Mugged at the Courthouse: An Analysis of the Decision of the United States Court of Federal Claims in Alaska V. United States, 35 Fed. Cl. 685 (Ct. Cl.1996) and Subsequent Petition of Certiorari

By Grant W. Hunter

Alaskans live or die by natural resources development. Democrats probably prefer that Alaskans die in order to provide a pristine landscape for their pals among the Eurotrash and environmentalists. On May 31, 1996, the United States Court of Federal Claims ruled that the State of Alaska was not contractually entitled to collect 90 percent of the mineral leasing revenues from federal lands within Alaska. The United States Court of Appeals for the Federal Circuit affirmed that decision by incorporating the aforesaid decision by reference without further comment in 1997. The United States Supreme Court refused certiorari in 1998. These courts ignored Alaskans rights under the Alaska Statehood Act and the larger issue of the rights of states under the statehood compacts within their respective statehood acts.

• Language: English
• Publisher: Xlibris US
• Release date: Aug 2, 2007
• ISBN: 9781462825288

Grant W. Hunter

Grant W. Hunter was born in Greensburg, Pennsylvania in 1956. He received his JD from Washington University School of Law (St. Louis, MO) in 1981 and his AB in economics from Dickinson College (Carlisle, PA) in 1978. He received his MLS from the University of Pittsburgh (Pittsburgh, PA) in 1990 and his MBA from the Alaska Pacific University (Anchorage, AK) in 1996. He has active licenses to practice law in Alaska and Pennsylvania.

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Contents

Acknowledgements

Biography

Forward By Walter J. Hickel, Governor Of Alaska (1966-1969, 1990-1994)

Introduction

Statutory And Constitutional Background

United States Court Of Federal Claims Discussion Of Issues Presented With Respect To Contractual Character Of Alaska Statehood Act

Alaska’s Reply To The United States Court Of Federal Claims

Conclusion

Bibliography

Endnotes

DEDICATION

This book is dedicated to Walter J. Hickel who

 risked life and limb in 1952 to confront

Vice-President Alben Barkley to secure Alaska’s rights.

ACKNOWLEDGEMENTS

I wish to thank Governor Walter J. Hickel and Mr. Malcolm Roberts for their inspiration and assistance in the preparation of this book. I would also like to thank the men and women responsible for developing personal computers.

BIOGRAPHY

Grant W. Hunter was born in Greensburg, Pennsylvania in 1956. He received his JD from Washington University School of Law (St. Louis, MO) in 1981 and his AB in economics from Dickinson College (Carlisle, PA) in 1978. He received his MLS from the University of Pittsburgh (Pittsburgh, PA) in 1990 and his MBA from the Alaska Pacific University (Anchorage, AK) in 1996. He has active licenses to practice law in Alaska and Pennsylvania.

FORWARD BY WALTER J. HICKEL, GOVERNOR OF ALASKA (1966-1969, 1990-1994)

Mugged at the Court House is an important book for all Alaskans and any American concerned with holding the federal government to the promises it makes to the respective states. When Alaska won statehood in 1958, a Compact was agreed upon by both Congress and by the Alaska voters. That Compact is the foundation of our land and resource entitlement which is the key to the Alaska economy today and to its sustainability in the future. Whenever the federal government violates that agreement, the Alaska people must rise up and demand redress.

That’s exactly what we did in the mid-1990s when I initiated the lawsuit: Alaska vs. United States (1996). I deeply believe that the unfavorable decision by the US Court of Federal Claims will one day be challenged and re-heard. The underlying truth is obvious. The terms of the Alaska Statehood Compact cannot be changed without the consent of both parties.

Grant Hunter has done a real service for Alaska by compiling the key documents from this case. Those with legal training will navigate this volume with ease, while others may want to pick and choose those sections of most interest. In any case, this book will be helpful for generations to come. It helps explain why Alaska is an Owner State and will be invaluable whenever Alaska must challenge future attempts by the Federal government to alter our Statehood Compact without our consent.

Walter J. Hickel

Former Governor of Alaska and

U.S. Secretary of the Interior

Anchorage, Alaska, August 2006

INTRODUCTION

Thesis & Procedural History of the Case

This book deals with the decision of the United States Court of Federal Claims in Alaska v. the United States of May 31, 1996. In that case, the United States Court of Federal Claims decided that the Alaska Statehood Act did not oblige the United States of America to maximize the commercial development of natural resources on lands of the United States located within the State of Alaska. The Court of Federal claims also decided that the Alaska Statehood Act did not confer upon the State of Alaska the right to receive forever 90 percent of gross mineral royalty revenue from federal land in the State of Alaska.1

The text of the head note provides an excellent summary:

State of Alaska sued United States for breach of contract with respect to certain terms of Alaska Statehood Act, or in alternative for takings in violation of Fifth Amendment. State moved for partial summary judgment, and United States cross-moved for summary judgment. The Court of Federal Claims, Bruggink, J., held that: (1) net effect of statute governing distribution to Territory of Alaska of proceeds of federal mineral leases and section of Alaska Statehood Act governing same was to make terms of Mineral Leasing Act of 1920 (MLA) applicable to Alaska on same terms as to other states; (2) section of Statehood Act at issue did not create promise on part of federal government to pay Alaska, in perpetuity, 90 percent of gross mineral leasing revenues from federal mineral leases in Alaska; and (3) section of Statehood Act at issue carried with it no express or implied promise on part of United States to make federal mineral lands productive of royalty revenues for state.2

Now what does this mean in plain English? The Court of Federal Claims allowed United States of America to break a promise to the people of Alaska. The United States promised the people of the Territory of Alaska certain payments if they voted to become the people of the State of Alaska. The United State promised to deposit ninety cents out of every dollar paid to the United States by any person or corporation pumping or digging minerals from land owned in Alaska. Oil is a liquid mineral; gas is gaseous mineral.

The Court of Federal Claims told the people of Alaska that Congress was free to change the size of the payments, discontinue payments or to end all taking of minerals from federal lands.

The United States Court of Appeals for the Federal Circuit upheld the decision of the Court of Federal Claims in 1997 by incorporating by reference the text of Judge Bruggink’s decision into an unpublished decision.3

Judges Michel, Lourie and Rader simply observed:

Before MICHEL, LOURIE, and RADER, Circuit Judges.

PER CURIAM.

**1 The order of the United States Court of Federal Claims granting summary judgment to the United States, State of Alaska v. United States, 35 Fed.Cl. 685 (1996), is affirmed on the basis of the reasoning set forth in the lengthy, detailed, precise and correct opinion of Judge Bruggink. Judge Bruggink’s scholarly opinion is thoroughly supported with cited and quoted authority and record evidence. Nothing more need be said.4

The United States Court of Appeals for the Federal Circuit simply adopted the decision of the United States Court of Federal Claims. The Federal Circuit didn’t even write a few paragraphs explaining the decision to allow the United States to stiff Alaska’s people on promised payments. There is nothing to indicate that the Federal Circuit even bothered to read the papers filed in the case in the absence of an opinion from the Federal Circuit. If work is not shown, how do we know that it has been done? Aren’t even the rustic peasants of Alaska entitled to a few paragraphs from the Federal Circuit before the bread is taken out of the mouths of their children?

The United States Supreme Court denied certiorari (refused to hear the case) on February 23, 19985 in one sentence:

ALASKA, petitioner,

v.

UNITED STATES.

No. 97-750.

Supreme Court of the United States

Feb. 23, 1998.

Case below, 35 Fed.Cl. 685; 119 F.3d 16.

Petition for writ of certiorari to the United States Court of Appeals for the Federal Circuit denied.

END OF DOCUMENT6

In fairness, the United States Supreme Court doesn’t usually hear a case in the absence of an opinion from the United States Court of Appeals.

STATUTORY AND CONSTITUTIONAL BACKGROUND

This book will now examine the Mineral Leasing Act of 19207, the Alaska Statehood Act and Article 8 of the Alaska State Constitution.

The key issue to understanding how Alaskans earn a living to support themselves and their society is that the United States denied Alaskans the opportunity to use the treasures under the earth. A person who bought or homesteaded a piece of public land in Alaska did not acquire a right to dig up or drill for minerals under the land. This denied an Alaskan a potential source of revenue or credit.

Mineral Leasing Act of 1920

Governor Hickel8 has observed that this statute created the principle difference between economic opportunity via private land ownership in Alaska and in the Lower Forty-Eight. He relates how his Uncle Emil was able to derive wealth from the presence of oil and gas under his homestead in Kansas. Governor Hickel then describes the Epiphany he reached upon being informed by Attorney Paul Robison of the retention of mineral rights by the United States of America through the policies instituted by Theodore Roosevelt in order to prevent the wastage of the mineral resources on public lands.9

Ernest Gruening10 observed that the Roosevelt policy with regard to the withdrawal of coal came from the misplaced notion that the coal resources in Alaska were in danger of wastage and exhaustion. Gruening observed that only salmon and sea otter were in danger of exhaustion during the period leading up to the adoption of the Mineral Leasing Act.11 Gruening made the following observation concerning conservation:

These two actions were part of a nationwide conservation program, which under the inspiration of Gifford Pinchot was established in the administrations of Theodore Roosevelt, and has become accepted in principle as national policy ever since. Its application as distinct from its purpose has often been, and continues to be, a matter of controversy. We are here concerned only with the effect of these far-reaching withdrawals on Alaska. There they proved a further impediment to development and settlement. For Alaska had not even remotely approached the point where its natural resources—with the exception of the salmon fisheries and sea otter—were in danger of depletion. They had neither been wasted nor, except for fur seals, monopolized. Congressional inaction or misaction and bureaucratic obstruction had thus prevented their utilization and concomitant settlement. What had been wasted was much human effort and substance.12

Politicians and bureaucrats in the Lower Forty Eight had the idea that people in Alaska were wasting resources in Alaska. People in Alaska were removing the resources from the earth at too low a price and leaving too little for future generations. In point of fact, people in Alaska were not wasting the resources of the earth; however, the Lower Forty-Eight saw fit to keep Alaskans from using the earth’s resources. Lower Forty-Eight ignorance put Alaskans out of work and into poverty.

Section 21 of the Mineral Leasing Act contains the following language:

Section 21. Mineral lands reserved

In all cases lands valuable for minerals shall be reserved from sale, except as otherwise expressly directed by law.13

Section 18114 provides the following description of what is reserved by the Mineral Leasing Act:

Section 181. Lands subject to disposition;