Opinion ID: 1209439
Heading Depth: 3
Heading Rank: 4

Heading: Market Regulator Market Participant Distinction.

Text: This method of analysis applies both when the state is acting as a sovereign  a market regulator  and as an owner  a market participant. [4] United Building & Construction Trades v. Mayor and Council of the City of Camden, 465 U.S. 208, 220-23, 104 S.Ct. 1020, 1028-30, 79 L.Ed.2d 249, 259-61 (1984); Hicklin, 437 U.S. at 528-29, 98 S.Ct. at 2488-89, 57 L.Ed.2d at 406. However, more leeway is granted the state in its perception of local evils and in prescribing appropriate cures when it is acting in a proprietary capacity, as where it is merely setting conditions on the expenditures of funds it controls. Camden, 465 U.S. at 223, 104 S.Ct. at 1030, 79 L.Ed.2d at 261 (citations omitted). This analytical framework, except for the deference given to the state as a market participant, is quite similar to what has come to be called the level of intermediate scrutiny under the federal equal protection clause. Classifications may be made only for important purposes, and the means used to accomplish them must be fairly and substantially related to the achievement of those purposes. State v. Ostrosky, 667 P.2d 1184, 1192 (Alaska 1983) (citations omitted). [5] The amount of deference due a state when acting as a market participant is not clear from federal cases. The state suggests, and we believe, that a variable standard must be employed. Thus, where the discrimination is far-reaching and exclusive in nature, and extends to the fringes of the state's proprietary interests, the state is entitled to little deference. On the other hand, where the discrimination is narrow in scope and involves a direct relationship between the state and affected individuals, greater deference is called for. The Alaska Hire statute struck down in Hicklin, which covered all employment which was the result of state oil and gas leases, which excluded all non-residents from employment so long as qualified Alaskans were available, and which required private employers to discriminate, including those who had no direct dealings with the state, is an example of a case in which the proprietary interest of the state was entitled to little or no deference. An example where more leeway is due might be a case in which a state law requires residency as a qualification for important non-elective public offices. Cf. Sugarman v. Dougall, 413 U.S. 634, 647-49, 93 S.Ct. 2842, 2850-51, 37 L.Ed.2d 853, 862-64 (1973).