Opinion ID: 1274667
Heading Depth: 3
Heading Rank: 3

Heading: The Challenged Fee Differential under the Privileges and Immunities Clause

Text: The class contends also that the nonresident fee differential violates the Privileges and Immunities Clause of the United States Constitution. The Privileges and Immunities Clause is not absolute. [I]t does not preclude disparity of treatment [of citizens of other states] in the many situations where there are perfectly valid independent reasons for it. Toomer, 334 U.S. at 396, 68 S.Ct. at 1162. A claim that a residency classification violates the Privileges and Immunities Clause requires a two-step inquiry: First, the activity in question must be sufficiently basic to the livelihood of the Nation ... as to fall within the purview of the Privileges and Immunities Clause.... Second, if the challenged restriction deprives nonresidents of a protected privilege, we will invalidate it only if we conclude that the restriction is not closely related to the advancement of a substantial state interest. Supreme Court of Virginia v. Friedman, 487 U.S. 59, 64-65, 108 S.Ct. 2260, 2264, 101 L.Ed.2d 56 (1988) (internal quotations and citations omitted). We determined in Carlson I that commercial fishing is a sufficiently important activity to come within the purview of the Privileges and Immunities Clause. 798 P.2d at 1274. However, the class claims that for us to find for the State on the relatedness prong of the inquiry, the State must demonstrate that behind the nonresident surcharge or differential is a [sic] (1) substantial reason advancing a legitimate State policy and (2) the means employed by the statutory scheme must be closely tailored and have a substantial relationship to a legitimate interest served by the statute. Appellant's Brief at 27. We have already made the first inquiry. In Carlson I, we held that equalizing the burden of fisheries management, where residents pay proportionately more in foregone benefits than nonresidents for fisheries management, was a substantial State interest. Id. at 1278. However, we concluded that the record did not contain sufficient evidence to determine whether the differential in fees charged residents and nonresidents was sufficiently related to this interest to justify such disparate treatment. Id. at 1278. The class questions the relatedness of the fee differential to the burden of fisheries management borne by residents. It analogizes this case to other Supreme Court cases, and challenges our conclusion in Carlson I that petroleum revenues are the analytical equivalent of taxes. The class argues that Oregon Waste Systems prohibits the State from arguing that the fee differentials do not discriminate against nonresidents because they merely impose on nonresidents their share of the costs of fisheries management. It claims that under the reasoning of Oregon Waste Systems, neither general tax revenues nor oil royalty revenues can be viewed as the residents' contributions to fisheries management. [12] There are two flaws with the class's argument. First, Oregon Waste Systems was a Commerce Clause case. See Oregon Waste Systems, 511 U.S. at ___, 114 S.Ct. at 1349. Although the reasoning in Privileges and Immunities Clause cases has been used in Commerce Clause cases, it is not analytically sensible to do the reverse in this case. In this case the Privileges and Immunities Clause question turns on whether there is a sufficient relationship between the higher fees charged nonresidents and the State's interest in imposing on nonresidents their share of the costs for managing the State's commercial fisheries. In Oregon Waste Systems, the issue was whether the interstate and intrastate taxes are imposed on sufficiently equivalent events such that they could be considered proxies for each other. See Id. at ___-___, 114 S.Ct. at 1352-53. These are different inquires for which the analysis is not interchangeable. [13] Second, the class's argument demonstrates a lack of understanding of our holding in Carlson I. Contrary to the class's contentions, we did not advocate the kind of fee-shifting denounced by the Supreme Court in Oregon Waste Systems. In Carlson I we did not advance a compensatory tax doctrine which would impose on nonresidents their entire share of the costs of commercial fisheries management, while resident fishers' share of these costs was borne by the entire population of the State. Rather, we held that the issue is whether all fees and taxes which must be paid to the state by a nonresident to enjoy the state-provided benefit are substantially equal to those which must be paid by similarly situated residents when the residents' pro rata shares of state revenues to which nonresidents make no contribution are taken into account. Carlson I, 798 P.2d at 1278. The disparate fees charged to nonresidents will not offend the Privileges and Immunities Clause if the differential does not exceed the contribution made by residents, because the differential will be justified as imposing on nonresidents their share of the costs of commercial fisheries. The fee differential merely balances out any conservation expenditures from taxes which only residents pay. Toomer, 334 U.S. at 399, 68 S.Ct. at 1163. [14] In Carlson I we held that the State bore the burden of persuasion on this issue. 798 P.2d at 1276. This burden should be met by calculating the contribution made by residents and comparing it with the challenged fee differentials.