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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Hageland Aviation Services, Inc. v. Harms (06/05/2009) sp-6379
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
| HAGELAND AVIATION | ) |
| SERVICES, INC., L. MICHAEL | ) Supreme Court Nos. S- 12871/12881 |
| HAGELAND, and JAMES TWETO, | ) |
| ) Superior Court No. 3AN-02-08561 CI | |
| Appellants, | ) |
| ) O P I N I O N | |
| v. | ) |
| ) No. 6379 June 5, 2009 | |
| JOHN HARMS and OTHER PILOTS | ) |
| SIMILARLY SITUATED, | ) |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Peter A. Michalski, Judge.
Appearances: Thomas M. Daniel, James N.
Leik, and Jacob Nist, Perkins Coie LLP,
Anchorage, for Appellant Hageland Aviation
Services, Inc. Peter J. Maassen, Ingaldson,
Maassen & Fitzgerald, P.C., Anchorage, for
Appellants L. Michael Hageland and James
Tweto. Timothy J. Petumenos, Max D. Garner,
and Peter C. Nosek, Birch, Horton, Bittner &
Cherot, Anchorage, for Appellees.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, and Carpeneti, Justices. [Winfree,
Justice, not participating.]
FABE, Chief Justice.
I. INTRODUCTION
Pilots of Hageland Aviation Services, Inc. filed a
class action lawsuit in 2002 for unpaid overtime wages under the
Alaska Wage and Hour Act. After the Alaska Legislature amended
the Act in 2003 to exempt pilots from the Acts overtime
compensation provision, Hageland moved to dismiss the lawsuit.
The superior court held that the legislative change exempting
pilots from the Act applied only from the amendments effective
date of July 16, 2003. The legislature again amended the Act in
2005 to make its 2003 amendment to the Act retroactive to 2000.
Hageland moved for summary judgment based on the retroactive
exemption, and the pilots cross-moved for summary judgment,
arguing that the retroactive exemption violates numerous
provisions of the state and federal constitutions. The superior
court concluded that the 2005 amendment violates the takings and
contract clauses of the Alaska Constitution. Hageland appeals.
Because we agree with the superior court that the 2005 amendment
is a violation of the takings and contract clauses, we affirm.
II. FACTS AND PROCEEDINGS
Hageland Aviation Services, Inc. is a regional air
carrier that provides commercial passenger service and hauls mail
to more than seventy villages. John Harms, a former pilot of
Hageland, filed a class action suit against Hageland on June 26,
2002, seeking unpaid overtime wages under the Alaska Wage and
Hour Act1 for himself and other similarly situated employees.
A few months before the class was certified, the
superior court granted Harmss motion for summary judgment on
Hagelands liability for Harmss unpaid overtime. Superior Court
Judge Peter A. Michalski concluded that Harms was entitled to
overtime wages as a matter of law because he earned less than
$300.00 per day, which made him a per se nonexempt employee under
the regulations promulgated by the Alaska Department of Labor and
Workforce Development for the Acts overtime compensation
provision.2
The class was certified in August 2003. As of May 2007
the class consisted of twenty-three then-current and former
pilots of Hageland who were paid a daily rate between June 26,
2000, and July 16, 2003. The basic term of the pilots employment
agreement, which was not in writing, was that they would receive
a daily rate for each day they were on duty. The pilots were on
duty for fourteen hours per day and their daily rates varied from
$66.67 to $350.00. Like other regional air carriers, Hageland
never paid overtime wages to its pilots, and none of the pilots
testified that they believed that they were entitled to overtime
wages while they were working for Hageland.
In 2003 the Alaska Legislature expressly exempted
pilots from the Acts overtime compensation provision by passing
Chapter 11 of SLA 2003, which is codified as AS 23.10.060(d)(19).
In October 2003 the superior court held that the statutory
exemption applied only from the amendments effective date of July
16, 2003, which left intact the pilots claims between June 26,
2000, and July 16, 2003. In the superior courts order, it noted
that Chapter 11 simply changes Alaska law, without directly
overturning court or executive decisions.
In a second summary judgment order on liability, the
superior court held in January 2004 that the pilots were per se
nonexempt employees and thus entitled to overtime wages. The
superior court reasoned that Hagelands practice of reducing the
pilots pay for partial-day absences violated the Alaska labor
departments regulations, which require that exempt employees
salaries not be subject to reduction because of variations in the
quantity of work performed.3
In 2005 the legislature passed another amendment to the
Acts overtime compensation provision. Chapter 19 of SLA 2005
made the 2003 amendments statutory exemption of pilots
retroactive to January 1, 2000, and explicitly stated that it
applied to all actions and proceedings under the Acts overtime
compensation provision that were not determined by a final
judgment before its effective date of May 18, 2005. The sponsor
statement for Chapter 19s senate bill explained that Chapter 19
clarifies legislative intent by retroactively removing flight
crews from the scope of statutory overtime compensation required
under the Alaska Wage and Hour Act found in AS 23.20.060. The
sponsor statement also recognized that three class action suits
had been filed and that they would be covered by the retroactive
provision. According to the sponsor statement, Chapter 11 was
enacted to codif[y] what . . . had been [Department of Labor]
policy exempting flight crews from the [Acts] overtime
compensation rules. The statement also highlighted the burdens
placed on the critical yet fragile air carrier industry
threatened by superfluous litigation.
In December 2005 the superior court considered the
parties cross-motions for summary judgment on the
constitutionality of Chapter 19. The superior court granted the
pilots cross-motion for partial summary judgment and denied
Hagelands motion for summary judgment, ruling that Chapter 19
violates the Alaska Constitutions takings and contract clauses.4
The superior court reasoned that the pilots property rights in
their claims for unpaid overtime pay vested at the end of each
pay period for which overtime wages would have been due. The
superior court further determined that the pilots had a
reasonable expectation to receive the overtime compensation
before Chapter 11 was enacted and Chapter 19 caused a direct
financial loss to the pilots. The superior court also held that
because Chapter 19s purpose was to eliminate the pilots claims,
it violated the contract clause by substantially impairing the
overtime compensation term of the parties employment agreement.
The superior court reasoned that this impairment served a
questionable purpose and was manifestly unfair.
After holding Chapter 19 unconstitutional, the only
unresolved issue before the superior court was the amount of
unpaid overtime wages owed to the pilots. In August 2007 the
parties stipulated to $1,600,000 in damages and final judgment
was entered. Hageland appeals the superior courts summary
judgment order holding that Chapter 19 violates the takings and
contract clauses of the Alaska Constitution.
III. STANDARD OF REVIEW
We review a grant of summary judgment de novo5 and will
affirm if the evidence in the record fails to disclose a genuine
issue of material fact and the moving party is entitled to
judgment as a matter of law.6 We draw all reasonable inferences
of fact in favor of the nonmoving party.7 Applying our
independent judgment to decide constitutional issues, 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.8 In matters of
statutory interpretation, we also apply our independent judgment.9
IV. DISCUSSION
Hageland appeals the superior courts ruling that
Chapter 19 is unconstitutional. Chapter 19 provides in full:
AN ACT
Relating to the retrospective application and
applicability of the overtime compensation
exemption for flight crew members; and
providing for an effective date.
_______________
* Section 1. The uncodified law of the
State of Alaska is amended by adding a new
section to read:
OVERTIME COMPENSATION EXEMPTION FOR
FLIGHT CREW WORK PERFORMED AFTER JANUARY 1,
2000. The provisions of AS 23.10.060(d)(19),
as enacted by sec. 1, ch. 11, SLA 2003, apply
to work performed on or after January 1,
2000.
* Sec. 2. The uncodified law of the
State of Alaska is amended by adding a new
section to read:
RETROSPECTIVE APPLICATION. This Act
applies retrospectively to all actions and
proceedings under AS 23.10.060(b) that are
based on a claim for overtime compensation
for employment as a flight crew member on or
after January 1, 2000, and that are not
determined by final court judgment or
administrative decision on or before the
effective date of this Act. For purposes of
this section, flight crew member means a
person performing work under AS
23.10.060(d)(19), as enacted by sec. 1, ch.
11, SLA 2003.
* Sec. 3. This Act takes effect
immediately under AS 01.10.070(c).[10]
Thus, Chapter 19 made Chapter 11s amendment to the Act
retroactive to January 1, 2000. Chapter 11 added subsection
(d)(19) to AS 23.10.060, the Acts overtime compensation
provision.11 Subsection (d)(19) exempts work performed by a
flight crew member employed by an air carrier subject to 45
U.S.C. 181-188 (subchapter II of the Railway Labor Act) from
application of the overtime compensation provision. According to
this subsection, flight crew means the pilot, co-pilot, flight
engineer, and flight attendants.
Before us in this appeal are the questions whether
Chapter 19s retroactive application12 of the statutory exemption
of flight crews from the Acts overtime compensation provision
violates the takings or contract clauses of the Alaska
Constitution.
A. Chapter 19 Is an Unconstitutional Taking.
Article I, section 18 of the Alaska Constitution
provides: Private property shall not be taken or damaged for
public use without just compensation. In analyzing whether a
taking has occurred in this case, we address two questions.13
First, are the pilots claims for unpaid compensation property
interests protected by the takings clause?14 Second, if the
claims are protected property interests, does Chapter 19 effect a
taking of that property?15 The superior court answered both of
these questions in the affirmative, reasoning that each pilot had
a protected property interest in the wages owed by law at the end
of each pay period and that under our multifactor test for
takings violations an unconstitutional taking had occurred. We
agree.16
1. The pilots have vested property interests that are
protected by the Alaska Constitutions takings
clause.
We have recognized that a cause of action for unpaid
overtime accrues at the end of each pay period in which overtime
is due.17 Applying this rule to the present case, the pilots
claims had already accrued when Chapter 19 was passed in 2005
because their claims were for unpaid overtime compensation for
work performed between June 26, 2000, and July 16, 2003.
Although Hageland argues that the claims for unpaid
overtime are not protected by the Alaska Constitutions takings
clause before a final judgment has been entered, we have held
that a chose in action . . . is a form of property that the
claimant cannot be deprived of litigating without due process of
law.18 Unlitigated causes of action become property when they
accrue.19 In Bidwell v. Scheele, we noted that vested and accrued
are often used interchangeably because accruing has been defined
as that which will or may, at a future time, ripen into a vested
right.20 Thus, a cause of action becomes a vested property
interest that is protected by the takings clause as soon as it
accrues and so has that status even before the issuance of a
final judgment. Here, the pilots property interests in their
claims for unpaid overtime are protected by our constitution at
the time their claims accrued; their claims need not have been
reduced to final judgment to create vested property interests
that are protected by the takings clause.
2. Chapter 19 takes the pilots vested property
interests in violation of the Alaska Constitutions
takings clause.
We consider three factors to determine whether a
government action effects a taking: (1) the character of the
government action, which includes consideration of the legitimacy
of the interest advanced by the action;21 (2) its economic impact;
and (3) its interference with reasonable investment-backed
expectations.22
Turning first to the character of the government
action, Hageland argues that the legislature was exercising its
police power by regulating employee wages when it passed Chapter
19 and that it did so for the common good, without tak[ing]
anything for its own use. Hagelands argument fails for two
reasons. First, Hageland explores the character of the
legislative decision to exempt pilots from the Acts overtime
compensation provision rather than the government action at
issue: the retroactivity provided in Chapter 19. When the
legislature passed Chapter 11, it shifted future economic burdens
once borne by air carriers to their flight crews. While this
enactment may have been a legitimate exercise of the legislatures
police power to regulate employment and wages,23 the broad purpose
of Chapter 11s exclusion stands in stark contrast to the narrow
purpose of Chapter 19s retroactivity. The avowed purpose of
Chapter 19 was to eliminate the pilots claims along with the
claims of two other class actions against Alaska air carriers.
The legislature enacted Chapter 19 to extinguish retroactively
all claims for unpaid overtime compensation for work performed on
or after January 1, 200024 because, as the sponsor statement for
Chapter 19s senate bill explained, Chapter 11 failed to fully
enact the legislative intent necessary to deflect court actions
seeking recovery for periods dating back to the year 2000. In
carrying out the legislatures narrow purpose to prevent
litigation of these class actions, Chapter 19 effectively
transferred money from the pockets of one private party to
another.
Second, despite Hagelands focus on the fact that the
State did not take the pilots claims for its own use when it
enacted Chapter 19, whether the State receives a benefit from the
alleged taking is irrelevant to the takings analysis.25 We have
recognized that [t]he finding of a taking, finally, depends on
whether someone has been deprived of the economic benefits of
ownership, not whether the State captures any of those benefits.26
Chapter 19s significant economic impact on the pilots
is obvious. Although Hageland acknowledges that Chapter 19
eliminated the pilots claims to unpaid overtime, it maintains
that their claims were inchoate, speculative, and uncertain. But
the pilots recovery was certain when Chapter 19 was enacted.
Hageland had already been found liable for the pilots unpaid
overtime and the only unresolved issue before the superior court
was the exact value of the judgment against Hageland, which was
later stipulated by the parties to be $1,600,000 by no means a
small sum of money. And even if there had not been a summary
judgment ruling in favor of the pilots, they would still have
suffered a substantial economic loss. They had already worked
the overtime hours, and by law they were entitled to receive
compensation for those hours of work at the end of each pay
period.
With regard to the final factor, Hageland contends that
the pilots did not have a reasonable investment-backed
expectation of being paid overtime compensation because they did
not have an actual expectation of being paid more than they had
already received. But the test for reasonable expectations is an
objective one,27 and the pilots reasonably expected that they
would be paid according to the law for the work they had
performed for Hageland. Regardless of whether the pilots knew
the specifics of the law and whether it required payment of
overtime wages under particular circumstances, they could
reasonably expect that Hageland would comply with the existing
wage and hour laws. Thus, the pilots had a reasonable investment-
backed expectation protected by the takings clause and it was
interfered with when Chapter 19 retroactively eliminated their
claims for unpaid overtime.28
B. Chapter 19 Is an Unconstitutional Impairment of
Contracts.
Article I, section 15 of the Alaska Constitution
provides: No law impairing the obligation of contracts . . .
shall be passed. Because the language of the contract clause of
the Alaska Constitution is nearly identical to that of the
federal Contract Clause,29 we apply the same two-part analysis to
alleged violations of the Alaska and federal contract clauses.30
We first ask whether the change in state law has operated as a
substantial impairment of a contractual relationship.31 If there
is a substantial impairment, we then examine whether the
impairment is reasonable and necessary to serve an important
public purpose.32 The superior court determined that Chapter 19
substantially impaired the overtime compensation term of the
parties employment agreement. The superior court also determined
that this impairment was not justified by a legitimate public
purpose because the legitimacy of targeting specific, ongoing
lawsuits is questionable, and even if Chapter 19s public purpose
was legitimate, it would not justify [t]he retroactive removal of
existing contract rights from one party in favor of another who
clearly violated existing law.
1. Chapter 19 substantially impairs the parties
contractual relationship.
Under the first prong of the contract clause test, we
consider: (1) whether there is a contractual relationship, (2)
whether the law impairs the contractual relationship, and (3)
whether the impairment is substantial.33 The parties do not deny
there was a contractual relationship between Hageland and the
pilots. It is also undisputed that under the parties unwritten
agreement the pilots would receive a daily rate for each day they
were on duty.
As to whether Chapter 19 impairs the parties
contractual relationship, Hageland argues that the term of the
contract alleged to be infringed the payment of overtime
compensation under AS 23.10.060 was not a part of the contract
between Hageland and the pilots because the parties contractual
expectations did not include payment for overtime wages. Alaska
Statute 23.10.060(c), however, expressly states that the Acts
overtime compensation provision is included in all contracts of
employment.
By eliminating the pilots claims to unpaid overtime,
Chapter 19 substantially, and in fact completely, impaired
Hagelands contractual obligation to pay overtime compensation as
required by statute. Hageland disagrees with this conclusion,
arguing that even if Chapter 19 impairs the parties employment
agreement, the impairment could not be substantial because the
parties did not actually rely on the overtime compensation term
of their agreement. Hageland relies on City of Charleston v.
Public Service Commission of West Virginia, in which the Fourth
Circuit recognized that the United States Supreme Courts greatest
concern appears to be the contracting parties actual reliance on
the abridged contractual term.34 But the question whether the
pilots expected to be paid more than they received from Hageland
is separate from the question whether they actually relied on the
overtime compensation provision because, as the Fourth Circuit
noted, the requisite reliance is assessed from an objective
viewpoint.35 And as noted above, the pilots had a reasonable
belief that they would be compensated in accordance with the law.
Moreover, in City of Charleston, the Fourth Circuit
examined the United States Supreme Courts considerations in
assessing objective evidence of reliance.36 Of particular
significance to the present case is the Supreme Courts
consideration of how the challenged statute changed the parties
contractual relationship. In United States Trust Co. v. New
Jersey, the Court held that a New Jersey statutory amendment
impaired a constitutionally protected contract right because it
totally eliminated an important statutory covenant that limited
the Port Authoritys ability to use revenues and reserves to
subsidize rail passenger transportation.37 Similarly, Chapter 19
totally eliminated the pilots important contractual right to
overtime wages for work performed between June 26, 2000, and July
16, 2003.38 We agree with the Fourth Circuit that compensation
for work performed according the parties employment agreement is
of great importance:
In the employment context, there likely
is no right both more central to the
contracts inducement and on the existence of
which the parties more especially rely, than
the right to compensation at the
contractually specified level. Accordingly,
we believe that the salary reductions at
issue constituted a substantial impairment of
the employees contract . . . .[39]
Hageland also argues that when the legislature abridges a right
that it provided through an earlier act, the impairment is not
substantial. But the Supreme Courts decision in United States
Trust Co. demonstrates that a legislatures impairment of a
statutory right created through a prior enactment may be
substantial.40
For these reasons, Hagelands arguments are unavailing.
Chapter 19 substantially impaired the overtime compensation
provision of the parties employment agreement when Chapter 19
totally eliminated the pilots claims for unpaid overtime wages
against Hageland.
2. Chapter 19s impairment of Hagelands obligation to
pay the pilots overtime compensation for work
already performed is not reasonable and necessary
to serve an important public purpose.
Under the second prong of our contract clause analysis,
we scrutinize whether Chapter 19 is reasonable and necessary to
serve an important public purpose.41 The severity of the
impairment measures the height of the hurdle the state
legislation must clear. . . . Severe impairment . . . will push
the inquiry to a careful examination of the nature and purpose of
the state legislation.42 Here, Chapter 19s impairment of the
pilots contractual right to overtime compensation was severe in
that it completely eliminated Hagelands obligation to pay the
pilots the overtime wages that they were entitled to under the
superior courts summary judgment orders on liability.
According to Hageland, the sponsor statement for
Chapter 19s senate bill demonstrates the legislatures belief that
Chapter 19 would serve the important public purpose of aiding the
vulnerable air carrier industry in Alaska. The sponsor statement
highlighted the burdens placed on the critical yet fragile air
carrier industry threatened by superfluous litigation.
We do not question that Chapter 11 serves an important
public purpose by reallocating the financial burdens borne by air
carriers and their employees in order to aid a struggling
transportation industry that many Alaskans, especially those
living in rural areas off the road system, depend upon to sustain
their way of life. Yet it is difficult to discern how Chapter 19
serves this important public purpose by denying pilots employed
by three air carriers the overtime they were entitled to under
the existing law when they performed the work. Hageland cites
the possibility that the pilots suit, and others like it, would
put Hageland and other air carriers out of business. But Chapter
19 only addresses the overtime wages of pilots employed by three
of Alaskas more than sixty-five air carriers. As the superior
court remarked, [t]he retroactive removal of existing contract
rights from one party in favor of another who clearly violated
existing law is manifestly unfair.43 Thus, Chapter 19 is not
reasonable and necessary to serve the important public purpose
advanced by Hageland.
V. CONCLUSION
Because Chapter 19s retroactive application of the
statutory exemption of flight crews to the Acts overtime
compensation provision is an unconstitutional taking of the
pilots overtime wages and an unconstitutional impairment of the
parties employment agreement, we AFFIRM the superior courts
holding that Chapter 19 violates the takings and contract clauses
of the Alaska Constitution.
_______________________________
1 AS 23.10.050.150.
2 AS 23.10.060; 8 Alaska Administrative Code (AAC)
15.908(c) (2004).
3 8 AAC 15.908(a), .908(c), .910(a)(22).
4 The superior court rejected the pilots arguments that
Chapter 19 violates the substantive due process, equal
protection, special legislation, and ex post facto provisions of
the state and federal constitutions.
5 Simpson v. Murkowski, 129 P.3d 435, 440 (Alaska 2006).
6 Ware v. Ware, 161 P.3d 1188, 1192 (Alaska 2007)
(internal quotation marks omitted).
7 Id.
8 Simpson, 129 P.3d at 440 (internal quotation marks
omitted).
9 Regulatory Commn of Alaska v. Tesoro Alaska Co., 178
P.3d 1159, 1163 (Alaska 2008).
10 Ch. 19, SLA 2005.
11 Ch. 11, 1, SLA 2003.
12 Hageland argues that Chapter 19s retroactive
application of Chapter 11 is constitutional because the
legislatures intent in passing both chapters was to clarify
existing law. But we do not afford the legislatures opinion
great weight in interpreting the meaning of its previously
enacted statutes. See Hillman v. Nationwide Mut. Fire Ins. Co.,
758 P.2d 1248, 1252 (Alaska 1988) (noting that the inquiry as to
whether a legislature which has amended a statute intends to
change or merely clarify the statute is usually fruitless because
the legislatures opinion as to the meaning of a statute passed by
an earlier legislature is no more persuasive than that of a
knowledgeable commentator). In this case, we decline to treat
Chapters 11 and 19 as clarifying legislation. Despite
legislative comments to the contrary, the Acts pre-amendment
language, its history, and its application to pilots by the
Alaska labor department support the superior courts conclusion
that the enactments changed existing law. See, e.g., AS
23.10.060(d) (2002) (listing eighteen exemptions to application
of the Acts overtime compensation provision), amended by ch. 11,
1, SLA 2003; ch. 90, 3, SLA 2005; ch. 45, 1, SLA 1972
(repealing the Acts original exemption from application of its
overtime compensation provision for all persons subject to the
United States Railway Labor Act, including employees of air
carriers that were engaged in interstate or foreign commerce or
transporting mail for the United States).
13 As in State, Department of Natural Resources v. Arctic
Slope Regional Corp., the questions of whether the taking is for
a public use and whether the statute provides adequate
compensation are not at issue in this case. See 834 P.2d 134,
138 & n.3 (Alaska 1991) (adopting the analysis used by the United
States Supreme Court in Ruckelshaus v. Monsanto Co., 467 U.S.
986, 1000-01 (1984), to determine whether a violation of the
federal Takings Clause had occurred).
14 See id. at 138.
15 See id.
16 As a threshold matter, Hageland argues that the
superior court should have dismissed the pilots takings claims so
they could pursue compensation for the alleged taking because a
party who alleges a takings violation must show that the
government denied compensation for the alleged taking. However,
we have not imposed such a requirement on takings claimants, and
we decline do so here. See Reust v. Alaska Petroleum
Contractors, Inc., 127 P.3d 807, 823 (Alaska 2005) (performing a
takings analysis without reference to whether the government
denied compensation).
17 Quinn v. Alaska State Employees Assn/Am. Fedn of State,
County & Mun. Employees, Local 52, 944 P.2d 468, 470 n.3 (Alaska
1997).
18 Bush v. Reid, 516 P.2d 1215, 1219-21 (Alaska 1973).
19 Reust, 127 P.3d at 823.
20 355 P.2d 584, 586 n.5 (Alaska 1960).
21 In some of our prior applications of this analysis, we
have identified the legitimacy of the interest advanced by the
government action as a fourth factor separate from the first
factor. E.g., Spinell Homes, Inc. v. Municipality of Anchorage,
78 P.3d 692, 702 (Alaska 2003); R & Y, Inc. v. Municipality of
Anchorage, 34 P.3d 289, 293 (Alaska 2001). Although Palazzolo v.
Rhode Island, 533 U.S. 606, 633-34 (2001), hinted at four
factors, including the legitimacy of the public purpose as a
separate factor, the United States Supreme Court has since made
it clear that there are only three factors and that this is not a
separate fourth factor. See Lingle v. Chevron U.S.A., Inc., 544
U.S. 528, 538-39 (2005) (listing three factors); Tahoe-Sierra
Pres. Council, Inc. v. Tahoe Regl Planning Agency, 535 U.S. 302,
315 n.10 (2002) (same). Accordingly, we do not treat the
legitimacy of the interest advanced by the government action as a
separate factor and instead examine the legitimacy of the
interest when applying the first factor.
22 E.g., Holding v. Municipality of Anchorage, 63 P.3d
248, 251 n.14 (Alaska 2003); State, Dept of Natural Res. v.
Arctic Slope Regl Corp., 834 P.2d 134, 139 (Alaska 1991) (quoting
Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984)).
23 See Dayhoff v. Temsco Helicopters, Inc., 848 P.2d 1367,
1369 (Alaska 1993) (Employment laws, including wage laws, are a
local concern traditionally within states police powers.).
24 Ch. 19, 2, SLA 2005.
25 See Waiste v. State, 10 P.3d 1141, 1154 (Alaska 2000).
26 Id.
27 Although we have not directly addressed whether the
test for this factor is wholly objective, in our prior decisions
we have largely devoted our discussion of this factor to the
reasonableness of the investment-backed expectations, an
objective inquiry. See, e.g., Anchorage v. Sandberg, 861 P.2d
554, 559 (Alaska 1993) (The real question presented by this case
is whether SD & Rs expectations concerning its development plans
were reasonable and whether those expectations should be afforded
constitutional protection.). Accordingly, we agree with the
Federal Circuits determination that [w]hile this analysis is
essentially an ad hoc, factual inquiry, it is nonetheless an
objective one. The subjective expectations of the [claimants]
are irrelevant. Chancellor Manor v. United States, 331 F.3d 891,
904 (Fed. Cir. 2003) (citations omitted).
28 In addition to arguing that the superior court
correctly determined that a takings violation occurred under our
ad hoc analysis for takings violations, the pilots ask us to
entertain whether a per se taking of an intangible right
occurred. We do not need to address this alternative ground for
affirming the superior courts ruling because we agree with the
superior court that Chapter 19 effected an unconstitutional
taking under our multifactor approach. See M.J.S. v. State, Dept
of Health & Soc. Servs., Div. of Family & Youth Servs., 39 P.3d
1123, 1126 n.12 (Alaska 2002) (Our decision affirming the
superior court on this ground makes it unnecessary to address the
courts findings of alternative grounds . . . .).
29 Article I, section 10 of the United States Constitution
provides: No State shall . . . pass any . . . Law impairing the
Obligation of Contracts . . . .
30 See Stepanov v. Homer Elec. Assn, Inc., 814 P.2d 731,
736 (Alaska 1991) (rejecting the claim that a state commissions
effective revision of the claimants contracts violated the Alaska
and federal contract clauses); Wien Air Alaska v. Arant, 592 P.2d
352, 363 (Alaska 1979) (dismissing the argument that the maximum
rate table of a workers compensation law impairs obligations
under the claimants insurance contract in violation of the Alaska
and federal contract clauses), overruled on other grounds by
Fairbanks N. Star Borough Sch. Dist. v. Crider, 736 P.2d 770
(Alaska 1987).
31 Simpson v. Murkowski, 129 P.3d 435, 444 (Alaska 2006)
(internal quotation marks omitted).
32 Id. (internal quotation marks omitted).
33 Id.
34 57 F.3d 385, 392 (4th Cir. 1995).
35 See id. (When assessing whether there has been the
requisite reliance, the Court has looked to objective evidence of
reliance.).
36 Id. at 392-94.
37 431 U.S. 1, 19 (1977).
38 See Ch. 19, SLA 2005 (applying the statutory exemption
of flight crews to the Acts overtime compensation provision to
claims for unpaid wages for overtime worked on or after January
1, 2000).
39 Balt. Teachers Union, Am. Fedn of Teachers Local 340 v.
Mayor of Balt., 6 F.3d 1012, 1018 (4th Cir. 1993).
40 431 U.S. at 19 (holding that a New Jersey statutory
amendment that eliminated a statutory covenant constituted an
impairment substantial enough to trigger contract clause
protections).
41 See Simpson v. Murkowski, 129 P.3d 435, 444 (Alaska
2006).
42 Allied Structural Steel Co. v. Spannaus, 438 U.S. 234,
245 (1978).
43 Although a determination that Chapter 19 violates
either the takings clause or the contract clause would be
sufficient to uphold the superior courts order, we affirm the
superior courts decision on both of its alternative grounds for
concluding that Chapter 19 is unconstitutional. See Meiners v.
Bering Strait Sch. Dist., 687 P.2d 287, 298 & n.12 (Alaska 1984)
(affirming the superior courts ruling on two alternative
grounds). We do not address the pilots argument that the
superior courts ruling should be upheld because Chapter 19 also
violates the due process and equal protection clauses of the
Alaska Constitution. See M.J.S. v. State, Dept of Health & Soc.
Servs., Div. of Family & Youth Servs., 39 P.3d 1123, 1126 n.12
(Alaska 2002) (Our decision affirming the superior court on this
ground makes it unnecessary to address the courts findings of
alternative grounds . . . .).
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