Lexplug logoLexplug

Laverty v. Alaska RR Corp.

Alaska Supreme Court
13 P.3d 725 (2000)
ELI5:

Rule of Law:

Lands held by a state-created public corporation functioning as an instrumentality of the state are considered 'state lands' under the Alaska Constitution's Public Notice Clause. This clause requires public notice prior to the legal disposal of any interest in such lands, and notice that occurs after the interest has been transferred is constitutionally insufficient, even if it occurs before physical operations begin.


Facts:

  • The Alaska Railroad Corporation (ARRC), a state-owned entity, held title to land in an Anchorage neighborhood containing valuable gravel deposits.
  • Paul Laverty was a resident of the neighborhood and a member of a task force considering redevelopment options for the area, which included the sale of gravel.
  • In October 1995, while the task force was still deliberating, ARRC entered into a four-year agreement with Flamingo Brothers Partnership.
  • The agreement granted Flamingo Brothers the exclusive right to enter ARRC's property and extract 670,000 cubic yards of gravel in exchange for royalty payments.
  • Beginning in December 1995, after the agreement was executed, Flamingo Brothers initiated a public municipal process to obtain a zoning change and a conditional use permit necessary for the excavation.
  • During the year-long permitting process, Flamingo Brothers incurred substantial costs for activities such as a geotechnical study.
  • Laverty learned of the ARRC/Flamingo Brothers contract shortly after it was signed and was advised by an attorney in early 1996 that it likely violated the state constitution.

Procedural Posture:

  • Paul Laverty filed suit against the Alaska Railroad Corporation (ARRC) and Flamingo Brothers Partnership in the superior court, a state trial court.
  • Laverty sought an injunction to block the contract and a declaratory judgment that it violated the Alaska Constitution's Public Notice Clause.
  • The parties filed cross-motions for summary judgment.
  • The superior court ruled that ARRC lands are 'state lands' subject to the Public Notice Clause.
  • The court, however, denied injunctive relief, finding Laverty's claim was barred by the doctrine of laches.
  • The court also denied declaratory relief, ruling that the municipal permitting process provided adequate prior notice.
  • The superior court dismissed Laverty's complaint, and he appealed to the Alaska Supreme Court.
  • ARRC and Flamingo Brothers filed a cross-appeal, challenging the ruling that their lands were 'state lands'.

Locked

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Does a contract by the Alaska Railroad Corporation, a state-owned entity, granting a private company the right to extract gravel from its land, violate the Alaska Constitution’s Public Notice Clause when public notice of the arrangement only occurred through a municipal permitting process initiated after the contract was signed?


Opinions:

Majority - Justice Bryner

Yes, the contract violates the Alaska Constitution's Public Notice Clause. First, ARRC's lands are 'state lands' for constitutional purposes. Despite being a separate corporate entity, ARRC was created by the state to perform an essential government function and remains under state control, making it an instrumentality of the state that is bound by the constitution. Second, the agreement to extract gravel, though styled as a 'license,' granted an exclusive right to enter and remove minerals, which constitutes a property interest known as a 'profit à prendre,' and is therefore a 'disposal of an interest in land.' Finally, the public notice provided during the municipal permitting process was not 'prior' notice as required by the constitution, because it occurred after the contract was signed and the property interest had already been legally transferred to Flamingo Brothers. The court affirmed that laches barred an injunction due to Laverty's delay and the prejudice to Flamingo Brothers, but held that laches did not bar a declaratory judgment on this issue of public importance.



Analysis:

This decision establishes that state-created public corporations, despite legislative grants of operational independence, are considered state actors subject to constitutional constraints when disposing of their assets. The court prevents the state from evading constitutional duties, such as public notice, by merely using a corporate form. This ruling solidifies the principle that substance triumphs over form, as the court looked past the 'license' label to find a disposal of a real property interest. The case also provides a strict interpretation of 'prior' notice, requiring it before the legal transfer of rights, thereby protecting the public's right to be informed before state resources are committed.

G

Gunnerbot

AI-powered case assistant

Loaded: Laverty v. Alaska RR Corp. (2000)

Try: "What was the holding?" or "Explain the dissent"