Mobil Oil Corp. v. Local Boundary Commission

• Decision Date: 16 January 1974
• Docket Number: No. 1947,1947
• Citation: 518 P.2d 92
• Parties: MOBIL OIL CORPORATION et al., Appellants, v. LOCAL BOUNDARY COMMISSION of the State of Alaska et al., Appellees.
• Court: Alaska Supreme Court

Page 92

518 P.2d 92

MOBIL OIL CORPORATION et al., Appellants, v. LOCAL BOUNDARY COMMISSION of the State of Alaska et al., Appellees.

No. 1947.

Supreme Court of Alaska.

Jan. 16, 1974.

H. Russel Holland, Holland & Thornton, Joseph Rudd, Ely, Guess & Rudd, Anchorage, John Lansdale, Jr., Squire, Sanders & Dempsey, Cleveland, Ohio, for appellants.

John E. Havelock, Atty. Gen., Juneau, John A. Reeder, Jr., Asst. Atty. Gen., Charles K. Cranston, Anchorage, David H. Getches, Native American Rights Fund, Boulder, Colo., John W. Hendrickson, Anchorage, for appellees.

Before RABINOWITZ, Chief Justice, CONNOR, ERWIN and FITZGERALD, Justices, and BURKE, Superior Court Judge.

OPINION

ERWIN, Justice.

This appeal challenges administrative actions by the Local Boundary Commission and the Local Affairs Agency ¹ in connection with incorporation of the North Slope Borough.

On April 6, 1971, a petition for incorporation of a first class organized borough was submitted to the Local Affairs Agency by the Arctic Slope Native Association. ² The petition proposed creation of a North Slope Borough reaching from the Bering Straits below Point Hope eastward to the Canadian border and from the Brooks Range north to the Arctic shore. Within these 87,500 square miles lie the cities of Barrow, Point Hope, Wainwright, Kaktovik and Anaktuvuk Pass, a total population of less than four thousand, and the oil fields and associated development camps near Prudhoe Bay.

Upon receipt of the petition and pursuant to its duties under AS 07.10.060-. 090, ³ the Local Affairs Agency reviewed the petition for proper form and number of signatures ⁴ and undertook an investigation of its compliance with certain standards for incorporation, composition and apportionment of the borough assembly, and areawide powers set out in AS 07.10.030.-050. The agency submitted a report on its inquiries to the Local Boundary Commission.

The Commission, pursuant to AS 07.10.100-.110, ⁵ commenced an additional investigation. A mandatory hearing was held at Barrow on December 2, 1971, to elicit public comment. On February 23, 24 and 25, 1972, the Commission held a public meeting in Anchorage, heard additional comment, and accepted the petition. ⁶ This was noticed to the Lieutenant Governor in a document dated February 25, 1972. And on March 28, 1972, a group of eleven corporations and individuals filed the petition for judicial review which has led to this appeal. ⁷

These corporations and individuals are holders of surface leases and owners of interests in oil and gas wells and other real and personal property in the area of Prudhoe Bay. In the superior court, they sought a declaratory judgment against the Local Boundary Commission, the Lieutenant Governor and the state holding the incorporation invalid. The five incorporated cities within the borough, two residents of the area, the Arctic Slope Native Association and the North Slope Borough were permitted to intervene as defendants. After motions for summary judgment by all parties were denied, the superior court upheld acceptance of the petition, finding, inter alia, that the investigations of the Local Affairs Agency and the Local Boundary Commission were consistent with procedural due process, that inclusion of the plaintiffs' property within the borough did not deny substantive due process, and that the evidence assembled gave substantial ssupport to the Commission's action. The defendants were awarded $20,000.00 attorneys' fees. From the judgment affirming the Commission and the order awarding attorneys' fees, all plaintiffs below appeal.

The property owners challenge the procedures of the administrative agencies, the scope of review applied by the superior court and the adequacy of the evidence supporting organization of the North Slope Borough. They raise the following arguments: (1) the Local Boundary Commission did not produce required findings of fact; (2) the superior court should not have deferred to the Commission's interpretation of the statutory criteria for incorporation; (3) acceptance of the borough petition was not supported by substantial evidence; (4) inclusion of the plaintiffs' property within the borough denied them substantive due process; (5) the accepted incorporation petition should have been submitted to the legislature; and (6) attorneys' fees should not have been awarded to the prevailing parties.

I. FINDINGS OF FACT

AS 07.10.110 permits judicial review of the Commission's acceptance of an incorporation petition 'in the manner and within the scope of review prescribed by Sections 24 and 25, Ch. 2, of the Administrative Procedure Act (AS 44.62).' We do not accept appellants' contention that this language, read together with AS 44.62.510, ⁸ creates an obligation on the part of the Local Boundary Commission to make findings of fact. The sections of the Administrative Procedure Act invoked are 44.62.560-44.62.570 ⁹ which prescribe the manner and scope of judicial review but do not address the form of the agency's determinations. The latter was set out in AS 07.10.110 without imposition of a duty to produce findings. If these were to be required by the Administrative Procedure Act, the obligation could be expected to have been imposed in the same manner as it has been placed upon other agencies; that is, by listing the Local Boundary Commission among the administrative bodies subjected by AS 44.62.330(a) to certain procedural requirements, including the duty in AS 44.62.510 to prepare written findings of fact, or by expressly imposing such a duty in a statute relating to the Commission. ¹⁰ The Local Boundary Commission is not named, nor does any part of Title 7 require findings. Given this framework, we find no statutory command that findings of fact accompany acceptance of a petition for borough incorporation.

The special function of the Commission, to undertake a broad inquiry into the desirability of creating a political subdivision of the state, makes us reluctant to impose an independent judicial requirement that findings be prepared. ¹¹ From our own review of the entire record of this controversy, we have been able to determine the basis of the Commission's decision, ¹² and we have concluded that its proceedings and review by the superior court have been consistent with sound principles of administrative law.

II. SCOPE OF REVIEW

Appellants attack the scope of the superior court's review of the Commission's action, contending that the court accorded undue deference to the Commission when it declined to undertake independent interpretation of the standards for incorporation. ¹³ We disagree. Recent cases have established that where administrative action involves formulation of fundamental policy, the appropriate standard on review is whether the agency action has a reasonable basis. Swindel v. Kelly, 499 P.2d 291, 298 (Alaska 1972); Kelly v. Zamarello, 486 P.2d 906, 911 (Alaska 1971); Pan American Petroleum Corporation v. Shell Oil Company, 455 P.2d 12, 21-23 (Alaska 1969). A determination whether an area is cohesive and prosperous enough for local self-government involves broad judgments of political and social policy. The standards for incorporation set out in AS 07.10.030 were intended to be flexibly applied to a wide range of regional conditions. This is evident from such terms as 'large enough', 'stable enough', 'conform generally', 'all areas necessary and proper', 'necessary or desirable', 'adequate level' and the like. The borough concept was incorporated into our constitution in the belief that one unit of local government could be successfully adapted to both urban and sparsely populated areas of Alaska, ¹⁴ and the Local Boundary Commission has been given a broad power to decide in the unique circumstances presented by each petition whether borough government is appropriate. Necessarily, this is an exercise of delegated legislative authority to reach basic policy decisions. Accordingly, acceptance of the incorporation petition should be affirmed if we perceive in the record a reasonable basis of support for the Commission's reading of the standards and its evaluation of the evidence.

The appellants argue that neither the geography nor the transportation standard is satisfied by the record evidence. Our review of the record has been undertaken in light of the statement of purpose accompanying article X, the local government article, of the Alaska constitution. Section 1 declares in part:

The purpose of this article is to provide for maximum local self-government with a minimum of local government units, and to prevent duplication of tax-levying jurisdictions. . . .

We read this to favor upholding organization of boroughs by the Local Boundary Commission whenever the requirements for incorporation have been minimally met.

The geography standard, AS 07.10.030(2), provided that borough boundaries are to 'conform generally to the natural geography of the area' and 'include all areas necessary and proper for the full development of integrated local government services.' However, 'all areas such as military reservations, glaciers, ice caps, and uninhabited and unused lands' are to be excluded 'unless such areas are necessary or desirable for integrated local government.' The property owners point out that the borough encompasses Naval Petroleum Reserve No. 4 ¹⁵ and argue that its inclusion cannot be justified as 'necessary or desirable for integrated local government' because the Reserve is within the exclusive jurisdiction of the federal government leaving the borough powerless to regulate its use. In re Long's Petition, 200 F.Supp. 313 (D. Alaska 1961), leads us to a contrary conclusion. On a petition for a writ of habeas corpus, the district court was required to decide whether an alleged burglary committed within the boundaries of Naval Petroleum Reserve No. 4 could be prosecuted under Alaska law. Following a thorough review of the original order creating the...