Opinion ID: 1198813
Heading Depth: 3
Heading Rank: 2

Heading: The Superior Court Should Have Provided the Hearing Procedures and Due Process Required under the Lease.

Text: ADL 36306 was the State grazing lease held by Stratman. Stratman's original lease, federal grazing lease # A-059264, was canceled in 1967, and ADL 36306 was created with the State as lessor and Stratman as lessee. ADL 36306 incorporated by reference the terms of the federal grazing lease. However, when the State waived administration of the lease as to the 15,870 acres at issue, ADL 36306 was effectively severed into two distinct leases. One, for 4,530 acres, continues to be administered by the State and is not at issue in this case. The other, for 15,870 acres, is now administered by Leisnoi. ANCSA subsection 14(g) guarantees Stratman's rights under the pre-existing federal grazing lease, as follows: All conveyances made pursuant to this Act shall be subject to valid existing rights. Where, prior to patent of any land or minerals under this Act, a lease ... has been issued for the surface or minerals covered under such patent, the patent shall contain provisions making it subject to the lease . .. and the right of the lessee ... to the complete enjoyment of all rights, privileges, and benefits thereby granted to him. Such rights necessarily include not only those contained in the lease itself, but also the right to due process and to the various statutory protections and guarantees that are incidental to the possession of a grazing lease under the Alaska Livestock Grazing Act (43 U.S.C. § 316 et seq. ). Of particular importance in the instant case are Grazing Act sections 316g and 316m. Section 316g provides: Grazing fees (a) The Secretary shall determine for each lease the grazing fee to be paid. Such fee shall  (1) Be fixed on the basis of the area leased or on the basis of the number and kind of stock permitted to be grazed; (2) Be fixed, for the period of the lease, as a seasonal or annual fee, payable annually or semiannually on the date specified in the lease; (3) Be fixed with due regard to the general economic value of the grazing privileges, and in no case shall exceed such value; and (4) Be moderate. (Emphasis added.) Section 316m provides: Hearing and appeals (a) Any lessee of ... grazing privileges ... may procure a review of any action or decision of any officer or employee of the Interior Department in respect of such privileges, by filing with such officer as the Secretary of the Interior may designate of the local land office an application for a hearing, stating the nature of the action or decision complained of and the grounds of complaint. Upon the filing of any such application such officer of such land office shall proceed to review such action or decision as nearly as may be in accordance with the rules of practice then applicable to applications to contest entries under the public land law. Subject to such rules of practice, appeals may be taken by any party in interest from the decision of such officer to the Secretary. (b) The Secretary shall take no action which will adversely affect rights under any lease pursuant to this subchapter until notifying the holder of such lease that such action is proposed and giving such holder an opportunity for a hearing. Though Stratman is entitled to all of the rights, privileges, and benefits ... granted to him under the lease, this does not mean that he is entitled to have the administration of his lease overseen by the State or federal government, notwithstanding the language in 43 U.S.C. § 316 referring to the Secretary of the Interior. The governments of both the State of Alaska and the United States have explicitly waived administration of the lease now owned by Leisnoi. Rather, Leisnoi is required, in administering the lease, to set fees, provide notice, and take all other actions in a manner consistent with the rights accorded Stratman under the lease and under the Alaska Livestock Grazing Act. [4] We will not require Leisnoi to proceed before a State or federal agency  these want no part of the administration of this lease. Yet due process requires that Stratman receive notice [and] opportunity to be heard in some meaningful way and to present mitigating circumstances prior to the termination of the lease. McCarrey v. Commissioner, 526 P.2d 1353 (Alaska 1974). And, as previously noted, lease fees are determined by statutory criteria and the lessee has a right to a hearing concerning their validity before they may be imposed. See supra, p. 17. We conclude that Stratman's due process right under Alaska's constitution, to be heard on the issue whether Leisnoi may appropriately terminate his lease, may be satisfied by the superior court before which the present action was brought. [5] We therefore reverse the superior court's dismissal of Leisnoi's FED action insofar as it was based on Leisnoi's inability to terminate the lease without first providing Stratman due process. On remand, the superior court should make specific findings as to whether Stratman breached the lease, whether Leisnoi validly increased the lease rental, and whether any arrearages are owed by Stratman to Leisnoi. In making these findings the superior court should apply the standards from the Alaska Livestock Grazing Act. [6] With respect to Leisnoi's efforts to raise the lease fee, the superior court should provide the review that would have been provided administratively by the Interior Department and the Secretary of the Interior. The court then should determine, in light of its findings and review, whether and under what circumstances Leisnoi was or will be entitled to terminate Stratman's lease. Once these determinations are made, the court may proceed to determine whether the elements of an FED action or an ejectment action have been satisfied. [7]