions as well, including
. . . my decision to retire from [law]
practice about two years ago, before Governor
Murkowskis election.
Significantly, Simpson demonstrated that the senior
Alaskans continue[d] uninterrupted residency20 in Alaska in
reliance on the bonus. Some senior Alaskans noted that had they
not anticipated receiving the bonus, they would have relocated by
moving closer to children living outside of Alaska or settling in
retirement communities in warmer climates. For instance, in her
affidavit Ruth Bohms stated:
Years ago, while my late husband was
still alive, we spoke about and planned for
our lives as elder Alaskans in the golden
years. We actively considered leaving
Alaska. A child of ours lives near
Anchorage, but another child lives, with her
husband and children, in Washington State. .
. .
Jerry and I, in the course of our
planning, made a very careful analysis of the
state of our finances. The availability of
the longevity bonus was a critical factor in
our decision to remain in Alaska.
And Helen Simpson commented:
I gave serious consideration to moving to
Guadalajara, Mexico, where there was a
substantial group or colony of American
retirees. I even made a personal visit to
Guadalajara to inspect possible places to
buy. However, it was at about this time that
the Longevity Bonus, inaugurated by
legislation adopted in 1972, became
effective. I made a personal decision to
remain in Alaska rather than give up the
bonus.
By presenting this undisputed evidence, Simpson
established a substantial change of position sufficient to defeat
summary judgment on the first prong of the promissory estoppel
test. According to Corbin on Contracts, [f]oreseeability of
reliance raises a question of fact for court and jury.21 The
superior court determined that any action that might have been
induced by Governor Hickels letter was not foreseeable. We
disagree and hold that Simpson did raise a question of fact
whether it was foreseeable that senior Alaskans would rely upon
Governor Hickels letter and the legislation which subsequently
implemented his proposal. The stated purpose of the longevity
bonus was to provide to senior Alaskans through monthly payments
an incentive to continue uninterrupted residence in the state.22
Far from it being unforeseeable that the senior Alaskans would
rely upon the longevity bonus program in making decisions about
planning their retirement and in remaining in Alaska, the actions
on the part of the senior Alaskans induced by the longevity bonus
program were expressly intended by the legislature.
Governor Hickels proposal to phase out the longevity
bonus program sought to protect senior citizens who had relied
upon the longevity bonus program. The transmittal read:
The bill protects current bonus recipients,
and those future recipients who turn 65
before January 1, 1994, by providing that
they will receive $250 a month for the
remainder of their lives (as long as the
eligibility requirements are met). The bill
phases out the program by reducing to $200
the monthly bonus for those turning 65 in
1994, by reducing to $150 the monthly bonus
for those turning 65 in 1995, by reducing to
$100 the monthly bonus for those turning 65
in 1996, and by eliminating the bonus
altogether for those turning 65 in 1997 and
later.
I am proposing this phased elimination
because many Alaskans who will be reaching
age 65 in the next four years have counted on
the bonus in planning for their retirement,
and an abrupt termination of the program
would not be fair to them.[23]
(Emphasis added.)
The proposal set forth in the transmittal letter and
the legislation implementing the proposal evinced a desire on the
part of the governor and the legislature to protect senior
citizens who had relied on the longevity bonus program by
extending the benefits of the program. It cannot be said as a
matter of law that it was unreasonable for the senior Alaskans to
rely upon Governor Hickels letter and House Bill 81, the language
of which suggested that they would continue to enjoy the benefits
of the program for the remainder of their lives. And it cannot
be said that it was unforeseeable that the senior Alaskans would
take the very actions that were expressly invited by the purpose
clause of the statute that originally enacted the longevity bonus
program.24 We therefore disagree with the superior courts
determination that [n]o action by the [senior Alaskans] could
have reasonably been induced by this letter.
We turn next to the question whether Governor Hickels
letter and House Bill 81 can reasonably be construed as a
promise.
To make out a claim for promissory estoppel, one must
show that an actual promise was made.25 Governor Hickels letter
stated:
I am proposing this phased elimination
because many Alaskans who will be reaching
age 65 in the next four years have counted on
the bonus in planning for their retirement,
and an abrupt termination of the program
would not be fair to them. I urge your
prompt consideration and passage of this
bill.[26]
(Emphasis added.) The superior court interpreted this language
to mean that the letter was simply a proposal to phase out the
longevity bonus program; it did not establish law or make any
specific promise to any specific individuals.
Simpson argues that the superior courts analysis was
flawed and that the letters publication in the House Journal made
it more than simply a proposal:
The letter was put in the Journal for a
reason: to explain to legislators, to [the]
press, and to [the] public what the
legislation was meant to accomplish. One of
its avowed purposes was to safeguard and hold
inviolate the longevity bonus payments for
qualified Alaskans choosing to participate in
the program and continue to qualify.
Simpson further argues that the purpose language of the
statute underscored the letters pledge to eligible seniors that
the bonuses would continue.27 Under this courts precedents,
though, neither the language of the transmittal letter nor the
legislations statement of purpose are sufficiently definite to
qualify as an actual promise.28 Governor Hickels letter stated
that he was proposing a phased elimination. This language
supports the superior courts conclusion that the letter was a
proposal and not a promise. That the letter was subsequently
incorporated into the legislative history of House Bill 81 does
not change the tentative nature of this language and Simpson
cites no case to support her contention that the proposal evolved
into a promise when it was enacted into law.
Our previous promissory estoppel decisions illustrate
that an actual promise must be very clear. For instance, in a
case involving an alleged promise to negotiate a contract for a
lease on property owned by the Valdez Fisheries Association, we
considered a letter sent to Valdez Fisheries by Alyeska Pipeline
Service Company.29 The letter informed Valdez Fisheries that it
had been selected as the winning bidder for the lease and stated:
We intend to begin the process of negotiating a contract as soon
as possible. For your planning purposes, we would like to begin
discussions the week of May 16, 1994.30 We concluded that the
language did not constitute an actual promise to negotiate and
that it was a statement of present intent, not a promise.31
Our decision in Eufemio v. Kodiak Island Hospital
further illustrates the precision of language required before a
promise will be found.32 There, we held that a hospital hearing
committees speculation that a years additional training in a
structured setting, surrounded by examples of current good
medical and surgical practice, would substantially improve [the
plaintiffs] qualifications for medical staff membership did not
constitute a promise that the plaintiff would be granted medical
staff membership after he received a years additional training.33
Both Valdez Fisheries and Eufemio demonstrate that a promise must
be definitive in order to fulfill the actual promise prong of the
promissory estoppel test. Governor Hickels transmittal letter
contained no such precise language and neither the fact that the
proposal was subsequently enacted nor the purpose clause of the
statute enacting the longevity bonus program cure this
deficiency.
Furthermore, on the face of Governor Hickels
transmittal letter it is apparent that he did not have the
authority to make a promise to the senior Alaskans that they
would continue to receive the longevity bonus for the remainder
of their lives. He expressly stated that he urge[d] . . . prompt
consideration and passage of this bill. We held in James v.
State under analogous circumstances that an author of a letter
who lacked authorization on his own to grant preference rights
could not promise to grant preference rights.34 In James, the
plaintiffs had participated in a land lottery conducted by the
Department of Natural Resources (DNR).35 We held the lottery
invalid36 and DNR decided it would cure the problems found with
the first lottery and conduct another lottery.37 The director of
the Division of Land and Water Management wrote a letter to the
lottery winners from the invalid lottery indicating that they
would be afforded preference in the second lottery:
It is my decision to allow each individual
Potlatch Ponds parcel winner . . . the right
to apply for a preference right of purchase
for the agricultural interests to the
Potlatch Ponds parcel each originally
claimed, or another parcel of similar size or
value, pursuant to AS 38.05.035(b)(2).[38]
We noted that the letter allowed for the right to apply
for a preference right pursuant to AS 38.05.035(b)(2), a statute
requiring the commissioner to expressly approve each grant of a
preference right. Because the letter was clear with respect to
the status of the preference rights at issue: they would have to
be approved by the Commissioner they did not grant or promise to
grant preference rights.39 Similarly, in this case Governor
Hickels proposed phase-out of the longevity bonus program
expressly noted that it was subject to the approval of the
legislature. Under James, his letter therefore did not
constitute a promise.
Because we affirm the superior courts decision that
Simpson failed to establish that a promise was made, we need not
reach the question whether enforcement of the purported promise
would be necessary in the interests of justice.
C. The States Discontinuation of the Longevity Bonus Did
Not Violate the Contract Clause of the United States
Constitution.
Simpson claims that cancellation of the longevity bonus
was an impairment of an existing contract in violation of Article
I, Section 10 of the United States Constitution, which provides:
No State shall . . . pass any . . . Law impairing the Obligation
of Contracts. Rejecting this argument, the superior court
concluded that the longevity bonus program was not an open offer
to contract and therefore did not implicate the Contract Clause.
We agree.
Courts apply a two-part test when determining whether a
state law violates the Contract Clause. First, courts examine
whether the change in state law has operated as a substantial
impairment of a contractual relationship. 40 If the first prong
is answered affirmatively, the court then examines whether the
impairment is reasonable and necessary to serve an important
public purpose.41 Whether a state law operates as a substantial
impairment of a contractual relationship is assessed in three
parts: (1) whether there is a contractual relationship; (2)
whether a change in law impairs the contractual relationship; and
(3) whether the impairment is substantial.42 Because we concur
with the superior courts decision that Simpson did not meet the
threshold requirement that a contract exist between the senior
Alaskans and the State, we affirm the superior courts decision
that Simpson failed to establish a violation of the Contract
Clause as a matter of law.
We have cited the Federal Court of Claims decision in
Clawson with approval:
It would do violence to traditional contract
theory, not to mention the operation of
government, to hold that any statute
requiring some action by a citizen to obtain
a benefit or protect a right constituted an
open offer to contract.[43]
It is therefore presumed that a law is not intended to create
private contractual or vested rights but merely declares a policy
to be pursued until the legislature shall ordain otherwise.44 The
United States Supreme Court has made clear that this presumption
is inherent in the function of the legislative branch:45
Policies, unlike contracts, are inherently subject to revision
and repeal, and to construe laws as contracts when the obligation
is not clearly and unequivocally expressed would be to limit
drastically the essential powers of a legislative body.46 It is
the burden of the party asserting the contract to overcome this
well-founded presumption.47
In an attempt to meet this burden, Simpson argues that
the longevity bonus program establishes a true unilateral
contract, providing an exchange of a promise for behavior. But
as discussed above in the context of the promissory estoppel
claim, the State did not in fact make a promise to the senior
Alaskans that they would receive benefits under the longevity
bonus program for the rest of their lives.48 Governor Hickels
letter stated that he was proposing a phase-out of the longevity
bonus program and made it clear that it was the legislature,
rather than the executive branch, that had the authority to enact
the proposed legislation. The language of Governor Hickels
letter is therefore insufficient to establish the promise Simpson
argued was the States consideration in this purported unilateral
contract.
Nor does the language of the statute implementing
Governor Hickels proposal suggest that the legislature intended
to create a contract. The United States Supreme Court has stated
that [i]n general, a statute is itself treated as a contract when
the language and circumstances evince a legislative intent to
create private rights of a contractual nature enforceable against
the State.49 The Supreme Court has also emphasized that the most
important step in any analysis of whether a state legislature
intended to treat a statute as a contract is the language of the
statute itself.50 In general, courts will look for language
specifically creating a contract or expressly prohibiting future
amendments that would reduce benefits.51 None of the provisions
of AS 47.45 demonstrate an intent on the part of the Alaska
Legislature to bind the State to a contract and Simpson does not
meet her burden by pointing to any specific language in the
statute or the legislative history indicating an intent to
contract.52 Because AS 47.45 contains no language evincing a
clear and unequivocal intent to create a binding contract, we
affirm the superior courts conclusion that the Contract Clause is
simply not implicated.
D. The Senior Alaskans Are Not Entitled to the Longevity
Bonus Under AS 47.45.
Simpson argues that, despite Governor Murkowskis veto,
the senior Alaskans are entitled to longevity bonus payments
because the provisions of AS 47.45 remain unrepealed, mandating
continuation of the program. In response to this argument, the
superior court concluded that House Bill 81 provided for payment
of the longevity bonus out of annual appropriations; by failing
to make such an appropriation in 2004, the legislature acted in a
way that was contemplated by and consistent with AS 47.45.
Because the Alaska Constitution supports the superior courts
conclusion, we affirm.
Simpson concedes that entitlement programs can be
modified by subsequent enactments.53 She also concedes that the
legislative process, when it repeals an entitlement program or
reduces [an] entitlement benefit, may provide all of the due
process to which affected citizens are due. She essentially
argues, then, that although the legislature could eliminate or
reduce the longevity bonus program, as long as AS 47.45 remains
law the governor is not empowered to use his veto power with
respect to appropriations to fund the program. But the plain
language of the Alaska Constitution invalidates this argument.
As the State argues, the Alaska Constitution
contemplates a role for both the governor and the legislature in
the appropriations process. The legislature has the power to
pass appropriation bills.54 With regard to the governors role,
section 12 of article IX of the Alaska Constitution states: The
governor shall submit to the legislature, at a time fixed by law,
a budget for the next fiscal year setting forth all proposed
expenditures and anticipated income of all departments, offices,
and agencies of the State. The governor, at the same time, shall
submit a general appropriation bill to authorize the proposed
expenditures, and a bill or bills covering recommendations in the
budget for new or additional revenues. Section 15 of article II
of the Alaska Constitution establishes the power of the governor
to exercise a line item veto with respect to appropriation bills,
providing that [t]he governor may veto bills passed by the
legislature. He may, by veto, strike or reduce items in
appropriation bills.
In Alaska Legislative Council v. Knowles, we examined
the history and purpose of the line item veto, noting:
It gives the governor the power to influence
the states budget by requiring him or her to
submit a proposed budget and general
appropriation bill to the legislature and by
striking or reducing items appropriated by
the legislature.[55]
In Thomas v. Rosen, we recognized that [t]he
constitutional history underlying this provision indicates a
desire by the delegates to create a strong executive branch with
a strong control on the purse strings of the state.56
The constitution also allows the legislature to
override a governors veto. Section 16 of article II of the
Alaska Constitution provides in part: Bills to raise revenue and
appropriation bills or items, although vetoed, become law by
affirmative vote of three-fourths of the membership of the
legislature.
In 2003 Governor Murkowski submitted a proposed
operating budget to the legislature for fiscal year 2004 that did
not include an appropriation for the longevity bonus. The 2003
legislature amended the proposed budget to include an
appropriation for the longevity bonus program for 2004. Governor
Murkowski then exercised his line item veto power to eliminate
the appropriation. The legislature did not use its
constitutional power to override Governor Murkowskis veto and to
reinstate the appropriation. This sequence of events occurred in
accordance with the appropriations process set forth in the
Alaska Constitution and Simpson provides no basis for us to
conclude that, simply because AS 47.45 has not been repealed, a
veto of the appropriation was improper.
Simpson also urges that we mandate funding of the
longevity bonus entitlement because AS 47.45 has not been
repealed. But the cases she cites in support of this request are
inapposite. For example, in Department of Health & Social
Services v. Planned Parenthood of Alaska, we struck down a state
regulation denying funding for medically necessary abortions, but
we emphasized that we were doing so in order to protect the
constitutional rights of Alaskans.57 At issue in this proceeding
is funding with respect to a statutory entitlement program, not a
constitutional right. Planned Parenthood therefore does not
apply.
Simpson also cites Bresolin v. Morris,58 in which the
Washington Supreme Court ruled that the state legislature
impermissibly refused to fund statutorily mandated drug treatment
programs. But the Washington Supreme Court stopped short of
requiring the legislature to appropriate funds. It expressed
optimism that the legislature might do so, but posited transfer
of the petitioning prisoner as an alternative.59
We recognized in Knowles the tension between a desire
to prevent legislatures from using appropriations bills to make
programmatic changes . . . and the realization that legislatures
do not have to fund or fully fund any program (except, possibly,
constitutionally mandated programs).60 As the superior court
concluded, under the Alaska Constitution it is the joint
responsibility of the governor and the legislature to determine
the States spending priorities on an annual basis. Therefore the
same tension acknowledged in Knowles exists with respect to the
governors exercise of the line item veto. Because Simpson has
not identified a legal basis for divergence from the procedure
constitutionally prescribed for appropriations and because she
has made no viable claim that a constitutional right was violated
when the governor vetoed the appropriation, we affirm the
superior courts grant of summary judgment to the State.61
E. We Remand the Superior Courts Decision that the Senior
Alaskans Were Public Interest Litigants.
Following the superior courts grant of summary
judgment, the State moved for attorneys fees under Civil Rule 82.
Simpson opposed the motion on the ground that the senior Alaskans
were public interest litigants under this courts precedents and
were therefore exempt from paying attorneys fees. In response,
the State argued that the senior Alaskans were not public
interest litigants because they had sufficient economic interest
to bring this litigation. Further, the State argued, even if the
senior Alaskans were public interest litigants, AS 09.60.010
abrogated the rule exempting public interest litigants from
paying attorneys fees except in limited circumstances,
inapplicable to this case. The superior court found that the
senior Alaskans were exempt from paying attorneys fees but did
not articulate a basis for its finding, stating only that
[p]laintiffs, as public[]interest litigants, are exempt from the
payment of attorneys fees in this case.
In 2003 the legislature enacted a statute expressly
abrogating the special status given to public interest litigants
with respect to the award of attorneys fees and costs under this
courts precedents and limiting the circumstances in which public
interest litigants would be considered exempt from paying
attorneys fees.62 This statute became effective September 11,
2003 and applies to all civil actions filed after the effective
date, including this case, which was commenced on December 18,
2003.63
Under AS 09.60.010(b), as amended, public interest
litigants are generally not exempt from paying attorneys fees.
The statute provides:
(b) Except as otherwise provided by
statute, a court in this state may not
discriminate in the award of attorney fees
and costs to or against a party in a civil
action or appeal based on the nature of the
policy or interest advocated by the party,
the number of persons affected by the outcome
of the case, whether a governmental entity
could be expected to bring or participate in
the case, the extent of the party's economic
incentive to bring the case, or any
combination of these factors.
But public interest litigants may be exempt from paying attorneys
fees under certain circumstances. Relevant to this case, AS
09.60.010(c)(2) provides:
(c) In a civil action or appeal
concerning the establishment, protection, or
enforcement of a right under the United
States Constitution or the Constitution of
the State of Alaska, the court:
. . . .
(2) may not order a claimant to pay the
attorney fees of the opposing party devoted
to claims concerning constitutional rights if
the claimant as plaintiff, counterclaimant,
cross claimant, or third-party plaintiff in
the action or appeal did not prevail in
asserting the right, the action or appeal
asserting the right was not frivolous, and
the claimant did not have sufficient economic
incentive to bring the action or appeal
regardless of the constitutional claims
involved.
Simpson argues and the State agrees that the phrase
regardless of the constitutional claims involved means that the
appropriate inquiry under the statute is whether the plaintiff
would have had sufficient economic incentive to bring the action
in the absence of any constitutional claims that might be made.
This provision mirrors the fourth prong of the test for
identifying public interest litigants used by this court prior to
the enactment of AS 09.60.010(c)(2), which asked, [w]ould the
purported public interest litigant have sufficient economic
incentive to file suit even if the action involved only narrow
issues lacking general importance?64
In its order denying attorneys fees to the State, the
superior court did not address the question whether the senior
Alaskans would have had sufficient economic interest to bring
this lawsuit even if the case involved only narrow issues lacking
general importance. Yet the economic incentive of the senior
Alaskans to bring this lawsuit was one of the central issues
raised by the State in its briefing before the superior court
with respect to attorneys fees. More explicit findings with
respect to the economic interest of the senior Alaskans in
bringing this lawsuit are therefore necessary before we can
meaningfully review the superior courts decision that the senior
Alaskans were public interest litigants exempt from paying
attorneys fees.65 Because this fact specific inquiry is more
appropriately undertaken by the superior court in the first
instance, we remand the superior courts award of attorneys fees
for further findings on the question whether the senior Alaskans
would have had sufficient interest to bring this litigation if
the case involved only narrow issues lacking general importance.66
IV. CONCLUSION
For the foregoing reasons, we AFFIRM the superior
courts grant of summary judgment to the State on the promissory
estoppel, Contract Clause, and entitlement claims. We REMAND the
superior courts award of attorneys fees for a determination of
whether the senior Alaskans would have had an economic incentive
to bring this lawsuit if the action involved only narrow issues
lacking general importance and for an evaluation of whether the
senior Alaskans would be entitled to an abatement of attorneys
fees under AS 09.60.010(e).
_______________________________
1 Although these cases were filed as separate appeals, we
consolidated them for oral argument and are now consolidating
them for purposes of decision.
2 Ch. 205, SLA 1972.
3 AS 47.45.170 (1973). The original statement of purpose
for former AS 47.45.170 read:
The sole purpose of this chapter is to offer
and provide all law-abiding Alaskans capable
of managing their own affairs who have
maintained a domicile in the state for at
least 25 years and have reached a retirement
age of 65, an incentive to continue
uninterrupted residency in the state. Under
no circumstances shall this chapter be
considered a form, type, or manner, of public
relief. Bonuses made under this chapter are
not predicated on need even though they may
appear to provide supplemental income to some
qualified persons who would otherwise be
forced to become responsibilities of the
state. The legislature further finds and
states that this legislation recognizes the
economic hardships suffered by many elderly
Alaskans, Alaskans who through their tenacity
and perseverance molded Alaska as we know it
through skillful application of their
talents. These pioneers are the same
Alaskans, who in the prime of their life were
in effect treated as second-class citizens by
the federal government and who paid much of
their hard-earned income to a government in
which they did not have the right to
participate through the power of the ballot.
The legislature also is aware of the fact
that many of these pioneers have been forced
to live out their retirement years in areas
far away from the land they loved and
nurtured and thereby also suffering, in many
cases, the loss of familial relationship with
their own kin, an experience that is sad and
frustrating to them as well as depriving new
generations of Alaskans of the benefits of
their wisdom and experience. This
legislation hopefully will provide our
pioneers with the economic means to remain in
and continue to serve their state and to
enjoy the opportunity of aiding the new
Alaskan in making this state truly The Great
Land.
Quoted in Schafer v. Vest, 680 P.2d 1169, 1170 (Alaska 1984).
4 AS 47.45.030.
5 Schafer, 680 P.2d at 1171; ch. 38, SLA 1984.
6 Ch. 38, SLA 1984.
7 1993 House Journal 131.
8 Id.
9 Id.
10 Ch. 64, SLA 1993.
11 Helen Simpson, named plaintiff in this lawsuit, passed
away during the course of this litigation, but remains the named
plaintiff. Three of the original plaintiffs are not parties to
this appeal.
12 Alaska Const. art. IX, 13 states in part: No money
shall be withdrawn from the treasury except in accordance with
appropriations made by law. No obligation for the payment of
money shall be incurred except as authorized by law.
13 Schaub v. K & L Distribs., Inc., 115 P.3d 555, 559
(Alaska 2005).
14 See, e.g., Rockstad v. Erikson, 113 P.3d 1215, 1219
(Alaska 2005).
15 See, e.g., Alaska Legislative Council v. Knowles, 21
P.3d 367, 370 (Alaska 2001).
16 Id.
17 See, e.g., City of Kodiak v. Samaniego, 83 P.3d 1077,
1082 (Alaska 2004).
18 Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1284
(Alaska 1985). Simpson proposes the application of the four-part
test for equitable estoppel articulated by this court in Wassink
v. Hawkins, 763 P.2d 971, 975 (Alaska 1988). As this court
explained in Mortvedt v. State, Department of Natural Resources,
the primary difference between promissory and equitable estoppels
is that the former is offensive, and can be used for affirmative
enforcement of a promise, whereas the latter is defensive, and
can be used only for preventing the opposing party from raising a
particular claim or defense. 858 P.2d 1140, 1143 n.7 (Alaska
1993) (quoting James v. State, 815 P.2d 352, 355 n.9 (Alaska
1991)) (internal citations omitted). Because Simpson seeks to
enforce an alleged promise, the four-part test for promissory
estoppel set forth by this court in Zeman is the appropriate
test.
19 Zeman, 699 P.2d at 1284, (citing 1A A. Corbin, Corbin
on Contracts 200, at 216 (1963)).
20 AS 47.45.170 (1973).
21 1A A. Corbin, Corbin on Contracts 200, at 216 (1963)).
22 AS 47.45.170 (1973).
23 1993 House Journal 131.
24 See supra note 3 (the text of the original purpose).
25 Brady v. State, 965 P.2d 1, 10 & n.20 (Alaska 1998);
James, 815 P.2d at 357 (quoting Zeman, 699 P.2d at 1284).
26 1993 House Journal 131.
27 Simpson additionally raises the argument that the State
should be judicially estopped from taking the position that there
was no promise because the State took a contrary position in a
previous case before the superior court, Maggard v. Sipe, case
No. 3AN-94-03935 CI. In Maggard, the plaintiffs challenged the
sunset clause contained in House Bill 81, which became AS
47.45.010(a). The State argued in Maggard that the sunset clause
represented a legitimate effort to protect the reliance interests
of those seniors already enrolled in the longevity bonus program.
But the State also noted that no recipient has a legally
enforceable contractual right to receive the bonus in perpetuity
and declared that had the legislature decided to terminate the
[longevity bonus program] immediately . . . no bonus recipient
could sue. Because the position taken by the State in Maggard was
not in fact contradictory to the position it has taken in this
litigation, we need not address the issue of whether judicial
estoppel could apply to estop the State from arguing that there
was no promise in this case.
28 Brady, 965 P.2d at 10 & n.20; James, 815 P.2d at 357
(quoting Zeman, 699 P.2d at 1284).
29 Valdez Fisheries Dev. Assn, Inc. v. Alyeska Pipeline
Serv. Co., 45 P.3d 657, 668 (Alaska 2002).
30 Id. at 663.
31 Id. at 668.
32 837 P.2d 95, 103 (Alaska 1992).
33 Id.
34 815 P.2d at 358.
35 Id. at 355.
36 State v. Weidner, 684 P.2d 103, 110-11 (Alaska 1984).
37 James, 815 P.2d at 354.
38 Id.
39 Id. at 358.
40 Gen. Motors Corp. v. Romein, 503 U.S. 181, 186 (1992)
(quoting Allied
Structural Steel Co. v. Spannaus, 438 U.S. 234, 244 (1978)).
41 U.S. Trust Co. of N.Y. v. N.J., 431 U.S. 1, 25 (1977);
see also Parker v.
Wakelin, 123 F.3d 1, 5 (1st Cir. 1997).
42 Romein, 503 U.S. at 186.
43 Beluga Mining Co. v. State, 973 P.2d 570, 578 (Alaska
1999) (citing Clawson v. United States, 24 Cl. Ct. 366, 370
(1991)).
44 Natl R.R. Passenger Corp. v. Atchison Topeka & Santa Fe
Ry. Co., 470 U.S. 451, 466 (1985) (quoting Dodge v. Bd. of Educ.,
302 U.S. 74, 79 (1937)).
45 Simpson argues that the superior courts reliance on
Beluga Mining is misplaced because of the unique character of
mining law. But as shown by applicable United States Supreme
Court case law, the presumption that a law is not intended to
create contractual rights is well established, regardless of the
type of statute involved.
46 Natl R.R. Passenger Corp., 451 U.S. at 466.
47 Id.
48 See, e.g., Valdez Fisheries, 45 P.3d at 668 (When a
promissory estoppel claim is made in conjunction with a breach of
contract claim, the actual promise element of promissory estoppel
is analytically identical to the acceptance [or offer] required
for a contract.) (citing Brady, 965 P.2d at 11).
49 U.S. Trust Co. of N.Y., 431 U.S. at 18 n.14.
50 Natl R.R. Passenger Corp., 470 U.S. at 466-67
(concluding that statute did not contain any language indicating
intent to contract, and thus there was no contract).
51 See U.S. Trust Co. of N.Y., 431 U.S. at 18 (finding
intent to contract due to statutes use of phrase covenant and
agree).
52 Simpson acknowledges that ordinarily public benefit
programs created by statute do not create contracts and can be
altered or eliminated at any time as long as the recipients are
afforded due process. See U.S. R.R. Retirement Bd. v. Fritz, 449
U.S. 166, 174 (1980) (railroad benefits, like social security
benefits, are not contractual and may be altered or even
eliminated at any time); Richardson v. Belcher, 404 U.S. 78, 80
(1971) (an expectation of public benefits [does not] confer a
contractual right to receive the expected amounts); Flemming v.
Nestor, 363 U.S. 603, 611 (1960) (calling social security a
noncontractual benefit). Simpson argues that the longevity bonus
program is different from typical public benefits programs
because the statutes creating those programs specify that they
may be amended or repealed. In making this argument, Simpson
overlooks the strong presumption against treating a statute like
a contract and the burden that is placed on the party asserting
the contract to establish through the language of the statute an
intent to contract. Natl R.R. Passenger Corp., 470 U.S. at 466.
The mere absence of language that the program could be amended or
repealed is not sufficient to overcome this presumption. Id. at
466-67.
53 When conceding this point, Simpson cites Gattis v.
Gravett, which states that the legislature which creates a
statutory entitlement (or other property interest) is not
precluded by having done so from altering or terminating the
entitlement by subsequent legislative enactment. 806 F.2d 778,
780 (8th Cir. 1986).
54 Alaska Const. art. II, 1; art. II, 13.
55 21 P.3d 367, 371 (Alaska 2001).
56 569 P.2d 793, 795 (Alaska 1977).
57 28 P.3d 904, 914 (Alaska 2001).
58 543 P.2d 325 (Wash. 1975). Simpson also cites Weiss v.
State, 706 P.2d 681 (Alaska 1985). In Weiss, this court held
that the legislature improperly cancelled a trust, but the case
did not concern appropriations. Id. The final case cited by
Simpson, Cleary v. Smith, case No. 3AN-81-05274 CI, is a superior
court case that settled and was not litigated on the merits.
59 Bresolin, 543 P.2d at 331.
60 21 P.3d at 378.
61 Because we affirm the superior courts grant of summary
judgment to the State on the promissory estoppel, Contract
Clause, and entitlement claims, we need not reach the superior
courts alternative conclusion that article IX, section 13 of the
Alaska Constitution would independently prohibit Simpson from
obtaining relief on her claims.
62 Ch. 86, SLA 2003. Simpson does not challenge the
validity of AS 09.60.010, as amended, and our interpretation of
the statute should not be viewed as a reflection of how we might
rule if a challenge to the statute were properly before us.
63 Id.
64 Citizens Coalition for Tort Reform, Inc. v. McAlpine,
810 P.2d 162, 171 (Alaska 1991).
65 Under Alaska Civil Rule 52(a), a superior courts order
must contain specific findings of fact and conclusions of law to
permit meaningful review by this court. Cf. Fyffe v. Wright, 93
P.3d 444, 456 (Alaska 2004); Ilardi v. Parker, 914 P.2d 888,
892 (Alaska 1996). A superior courts findings are sufficiently
clear and explicit to satisfy Rule 52(a) if they resolve all
critical areas of dispute in the case and are sufficiently
detailed to allow for meaningful appellate review. Mapco
Express, Inc. v. Faulk, 24 P.3d 531, 537 (Alaska 2001). In
particular, the superior court must provide findings sufficient
to give a clear understanding of the grounds upon which it
reached its decision. Ilardi, 914 P.2d at 892.
66 During oral argument in this case, Simpson also argued
that the senior Alaskans would qualify for an abatement of
attorneys fees under AS 09.60.010(e), which provides:
The court, in its discretion, may abate, in
full or in part, an award of attorney fees
and costs . . . if the court finds, based
upon sworn affidavits or testimony, that the
full imposition of the award would inflict a
substantial and undue hardship upon the party
ordered to pay the fees and costs or, if the
party is a public entity, upon the taxpaying
constituents of the public entity.
On remand, the parties are free to raise before the superior
court the question whether an abatement would be appropriate in
this case.
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