ALASKA TRADEMARK SHELLFISH, LLC v. STATE

OPINION

BRYNER, Justice.

I. INTRODUCTION

This case requires us to determine whether Alaska law gives shellfish farmers the exclusive right to harvest wild stocks already growing on their farm sites. Several applicants asked the Alaska Department of Fish and Game for aquatic farm permits allowing them to grow and commercially harvest geoduck clams in Alaska waters. When the Department of Fish and Game declined to give them exclusive rights to the wild geoducks on their proposed farm sites, the applicants appealed to the superior court. The superior court upheld the department's decision, concluding that the Alaska Constitution bars the department from giving geoduck farmers exclusive rights to commercially harvestable stocks already on their farms. The applicants filed this appeal. We affirm the superior court's ruling but rest our decision on narrower grounds, holding that, no matter what the constitution might permit, the department lacked statutory authority to give aquatic farmers exclusive rights to the existing wild stocks.

II. FACTS AND PROCEEDINGS

Alaska's Aquatic Farming Act1 sets out procedures for obtaining permits to start aquatic farms in Alaska waters. The act puts the Department of Fish and Game in charge of the permitting process, which includes the issuance of a coastal zone consistency certification, an aquatic farm lease, a special area permit, an aquatic farm operation permit, and a stock acquisition permit. In the case at issue here, Alaska Trademark Shellfish, LLC, applied to the Department of Fish and Game for aquatic farm permits to allow the company to raise geoducks—an unusually large, slow-growing species of clam that commands high market prices—on several proposed farm sites in Southeastern Alaska waters; at about the same time, several other applicants requested permits in various different locations. In prior communications with prospective shellfish farmers, the department had suggested that applicants who received permits would be given the right to take all wild stocks already on their farms when the permits were issued. Thus, in the present case, most of the applicants proposed to harvest and sell the wild geoducks already growing on their selected sites.

After reviewing the applications, the department notified the applicants that it would conditionally approve their permits: each applicant would be required to develop a practical method of distinguishing their farmed geoducks from the wild, "common property," geoducks already on their property; and each applicant would have to agree to use their proposed method when they started farming. The department explained that it believed these conditions to be necessary "[b]ecause the density of geoducks on your site may exceed that necessary to provide seed stock for propagation." Specifically, the department stated, "it is likely that a portion of the wild geoducks at your proposed sites would remain a common property resource, which should be made available for other uses." The department asserted that the Aquatic Farming Act allowed aquatic farmers to take wild resources from their sites only if they were issued a stock acquisition permit under AS 16.40.120, which, in the department's view, allowed farmers to use existing stocks solely to "further growth" and for "propagation." According to the department, allowing aquatic farmers a broader right to harvest standing stocks might violate the Alaska Constitution:

The applicants responded that they found the department's conditions of approval to be unreasonable. They proposed several alternative arrangements. After holding a teleconference to discuss these and other options, the department sent the applicants a letter summarizing the general principles that it proposed to use to "guide the department's actions on your pending permit applications."2 For present purposes, the most important principle was that the department would permit the applicants to use existing geoducks only for brood stock or for active cultivation:

The applicants replied that the department's proposal to condition approval of their applications on these principles would preclude them from operating successfully. They demanded an unconditional decision on their pending applications. In response, the Commissioner of Fish and Game issued a final decision denying the permits, ruling that the applicants had no right to claim wild geoducks already on their proposed sites:

The applicants appealed the commissioner's decision to the superior court, insisting that the department had violated the Aquatic Farming Act by conditioning their farm operation permits on their willingness to make wild geoduck stocks available for common use. Alternatively, the applicants argued, the department should be estopped from prohibiting them from harvesting their standing stocks, since its earlier communications had promised that all successful applicants for shellfish farming permits would automatically receive the right to harvest wild stock.

Superior Court Judge Michael A. Thompson affirmed the commissioner's ruling, relying on a constitutional theory. Finding that "[t]he real question ... is not whether the legislature intended to allow [stock acquisition permit] holders to harvest wild stock, but whether the legislature is permitted to do so," Judge Thompson passed over the disputed statutory issues, ruling instead that the Alaska Constitution's common use clause3 precluded the department from giving geoduck farmers exclusive harvest rights to any commercially significant wild geoduck stocks.

The applicants appeal this decision.

III. DISCUSSION

A. Standard of Review

In resolving administrative appeals from decisions issued by the superior court as an intermediate appellate tribunal, we review the administrative agency's decision directly.4 We apply our independent judgment to decide questions of law involving statutory and constitutional interpretation.5

B. Parties' Arguments

The applicants challenge the superior court's ruling that the Alaska Constitution's common-use clause forbids giving newly permitted geoduck farmers harvest rights to geoduck stocks already growing on their farms. They maintain that the superior court misunderstood the relationship between the Alaska Constitution's common-use clause and no-exclusive-right clause.6 Pointing to cases like State v. Ostrosky,7 Owsichek v. State,8 CWC Fisheries v. Bunker,9 and McDowell v. State,10 the applicants insist that the common-use clause and public trust doctrine do not prevent the department from giving standing stocks to aquatic shellfish farmers. Alternatively, the applicants argue, estoppel bars the department from denying their applications.

The state counters by arguing that the court's constitutional analysis was sound. Alternatively, renewing the statutory arguments that the superior court declined to decide, the state asserts that the Aquatic Farming Act does not give the department authority to grant exclusive standing-stock rights to the applicants.

C. Procedural Objections to a Decision on Statutory Grounds

The applicants raise a procedural objection to the state's statutory argument. They maintain that the state cannot properly rely on this theory, since the superior court declined to decide it and since the theory is not raised in the applicant's statement of points on appeal. The applicants urge us to confine our review to the constitutional issue decided below. Alternatively, they ask us to allow supplemental briefing if we reach the statutory issue.

But the trial court's choice of a particular legal theory does not define the scope of our appellate review. An appellate court may uphold the trial court's judgment on any legal theory supported by the record—even one that the trial court expressly rejects.11 Here, the state's brief discusses a statutory point that it properly raised in the superior court. Both parties briefed and argued the point below. Although the superior court elected to rest its ruling on constitutional grounds, we have often recognized that appeals should ordinarily not be decided on constitutional grounds when narrower grounds are available.12 Given these circumstances, we reject the applicants' procedural objections. We thus turn to the statutory issues.

D. Relevant Statutory Framework

The Aquatic Farming Act authorizes the Department of Fish and Game to issue permits for aquatic farming; conversely, the act prohibits aquatic farming except as permitted.13 The act authorizes the department to issue two distinct kinds of permits: permits to operate aquatic farms and permits to acquire stock for aquatic farms.14

1. Operation Permits

Alaska Statute 16.40.100 describes the first kind of permit, an operation permit, providing, "A person may not, without a permit from the commissioner, construct or operate... an aquatic farm."15 An operation permit issued under this section allows aquatic farmers to acquire and sell "stock and aquatic farm products that are used or reared at the hatchery or aquatic farm."16 The act assigns precise meanings to the terms "aquatic farm product" and "stock":

"aquatic farm product" means an aquatic plant or shellfish, or part of an aquatic plant or shellfish, that is propagated, farmed, or cultivated in an aquatic farm and sold or offered for sale;

In deciding whether to issue an operation permit under section .100, the department must consider four criteria:

2. Stock Acquisition Permits

Alaska Statute 16.40.120 describes the second kind of permit required for aquatic farming, an "aquatic stock acquisition" permit. Section .120 provides that "[a] person may not acquire aquatic plants or shellfish from wild stock in the state for the purpose of supplying stock to an aquatic farm or hatchery required to have a permit under AS 16.40.100 unless the person holds an acquisition permit."19 An aquatic stock acquisition permit enables permit holders to acquire wild stock, but only "for the purposes of supplying stock ... to an aquatic farm or hatchery required to have [an operating] permit under AS 16.40.100 ... [or to] the department."20 Any wild shellfish acquired under a stock acquisition permit "become the property of the permit holder and are no longer a public or common resource."21

E. Department's Authority To Authorize Harvest of Wild Stocks

The state asserts that these statutes leave the department no authority to grant shellfish farmers a right to harvest and sell the wild geoducks already populating their farm sites. The state's argument has merit.

The act describes only two ways for the department to give—and for aquatic farmers to receive—access to wild geoduck stocks: through an operation permit issued under AS 16.40.100 or through a stock acquisition permit issued under AS 16.40.120. If the applicants have any claim to the wild stocks on their proposed sites, then, their claims must arise under these provisions.

The operation permit statute, AS 16.40.100, neither states nor implies that a right to harvest and sell wild stocks arises from an operation permit. It allows farmers to acquire and sell aquatic farm products and stock only when the products or stock are "used or reared at the hatchery or aquatic farm."22 By requiring all aquatic "farm products" and "stock" acquired or sold by an aquatic farm to be "used or reared at" the farm, this provision precludes harvesting unfarmed, wild geoduck stock for the purpose of sale. Similarly, no right to harvest wild geoducks for general commercial purposes emerges under the stock acquisition permit statute, AS 16.40.120. As we have seen, stock acquisition permits issued under this section only allow their holders to acquire wild stock for limited purposes: to supply stock to the department or to a licensed aquatic hatchery or farm.23

In arguing their case before the department, the applicants proposed several theories for finding that a stock acquisition permit would authorize harvesting and selling the wild geoduck stocks on their sites. For example, pointing to the act's definition of "stock," which would only encompass geoducks that were "intended for use ... for... further growth or propagation,"24 the applicants suggested that the wild geoducks they intended to harvest and sell would qualify as stock covered by their acquisition permits because the geoducks would undergo "further growth" between the time the permits were issued and the time the harvest and sale occurred. Yet by requiring stock to be "intended for use for further growth or propagation," the statutory definition of "stock" demands something more than passive growth: its express terms command an intent to "use" the wild stock "for" further growth. These purposive words unmistakably signal an intended use that will produce growth through action—an active "use" of the stock by the farmer "for" promoting its further growth. A mere waiting period between issuance of a permit and commercial harvest would not meet this definition.

The applicants also claimed a right to harvest existing geoduck stocks under another provision of the stock acquisition permit statute, AS 16.40.120(f). This provision directs the department to issue a stock acquisition permit if "wild stock is necessary to meet the initial needs of farm or hatchery stock." Contending that commercially harvesting wild stocks is necessary to make geoduck farming a viable enterprise, the applicants reasoned that subsection .120(f) would allow them to receive permits to harvest wild geoduck stocks. Thus, in the applicants' view, the department acted unlawfully in proposing to condition their permits on their willingness to surrender existing geoduck stocks.

But this argument disregards the specific terms of AS 16.40.120(f). Subsection .120(f) authorizes the department to issue acquisition permits for wild stock when necessary to meet a farm's "initial needs of farm ... stock." Hence, this provision does not address a farm's general startup needs; it only addresses a farm's initial needs for "stock." A "stock," as discussed above, may only be used "for further growth or propagation."25 Here the applicants' proposal to harvest and sell wild geoducks from their sites and to plow their earnings back into their farms has no direct relation to their initial needs for farm stock.

Nor do the applicants' arguments fare any better under the statutory provision governing operation permits, AS 16.40.100. As already explained in discussing the relevant statutory framework, an operation permit issued under section .100 does not generally authorize geoduck farmers to sell wild geoduck stocks; instead, it only permits them to acquire or sell "stock" and "aquatic farm products" if they "are used or reared at the... aquatic farm." Although the applicants maintained below that their proposed harvest and sale of wild geoducks would amount to a "use" under subsection .100(b), their argument strains the statute's plain meaning beyond plausible limits. Moreover, the argument disregards the need to interpret subsection.100(b)'s references to "stock" and "aquatic farm products" in light of AS 16.40.199's provisions defining those terms: to qualify as salable "stock," a wild geoduck would have to be "intended for use by [an]... aquatic farm for the purpose of further growth or propagation"; and to qualify as "a farm product," the geoduck would have to be "propagated, farmed, or cultivated in an aquatic farm."26

In short, no provision of the aquatic farming act empowers the department to grant—or entitles the holder of an operation or stock acquisition permit to claim—exclusive rights to harvest and sell existing wild geoduck stocks. We thus conclude that the commissioner properly denied the disputed applications. Our reliance on this statutory ground makes it unnecessary to decide whether the Alaska Constitution would be violated by giving geoduck farmers exclusive rights to existing wild stocks.

F. Estoppel

A final point of equity remains to be considered. The applicants assert that the department should be estopped from denying them the exclusive right to harvest wild geoducks because it repeatedly assured them that they would acquire the right with their permits. Although the department vigorously disputes the applicants' interpretation of its prior communications, we need not decide the dispute as to the meaning of the department's statements. We have previously recognized that private parties may invoke estoppel against the state in certain exceptional cases.27 But when a party's request for estoppel would require the government to take unlawful or otherwise unauthorized action, we have carefully restricted the defense's use to circumstances in which the balance of equities manifestly favors the requesting party and estoppel is necessary to avoid further injustice.28 Considering the totality of the circumstances here, although the department's prior representations have understandably caused considerable disappointment, we cannot say that the equities weigh heavily in the applicants' favor; nor do we see any compelling need to invoke estoppel as a means to prevent waste or avoid injustice.29

Thus, even assuming that the applicants reasonably interpreted the department's prior representations as unequivocal promises, we conclude that the balance of the equities would fall well short of justifying an order compelling the state to issue permits for exclusive fishing rights that the legislature has not authorized it to grant.30

IV. CONCLUSION

For these reasons, we AFFIRM the department's decision denying the disputed applications for aquatic farming permits.