Brief Fact Summary. The Alaska Constitution allowed for annual dividends to be paid out to citizens on the basis of the time in which they entered the state.
Synopsis of Rule of Law. Creating “permanent sub-classes of residents” requires only a general equal protection analysis.
In 1967, Alaska discovered large oil reserves on state owned land, which resulted in substantial income for the state. In order to efficiently utilize this income from the mineral reserves, the state amended its constitution to include the Permanent Fund to be used as a depository for at least 25% of the income each year. “The amendment prohibits the legislature from appropriating any of the principle of the fund but permits use of the fund’s earnings for general governmental purposes.” A dividend program was created by the legislature in 1980, which provided annual distributions to the State’s adult residents. The Appellants, Ronald M. Zobel and Patricia L. Zobel (Appellants), residents of Alaska since 1978, brought this suit in 1980. The suit challenged the dividend distribution plan as violative of their right to equal protection guarantees and their constitutional right to migrate to Alaska, to establish residency their and therefore to enjoy the full rights of Alaska citi
zenship on the same terms as all other citizens of the state. Particularly, the Appellants challenge the preference given to people who were residents when Alaska became a state in 1959 over all those who have arrived since that year. The Alaska Supreme Court determined that the statute was constitutional.
Issue. Whether a statutory scheme by which a State distributes income derived from its natural resources to the adult citizens of the State in varying amounts, based on length of each citizen’s residence, violates the equal protection rights of newer state citizens.
Held. Chief Justice Warren Burger (J. Burger). Yes. The statutory scheme is unconstitutional pursuant to the minimum rationality test. “[T]he first two state objectives – creating a financial incentive for individuals to establish and maintain Alaska residence, and assuring prudent management of the Permanent Fund and the State’s natural and mineral resources – are not rationally related to the distinctions Alaska seeks to make between newer residents and those who have been in the State since 1959.” Also, the states objective that the fund will reward citizens for past contributions is not sufficient to pass the rationality test. The judgment is reversed.Dissent.
Justice William Rehnquist (J. Rehnquist). Alaska’s economic distribution to its citizens is no different than any other economic benefit allocated by a state. This Court has stirred from its traditional holdings that “state economic regulations [to be] presumptively valid . . . .”
Concurrence. The concurring opinions are as follows:
Justice William Brennan (J. Brennan). “[T]he pervasive discrimination embodied in the Alaska distribution scheme gives rise to constitutional concerns of somewhat larger proportions than may be evident on a cursory reading of the Court’s opinion.”
Justice Sandra Day O’Connor (J. O’Connor). “[T]he Court misdirects its criticism [of the constitutional provision] when it labels Alaska’s objective illegitimate. Some objectives may be “wholly reasonable.” Discussion.
Interestingly, the Supreme Court of the United States (Supreme Court) did not classify this case as one requiring strict scrutiny even though it raised issues regarding the right to travel.