The Commercial Fisheries Entry Commission (hereafter CFEC or Commission) petitions for review from a superior court decision ordering it to allow Jacob Byayuk to submit evidence that he qualifies for income dependence points pursuant to State, Commercial Fisheries Entry Commission v. Templeton, 598 P.2d 77 (Alaska 1979), and to determine the validity of this evidence.
I. FACTUAL AND PROCEDURAL BACKGROUND
Jacob Byayuk filed a timely application for a Bristol Bay salmon drift gill net limited entry permit with the CFEC in September 1977.
The Commission then wrote to Byayuk on July 7, 1978 advising him of his right to submit additional evidence on his point claims pursuant to 20 AAC 05.520(d).
The Commission addressed these letters to Byayuk in care of General Delivery in Togiak. Byayuk states that he never received anything from the Commission other than a general notice of receipt of his initial application. Since he was not in Togiak during this time he alleges that the letters were either lost in the mail or never forwarded to him. In any case, he did not respond to the notices within any of the time limits set forth by the Commission.
On February 14, 1979, Alaska Legal Services Corporation (hereafter ALSC) sent a letter to the CFEC on behalf of Byayuk asking for a copy of his file. A point application was attached to this letter claiming eighteen points. This point application differed from the original by requesting six additional points; three for
ALSC wrote on March 1, 1979 to request an extension of time to submit additional point claims evidence. On July 3, 1979, CFEC denied the extension request. Byayuk filed a request for a hearing on August 15, 1979. This request was finally denied in a letter of March 18, 1980 "as not demonstrating a genuine issue in contention." This letter concluded by stating that it constituted the final action by the Commission and that Byayuk had thirty days in which to appeal. Byayuk did file a timely appeal.
This court issued its decision in State, Commercial Fisheries Entry Commission v. Templeton, 598 P.2d 77 (Alaska 1979), on August 3, 1979. While Byayuk's request for a hearing did not specifically refer to Templeton, the decision did have obvious relevance to Byayuk's situation. In Templeton we held that a person who fishes as an equal partner is entitled to special circumstances points for economic dependence under 20 AAC 05.630(b)(2)
After the CFEC denied Byayuk a hearing but prior to the superior court hearing, Byayuk requested that the CFEC stipulate to a remand for a determination on the special circumstances points pursuant to Templeton. The Commission did not so stipulate and the case subsequently went to hearing. The superior court ordered the case remanded to the CFEC to afford Byayuk the opportunity to submit evidence on his failure to meet the additional evidence deadline and to present evidence on his claim for income dependence points under Templeton. CFEC petitioned for review to this court which we granted on January 28, 1982.
Three issues are raised by the parties: (1) was there a "final" determination by the Commission prior to Byayuk's request for an extension of time;
II. RETROACTIVE APPLICATION OF TEMPLETON
In order for Byayuk to get the benefit of partnership points it is necessary for us to find that Templeton should be applied retroactively to persons in his position. The Commission urges a prospective application, or at the most, a limited retroactive application. Templeton itself did not specifically deal with this issue beyond applying the rule to the litigants in that case.
There is no rule of retroactive law carved into the United States Constitution or state constitution.
We have attempted in the past to deal with the problem of whether to apply a new rule of law prospectively or retroactively by formulating criteria by which to measure each case.
A. The Threshold Test
The first criterion, whether the holding overrules prior law or decides an issue of first impression, serves as a threshold test to determine whether a purely prospective application of a new rule of law is even at issue. If a holding is not new in the sense
In this instance the Templeton decision, in effect, overruled a presumptively valid regulation promulgated by the Commission.
B. Purpose and Intended Effect of Templeton
Once the threshold test has been met the next step in our analysis is to determine the purpose and intended effect of the Templeton decision. This is the single most important criterion to use in determining whether to apply a new rule of law retroactively or prospectively. As we stated in Plumley v. Hale, 594 P.2d 497, 504 (Alaska 1979), "[i]t is fundamental that the determination as to whether a decision will be prospectively or retroactively applied, is one guided by equitable principles... ." (footnote omitted). The equities in these cases are largely dictated by the purpose and intended effect of the new rule.
The general purpose behind the Limited Entry Act is to regulate entry into commercial fishing "without unjust discrimination."
Prior to Templeton, the Commission had interpreted the Limited Entry Act as requiring actual possession of a gear license as a prerequisite to income dependence points. In reversing the Commission's interpretation, we stated in Templeton that "allocating one permit between two partners solely on the fortuitous circumstances of which one held the gear license in two given years does not realistically weigh the relative hardship which each partner would suffer by denial of a permit."
Our decision in Templeton required that the Commission avoid unjust discrimination by judging all applicants by standards which accurately reflect their relative hardship. Implicit in that requirement was a finding that point allocations made according to the Commission's earlier standards were inaccurate. Thus, in denying permits in reliance on those point allocations, the Commission had not avoided "unjust discrimination."
Moreover, as we stated in Commercial Fisheries Entry Commission v. Apokedak, 606 P.2d 1255, 1261 (Alaska 1980), one purpose of the Limited Entry Act is to "segregate hardship and non-hardship cases." In Templeton, we determined that
C. Reasonable Reliance
The next criterion is closely related to the threshold test in substance although not in purpose. In this instance the extent of reliance on an old rule of law is used to further weigh the merits of a prospective versus a retrospective application and also to set the limits of retroactivity. In other words, rather than setting forth a determinative test, as the threshold criterion does, this criterion is used as a balancing factor.
As noted earlier, the Commission's regulation was presumptively valid and there were no court decisions prior to Templeton which challenged the validity of the regulation. We find that the CFEC did reasonably rely on its partnership policy and that the new rule announced in Templeton was not clearly foreseeable. We note that this criterion is generally designed to protect persons who innocently rely on judicial or legislative law rather than agencies which rely upon their own regulation. Reasonable as its reliance was it is still arguable that the Commission is not entitled to the benefits this criterion provides in this case. Regardless, this factor is of minimal importance where the purpose and intended effect of the new rule of law clearly justifies a retroactive application. The overriding equities in favor of retroactivity clearly outweigh the agencies reliance in this instance.
D. Effect on the Administration of Justice
The final criterion is the effect on the administration of justice of a retroactive application of the new rule. This factor is useful in determining not only whether a new rule should apply retroactively but also how far the application should extend. State v. Glass, 596 P.2d 10, 14 (Alaska 1979).
The CFEC urges that retroactive application be denied to avoid undue hardship to the administration of the limited entry system and to avoid excessive overissuance of permits. It cannot be denied that some hardship will befall the Commission if we apply Templeton retroactively. However, applicants who did not receive a permit because they fished as partners were treated unfairly and the harm to them will not be remedied if we apply the rule prospectively. As we stated in Judd v. State:
A change in the law or the formation of a new rule will invariably lead to some inequitable results. For the following reasons we hold that a retroactive application of Templeton results in the fewest inequities.
The Commission states in its reply brief that "[t]his case suggests that [the] number [of Templeton claims] would be huge." No other information is provided articulating
Furthermore, much of the potential hardship to the CFEC could have been avoided if it had acted with due diligence when the first sign of difficulties became apparent. The superior court issued an order on April 3, 1978 requiring the CFEC to give partnership points to Templeton. The Commission petitioned the supreme court for review of this order, and thereafter sent out letters to applicants announcing the 1978 period for additional point claims evidence. The CFEC, for its own protection, could have specifically requested partnership information pursuant to the lower court decision. The Commission could have waited until its review by this court was completed before making a final point determination. In this way the Commission would have been able to guard against excessive overissuance from that point.
A retroactive application of Templeton will not automatically lead to the issuance of permits. To receive a permit an applicant must prove partnership, income dependence, and a point total at or above the issuance level. When retroactive application of a rule leads to an automatic reversal of a prior verdict, the effect on the administration of justice is serious. On the other hand, when a new rule only results in a new trial, the foreseeable consequences are less severe.
The final consideration in this area is the effect of retroactivity on persons already granted permits. If excessive overissuance is the result of our decision then persons already in the fishery may be affected. In Moore v. State, 553 P.2d 8 (Alaska 1976), we expressed concern over the effect of a decision on innocent persons. In that case we held that the state must consult with local planning agencies prior to selling offshore oil and gas leases. In deciding to adopt the new law prospectively we noted that "once the disposition has occurred, the new owners or lessors also have a paramount interest in maintaining their rights to the land. We have no desire in this area, to upset settled transactions which were entered into in good faith."
The Templeton situation is easily distinguishable. The persons presently holding permits have no interest that is paramount over that of deserving Templeton claimants. In fact, the opposite is true. Many of the persons with permits would not have received one had the partnership claims initially been processed fairly. Moreover, the Commission may implement a "buy-back" program to repurchase the excess permits under AS 16.43.310.
Templeton should be applied retroactively for the above stated reasons.
III. EXTENT OF RETROACTIVITY
Having decided that Templeton merits retroactive application, we must now decide whether that retroactivity should be extended to final decisions.
In this case Byayuk had filed a limited entry permit application with the CFEC prior to Templeton. We find that the Templeton rule should at least be extended to persons who have filed timely permit applications. Whether Templeton should also be extended to persons who have not applied on time is a question which is not presented here and on which we express no opinion.
This decision applies to a finite, definable group of persons and it extends back to a definite date. Much of the hesitancy for applying a rule to final decisions stems from a concern that an overwhelming number of cases would be reopened.
Finally the Commission's own interpretation of a similar court decision and its immediate response to Templeton demonstrate that the CFEC might have anticipated this holding. In Isakson v. Rickey we held that the Commission wrongfully denied the claimants in that case an opportunity to apply for a permit since they owned gear licenses for the first time subsequent to January 1, 1973. We did not specifically address the issues of retroactivity but the Commission responded by reopening the application period for Isakson claims. Similarly, when Templeton was decided the CFEC proposed regulations which allowed applicants to adjust their allocation of points according to the rule announced in that case.
IV. FAILURE TO RAISE TEMPLETON CLAIMS
Finally, we must determine whether Templeton should be applied retroactively
Res judicata generally bars litigation of an issue which has already been decided or which could have been decided in a prior proceeding. Our most recent discussion of administrative res judicata was in Jeffries v. Glacier State Telephone Company, 604 P.2d 4 (Alaska 1979). We recognized in that case that res judicata is applicable to administrative adjudicative decisions but that the doctrine is often applied there with less rigidity.
In Storrs v. Lutheran Hospitals and Homes Society of America, Inc., 609 P.2d 24, 28 (Alaska 1980), we noted that an objection to an administrative ruling must be made to the agency to preserve the objection, "at least when, as here, a complainant ... has had an ample opportunity to urge his objections at the administrative level." We compared this to a situation where the party has knowledge of facts of bias on the part of an arbitrator and remains silent nonetheless. Id. at 29 n. 13. In contrast, Byayuk had no knowledge or reason to know that the CFEC's partnership policy was incorrect. Thus, we cannot realistically require him to have raised this issue.
Even if Byayuk had raised the issue to the CFEC the issue is not within the scope of the agency's expertise. In Templeton we specifically stated that the Commission's interpretation of the statutory scheme did not involve its particularized expertise.
Our decision to allow Byayuk to raise his Templeton claims is consistent with the general overriding concerns of fairness articulated throughout this opinion. As the United States Supreme Court stated in Hormel v. Helvering, 312 U.S. 552, 557, 61 S.Ct. 719, 721, 85 L.Ed. 1037, 1041 (1941):
We decline in this case to follow the general rule requiring a party to raise the issue before the administrative agency.
AFFIRMED as modified.
See also, Commercial Fisheries Entry Commission v. Apokedak, 606 P.2d 1255 (Alaska 1980).
414 F.2d at 1073 (citations omitted). See also Myron v. Martin, 670 F.2d 49, 52 (5th Cir.1982).