March 8: Fairbanks Daily News-Miner on a prison at Delta Junction:

Posted: Monday, March 13, 2000

One portion of the dispute over a private prison contract that the city of Delta Junction terminated last fall has been clarified, but much remains to be resolved.

Time should be allowed for that resolution to occur.

Fairbanks Superior Court Judge Charles Pengilly ruled on a question that must have been puzzling many people. How could the city legally pass an ordinance to drop out of the contract unilaterally?

It couldn't, Pengilly said.

A city can't pass an ordinance to nullify a legitimate contract. Allvest, the company that holds the prison contract, argued in its court brief that the ordinance violated Article 1, Section 15 of the Alaska Constitution. The Constitution says that ''No law impairing the obligation of contracts ... shall be passed.''

Pengilly granted summary judgment in favor of Allvest. In a memorandum, the judge explained that there were two questions before him in the case.

First is whether the contract, referred to as the Settlement Agreement, between Allvest and city is a legitimate, enforceable contract. Pengilly said this first issue is ''factually and legally complex'' and must be further litigated.

Second is whether the ordinance terminating the contract has unconstitutionally impaired any contract right created by the Settlement Agreement.'' This second question was easily decided in Allvest's favor. ''Assuming that the court has correctly construed the parties' arguments, it is compelled to decide this narrow issue in plaintiff's favor,'' he said. ''In principle, there is no need to determine the truth of plaintiff's premise (that an enforceable contract exists) in order to rule on the validity of their conditional claim (that if an enforceable contract exists, their rights under that contract could not legally be impaired by the passage of Ordinance 2000-02.)

Obviously, the fight will now turn to whether the contract with Allvest was valid and enforceable in the first place. That won't be a short or easy battle, it appears. However, it's the only way to clear up this mess. Legislators and others should wait for the court case to be concluded before they act to muddy the future of the Delta prison proposal.


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