Court Opinion

ID: 9559524
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:30:37.541433+00
Date Added: 2024-06-11T09:09:49.324792
License: Public Domain

BOOCHEVER, Chief Justice,
with whom RABINOWITZ, Justice, joins, dissenting in part.
AS 38.40.030 requires that all Alaskan oil and gas leases, easements or right-of-way permits for oil and gas pipelines and unit-ization agreements contain provisions requiring employment of Alaska residents. Only if qualified Alaska residents are unavailable, may others be employed. The provisions of the act apply also to all employment which is the result of oil and gas leases, easements, leases or right-of-way permits for oil or gas pipeline purposes and unitization agreements.1 Thus, the act appears to include employment opportunities at refineries and in distribution systems utilizing oil and gas obtained under Alaska leases.
The majority opinion is based on an antiquated line of authority stemming from Corfield v. Coryell, 6 Fed.Cas. 546, 551-52 (No. 3,230) (C.C.E.D.Pa.1823), where a local state fishery was held to be the common property of the people of the state. Accord, Geer v. Connecticut, 161 U.S. 519, 16 S.Ct. 600, 40 L.Ed. 793 (1896) (game birds); McCready v. Virginia, 94 U.S. 391, 24 L.Ed. *172248 (1876) (fish). Each of the cases cited by the majority deals with fish or game. Cor-field limited commercial fishing for shellfish to local fishermen; Geer pertained to game birds and McCready restricted the planting of oysters in Virginia waters to Virginians.
The application of these cases has been severely limited by Toomer v. Witsell, 334 U.S. 385, 68 S.Ct. 1156, 92 L.Ed. 1460 (1948). There, the Court pointed out that McCready was its only prior decision upholding discrimination against commercial fishing or hunting by citizens of other states without advancing “persuasive independent reasons justifying the discrimination.” The court refused to extend McCready beyond its facts and struck down a law whereby shrimp boats belonging to South Carolina residents were licensed for substantially lower fees than those of nonresidents.
McCready was distinguished on two grounds. First, the Court pointed out that, in contrast to the Virginia oysters, the South Carolina shrimp were free-swimming and migrating. Secondly, it emphasized that McCready involved regulation of inland waters while Toomer involved the marginal sea. Thus, casting serious doubt on the continued authority of McCready, it concluded:
These considerations lead us to the conclusion that the McCready exception to the privilege and immunity clause, if such it he, should not be expanded to cover this case, (emphasis added)2
A rationale for state action more in keeping with the mobility of modern society was advanced:
The whole ownership theory, in fact, is now generally regarded as but a fiction expressive in legal shorthand of the importance to its people that a State have power to preserve and regulate the exploitation of an important resource. And there is no necessary conflict between that vital policy consideration and the constitutional command that the State exercise that power, like its other powers, so as not to discriminate without reason against citizens of other States, (footnote omitted)3
The majority bases its holding on the theory that the natural resources of Alaska “belong” to Alaska and Alaskans. Under this rationale, it has been held that certain state resources may be restricted for state use.4 But the law here in question is not aimed at restricting oil and gas use to Alaska.5 In fact, the Alaska Pipeline has been constructed to the port of Valdez as a means of delivery of the oil to other states.
Even assuming McCready has continued viability,6 however, ready distinctions here, as in Toomer, render that case inapplicable. We are not dealing with any proprietary interest of a state in its fish and game. *173Nor is the statute with which we are concerned limited to the extraction of oil located on state lands. The Alaska act goes must further and restricts nonresident employment not only in extraction of a natural resource, but also in the distribution or any other use resulting from its extraction.7 In fact, employment on the pipeline involves construction of a distribution system rather than extraction of the oil. Moreover, the rationale behind the statute could be applied to all leases of state lands. Under the Alaska Statehood Act, Alaska was authorized to select in excess of 103,000,000 acres of land.8 As a condition to utilizing the natural resources, whether by mining, agriculture or timber industry, provisions in the leases could require preferential hire of residents. Such provisions could specify a local preference in all employment resulting from the leases. Thus, nonresidents could be barred from dairy, agricultural, mining and lumber industries established on state lands, as well as from employment in any processing or manufacturing resulting therefrom. There is nothing in McCready to suggest that such a pervasive restriction of nonresident employment would be constitutionally permissible.
Certainly, Alaska has a major problem with unemployment. This problem is particularly acute in rural arctic communities which are faced with the inexorable change from their historic reliance on fish and game for subsistence. Hopefully, by means of valid enlightened legislation such as the Alaska Native Claims Settlement Act9 and the initiative of community leaders, these concerns may properly be addressed.
In any event, preference for resident employees may not be upheld on the basis of the economic benefits derived by the state. If economic benefits to residents could justify discrimination, the privileges and immunities clause of the United States Constitution would become meaningless. It was for that reason that we held in Lynden Transport, Inc. v. State, 532 P.2d 700, 711 (Alaska 1975):
Benefiting economic interests of residents over nonresidents is not a purpose which may constitutionally vindicate discriminating legislation, .
While Alaska’s problem is unique in its specific setting, other states either presently or in the past have confronted similar economic problems.10 It takes little imagination to see that if Alaska’s local hire law is constitutional because of economic benefits to its residents, each state could justify restricting to its own residents not only the utilization of its lands and natural resources, but also employment resulting from such use.
In my opinion, the local hire statute runs afoul of the concept of federalism. In The Federalist, John Jay, Alexander Hamilton and James Madison wrote eloquently of the importance of our being one nation with citizens enjoying the same rights, privileges and protection.11 These principles were *174echoed by Justice Cardozo in Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 528, 55 S.Ct. 497, 500, 79 L.Ed. 1032, 1038 (1935).12
In Toomer, Chief Justice Vinson spoke of the privileges and immunities clause in terms of a like philosophy:
The primary purpose of this clause, like the clauses between which it is located— those relating to full faith and credit and to interstate extradition of fugitives from justice — was to help fuse into one Nation a collection of independent, sovereign States. It was designed to insure to a citizen of State A who ventures into State B the same privileges which the citizens of State B enjoy. For protection of such equality the citizen of State A was not to be restricted to the uncertain remedies afforded by diplomatic processes and official retaliation. Indeed, without some provisions of the kind removing from the citizens of each State the disabilities of alienage in the other States, and giving them equality of privilege with citizens of those States, the Republic would have constituted little more than a league of States; it would not have constituted the Union which now exists. Paul v. Virginia, 8 Wall (U.S.) 168, 180, 19 L.Ed. 357, 360 (1868).
In line with this underlying purpose, it was long ago decided that one of the privileges which the clause guarantees to citizens of State A is that of doing business in State B on terms of substantial equality with the citizens of that State. 334 U.S. at 395-96, 68 S.Ct. at 1162, 92 L.Ed.2d at 1471.
If local hire is valid and each state may restrict to its own residents not only the utilization of its land and natural resources but also employment resulting from such use, then the concept of federalism would be effectively extinguished. Each state would become a separate and isolated enclave. I cannot believe that the Framers intended such a result and therefore conclude that the local hire statute is unconstitutional.13

. AS 38.40.050.

. 334 U.S. at 402, 68 S.Ct. at 1165, 92 L.Ed. at 1474.

. Id.

. In People v. Crane, 214 N.Y. 154, 164, 108 N.E. 427, 430 (1915), then Judge Cardozo stated: “The state, in determining what use shall be made of its own moneys, may legitimately consult the welfare of its own citizens.” The Crane decision was affirmed in Crane v. New York, 239 U.S. 195, 36 S.Ct. 85, 60 L.Ed. 218 (1915), which held that a state may give preference to its residents when using its funds on public works projects. Accord Heim v. McCall, 239 U.S. 175, 36 S.Ct. 78, 60 L.Ed. 206 (1915); People ex. rel. Holland v. Bleigh Constr. Co., 61 Ill.2d 258, 335 N.E.2d 469 (1975). Crane and Heim were held no longer to be controlling as applied to preference in state employment of United States citizens over aliens. Sugarman v. Dougall, 413 U.S. 634, 645, 93 S.Ct. 2842, 2849, 37 L.Ed.2d 853, 861 (1973). See also C.D.R. v. Board of Education, 412 F.Supp. 1164 (E.D.N.Y.1976), affirmed, 429 U.S. 1031, 97 S.Ct. 721, 50 L.Ed.2d 742 (1977).

. If the use of the resource were restricted to the state, serious constitutional questions would be involved. In Pennsylvania v. West Virginia, 262 U.S. 553, 581, 43 S.Ct. 658, 67 L.Ed. 1117 (1923), it was held that an attempt by West Virginia to require preference in use of natural gas produced in that state to local consumers had the effect of withdrawing large quantities of gas from interstate markets and was an unconstitutional interference with interstate commerce.

. See Justice Braucher’s cogent opinion in Commonwealth v. Westcott, 344 N.E.2d 411 (Mass.1976).

. AS 38.40.050.

. Alaska Statehood Act, P.L. 85-508, 72 Stat. 339 (July 7, 1958) Sec. 6.

. P.L. 92-203, 85 Stat. 688, 43 U.S.C. § 1601 et seq. (Dec. 18, 1971).

. For example, New York state has encountered unemployment and substandard living conditions resulting from waves of migrants to New York City. The vast automobile industry of Michigan is subject to periodic upheavals causing massive unemployment. The exodus of industry from the New England states presents them with equally valid economic reasons for favoring residential employment. California at one time sought to keep out nonresident indigents. In Edwards v. California, 314 U.S. 160, 62 S.Ct. 164, 86 L.Ed. 119 (1941), a law making it a criminal offense to bring or assist in bringing an indigent nonresident into California was held invalid by a unanimous Court. Five justices based their decision on the Commerce Clause. Justice Douglas, speaking for three members of the Court, based his decision on the right of persons to move freely from state to state. He held that the law violated the fourteenth amendment privileges and immunities clause protecting privileges and immunities of national citizenship against state interference. Justice Jackson took a similar approach.

.The Federalist, No. 2 (J. Jay) p. 94 (Wright, ed. 1972):
To all general purposes we have uniformly been one people; each individual citizen *174everywhere enjoying the same national rights, privileges, and protection.
The Federalist, No. 22 (A. Hamilton) p. 192 (Wright, ed. 1972):
‘The commerce of the German empire is in continual trammels from the multiplicity of the duties which the several princes and states exact upon the mechandises passing through their territories, by means of which the fine streams and navigable rivers with which Germany is so happily watered are rendered almost useless.’ Though the genius of the people of this country might never permit this description to be strictly applicable to us, yet we may reasonably expect, from the gradual conflicts of State regulations, that the citizens of each would at length come to be considered and treated by the others in no better light than that of foreigners and aliens.
See also The Federalist, No. 42 (J. Madison) (Wright, ed. 1972).

. Rejecting the contention that New York could apply its laws for the purposes of economic protection of its dairy industry against out-of-state milk producers, he stated:
To give entrance to that excuse would be to invite a speedy end of our national solidarity. The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the people of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division.

. In Douglas v. Seacoast Products, Inc., - U.S. -, 97 S.Ct. 1740, 52 L.Ed.2d 304 (1977), the United States Supreme Court has reiterated the concept of federalism in striking down, primarily on the basis of federal pre-emption and the Supremacy Clause, a Virginia law prohibiting federally licensed vessels owned by nonresidents of Virginia from fishing in Chesapeake Bay. In condemning such restrictive laws, the Court stated:
Each State’s fishermen eventually might be effectively limited to working in the territorial waters of their residence, or in the federally controlled fishery beyond the three-mile limit. Such proliferation of residency requirements for commercial fishermen would create precisely the sort of Balkanization of interstate commercial activity which the Constitution was intended to prevent. - U.S. at -, 97 S.Ct. at 1752. (footnotes omitted, citations omitted)