Zobel v. Williams

457 U.S. 55, 102 S. Ct. 2309, 72 L. Ed. 2d 672, 1982 U.S. LEXIS 39, 50 U.S.L.W. 4613

• Court: Supreme Court of the United States
• Decided: June 14, 1982
• Docket: 80-1146
• Status: Published

Opinions

Chief Justice Burger

delivered the opinion of the Court.

The question presented on this appeal is 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 the length of each citizen’s residence, violates the equal protection rights of newer state citizens. The Alaska Supreme Court sustained the constitutionality of the statute. 619 P. 2d 448 (1980). We stayed the distribution of dividend funds, 449 U. S. 989 (1980), and noted probable jurisdiction, 450 U. S. 908 (1981). We reverse.

I

The 1967 discovery of large oil reserves on state-owned land in the Prudhoe Bay area of Alaska resulted in a windfall to the State. The State, which had a total budget of $124 million in 1969, before the oil revenues began to flow into the state coffers, received $3.7 billion in petroleum revenues during the 1981 fiscal year.¹ This income will continue, and most likely grow for some years in the future. Recognizing that its mineral reserves, although large, are finite and that the resulting income will not continue in perpetuity, the State took steps to assure that its current good fortune will bring long-range benefits. To accomplish this, Alaska in 1976 adopted a constitutional amendment establishing the Permanent Fund into which the State must deposit at least 25% of its mineral income each year. Alaska Const., Art. IX, § 15. The amendment prohibits the legislature from appropriating any of the principal of the Fund but permits use of the Fund’s earnings for general governmental purposes.

In 1980, the legislature enacted a dividend program to distribute annually a portion of the Fund’s earnings directly to the State’s adult residents. Under the plan, each citizen 18 years of age or older receives one dividend unit for each year of residency subsequent to 1959, the first year of statehood. The statute fixed the value of each dividend unit at $50 for the 1979 fiscal year; a one-year resident thus would receive one unit, or $50, while a resident of Alaska since it became a State in 1959 would receive 21 units, or $1,050. The value of a dividend unit will vary each year depending on the income of the Permanent Fund and the amount of that income the State allocates for other purposes. The State now estimates that the 1985 fiscal year dividend will be nearly four times as large as that for 1979.

Appellants, residents of Alaska since 1978, brought this suit in 1980 challenging the dividend distribution plan as vio-lative of their right to equal protection guarantees and their constitutional right to migrate to Alaska, to establish residency there and thereafter to enjoy the full rights of Alaska citizenship on the same terms as all other citizens of the State. The Superior Court for Alaska’s Third Judicial District granted summary judgment in appellants’ favor, holding that the plan violated the rights of interstate travel and equal protection. A divided Alaska Supreme Court reversed and upheld the statute.²

II

The Alaska dividend distribution law is quite unlike the durational residency requirements we examined in Sosna v. Iowa, 419 U. S. 393 (1975); Memorial Hospital v. Maricopa County, 415 U. S. 250 (1974); Dunn v. Blumstein, 405 U. S. 330 (1972); and Shapiro v. Thompson, 394 U. S. 618 (1969). Those cases involved laws which required new residents to reside in the State a fixed minimum period to be eligible for certain benefits available on an equal basis to all other residents.³ The asserted purpose of the durational residency requirements was to assure that only persons who had established bona fide residence received rights and benefits provided for residents.

The Alaska statute does not impose any threshold waiting period on those seeking' dividend benefits; persons with less than a full year of residency are entitled to share in the distribution. Alaska Stat. Ann. §43.23.010 (Supp. 1981).⁴ Nor does the statute purport to establish a test of the bona fides of state residence. Instead, the dividend statute creates fixed, permanent distinctions between an ever-increasing number of perpetual classes of concededly bona fide residents, based on how long they have been in the State.

Appellants established residence in Alaska two years before the dividend law was passed. The distinction they complain of is not one which the State makes between those who arrived in Alaska after the enactment of the dividend distribution law and those who were residents prior to its enactment. Appellants instead challenge the distinctions made within the class of persons who were residents when the dividend scheme was enacted in 1980. The distinctions appellants attack include the preference given to persons who were residents when Alaska became a State in 1959 over all those who have arrived since then, as well as the distinctions made between all bona fide residents who settled in Alaska at different times during the 1959 to 1980 period.⁵

When a state distributes benefits unequally, the distinctions it makes are subject to scrutiny under the Equal Protection Clause of the Fourteenth Amendment.⁶ Generally, a law will survive that scrutiny if the distinction it makes rationally furthers a legitimate state purpose. Some particularly invidious distinctions are subject to more rigorous scrutiny. Appellants claim that the distinctions made by the Alaska law should be subjected to the higher level of scrutiny applied to the durational residency requirements in Shapiro v. Thompson, supra, and Memorial Hospital v. Maricopa County, supra. The State, on the other hand, asserts that the law need only meet the minimum rationality test. In any event, if the statutory scheme cannot pass even the minimal test proposed by the State, we need not decide whether any enhanced scrutiny is called for.

A

The State advanced and the Alaska Supreme Court accepted three purposes justifying the distinctions made by the dividend program: (a) creation of a financial incentive for individuals to establish and maintain residence in Alaska; (b) encouragement of prudent management of the Permanent Fund; and (c) apportionment of benefits in recognition of undefined “contributions of various kinds, both tangible and intangible, which residents have made during their years of residency,” 619 P. 2d, at 458.⁷

As the Alaska Supreme Court apparently realized, the 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 1959.⁸ Assuming, arguendo, that granting increased dividend benefits for each year of continued Alaska residence might give some residents an incentive to stay in the State in order to reap increased dividend benefits in the future, the State’s interest is not in any way served by granting greater dividends to persons for their residency during the 21 years prior to the enactment.⁹

Nor does the State’s purpose of furthering the prudent management of the Permanent Fund and the State’s resources support retrospective application of its plan to the date of statehood. On this score the State’s contention is straightforward:

“[A]s population increases, each individual share in the income stream is diluted. .The income must be divided equally among increasingly large numbers of people. If residents believed that twenty years from now they would be required to share permanent fund income on a per capita basis with the large population that Alaska will no doubt have by then, the temptation would be great to urge the legislature to provide immediately for the highest possible percentage return on the investments of the permanent fund principal, which would require investments in riskier ventures.” Id., at 462.

The State similarly argues that equal per capita distribution would encourage rapacious development of natural resources. Ibid. Even if we assume that the state interest is served by increasing the dividend for each year of residency beginning with the date of enactment, is it rationally served by granting greater dividends in varying amounts to those who resided in Alaska during the 21 years prior to enactment? We think not.

The last of the State’s objectives — to reward citizens for past contributions — alone was relied upon by the Alaska Supreme Court to support the retrospective application of the law to 1959. However, that objective is not a legitimate state purpose. A similar “past contributions” argument was made and rejected in Shapiro v. Thompson, 394 U. S., at 632-633:

“Appellants argue further that the challenged classification may be sustained as an attempt to distinguish between new and old residents on the basis of the contributions they have made to the community through the payment of taxes. . . . Appellants’ reasoning would . . . permit the State to apportion all benefits and services according to the past tax [or intangible] contributions of its citizens. The Equal Protection Clause prohibits such an apportionment of state services.” (Emphasis added.)

Similarly, in Vlandis v. Kline, 412 U. S. 441 (1973), we noted that “apportionment of] tuition rates on the basis of old and new residency . . . would give rise to grave problems under the Equal Protection Clause of the Fourteenth Amendment.” Id., at 449-450, and n. 6.¹⁰

If the states can make the amount of a cash dividend depend on length of residence, what would preclude varying university tuition on a sliding scale based on years of residence — or even limiting access to finite public facilities, eligibility for student loans, for civil service jobs, or for government contracts by length of domicile? Could states impose different taxes based on length of residence? Alaska’s reasoning could open the door to state apportionment of other rights, benefits, and services according to length of residency.¹¹ It would permit the states to divide citizens into expanding numbers of permanent classes.¹² Such a result would be clearly impermissible.¹³

B

We need not consider whether the State could enact the dividend program prospectively only. Invalidation of a portion of a statute does not necessarily render the whole invalid unless it is evident that the legislature would not have enacted the legislation without the invalid portion. Buckley v. Valeo, 424 U. S. 1, 108 (1976); United States v. Jackson, 390 U. S. 570, 585 (1968); Champlin Refining Co. v. Corporation Comm’n of Oklahoma, 286 U. S. 210, 234 (1932). Here, we need not speculate as to the intent of the Alaska Legislature; the legislation expressly provides that invalidation of any portion of the statute renders the whole invalid:

“Sec. 4. If any provision enacted in sec. 2 of this Act [which included the dividend distribution plan in its entirety] is held to be invalid by the final judgment, decision or order of a court of competent jurisdiction, then that provision is nonseverable, and all provisions enacted in sec. 2 of this Act are invalid and of no force or effect.” 1980 Alaska Sess. Laws, ch. 21, §4.

However, it is of course for the Alaska courts to pass on the severability clause of the statute.

h-4 4 t — 4

The only apparent justification for the retrospective aspect of the program, “favoring established residents over new residents,” is constitutionally unacceptable. Vlandis v. Kline, supra, at 450. In our view Alaska has shown no valid state interests which are rationally served by the distinction it makes between citizens who established residence before 1959 and those who have become residents since then.

We hold that the Alaska dividend distribution plan violates the guarantees of the Equal Protection Clause of the Fourteenth Amendment. Accordingly, the judgment of the Alaska Supreme Court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.

Reversed and remanded.

1 Alaska Dept, of Revenue, Revenue Sources FY 1981-1983 (Sept. 1981). (Includes General Fund unrestricted petroleum revenues of $3.3 billion and petroleum revenues directly deposited in the Permanent Fund in the amount of $400 million. An additional $900 million was transferred from the General Fund to the Permanent Fund in the 1981 fiscal year.) The 1980 census reports that Alaska’s adult population is 270,265; per capita 1981 oil revenues amount to $13,632 for each adult resident. Petroleum revenues now amount to 89% of the State’s total government revenue. Ibid.

2 The infusion of Permanent Fund earnings into state general revenues also led the Alaska Legislature to enact a statute giving residents a one-third exemption from state income taxes for each year of residence; this operated to exempt entirely anyone with three or more years of residency. The Alaska Supreme Court, again by a 3-2 vote, held that this statute violated the State Constitution’s equal protection clause. Williams v. Zobel, 619 P. 2d 422 (1980). Chief Justice Rabinowitz, the only justice in the majority in both cases, found that the tax exemption statute, but not the dividend distribution plan, could “be perceived as a penalty imposed on a person who chooses to exercise his or her right to move into Alaska.” 619 P. 2d, at 458.

3 In the durational residency cases, we examined state laws which imposed waiting periods on access to divorce courts, Sosna v. Iowa; eligibility for free nonemergency medical care, Memorial Hospital v. Maricopa County; voting rights, Dunn v. Blumstein; and welfare assistance, Shapiro v. Thompson.

4 Section 43.23.010(b) provides:

“For each year, an individual is eligible to receive payment of the permanent fund dividends for which he is entitled under this section if he

“(1) is at least 18 years of age; and

“(2) is a state resident during all or part of the year for which the permanent fund dividend is paid.”

The remainder of §43.23.010 establishes the number of dividend units residents are entitled to receive and the method of payment. Section 43.23.010(f) provides that a resident entitled to benefits under subsection (b) who was a resident for less than a full year is entitled to a dividend prorated on the basis of the number of months of state residence.

5 The Alaska statute does not simply make distinctions between native-born Alaskans and those who migrate to Alaska from other states; it does not discriminate only against those who have recently exercised the right to travel, as did the statute involved in Shapiro v. Thompson, 394 U. S. 618 (1969). The Alaska statute also discriminates among long-time residents and even native-born residents. For example, a person bom in Alaska in 1962 would have received $100 less than someone who was bom in the State in 1960. Of course the native Alaskan bom in 1962 would also receive $100 less than the person who moved to the State in 1960.

The statute does not involve the kind of discrimination which the Privileges and Immunities Clause of Art. IV was designed to prevent. That Clause “was designed to insure to a citizen of State A who ventures into State B the same privileges which the citizens of State B enjoy." Toomer v. Witsell, 334 U. S. 385, 395 (1948). The Clause is thus not applicable to this case.

6 The Alaska courts considered whether the dividend distribution law violated appellants’ constitutional right to travel. The right to travel and to move from one state to another has long been accepted, yet both the nature and the source of that right have remained obscure. See Jones v. Helms, 452 U. S. 412, 417-419, and nn. 12 and 13 (1981); Shapiro v. Thompson, supra, at 629-631; United States v. Guest, 383 U. S. 745, 757-759 (1966). See also Z. Chafee, Three Human Rights in the Constitution of 1787, pp. 188-193 (1956). In addition to protecting persons against the erection of actual barriers to interstate movement, the right to travel, when applied to residency requirements, protects new residents of a state from being disadvantaged because of their recent migration or from otherwise being treated differently from longer term residents. In reality, right to travel analysis refers to little more than a particular application of equal protection analysis. Right to travel cases have examined, in equal protection terms, state distinctions between newcomers and longer term residents. See Memorial Hospital v. Maricopa County, 415 U. S. 250 (1974); Dunn v. Blumstein, 405 U. S. 330 (1972); Shapiro v. Thompson, supra. This case also involves distinctions between residents based on when they arrived in the State and is therefore also subject to equal protection analysis.

7 These purposes were enumerated in the first section of the Act creating the dividend distribution plan, 1980 Alaska Sess. Laws, ch. 21, § 1(b):

“(b) The purposes of this Act are

“(1) to provide a mechanism for equitable distribution to the people of Alaska of at least a portion of the state’s energy wealth derived from the development and production of the natural resources belonging to them as Alaskans;

“(2) to encourage persons to maintain their residence in Alaska and to reduce population turnover in the state; and

“(3) to encourage increased awareness and involvement by the residents of the state in the management and expenditure of the Alaska permanent fund (art. IX, sec. 15, state constitution)."

Thus we need not speculate as to the objectives of the legislature.

8 In response to the argument that the objectives of stabilizing population and encouraging prudent management of the Permanent Fund and of the State’s natural resources did not justify the application of the dividend program to the years 1959 to 1980, the Alaska Supreme Court maintained that the retrospective aspect of the program was justified by the objective of rewarding state citizens for past contributions. 619 P. 2d, at 461-462, n. 37. See also dissenting opinion of Justice Dimond, id., at 469-471.

9 In fact, newcomers seem more likely to become dissatisfied and to leave the State than well-established residents; it would thus seem that the State would give a larger, rather than a smaller, dividend to new residents if it wanted to discourage emigration. The separation of residents into classes hardly seems a likely way to persuade new Alaskans that the State welcomes them and wants them to stay.

Of course, the State’s objective of reducing population turnover cannot be interpreted as an attempt to inhibit migration into the State without encountering insurmountable constitutional difficulties. See Shapiro v. Thompson, 394 U. S., at 629.

10 Even if the objective of rewarding past contributions were valid, it would be ironic to apply that rationale here. As Representative Randolph noted during debate in the state legislature on the dividend statute:

“The pipeline is the entity that has allowed us all this latitude to do all the things we’re considering doing, not only today but throughout the session. And without. . . newcomers, we couldn’t have built that pipeline. Without their skill, without their ability, without their money, the pipeline wouldn’t be there. So I get a little bit tired of — and I’ve got a hunch an awful lot of people who have been here five or six or seven or ten years, whatever we knock off as newcomers, get a little bit tired of being chastized and penalized and discriminated against for having not been born here or not have been here 30 or 40 or 50 years."

11 Apportionment would thus be prohibited only when it involves “fundamental rights” and services deemed to involve “basic necessities of life.” See Memorial Hospital v. Maricopa County, 415 U. S., at 259.

12 “Such a power in the States could produce nothing but discord and mutual irritation, and they very clearly do not possess it.” Passenger Cases, 7 How. 283, 492 (1849) (Taney, C. J., dissenting).

13 Starns v. Malkerson, 326 F. Supp. 234 (Minn. 1970), summarily aff’d, 401 U. S. 985 (1971), cannot be read as a contrary decision of this Court. First, summary affirmance by this Court is not to be read as an adoption of the reasoning supporting the judgment under review. Fusari v. Steinberg, 419 U. S. 379, 391 (1975) (concurring opinion). See also Colorado Springs Amusements, Ltd. v. Rizzo, 428 U. S. 913, 920-921 (1976) (BRENNAN, J., dissenting); Edelman v. Jordan, 415 U. S. 651, 671 (1974). Moreover, as we pointed out in Vlandis v. Kline, 412 U. S. 441, 452-453, n. 9 (1973), we considered the Minnesota one-year residency requirement examined in Stams a test of bona fide residence, not a return on prior contributions to the commonweal.