The state is fighting an $82 million court judgment to thousands of nonresident commercial fishermen whom the state courts decided, years ago, were overcharged for their fishing permits.
The fishermen, some of them now Alaska residents, filed their class-action lawsuit in 1984, but the case morphed into one of the longest-running lawsuits in state history -- if not the longest -- dragging out even longer than the 1989 Exxon Valdez spill litigation.
Twice, the U.S. Supreme Court declined to hear the case. This week's appeal by the state marks the fifth appeal of the case to the state Supreme Court.
In a key 2003 ruling in the case, the Alaska Supreme Court said that the state had charged nonresident commercial fishermen amounts that were unconstitutionally high. At the time, nonresident commercial fishermen paid three times what Alaska fishermen did for their licenses and permits.
State Superior Court Judge Peter Michalski ruled Tuesday that the state must pay $12.4 million in refunds to 4,075 fishermen and a whopping $62.4 million in accrued interest. The judge also awarded $7.5 million in attorney fees.
The actual payments to fishermen would range between $1.60 to $212,639 and the entire cash award would have to be appropriated by the Legislature, lawyers said Tuesday.
The state is no longer fighting the refund payment. Instead, it filed an appeal this week to the Alaska Supreme Court challenging the interest payment and attorneys fees.
Interest owed by the state has been accumulating by $600,000 per month, based on a 2003 ruling in the case.
Under Tuesday's ruling, Judy MacDonald, a retired Southeast fishermen, and her deceased husband would receive $6,000 for the year-and-a-half that they moved down to the Lower 48 and paid nonresident fishing permits.
"I do feel if the state has an obligation, it should be paid, especially if it is costing them dearly every day," said MacDonald, 73, who stopped fishing 12 years ago and now homesteads in Tenakee Springs.
The state's attorneys, in their appeal this week to the state Supreme Court, argue that the $7.5 million attorney fee award is far in excess of the actual legal work done and they dispute the "punitive" 11 percent compounding interest rate the Supreme Court ordered in 2003.
"The interest amount is pretty staggering," said Lance Nelson, a state assistant attorney general litigating the case.
Nelson said the Supreme Court's earlier interest rate calculation should be lowered because it is based a portion of the case that has since been thrown out.
Loren Domke, a Juneau attorney for the fishermen, disputed the state's appeal arguments.
Domke said the judge used the standard procedure for awarding attorney fees and the state is improperly trying to "relitigate" the interest payment.
"They argued it, they lost it, they acquiesced, and now they want to raise it again," Domke said.
Previous rulings in the case have had some major impacts on the state already. The case forced the state to change how it charges nonresident commercial fishermen. Now, nonresidents are charged a flat fee on each of their fishing permit applications -- this year, it's $140 -- and the amount fluctuates annually based on how much the state spends to regulate commercial fishing.
The Law Department has asked the justices to expedite its appeal, allowing a decision by May 7.
Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.
By ELIZABETH BLUEMINK