A Cook Inlet commercial fishing organization wants the Kenai Peninsula Borough to help finance a lawsuit it plans to file against the state seeking compensation for revenues lost due to regulatory decisions that have impacted salmon harvests in recent years.
The Cook Inlet Fisherman's Fund asked the borough assembly Tuesday to consider appropriating $165,000 for its cause. Fund spokesperson David Martin told the assembly the group needs $500,000 in order to initiate the litigation. The complex issues could well send the matter as high as the U. S. Supreme Court, Martin said.
"We have been assured that we need enough money to go that far if it becomes necessary," he said. "The U. S. Constitution as well as the Alaska Constitution guarantees just compensation for a government taking."
The group already has raised $335,000 from Cook Inlet commercial fishers. According to Martin, 322 of the group's 440 active members have contributed to the litigation fund.
According to the group, application of regulations and decisions by state fish managers have, among other things, caused over-escapement and waste of resources, unnecessarily resulting in lost fishing opportunities for Cook Inlet's strapped commercial fishing industry. That, in turn, has meant less raw fish taxes and less cash in the local economy.
"Current regulations have caused millions of fish to be wasted and have cost the state, cities and the Kenai Peninsula Borough millions of dollars in lost revenues," Martin said.
In documents provided to the assembly, the group said management decisions in 2003 by the commissioner of Fish and Game and the directors of sport and commercial fisheries "overrode the local biologist by not allowing emergency order authority to manage for the commercial harvest of the abundant sockeye salmon stocks."
A resulting surplus was in excess of the fish needed to meet biological escapement goals. The surplus fish were not harvested in the river by sport fishers. The group argued the decision resulted in a loss to the local economy of more than $8.45 million.
Martin noted over-escapement of pink salmon in 2000 and 2002 that caused Soldotna to stink because of rotting carcasses.
"This was not allocation," he said. "This is an intentional waste of the resource and a loss of the monetary value this resource would have produced."
Other examples were cited in the packet of information delivered to the assembly.
The proposed litigation, Martin said, seeks "just compensation" for what the group considers a government taking similar to that of an eminent domain taking of real property.
"Regulatory taking of the fishermen's right to use their permit and other properties to fish and to make a living has been a major factor in destroying the viability of the salmon fishery in Cook Inlet," Martin said.
In the documents provided to the assembly, the group said commercial fishing families with setnet sites contiguous with their land or who own state leases have a specific interest in the waters adjacent to their land. He also said that drift gillnet and setnet fishers have a right to use their Limited Entry Permits to make a living, and that those permits have "a bundle of property rights attached." It is just compensation for the taking of those property rights that the group is seeking.
Martin said one outcome they hoped would result from a suit is that limited entry permits would be declared property.
The property issue is central, because it is unclear how far the courts might go. There are aspects of permits that are property-like they can be bought and sold, for instance but whether that similarity rises to the status of, say, real estate, is an open question.
Don Johnson of Soldotna testified that he had done some research on "wronged user groups," and said it has been hard to successfully sue the state. He took issue with Martin's definition of taking.
"In order for a taking to occur, a person has to own something in the first place," he said. "And from what I heard, it sounds like he is admitting that they do not own anything in the way of a document that could actually be bought and sold. They have got permits, but that's not something that can be used as property."
For past losses of fishing opportunities (as when regulations curtailed use of a permit) to be considered a taking, the permit would already have to be considered property, Johnson contended.
He added that limited entry permits could be taken away by the state.
Alaska statutes say "An entry permit constitutes a use privilege that may be modified or revoked by the Legislature without compensation."
It might be time for commercial and sports fishers to put away past animosities, suggested Ricky Gease, director of the Kenai River Sport-fishing Association,
Gease said that in the past, the commercial and sport fishing industries have been at odds. Today's market realities argue that it is time for the two groups to "think outside the box." Together with the tourist industry, there may be mutually beneficial ways to help each other, he said.
He warned that "the golden age" of Cook Inlet fishing where fortunes were made is unlikely to return.
"We have got to start thinking of some creative solutions," he said.
Gease said the taking issue was complex and contentious and encouraged the borough to look at it thoroughly.
Some assembly members expressed reservations about funding such suits. Assembly Member Betty Glick of Kenai who said she believed in biological management of the fisheries, asked if the borough assembly had the authority to lend or grant money to such suits.
Borough Attorney Colette Thompson said there might be economic development aspects to the claims, but she would be leery about resting on economic development powers to support a lawsuit.
She said there might be a basis for a claim based on the loss of raw fish tax revenue, but she stopped well short of saying the borough would or could become a party to the proposed suit. She said she would review the issues.
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