288 P.3d 736
Alaska2012Background
- Alyeska Pipeline Service Company leases the TAPS right-of-way from the Alaska Department of Natural Resources and appealed a 2002 appraisal setting lease rent.
- The 2002 appraisal valued state lands within the right-of-way at 100 percent fee value, with no deduction for the non-exclusive nature of Alyeska's lease.
- Alyeska hired Olson to review and identified encumbrance of rights and submerged lands as issues; the submerged lands were noted as disputed acreage.
- The Commissioner upheld the appraisal in 2006, rejecting encumbrance of rights and not addressing submerged lands due to an oral agreement.
- The superior court remanded submerged lands issue; in 2008 the Commissioner affirmed, and the superior court later affirmed the Commissioner’s rulings.
- Alyeska argues statutory interpretation, APA regulation requirement, and title to submerged lands; the court affirmed the Department’s appraisal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does AS 38.35.140(a) require considering lease rights in valuing land? | Alyeska: rights retained by the State reduce land value. | Department: value is fair market rental of state land, not leasehold value. | Reasonable basis supports Department’s interpretation. |
| Must the Department’s interpretation be adopted as an APA regulation? | Alyeska: interpretation is a regulation subject to APA. | Department: interpretation used in adjudication, not a new regulation. | Not required to adopt as regulation. |
| Did the interpretation unlawfully burden interstate commerce? | Alyeska: increased rent burdens interstate commerce. | Waived due to procedural briefing deficiencies. | Claim waived. |
| Must the State prove title to submerged lands before charging rent? | Alyeska: title to submerged lands not proven; rent double-charged. | Quiet Title Act and title issues not fully proven; no agency ruling. | Submerged lands title issue addressed under independent judgment; no proof required to compel rent absent federal claim. |
Key Cases Cited
- Marathon Oil Co. v. State, Dep't of Nat. Res., 254 P.3d 1078 (Alaska 2011) (agency interpretation given in adjudication has reasonable basis; not regulated)
- Alyeska Pipeline Serv. Co. v. State, Dep't of Envtl. Conservation, 145 P.3d 561 (Alaska 2006) (regulatory interpretation; not required to be a regulation under APA)
- James v. State, 950 P.2d 1130 (Alaska 1997) (state ownership in navigable-water beds on statehood)
- United States v. Phillips, 433 F.2d 1364 (8th Cir. 1970) (waiver/abandonment of issues when not properly briefed)