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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State, Dept. of Natural Resources v. Alaska Riverways, Inc. (5/21/2010) sp-6479
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
| STATE OF ALASKA, | ) |
| DEPARTMENT OF NATURAL | ) Supreme Court Nos. S- 13249/13269 |
| RESOURCES, | ) |
| ) Superior Court No. 4FA-07-00855 CI | |
| Appellant and | ) |
| Cross-Appellee, | ) |
| ) O P I N I O N | |
| v. | ) |
| ) No. 6479 May 21, 2010 | |
| ALASKA RIVERWAYS, INC., and | ) |
| TANANA RIVER PROPERTIES, | ) |
| L.L.C., | ) |
| ) | |
| Appellees and | ) |
| Cross-Appellants. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Douglas Blankenship, Judge.
Appearances: Cameron M. Leonard and Mary Ann
Lundquist, Senior Assistant Attorneys
General, Fairbanks, and Talis J. Colberg,
Attorney General, Juneau, for Appellant/Cross-
Appellees. Susan E. Reeves and Brian J.
Stibitz, Reeves Amodio, LLC, Anchorage, and
Alexander O. Bryner, Feldman Orlansky &
Sanders, Anchorage, for Appellees/Cross-
Appellants.
Before: Fabe, Christen, Justices, and
Matthews, Senior Justice, pro tem.*
[Carpeneti, Chief Justice, Eastaugh, and
Winfree, Justices, not participating.]
FABE, Justice.
I. INTRODUCTION
We are called upon today to decide whether the State of
Alaska has the authority to require private parties who construct
wharves into adjacent navigable waters to enter into leases. The
answer to this question depends on whether the common law right
to construct a wharf in front of ones property, which was
recognized in territorial days, has given way to the right of the
state to require a lease on behalf of all Alaskans for the
exclusive use of state-owned land.
We conclude that the Alaska Constitution and the Alaska
Land Act have modified the common-law right to wharf out by
granting authority to the state to enter into leases with
landowners who build wharves over state-owned land adjacent to
their property. We therefore uphold the exercise of authority by
the Alaska Department of Natural Resources (DNR) to require
Alaska Riverways, Inc., a longtime paddlewheel tour boat operator
on the Chena River, to enter into a lease. But DNRs leasing
decision, issued in 2006, required Alaska Riverways to pay the
greater of $1,000 per year or $0.25 per paying passenger for its
use of approximately one acre of state riverbed. Because the per-
passenger fee violates federal law, we vacate that portion of the
leasing decision.
II. FACTS AND PROCEEDINGS
A. Facts
The basic facts of this case are undisputed. Alaska
Riverways, Inc. and Tanana River Properties, LLC (collectively
Alaska Riverways) operate paddlewheel tour boats on the Chena
River in Fairbanks.1 Alaska Riverways was incorporated in 1953
and has owned the riverside property that is the subject of the
current dispute since 1972. In about 1980, Alaska Riverways
built a system of floating docks and bulwarks secured to this
riverside property for mooring boats and loading passengers.
Alaska Riverways docks and moored boats together occupy about one-
third of the width of the Chena River.
Because the Chena River is navigable, the State of
Alaska owns the riverbed below the ordinary high water mark.2
This riverbed land is referred to as shoreland,3 and one whose
property borders on a stream or river is known as a riparian
landowner.4 Alaska Riverways docks and moored boats float above
state shoreland, but Alaska Riverways has never held a lease or
permit from DNR.
In 1979 Alaska Riverways filed an application seeking
to obtain a lease for use of state shoreland. DNR did not
immediately process Alaska Riverways 1979 lease application due
to an insufficient description of the subject property. In 1989
DNR began sending letters to Alaska Riverways requesting further
information regarding Alaska Riverways 1979 lease application and
seeking to require Alaska Riverways to enter into a lease.
Alaska Riverways submitted a new lease application in 1990, and
DNR issued a preliminary decision approving it. In 1991 DNR
issued a final decision offering Alaska Riverways a ten-year
lease. DNR instructed Alaska Riverways to have the lease area
surveyed and appraised to determine the lease fee, but Alaska
Riverways did not do so and no lease was issued.5
Another fifteen years of fruitless lease discussions
went by, during which DNR periodically renewed its efforts to
require Alaska Riverways to enter into a lease and Alaska
Riverways questioned the authority behind and fairness of DNRs
shoreland leasing program. Subjects of negotiation included
whether Alaska Riverways should be charged back rent and whether
the lease fee should be a fixed amount based on appraised value
or a variable amount based on Alaska Riverways passenger count.
Further details of the nearly three decades of leasing
discussions between Alaska Riverways and DNR are not relevant to
the legal issues now before us.
In April 2006 DNR issued a preliminary decision
proposing a twenty-five year lease of approximately one acre of
shoreland to Alaska Riverways for $1000 per year or $.25 per
paying passenger, whichever is greater. (Emphasis in original.)
Because Alaska Riverways owned the adjoining riparian land, the
proposed lease was a preference right lease under AS
38.05.075(c), which provides that [t]he owner or lessee of land
that fronts on shoreland, tideland,6 or submerged land7 of the
state may be granted a preference right to a lease for the
shoreland, tideland, or submerged land without competitive
bidding.
DNR gave public notice of its preliminary leasing
decision and received public comment. Alaska Riverways objected
to the proposed leasing arrangement, opposing the imposition of a
tax on its gross business revenues and questioning the authority
of the state to impose a permit or lease fee in the first
instance. Alaska Riverways also objected to DNRs policy of only
requiring leases from commercial users of shoreland. Despite its
doubts regarding DNRs authority to require a lease, Alaska
Riverways indicated that it had no objection to a fixed lease
amount as opposed to one based on its passenger count.
In August 2006 DNR issued a final finding and decision
approving the leasing arrangement proposed in its preliminary
decision and responding to comments from Alaska Riverways and
others. Countering Alaska Riverways various objections, DNR
asserted that [a] riparian owner does not have the right to
occupy state shoreland to support commercial uses without any
authorization or fee and that [r]egardless of whether any part of
[the docks] physically touches state shorelands, the [Alaska
Riverways] docks have removed a portion of the state-owned bed of
the Chena River from public use. DNR also maintained that
commercial and non-commercial riparian landowners are not
similarly situated such that DNR must treat them the same and
that 33 U.S.C. 5(b), which prohibits the state from levying a tax
for the use of navigable waters, is inapplicable because DNR is
not charging Alaska Riverways to navigate vessels on the Chena
River. Alaska Riverways appealed the August 2006 final finding
and decision to the commissioner of DNR, who affirmed it.
B. Proceedings
Alaska Riverways then appealed the commissioners final
decision to the superior court. In August 2008 Superior Court
Judge Douglas Blankenship issued an opinion reversing DNRs
leasing decision, concluding that DNR does not have the authority
to require [Alaska Riverways] to enter a lease in order to
exercise its riparian right to wharf out. Although it reversed
DNRs leasing decision, [f]or the sake of completeness the
superior court went on to hold that if DNR could require a lease,
the proposed lease would not violate Alaska Riverways right to
equal protection and the proposed fee structure would not violate
federal law or otherwise be inappropriate.
DNR appeals from the superior courts reversal of its
leasing decision, and Alaska Riverways cross-appeals from the
superior courts conclusion that if DNR could require a lease,
DNRs proposed leasing arrangement would be consistent with
federal and state law.
III. STANDARDS OF REVIEW
Where the superior court acts as an appellate court
reviewing a decision by an administrative agency, we
independently review the underlying administrative decision and
give no deference to the superior courts decision.8 We apply one
of four standards in performing this review: (1) the substantial
evidence test applies to questions of fact; (2) the reasonable
basis test applies to questions of law that involve agency
expertise; (3) the substitution of judgment test applies to
questions of law that do not involve expertise; and (4) the
reasonable and not arbitrary test applies to questions about
agency regulations and the agencys interpretation of those
regulations.9 The questions posed in this appeal regarding
whether the state may require Alaska Riverways to enter into a
lease and the legality of the lease terms are questions of law
not involving agency expertise. In considering these questions,
we will therefore substitute our judgment for that of DNR,
adopting the rule of law that is most persuasive in light of
precedent, reason, and policy.10
IV. DISCUSSION
A. Decision of the Superior Court
In reaching its decision in favor of Alaska Riverways,
the superior court held that under the common law in Alaska,
Alaska Riverways had a riparian right of access that included the
right to construct a wharf or dock when . . . necessary to enjoy
access with boats or ships to navigable water. The superior
court determined that in Alaska Riverways case, [p]ractical
access to the point of navigability would include the area of
deep water necessary to moor Alaska Riverways riverboats to its
docks as well as the dock space necessary to load passengers.
Therefore, the superior court reasoned, if riparian common law
rights of access still exist, the States decision to require a
lease would be equivalent to charging [Alaska Riverways] rent for
what [Alaska Riverways] already had a right to use.
The superior court then went on to examine whether
riparian common law rights of access still exist in light of
various sections of the Alaska Land Act11 that delineate DNRs
power to lease state shoreland. The superior court focused on
AS 38.05.075(c), which was enacted in 198412 and amended in
199713 and which grants a non-competitive preference right to
landowners who wish to lease the state-owned shoreland, tideland,
or submerged land adjoining their property. The superior court
noted that AS 38.05.075(c) is inconsistent with a common-law
wharfage privilege because a riparian landowner possessing a
common-law right to wharf out would have no use for a shoreland
lease from the state at all, let alone a preference right in
obtaining such a lease. The superior court thus reasoned that
AS 38.05.075(c) could be interpreted to abolish riparian owners
common law right to wharf out over state-owned riverbed. But the
superior court held that AS 38.05.075(c) could not be applied
retroactively to abolish Alaska Riverways right to wharf out
because Alaska Riverways built its floating docks in 1980, prior
to the enactment of that subsection.
DNR now appeals the superior courts decision in favor
of Alaska Riverways, arguing that under Alaska law, there is no
common law wharfage privilege that would permit Alaska Riverways
to construct and maintain its dock over state land free from
state regulation, and that [t]he Alaska Legislature has
authorized DNR . . . to undertake regulation of wharves over
shoreland through leases.
B. Under Common Law, Alaskan Riparian Owners Have a
Qualified Right to Wharf Out.
The existence, nature, and extent of the riparian right
to wharf out is a matter of state law.14 We therefore begin with
an examination of the nature of the common-law right to wharf out
in Alaska.
1. Pre-statehood judicial decisions
The right to wharf out in Alaska was addressed by
courts prior to statehood in the context of actions by littoral15
owners against private parties preventing their access to
adjacent tidelands and submerged lands. While we are not bound
by federal judicial rulings entered prior to the date of
statehood,16 these decisions help to define the context in which
our constitutional framers and the first Alaska state legislature
acted.
In Dalton v. Hazelet, decided in 1910, the Ninth
Circuit held: while in a territory a grant of land bordering on
or bounded by navigable waters conveys to the grantee no right or
title to the shore or soil below high-water mark, nevertheless
such a grantee has the right to a free and unobstructed access to
such waters.17 This right to access includes the right to erect
structures over waters too shoal [i.e. shallow] to be navigable,
but only up to the point of navigability where the necessity for
such erections ordinarily ceases.18 The court noted, however,
that a riparian owners right of access by means of a wharf or
other structure is subject to the right of [a future state] to
regulate the use of tide lands and beds of any of its navigable
waters. 19
The district court for the Territory of Alaska
considered the right to wharf out in detail several years later.
In Alaska Juneau Gold Mining Co. v. Northern Lumber Mills, the
court explained that a riparian owner may construct a wharf
because he has a right of access to the deep
water, and he cannot enjoy that right except
by means of a wharf. The right to build a
wharf in such cases is not a major right, not
an independent right, not an all-sufficient
right. It is a qualified right, having no
potency whatsoever except in so far as it is
referable and appurtenant to, and is a part
of, that other right, called the right of
access.[20]
The court defined the right of access as an easement, and as
such, the extent of a wharf built to exercise that right must be
reasonable.21 Reasonableness is dependent upon the purpose for
which such access is desired, with reference to the size and kind
of vessels which navigate the stream, and the kind of business
done upon it.22 The court found the proposed wharf in question,
which could accommodate large vessels carrying coal and heavy
mining machinery, to be necessary and reasonable for a large
quartz mining operation.23 Finally, the court noted that the
right of access is one of which, when once it is vested, the
owner can only be deprived in accordance with the established
law, and if necessary that it be taken for the public good, upon
due compensation.24
Shortly before statehood, the territorial court again
addressed the rights of a littoral owner, enjoining a defendant
from removing gravel from tidelands where the removal would
prevent plaintiff sawmill operator who owned adjacent tidelands
from constructing a wharf to load lumber on barges and vessels.25
Relying on Alaska Juneau Gold Mining Co., the court stated: It is
well established that a right of access such as claimed by the
plaintiff, is a property right and may be exercised by
constructing a wharf, pier or dock over the intervening tide
lands to the navigable waters.26 As a legal right, the right of
access may not be impaired without compensation.27
These cases make clear that prior to statehood, a
riparian owner in the Territory of Alaska, while having no right
or title to the soil below, had a common-law right to wharf out
that, once vested, could not be taken without compensation. But
the exercise of this right had to be reasonable; the wharf could
be constructed only to the extent necessary to reach navigable
waters, with reference to its intended use.
2. Wernberg v. State
In Wernberg v. State, the only Alaska case since
statehood relevant to the case before us, we referred to the many
and varied rights of riparian owners that, generally speaking,
include the right to build wharves and piers out to deep water if
this can be done without interfering with navigation.28 DNR
characterizes this mention of the right to wharf out as a passing
reference and classic obiter dictum, while Alaska Riverways
argues that Wernberg firmly establishe[d] the right to wharf out
in Alaska. The riparian rights listed in Wernberg were derived
from a law review article published several years earlier,29 and
were not specific to Alaska nor, apart from the right of access
to navigable waters, discussed in any detail in the opinion. It
does not appear that the plaintiff in Wernberg had built or
maintained a wharf.
Wernberg involved a challenge to the states
construction of a highway preventing plaintiffs historical access
to the Cook Inlet with his fishing boats via the creek and
tidewaters adjacent to his property. Confirming the importance
of the common-law right of access in Alaska, we held that this
interference could constitute a taking requiring compensation.30
We expressed a concern that a contrary holding might devalue
riparian property:
Alaska has a seacoast longer than that of the
entire United States. A large number of
Alaskan communities are located on the shores
of bays and inlets in order to gain water
access for transportation and shipping, or
easy access to the fertile fishing grounds of
Alaska. A substantial amount of development
in these cities is along the waterfront. . .
. [A] declaration that littoral access may be
taken for any public purpose without
compensation will immediately devalue
property in such areas and limit the
development of many isolated communities
whose only means of access is by water.[31]
While recognizing the importance of the right of access
in Alaska, we also noted that the rights of riparian owners are
not absolute, but are subject to those general regulations, which
are necessary to the common good and general welfare, exercised
pursuant to the states police power.32 We concluded that the
Alaska Constitution, while authorizing the state to take
plaintiffs right of access to construct a highway,33 also
required it to compensate plaintiff for his loss of access.34
While Wernberg made a generalized statement that the
right to wharf out was included among the rights of a riparian
owner, it did not specifically address the scope and limitations
of this right, nor whether it had been altered by the Alaska
Constitution or by statute. Rather, Wernberg addressed a
riparian owners right of access, holding that the state may not
take a riparian owners right of access to navigable waters
without compensation. It does not necessarily follow from this
holding that the state may not require an owner who builds a
wharf over state land to enter into a lease. For these reasons,
Wernberg is not controlling.
We next consider to what extent the common-law right to
wharf out that was recognized in territorial days has been
limited by the public trust doctrine, the Alaska Constitution,
and actions by the Alaska Legislature, and whether any of these
sources authorize DNR to require a riparian owner that builds a
wharf over state land to enter into a lease.
C. The Public Trust Doctrine Does Not Support Requiring
Riparian Owners Who Exercise Their Right To Wharf Out
To Enter into a Lease.
DNR argues that its attempt to require Alaska Riverways
to enter into a lease is a proper exercise of its general
authority to regulate the use of state waterways under the public
trust doctrine.35 DNR thus believes that this case pits the
common-law right to wharf out against the public trust doctrine
and that the former must accommodate the latter. We conclude
that DNRs authority to require riparian owners to enter into
leases for the use of shoreland arises, if at all, independent of
the public trust doctrine.
Under the public trust doctrine, the state holds title
to the beds of navigable waters in trust for the people of the
State that they may enjoy the navigation of the waters, carry on
commerce over them, and have liberty of fishing therein freed
from the obstruction or interference of private parties.36 It
may therefore subject a riparian owner to general rules and
regulations . . . for the protection of the rights of the
public.37 The right to wharf out, like all riparian rights, is
not absolute, but is limited by the states exercise of its
authority under the public trust doctrine.38
The common-law public trust doctrine has been
incorporated into the constitution and statutes of Alaska.
Article VIII, section 14 of the Alaska Constitution provides that
[f]ree access to the navigable or public waters of the State . .
. shall not be denied . . . except that the legislature may by
general law regulate and limit such access for other beneficial
uses or public purposes.39 The legislature codified the public
trust doctrine as applied to riparian and littoral landowners in
AS 38.05.126(c), enacted in 1999:
Ownership of land bordering navigable or
public water does not grant an exclusive
right to the use of the water and a right of
title to the land below the ordinary high
water mark is subject to the rights of the
people of the state to use and have access to
the water for recreational purposes or other
public purposes for which the water is used
or capable of being used consistent with the
public trust.
Under the public trust doctrine, the state can regulate a
riparian owners use of adjacent state-owned lands to protect
recreational and other public purposes, including the right to
fish, hunt, bathe, swim, to use for boating and general
recreation purposes the navigable waters of the state, and to use
the bottom of the navigable waters for anchoring, standing, or
other purposes.40
None of these public trust uses are implicated in this
case. In its preliminary decision, DNR explicitly found that
restricting public access to [Alaska Riverways] lease parcel will
not substantially impair the publics interest in trust
resources.41 Instead, DNR sought a lease with Alaska Riverways
for its exclusive use of state land in order that all Alaskans []
receive a return from any commercial use of their public lands.
Even construing the public trust doctrine broadly, it does not
permit the state to regulate riparian owners by requiring them to
pay rent for the use of state lands. The collection of rent is
simply not a public purpose that the state has an obligation to
protect under the public trust doctrine.
The public trust doctrine, as expressed in the common
law, the Alaska Constitution, and Alaska statutes, does not
support DNRs efforts to require riparian owners to enter into
leases. It does, on the other hand, support the regulation of
the exercise of riparian rights, including the right to wharf
out. DNR may use its leasing program, or any other regulatory
program authorized by the legislature, to regulate the
construction and maintenance of wharves over state-owned land to
protect public uses of the waterways, but it has not done so
here.
D. Under the Alaska Constitution, a Riparian Owner Does
Not Obtain a Protected Property Interest in State Lands
by Constructing a Wharf.
Article VIII of the Alaska Constitution, the natural
resources section, places all state lands under the control of
the legislature.42 Tidal and submerged lands are expressly
included in the state public domain.43 The legislature has
plenary authority to provide for the utilization of state lands
by providing for facilities and improvements,44 sales and
grants,45 and, most relevant here, leasing.46 No disposal of
state lands or interests in state lands can be made without
public notice and other safeguards of the public interest.47
Article VIII permits rights to be established by appropriation in
only two instances, neither of which includes the right to
appropriate an interest in state shoreland by building a wharf
over such land.48
Alaska Riverways argues that by virtue of being a
riparian owner, it has a protected property right to wharf out
over state land, and that DNRs requirement that Alaska Riverways
enter into a lease is an attempt to generate revenue by charging
[Alaska Riverways] for a property right [it] already possesses.
Yet, article VIIIs prohibition on disposal of state lands or
interests in state lands without public notice and other
safeguards is inconsistent with the creation of a protected
property interest in state lands simply by being a riparian
owner, or by constructing a wharf over state lands. So too is
article VIIIs strict limitation on instances in which a person
can obtain an interest in Alaska lands by appropriation.
In arguing that it possesses a protected property
interest, Alaska Riverways relies heavily on section 16 of
article VIII,49 which it claims recognized the common-law right
to wharf out as it existed in territorial days. The commentary
prepared by the Resources Committee of the Constitutional
Convention with respect to this section states:
This section, protecting any person from
involuntary divestment of property rights and
interests, is generally applicable to any
established right and might be relied upon to
protect persons who claim possessory rights
to tidelands in coastal areas where
substantial improvements have been made in
docks, wharves or other waterfront facilities
and homes.[50]
A proper understanding of section 16 and the committee
commentary requires that it be viewed in historical context. At
the time of the constitutional convention much of the
infrastructure of the territory was built over tidelands owned by
the United States.51 This included docks, warehouses, streets,
hotels, stores, schools, private residences, and much of the
commercial sections of Juneau, Ketchikan, Cordova, and Valdez.52
The United States took the position that most of these facilities
were trespasses, though it had no desire to abate them.53 The
reference to improvements in section 16 as explained in the
commentary was intended to address this problem by recognizing
that where substantial improvements have been made on tidelands
as of the time of statehood, a protected property right would
arise. Yet as to unimproved tidelands, the delegates were
advised that the state legislature would have full power insofar
as the disposition of surface rights for the building of . . .
docks [and] wharves . . . is concerned; the legislature may sell
the lands in these cases, should it desire to do so.54 Properly
understood, section 16 establishes that substantial improvements
on tidelands that existed at the time of statehood would give
rise to protected property rights while tidelands that were
unimproved at the time of statehood would be state property that
could be disposed of only in accordance with the other provisions
of article VIII.
In summary, article VIII placed control of all state
land, including shoreland, in the legislature. After statehood,
a riparian owner could not obtain a protected property interest
in state shoreland through the purchase of the riparian land or
by constructing a wharf. While article VIII authorized the
legislature to provide for the leasing of . . . any part of the
public domain, including submerged land,55 it did not itself
grant DNR authority to require riparian owners who construct
wharves to enter into leases for their use of state shoreland.
We now examine whether the state legislature granted DNR such
authority, and in doing so determined that the private common-law
right to wharf out should yield to the public interest in earning
revenue from the exclusive use of state land by a riparian owner.
E. The Legislature Has Expressly Granted Authority to DNR
To Require Upland Owners Who Wharf Out To Enter into
Leases.
The first Alaska state legislature enacted the Alaska
Land Act56 pursuant to the mandate of article VIII, section 2 of
the Alaska Constitution that the legislature provide for the
utilization, development, and conservation of all state land.
Alaska Riverways argues that the Alaska Land Act and its
subsequent amendments do not grant DNR statutory authority to
lease shorelands to riparian owners. We disagree and conclude
that the Alaska Land Act as first enacted in 1959 authorized DNR
to require riparian owners to enter into leases for exercising
their common-law right to wharf out.
1. Alaska Statute 38.05.070
DNR argues that AS 38.05.070, which was enacted as part
of the Alaska Land Act,57 authorized it to charge riparian owners
rent and abolished any common law right to wharf out.58 Alaska
Riverways argues that this statute instead grant[ed] DNR
authority to lease shorelands to anyone but riparian
landowners.59 (Emphasis in original.)
When it was enacted upon statehood in 1959, AS
38.05.070 provided:
All lands, including any tide, submerged or
shore lands, to which Alaska holds title or
to which Alaska may become entitled, may be
leased . . . in the manner provided in this
Article.
The lands to be leased would be determined by the director of the
Division of Lands of DNR, along with limitations and conditions
that shall attach to the lands and the terms that shall accompany
the lease.60 The leasing would be conducted at public auction to
the highest qualified bidder unless the total appraised value of
the transaction was $250 or less per year, in which case DNR
could negotiate the lease directly without advertisement.61
The text of AS 38.05.070 and the other leasing
provisions make no reference to riparian owners, let alone
explicitly state that DNR cannot lease shorelands to riparian
owners. The statute authorizes DNR to negotiate leases of up to
five years whose total appraised value is $250 or less per year,
imposing no limitation on the identity of the lessee. The
statute further authorizes DNR to hold public auctions to lease
lands it has selected. There is nothing in the statute that
prevents a riparian owner from submitting a bid for adjacent
shoreland. If AS 38.05.070 did not grant DNR authority to lease
shoreland to riparian owners, as argued by Alaska Riverways, DNR
would either have to reject such a bid, or else be unable to put
any shoreland (or tide or submerged land) adjacent to private
property up for auction in the first place. Alaska Riverways
construction of AS 38.05.070 would thus exclude the parties who
would be most interested in leasing state-owned lands, the
adjacent land owners, from the leasing program or substantially
undercut DNRs ability to exercise its statutory authority. We
find this construction to be untenable.
Consistent with article VIII, section 16 of the Alaska
Constitution, the Alaska Land Act also granted explicit rights to
those who had constructed wharves or other substantial permanent
improvements on tide and submerged lands for any business,
residential or other beneficial purpose prior to statehood.62
Such occupants were given a preference right to acquire the tide
and submerged land either from a municipality, if such land was
transferred from the state, or directly from the state.63 If the
improvements were constructed prior to September 7, 1957, the
occupant could acquire the land for the cost of surveying and
transferring title; if the improvements were constructed after
that date and prior to statehood, the occupant could acquire the
land for its appraised value, plus appraisal, administrative, and
transfer costs.64 Occupants had two years from the date the
municipality or DNR began accepting applications to apply for
preference rights, or else they would be lost.65 The provision
did not differentiate between occupants who owned adjacent upland
property, nor did it grant any rights to those constructing
improvements after statehood, whether owners of adjacent land or
not.
Reading these two provisions together, a legislative
framework emerges. Persons who had constructed improvements on
tide and submerged land prior to statehood were granted special
preference rights to purchase or lease these occupied lands, but
those rights would expire if unused. DNR was authorized to enter
into leases with all other parties, including upland owners, for
their occupancy of state lands either directly if the lease was
appraised at $250 or less, or after public auction. To this
extent, AS 38.05.070 restricted the common-law right to wharf out
when it was passed in 1959.66
The DNR lease application forms used by Alaska
Riverways in 1979 are consistent with this statutory construction
and suggest that DNR since at least that time has interpreted its
statutory authority to include leasing to upland owners.67 If
the applicant was not the upland owner, the application requested
the names and addresses of the upland owners in addition to
adjacent land owners. The application further gave notice to the
applicant that the applicant may have to provide a deposit to
cover the cost of advertising a public auction, which would be
returned [i]f advertisement of this land is required and the land
is leased to another party. The application thus contemplated
the possibility that DNR would conduct a public auction to lease
shoreland, tideland, and submerged land adjacent to upland owners
and ensured that DNR had the names of the landowners most likely
to be interested in participating or otherwise affected.
2. Alaska Statute 38.05.075(c)
The Alaska Land Act was substantially revised in 1984,
including changes to the leasing program.68 A provision was
added under which an upland owner would be entitled to acquire a
lease for the [adjacent] tide and submerged land without
competitive bidding regardless of the value of the lease if DNR
made certain determinations.69 This modification to the leasing
program was proposed by an executive of the Sealaska Native
Corporation who testified before the Senate Resources
Committee.70 After noting that the development of Sealaskas
1,000 miles of coastal property was dependent on access to state-
owned tidelands, the witness suggested that the creation of an
upland owners preference would facilitat[e] transportation and
commerce from adjacent uplands, which is vital to upland economic
development.71 The provision was presented and adopted at the
next meeting of the Resources Committee.72 The provision,
proposed by an owner of a large amount of land bordering tideland
and submerged land, was meant to expand the rights of littoral
owners by entitling them to noncompetitive leases for adjacent
property, not to restrict their rights by authorizing DNR to
lease tideland and submerged land to them when they could not do
so before.
Support for this interpretation of AS 38.05.075(c) and
DNRs authority to enter into leases with upland owners prior to
its enactment can be found in the Senate Resources Committee
files. The text of the provision proposed by Sealaska, which
specifically related to upland owner leases, was circulated among
committee members prior to its adoption with the following note
from committee staff: Leases for tide and submerged lands are
currently available through the competitive bidding process.
Under current statute, any lease for a term of less than 5 years
and valued at less than $250 annually may be negotiated.73 After
the amendment had been adopted by the committee, a summary of
major provisions of the amendments to the Alaska Land Act
described it as [p]rovid[ing] a mechanism for DNR to negotiate
leases for tide and submerged lands with upland land owners
without competitive bidding, whereas under the former leasing
procedures, [l]easing is made at auction to the highest qualified
bidder.74
In 1997, AS 38.05.075(c) was amended to authorize DNR
to grant preference rights to riparian owners leasing adjacent
shorelands in addition to owners leasing adjacent tidelands and
submerged lands.75 In its current form, the provision states:
The owner or lessee of land that fronts on shoreland, tideland,
or submerged land of the state may be granted a preference right
to a lease for the shoreland, tideland, or submerged land without
competitive bidding if the director makes certain determinations.
Alaska Statute 38.05.075(c) clearly authorizes DNR to directly
negotiate leases of any value with upland owners who construct
wharves.76 We therefore reject Alaska Riverways argument that
DNR is not authorized by statute to require it to enter into a
lease for its exclusive use of state-owned shoreland.
F. Alaska Riverways Challenge to DNRs Requirement that It
Enter Into a Lease for Wharfing Out over State Land
In addition to challenging DNRs statutory authority,
Alaska Riverways advances several arguments for why DNR may not
require it, as a riparian owner, to enter into a lease for
wharfing out over state land. First, it contends that DNRs
leasing decision constitutes an impermissible taking under
article VIII, section 16 of the Alaska Constitution. Second, it
contends that DNRs application of AS 38.05.075(c) to require it
to enter into a lease for its maintenance of a dock built prior
to the passage of that statute would constitute an improper
retroactive application of law. Third, it argues that DNRs
leasing decision violates its equal protection rights under the
state and federal constitutions.77 We consider each argument in
turn, and find them to be without merit.
1. DNRs leasing decision does not violate article
VIII, section 16 of the Alaska Constitution.
Alaska Riverways argues that DNRs application of AS
38.05.075(c) to require it to enter into a lease for maintaining
its docks violates article VIII, section 16 of the Alaska
Constitution. As discussed above, section 16 only protects
property rights in wharves that were constructed prior to
statehood. Riparian owners who have constructed wharves since
statehood gained no protected property interest by doing so.78
Alaska Riverways did not construct the wharf at issue in this
case until around 1980 or even acquire its current property until
the early 1970s, well after statehood.
Alaska Riverways argues that the date on which a
riparian landowner purchased the property or built a dock is
irrelevant to obtaining a protected property interest because the
right to wharf out attach[es] to the land. To the contrary,
under territorial common law, riparian owners had to first
exercise their right to wharf out before they acquired protected
property rights that could be divested; they could not make this
showing based on the existence of an abstract riparian right they
acquired through purchase of the land.79 Having built its wharf
well after statehood, Alaska Riverways therefore cannot claim
that it acquired any property interest protected by section 16.80
The legislature is free to balance the private right to
wharf out with the public interest in recognizing a return from
the exclusive use of state-owned lands. The legislature has done
so by permitting, but not requiring, DNR to enter into leases
with upland owners. DNR has exercised this discretion by
categorically exempting upland owners who construct docks for
personal, non-commercial use from lease requirements.81 Should
the legislature determine in the future that an upland owners
right to wharf out should not be limited by the states interest
in collecting revenue for the use of state-owned lands, it may
change the law accordingly.
2. DNRs leasing decision does not constitute an
improper retroactive application of AS
38.05.075(c).
While AS 38.05.070, enacted in 1959, first authorized
DNR to enter into leases with riparian owners, it was AS
38.05.075(c), as amended in 1997, under which DNR actually issued
the preference-right lease to Alaska Riverways. We must consider
Alaska Riverways argument that DNRs issuance of a lease under the
current version of AS 38.05.075(c) for a dock built prior to its
enactment constitutes a retroactive application of the statutory
provision. Statutes are not to be applied retroactively unless
the legislature expressly declares them to be retroactive.82
This court has explained retroactivity as follows:
A statute will be considered retroactive
insofar as it gives to pre-enactment conduct
a different legal effect from that which it
would have had without passage of the
statute. A statute creates this different
legal effect if it would impair rights a
party had when he acted, increase a partys
liability for past conduct, or impose new
duties with respect to transactions already
completed.[83]
The superior court found that the 1997 amendment to AS
38.05.075(c) first authorized DNR to require Alaska Riverways to
enter into a lease and that such authorization could not be
applied retroactively to abolish Alaska Riverways right to wharf
out. As we hold above, it was instead AS 38.05.070 that first
authorized DNR to enter into leases with riparian owners for the
adjacent shoreland if the appraised per annum value was under
$250 or put the land up for public auction. The 1997 amendment
simply gave DNR another leasing option under which it could grant
Alaska Riverways a preference right and negotiate a lease
directly. Rather than impairing Alaska Riverways right to wharf
out, it strengthened this right as it provided Alaska Riverways
with a preference right to lease adjacent shorelands and made it
less likely these shorelands would be put up for public auction.
Nor was Alaska Riverways subject to new duties both before and
after the amendment, Alaska Riverways could be forced to pay rent
to DNR if it entered into a lease with DNR.
Alaska Riverways has also failed to demonstrate that AS
38.05.075(c) increased Alaska Riverways liability for maintaining
its docks by authorizing DNR to charge a greater lease fee than
it could have charged for years prior to the statutes enactment.
From the date Alaska Riverways constructed the dock until the
1984 amendments to the leasing program, DNR would have had to
place the lease up for public auction if the appraised per annum
value of the lease was greater than $250. But in 1984, AS
38.05.070(b) was amended to allow DNR to negotiate leases
directly if their appraised per annum value was $5,000 or less.84
In 1994, the per annum value of the Alaska Riverways lease was
appraised at $925, well under $5,000. More than ten years later,
DNR estimated the fair market value of the lease to be only
slightly more, $1,000 per year. Therefore, beginning in 1984,
DNR could have negotiated the lease directly with Alaska
Riverways on the limitations, conditions and terms that [it]
considers are in the best interests of the state after 1984.85
Under the leasing decision, DNR seeks to collect back rent of
$1,000 per year from 1991. This does not represent an increase
in Alaska Riverways liability for maintaining its docks prior to
the 1997 amendment to AS 38.05.075(c) and is therefore not an
improper retroactive application of that provision.
3. DNRs leasing decision does not violate Alaska
Riverways equal protection rights.
Alaska Riverways contends that DNRs requirement that it
enter into a lease violates its equal protection rights under
both the federal and state constitutions because DNR has not
required all upland owners who build wharves to enter into
leases.86 Alaska Riverways argues that there is no rational
basis for DNR to treat commercial and non-commercial users
differently because [a]nyone that physically occupies surface
waters is equally effective at excluding others. Even if
commercial and non-commercial users are not similarly situated
for equal protection purposes, Alaska Riverways continues, DNR is
improperly treating it differently than other similarly situated
commercial users of surface waters.
The superior court rejected Alaska Riverways equal
protection arguments. First, it found that DNRs distinction
between non-commercial and commercial users of state shoreland is
rationally related to the permissible government objective that
commercial users should pay for the privilege of using state land
in aid of making a profit. Second, it found that DNRs
distinction between large and small [commercial] operations is []
rationally related to prudent management of state land in that it
is common sense that the larger businesses generally require
larger docks, which occupy more state shoreland.
a. Commercial vs. non-commercial users
The Uniform Application Clause and equal protection
clauses of the United States and Alaska Constitutions require
equal treatment only of persons similarly situated.87 Concluding
that two classes are not similarly situated necessarily implies
that the different legal treatment of the two classes is
justified by the differences between the two classes.88 DNR
argues that commercial and non-commercial users of state
shoreland are not similarly situated. We agree. We have already
held in various contexts that people using state land and
resources for different purposes are not similarly situated for
purposes of constitutional analysis, including sport and
commercial fishermen,89 residential and recreational purchasers
of state land,90 and Alaska resident and non-resident hunters.91
Similarly, we hold that riparian landowners using state
land to construct wharves for private use are not similarly
situated to those using state land to construct wharves for
commercial use. The legislature has expressed an intention that
DNR maximize the return on the leasing of state land.92 Only
commercial users earn revenue from their use of state lands and
have this revenue available to compensate Alaskans for their
exclusive use of state land.93 Because they are not similarly
situated, DNR may treat commercial and private users differently
without implicating the equal protection clauses of the federal
and state constitutions and the Uniform Application Clause.
b. Differences in treatment among commercial
users
Even if DNR is justified in treating commercial and
private users differently, Alaska Riverways argues that DNR is
treating it differently from other commercial users who are not
necessarily tourist operations by not requiring these other
commercial operations to enter into a lease. Instead of citing
specific examples, Alaska Riverways asks us whether DNR [is]
requiring a lease of every marina, port, fish processing plant,
freight hauler, hunting or fishing lodge, or other commercial
operation, suggesting that if not, DNRs lease decision would
violate Alaska Riverways equal protection rights. But it is
Alaska Riverways, not DNR or this court, that bears the initial
burden of identifying specific similarly situated users of state
land that are not being required to enter into a lease. Alaska
Riverways did not identify to the superior court any commercial
operations similar in size that have not entered into a lease
with DNR.
Nor would such evidence alone be sufficient to make out
an equal protection claim. Alaska Riverways further bears the
burden of demonstrating that DNRs [s]elective enforcement of the
leasing statute is part of a deliberate and intentional plan to
discriminate based on an arbitrary or unjustifiable
classification.94 It failed to present any such evidence. DNR,
while acknowledging that historically [it] has not authorized
every commercial business with a dock, contends that this has
been due to insufficient resources to address all uses occurring
on state land rather than purposeful discrimination. An agency
need not indeed, often cannot apply a statute simultaneously to
all similarly situated parties to avoid violating the equal
protection clause so long as it is not intentionally
discriminating against any party.
Because Alaska Riverways has failed to produce evidence
showing that DNR does not require leases of other similarly
situated commercial users and suggesting that DNRs selective
application of the leasing statute to Alaska Riverways
constitutes intentional discrimination, we hold that Alaska
Riverways has failed to establish a violation of its equal
protection rights.95
G. Alaska Riverways Challenge to DNRs Calculation of a
Lease Fee Based on Passenger Count
Alaska Riverways argues in its cross-appeal that, even
assuming DNR could require it to enter into a lease, DNR may not
base the lease fee on the number of its paying passengers.
First, Alaska Riverways contends that such a lease fee violates
federal law prohibiting states from levying a tax for the use of
navigable waters. Second, Alaska Riverways contends that DNR is
not authorized by statute to charge such a lease fee.96 We hold
that DNRs calculation of a lease fee based on passenger count
violates federal law and, consequently, need not consider Alaska
Riverways alternative argument that DNR lacks the statutory
authority to charge such a fee. We therefore vacate that portion
of the DNR leasing decision but leave in place the lease fee in
the amount of $1,000 per year.
Alaska Riverways argues that requiring it to pay a
lease fee based on its passenger count would violate 33 U.S.C.
5(b), which provides with some exceptions:
No taxes, tolls, operating charges, fees, or
any other impositions whatever shall be
levied upon or collected from any vessel or
other water craft, or from its passengers or
crew, by any non-Federal interest, if the
vessel or water craft is operating on any
navigable waters subject to the authority of
the United States, or under the right to
freedom of navigation on those waters.[97]
DNR argues that 33 U.S.C. 5(b) does not apply because it is not
charging vessels or passengers for use of the Chena River, but
rather charging Alaska Riverways rent for its exclusive use and
occupancy of state-owned shoreland in its capacity as a
landowner. DNR cites Brusco Towboat v. State in support, in which
the Oregon Supreme Court held that a lease fee did not violate an
Oregon statute similar to 33 U.S.C. 5(b) because the fee was not
a charge for the use of navigable waters, but rather a charge
upon those who wish to occupy, to the exclusion of others,
portions of the states lands in pursuit of their own business
activities.98 DNR ignores a crucial difference between this case
and Brusco Towboat: In Brusco Towboat, the administrative agency
did not attempt to calculate the lease fee based on passenger
count but instead based the lease fee on the amount of water
surface area occupied.99
The question here is whether the assessment of a lease
fee based on passenger count for exclusive use of state land
implicates 33 U.S.C. 5(b). We hold that it does and reject DNRs
argument that the fact that it calculates the rent . . . based on
the number of [Alaska Riverways] customers does not convert the
rental amount into a passenger fee or user fee. DNRs proposed
assessment on Alaska Riverways, however labeled, is a charge
exacted specifically for the use of navigable waters in this
case, $0.25 for each paying passenger and 33 U.S.C. 5(b)
therefore applies.
The Ninth Circuit reached a similar conclusion in
Western Oil and Gas Association v. Cory, where it held that
Californias practice of basing the lease fee for running a
pipeline over unimproved state tidelands on the volume of oil
passing through the pipeline violated the Commerce Clause of the
United States Constitution.100 In rejecting the argument by the
State of California that it was only charging rent for the use of
state-owned lands, the court stated:
Although the volumetric rates are designated
as rent by the State, it is the practical
effect of an exaction, not its label that is
the focus of analysis under the Commerce
Clause. The volumetric charges are exacted
specifically in return for the use of the
coastal property. The present case therefore
falls within the bounds of the Supreme Court
cases that have reviewed challenges to user
fees or taxes that were designed and defended
as a specific charge imposed by the State for
the use of state-owned . . . facilities and
services.[101]
Similarly, in reversing a decision by this court rejecting a
challenge to a port citys property tax on large vessels brought
under the Tonnage Clause, the United States Supreme Court made
clear that a state may not impose taxes and duties regardless of
their name or form . . . which operate to impose a charge on the
use of navigable waters.102
While Alaska Riverways contends that the lease fee
based on passenger count violates 33 U.S.C. 5(b) rather than the
Commerce or Tonnage Clauses, 33 U.S.C. 5(b) codified the common
law concerning these constitutional provisions.103 33 U.S.C.
5(b), like the Commerce and Tonnage Clauses, prohibits levying
fees on the use of navigable waters unless those fees do not
impose a significant burden on interstate commerce and represent
a fair approximation of the benefit conferred or cost incurred by
the charging authority.104 DNR does not argue that this
exception applies, but rather that 33 U.S.C. 5(b) (and the
Commerce and Tonnage Clauses) are inapplicable because the
assessment is not a user fee. For the reasons stated above, we
disagree.
Having determined 33 U.S.C. 5(b) to be applicable, the
proposed lease fee based on passenger count is clearly
impermissible because it does not approximate the benefit
conferred or cost incurred by the State of Alaska.105 The State
has not argued that it provides facilities or services to Alaska
Riverways or its passengers. Nor has the State shown that it
incurs costs in leasing the unimproved shorelands to Alaska
Riverways106 above the administrative costs of processing the
lease application and issuing the lease, and the litigation costs
associated with this lawsuit.107 The State does confer a benefit
on Alaska Riverways and indirectly on its passengers: the
exclusive use of state-owned shorelands. And the State may
charge for this benefit. Importantly, however, a per-passenger
lease fee is not a fair approximation of this benefit; indeed, it
has no relation to this benefit. Whether Alaska Riverways has
100 or 100,000 passengers, the benefit conferred by the State is
the same. Although DNR has authority to require commercial tour
operations to enter into leases for the exclusive use of
unimproved state-owned shorelands, it is prohibited by federal
law from basing that charge on the number of passengers using
navigable waters.
V. CONCLUSION
We hold that DNR has authority to require Alaska
Riverways to enter into a lease for its exclusive use of state-
owned shorelands but that DNRs choice of a lease fee based on
passenger count violates federal law. We therefore REVERSE the
superior courts decision and VACATE the portion of the lease fee
based on passenger count, leaving in place the lease amount of
$1,000 per year.
_______________________________
* Sitting by assignment under article IV, section 11 of
the Alaska Constitution and Administrative Rule 23(a).
1 Specifically, Alaska Riverways, Inc. operates the tour
boats, and Tanana River Properties, LLC owns the property used by
the enterprise.
2 See Dept of Natural Res. v. Pankratz, 538 P.2d 984, 988
& n.4 (Alaska 1975) (recognizing that the state has title to the
bed of its navigable rivers, including the Chena River).
3 Shoreland is defined by statute as land belonging to
the state which is covered by nontidal water that is navigable
under the laws of the United States up to ordinary high water
mark as modified by accretion, erosion, or reliction.
AS 38.05.965(20).
4 See Blacks Law Dictionary 1352 (8th ed. 2004).
5 Eventually, in 1994, Alaska Riverways hired an
appraiser who determined that the fair market value for an annual
lease of the land underneath the wharves was $925. Alaska
Riverways did not enter into a lease following this appraisal.
6 Tideland is land that is periodically covered by tidal
water between the elevation of mean high water and mean low
water. AS 38.05.965(23).
7 Submerged land is land covered by tidal water between
the line of mean low water and seaward to a distance of three
geographical miles. AS 38.05.965(22).
8 Nelson v. State, Commercial Fisheries Entry Commn, 186
P.3d 582, 585 (Alaska 2008).
9 Lakloey, Inc. v. Univ. of Alaska, 157 P.3d 1041, 1045
(Alaska 2007).
10 Premera Blue Cross v. State, Dept of Commerce, Cmty. &
Econ. Dev., Div. of Ins., 171 P.3d 1110, 1115 (Alaska 2007)
(quoting Alyeska Pipeline Serv. Co. v. DeShong, 77 P.3d 1227,
1231 (Alaska 2003)).
11 AS 38.05.005.990.
12 Ch. 152, 30, SLA 1984.
13 Ch. 91, 18, SLA 1997.
14 See Fox River Paper Co. v. Railroad Commn, 274 U.S.
651, 655 (1927) ([T]he nature and extent of the rights of the
state and of riparian owners in navigable waters within the state
and to the soil beneath are matters of state law to be determined
by the statutes and judicial decisions of the state.); see also
Oregon ex rel. State Land Bd. v. Corvallis Sand & Gravel Co., 429
U.S. 363, 370-71 (1977). State law in this field is subject to
paramount federal regulation regarding navigability under the
Commerce Clause of the United States Constitution. United States
v. River Rouge Improvement Co., 269 U.S. 411, 419 (1926).
15 Littoral means [o]f or relating to the coast or shore
of an ocean, sea, or lake. Blacks Law Dictionary 952 (8th ed.
2004).
16 Dresser Indus., Inc. v. Alaska Dept of Labor, 633 P.2d
998, 1002 (Alaska 1981).
17 182 F. 561, 573 (9th Cir. 1910); see also Columbia
Canning Co. v. Hampton, 161 Fed. 60, 64 (9th Cir. 1908) (holding
that riparian owner is entitled to free access to the navigable
waters of canal in front of property in Alaska Territory).
18 Dalton, 182 F. at 573 (quoting Dutton v. Strong, 66
U.S. 23, 32 (1861)).
19 Id. (quoting Act of May 14, 1898, ch. 299, 2, 30 Stat.
409, 413 (1901)).
20 5 Alaska 269, 271 (D. Alaska Terr. 1915).
21 Id. at 274.
22 Id. at 271-72 (internal quotation marks and citation
omitted).
23 Id. at 279-81.
24 Id. at 273 (quoting Yates v. Milwaukee, 77 U.S. 497,
504 (1870)).
25 Ketchikan Spruce Mills v. Alaska Concrete Prods. Co.,
14 Alaska 375, 380 (D. Alaska Terr. 1953).
26 Id. at 378.
27 Id. at 379.
28 516 P.2d 1191, 1194-95 (Alaska 1973).
29 Id. at 1194 (citing Richard Harnsberger, Eminent Domain
and Water Law, 48 Neb. L. Rev. 325, 381-82 (1969)).
30 Id. at 1201; see also id. at 1194-95 (noting that
riparian rights are valuable property, and ordinarily cannot be
taken for public use by the federal or state governments without
payment of just compensation to the landowner).
31 Id. at 1200-01 (footnote omitted).
32 Id. at 1195.
33 See id. at 1198 ([T]he Alaska Constitution does indeed
allow the state to take riparian or littoral property rights for
beneficial or public uses other than in aid of water
navigation.).
34 Id. at 1199, 1201.
35 In fact, DNR claims that [t]he only way that the state
can effectively manage its shoreland and know what riparian
landowners like Alaska Riverways are planning to build, and so
fulfill its trust duties, is to require riparian landowners to go
through an approval process, which takes the form of leasing
procedures. (Emphasis added.)
36 CWC Fisheries, Inc. v. Bunker, 755 P.2d 1115, 1117-18
(Alaska 1988) (quoting Illinois Cent. R.R. Co. v. Illinois, 146
U.S. 387, 452 (1892)). In both CWC Fisheries and Illinois
Central Railroad, the courts relied on the public trust doctrine
to condition or set aside a states conveyance of submerged land
to a private party where the conveyance failed to accommodate
certain public uses of the land. Since there has been no state
conveyance here, this particular application of the public trust
doctrine is not relevant. Rather, DNR relies on the public trust
doctrine more broadly to support the states authority as
sovereign to exercise a continuous supervision and control over
navigable waters of the state and the land underlying the waters.
37 Illinois Cent. R.R. Co., 146 U.S. at 446. The power to
pass these regulations has also been described as deriving from
the states police power to regulate for the common good. See
Wernberg, 516 P.2d at 1195; A. Dan Tarlock, Law of Water Rights
and Resources 3:74 (1988) (The right to wharf out . . . is
subject to police regulation . . . .).
38 Wernberg, 516 P.2d at 1195; see also New Jersey v.
Delaware, 128 S. Ct. 1410, 1421 (2008) ([T]he right of a riparian
owner to wharf out is subject to state regulation.); 78 Am. Jur.
2d Waters 43 (While a riparian landowner has certain rights
which inhere in the ownership of land adjacent to a body of
water, these rights are subject to reasonable regulation by the
state in the exercise of public trust rights.); Herbert T.
Tiffany and Basil Jones, 2 Tiffany Real Property 666 (2009) (The
exercise of the right is subject to the proviso that it be not
exercised in such a way as substantially to interfere with
navigation, and it is subject to any restrictions in this behalf
imposed by the state or by authority of the state.).
39 See Wernberg, 519 P.2d at 803 (the Alaska Constitution
does indeed allow the state to take riparian or littoral property
rights for beneficial or public uses ); see also AS 38.05.126(b)
(The state has full power and control of all of the navigable or
public water of the state, both meandered and unmeandered, and
the state holds and controls all navigable or public water in
trust for the use of the people of the state.).
40 Hayes v. A.J. Assocs., Inc., 846 P.2d 131, 133 n.6
(Alaska 1993).
41 Alaska Riverways suggests that if DNR found any
impairment of public trust uses, then it could not issue the
lease, further evidence that DNR is not acting pursuant to its
authority under the public trust doctrine. This is incorrect.
DNR can impose limitations, conditions and terms on a lease to
protect the public interest, such as requiring a public easement
allowing the public to use the wharf, rather than outright
denying a lease. AS 38.05.070(b).
42 Article VIII, section 2 provides:
The legislature shall provide for the
utilization, development, and conservation of
all natural resources belonging to the State,
including land and waters, for the maximum
benefit of its people.
43 Article VIII, section 6 provides:
Lands and interests therein, including
submerged and tidal lands, possessed or
acquired by the State, and not used or
intended exclusively for government purposes,
constitute the state public domain. The
legislature shall provide for the selection
of lands granted to the State by the United
States, and for the administration of the
state public domain.
44 Alaska Const. art. VIII, 5.
45 Alaska Const. art. VIII, 9.
46 Article VIII, section 8 provides:
The legislature may provide for the
leasing of, and the issuance of permits for
exploration of, any part of the public domain
or interest therein, subject to reasonable
concurrent uses. Leases and permits shall
provide, among other conditions, for payment
by the party at fault for damage or injury
arising from noncompliance with terms
governing concurrent use, and for forfeiture
in the event of breach of conditions.
47 Article VIII, section 10 provides:
No disposals or leases of state lands,
or interests therein, shall be made without
prior public notice and other safeguards of
the public interest as may be prescribed by
law.
48 The permitted instances of appropriation concern
mineral rights and rights to surface and subsurface water. See
Alaska Const. art. VIII, 11, 13.
49 Article VIII, section 16 of the Alaska Constitution
provides:
No person shall be involuntarily
divested of his right to the use of waters,
his interests in lands, or improvements
affecting either, except for a superior
beneficial use or public purpose and then
only with just compensation and by operation
of law.
50 Commentary on Article on State Lands and Natural
Resources, 6 Proceedings of the Alaska Constitutional Convention,
App. V at 103 (Jan. 16, 1956).
51 S. Rep. No. 85-1045 (1957), as reprinted in 1957
U.S.C.C.A.N. 1933, 1935-37.
52 Id. at 1936.
53 Id.
54 Alaska Statehood Committee, 1 Constitutional Studies:
The Alaskan Constitution and the State Patrimony 71 (Nov. 8,
1955).
55 Alaska Const. art. VIII, 6, 8. Even if the Alaska
Constitution did not explicitly authorize the legislature to
provide for leasing of shoreland, the legislature is free to
modify the common-law right to wharf out as long as doing so
would not conflict with any constitutional provision. Evans ex
rel. Kutch v. State, 56 P.3d 1046, 1068-69 (Alaska 2002) ([T]he
legislature is free to modify or abolish common law rules.).
Counsel for Alaska Riverways conceded at oral argument before us
that the legislature has the absolute right to change [the common-
law right to wharf out] when it wants to, its a common law rule.
56 Ch. 169, SLA 1959.
57 Ch. 169, art. V, 1, SLA 1959.
58 Alaska Riverways contends that DNR waived its argument
that AS 38.05.070(a) authorized its leasing proposal by failing
to raise the statute in the proceedings below, and instead
relying solely on AS 38.05.075(c). To the contrary, DNR
specifically mentioned AS 38.05.070 as a source of leasing
authority in its leasing decision and the commissioner of DNRs
appeals decision, which were reviewed by the superior court. In
any event, DNRs supposed failure to cite AS 38.05.070 as
statutory authority for Alaska Riverways proposed lease would not
preclude us from considering whether AS 38.05.070 generally
restricted the common-law right to wharf out as recognized by the
territorial courts.
59 In support of this interpretation, Alaska Riverways
relies on common law from Alaskas territorial courts, the Alaska
Constitution, [and] Wernberg. Alaska Riverways also cites the
first subsection of AS 38.05.070, which directs DNR to preserve
reasonable and traditional access to state land and water in
making its leasing decisions. But this language was not added
until 1984, as part of the amendments to Chapter 38 that first
granted preference rights to littoral owners. Ch. 152, 27, SLA
1984. It is therefore of no assistance in determining the intent
of the legislature in passing leasing provisions in 1959.
60 Ch. 169, art. V, 1(1), SLA 1959.
61 Id. art. V, 1(1), 2.
62 Ch. 169, art. III, 5(2)(a), SLA 1959.
63 Id. art. III, 5(2)(a), (3), (4).
64 Id. art. III, 5(2)(e), (g).
65 Id. art. III, 5(3)(f), (4)(d).
66 DNR argues that the legislatures passage of laws
inconsistent with this common-law right reflects that the
legislature at that time did not recognize a common law right to
wharf out and means that such a common law privilege simply does
not exist in Alaska. This argument is without merit. The
legislature has the power to abrogate common law rules and even
if the laws did reflect the opinion of the legislature that there
was no common-law right to wharf out, it would not be
controlling.
67 Although we generally apply our independent judgment to
matters of statutory interpretation, we will apply a more
deferential standard of review where an agency interpretation is
longstanding and continuous. Premera Blue Cross v. State, Dept
of Commerce, Community & Econ. Dev., 171 P.3d 1110, 1118-19
(Alaska 2007).
68 Ch. 152, SLA 1984.
69 Id. 30, SLA 1984. In particular, DNR must determine
that: (1) the lease is necessary for a water-dependent purpose,
(2) the proposed use is compatible with the classification of the
land and with any applicable land use plan, and (3) issuance of
the lease will not interfere with prior existing rights. Id.
70 An Act Relating to Land Disposal and Management:
Hearing on S.B. 375 Before the S. Resources Comm., 1984 Leg.
(Alaska February 20, 1984) (written testimony of Robert W.
Loescher, Vice President, Resource Management, Sealaska Corp.).
71 Id.
72 An Act Relating to Land Disposal and Management:
Hearing on S.B. 375 Before the S. Resources Comm., 1984 Leg.
(Alaska February 27, 1984).
73 Id. (Amendment No. 9, Tideland Lease).
74 S. Resources Comm., Summary of Major Provisions of
C.S.S.B. 375 (Res) (March 5, 1984).
75 Ch. 91, 18, SLA 1997.
76 While DNR is authorized to require upland owners who
wharf out to enter into leases, we note that DNR issued a
regulation in 2002 that expressly exempts upland owners who build
docks for their personal, non-commercial use from any permitting
or other written requirements, which would include leases.
11 Alaska Administrative Code (AAC) 96.020(a)(2)(B). To qualify
for this exemption, the dock must not interfere with public
access or another public use. Id.
77 Alaska Riverways also argues that it does not actually
use or occupy any state property because its docks float on the
surface of the river without physically contacting the state-
owned riverbed and therefore DNR may not require it to enter into
a lease for use of state property. We find no support for such a
narrow reading of DNRs leasing authority. As DNR correctly
notes, exclusive occupancy of the river surface, by precluding
other surface uses, is effective occupancy of the underlying
shoreland. See Brusco Towboat Co. v. State, 589 P.2d 712, 719
(Or. 1978) (The owner of the bed of a river is certainly entitled
to prevent permanent structures on the surface of the water which
preclude other uses of the bed, whether or not they actually rest
on the bed itself.).
78 See supra Part IV.D.
79 See Alaska Juneau Gold Mining Co. v. N. Lumber Mills, 5
Alaska 269, 273 (D. Alaska Terr. 1915) (right of access is one of
which, when once it is vested, the owner can only be deprived in
accordance with the established law, and if necessary that it be
taken for the public good, upon due compensation (emphasis added)
(citing Yates v. Milwaukee, 77 U.S. (10 Wall.) 497, 504 (1870))).
Counsel for Alaska Riverways conceded this point at oral
argument, recognizing that to benefit from [article VIII, section
16], the right has to exist; you have to vest and obtain your
common law right before the constitution entitles you to recover
for your improvement.
80 We need not decide whether and to what extent the state
may outright prohibit a riparian owner from constructing a wharf
or require its removal where doing so would interfere with the
owners access to water. Alaska Riverways has not argued, nor
could it, that DNRs proposed lease would prevent it from
exercising its right of access.
81 See supra, note 76.
82 AS 01.10.090.
83 Rush v. State, Dept of Natural Res., 98 P.3d 551, 555
(Alaska 2004) (internal quotation marks and footnote omitted).
84 Ch. 152, 27, SLA 1984.
85 AS 38.05.070(b).
86 Specifically, Alaska Riverways relies on the Equal
Protection Clause of the Fourteenth Amendment to the United
States Constitution, the Equal Rights and Opportunities Clause of
the Alaska Constitution, article I, section 1, and the Uniform
Application Clause of the Alaska Constitution, article VIII,
section 17.
87 City of Cleburne, Tex. v. Cleburne Living Ctr., 473
U.S. 432, 439 (1985) (equal protection clause of federal
constitution); Shepherd v. State, Dept of Fish & Game, 897 P.2d
33, 44 (Alaska 1995) (Equal Rights and Opportunities Clause and
Uniform Application Clause of state constitution).
88 Shepherd, 897 P.2d at 44 n.12 (Alaska 1995).
89 Tongass Sport Fishing Assn v. State, 866 P.2d 1314,
1318 (Alaska 1994).
90 Reichmann v. State, Dept of Natural Res., 917 P.2d
1197, 1200 (Alaska 1996).
91 Shepherd, 897 P.2d at 43-44.
92 See, e.g., AS 38.05.075(a) (stating that for public
auctions of leases, DNR should select the lease compensation
method that maximize[s] the return on the lease to the state).
93 Cf. Fairbanks N. Star Borough Assessors Office v.
Golden Heart, 13 P.3d 263, 273 (Alaska 2000) (concluding that
lessees of low-value property are not similarly situated to a
lessee of high-value property for purposes of city assessors
taxing policy).
94 Gates v. City of Tenakee Springs, 822 P.2d 455, 461
(Alaska 1991) (noting that conclusory accusations of
discrimination are insufficient to make a prima facie case).
95 Alaska Riverways also argues that DNR is treating it
differently than other commercial operations by charging rent
based on a per-passenger fee rather than based on the area of
state land occupied. Again, Alaska Riverways neither identifies
similarly situated commercial users being charged rent based on
other calculations, nor presents evidence that DNR is
intentionally discriminating against Alaska Riverways in the
selection of a user fee. The legislature has given DNR
discretion to calculate a lease fee using different methods and
to maximize the return for the state.
96 Alaska Riverways also asserts that DNRs choice of a per-
passenger lease fee, by forcing it to disclose the volume of
business it conducts, would be a violation of [its]
constitutionally protected privacy rights. Alaska Riverways
failed to include this argument in its points on appeal and makes
it in a single, conclusory sentence in its brief without citation
to legal authority. It is therefore waived. See, e.g., DeNardo
v. Maassen, 200 P.3d 305, 317 (Alaska 2009) ([A]n issue is waived
when a party fails to raise it in the points on appeal and then
inadequately briefs the argument.).
97 33 U.S.C. 5(b) allows for reasonable fees charged on a
fair and equitable basis that (A) are used solely to pay the cost
of a service to the vessel or water craft; (B) enhance the safety
and efficiency of interstate and foreign commerce; and (C) do not
impose more than a small burden on interstate or foreign commerce
. . . .
98 589 P.2d 712, 724 (Or. 1978).
99 Id. at 717-18.
100 726 F.2d 1340, 1344-45 (9th Cir. 1984).
101 Id. at 1344 (quoting Commonwealth Edison Co. v.
Montana, 453 U.S. 609, 615 (1981)) (citations omitted).
102 Polar Tankers, Inc. v. City of Valdez, 129 S. Ct. 2277,
2283 (2009) (emphasis added) (quoting Clyde Mallory Lines v.
Alabama, 296 U.S. 261, 265-66 (1935)).
103 See Bridgeport & Port Jefferson Steamboat Co. v.
Bridgeport Port Auth., 566 F. Supp. 2d 81, 102 (D. Conn. 2008)
(the requirements [of 33 U.S.C. 5(b)] closely track[] the
Commerce Clause and Tonnage Clause cases); Moscheo v. Polk
County, No. E2008-01969-COA-R3-CV, 2009 WL 2868754, at *15 (Tenn.
App. Sept. 2, 2009) ([t]he exception noted in 33 U.S.C. 5(b)(2)
tracks [the] language of the exception to the Tonnage Clause
carved out by the Supreme Court).
104 See Bridgeport & Port Jefferson Steamboat Co., 566 F.
Supp. 2d at 96, 101-02.
105 Cf. W. Oil & Gas Assn, 726 F.2d at 1345 (We are of the
opinion that the volumetric rates are a disguised revenue raising
measure. . . . There is no correlation between benefits
conferred by the State and the throughput charges.).
106 See Keokuk N. Line Packet Co. v. Keokuk, 95 U.S. 80, 88-
89 (1877) (noting that under Tonnage Clause, city cannot collect
wharfage . . . for the use of that which is not a wharf, but
merely the natural and unimproved shore of a navigable river); W.
Oil & Gas Assn, 726 F.2d at 1345 (finding a violation of the
Commerce Clause where the state charged for use of unimproved
lands on which no services or facilities [were] provided).
107 DNR does not argue that the lease fee is intended to
cover administrative costs. DNR charged Alaska Riverways a small
filing fee when it applied for the lease in question, presumably
to defray such costs.
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