Opinion ID: 1405962
Heading Depth: 2
Heading Rank: 5

Heading: did the cfec err in failing to set an optimum number of permits for this fishery while permit applications were pending?

Text: Alaska Statute 16.43.290 provides: Optimum number of entry permits. Following the issuance of entry permits under AS 16.43.270, the commission shall establish the optimum number of entry permits for each fishery... . The CFEC has not yet established an optimum number for the fishery. Johns argues that under the circumstances of this case, the CFEC was required to set an optimum number prior to a final adjudication of all permit applications. Johns suggests that the Limited Entry Act's mandate that the regulation of entry be without unjust discrimination, AS 16.43.010(a), requires the CFEC to establish the optimum number before final adjudication of permits in cases where the optimum number will exceed the established maximum number. In addition, Johns argues that maintaining the fishery based upon the original maximum number established by the CFEC, in the face of dramatically improved conditions in the fishery, is unconstitutional. The CFEC, on the other hand, argues that it cannot set an optimum number for the fishery until all applications are finally adjudicated. If the optimum exceeds the number of outstanding permits, the CFEC is required to sell additional permits at fair market value. AS 16.43.330. The CFEC argues that no one who is entitled to a permit under the initial issuance guidelines of AS 16.43.270 could be required to buy a permit under the sale provisions of AS 16.43.330. Thus, the CFEC concludes that it is necessary to wait until final adjudication of initial permit applications before embarking on the optimum number process. The trial court found that the reasonable interpretation of the phrase following the issuance of entry permits in AS 16.43.290 refers to the original issuance and not the disposition of the last permit. The court nonetheless concluded that AS 16.43.290 did not provide for a more definite time frame, and that the CFEC had discretion as to whether to wait until final adjudication of all applications was complete. The court noted that, in some circumstances, it would be unreasonable for the CFEC to wait until final adjudication was complete before embarking on the optimum number process, but, under the circumstances of this case, it was reasonable. In State v. Ostrosky, 667 P.2d 1184 (Alaska 1983), we noted that there is a tension between the limited entry clause of the state constitution and the clauses of the constitution which guarantee open fisheries. [12] We suggested that to be constitutional, a limited entry system should impinge as little as possible on the open fishery clauses consistent with the constitutional purposes of limited entry, namely, prevention of economic distress to fishermen and resource conservation. Ostrosky, 667 P.2d at 1191. The optimum number provision of the Limited Entry Act is the mechanism by which limited entry is meant to be restricted to its constitutional purposes. Without this mechanism, limited entry has the potential to be a system which has the effect of creating an exclusive fishery to ensure the wealth of permit holders and permit values, while exceeding the constitutional purposes of limited entry. Because this risk of unconstitutionality exists, the CFEC should not delay in embarking on the optimum number process, except where there is a substantial reason for doing so. We find the fact that there are applications which are not finally adjudicated for the fishery does not justify the CFEC's delay in initiating the optimum number process. The CFEC should determine the optimum number for this fishery. If the optimum is greater than the number of permits issued plus the number of applications pending, the excess should be sold under the provisions of AS 16.43.330. Similarly, as to those pending applications which are finally determined adversely to the applicant, additional sales should be held. For this reason, we REMAND this case to the superior court with instructions to order the CFEC to begin the optimum number process. In all other respects the decision of the superior court is AFFIRMED.