Native Village of Ekluntna v Alaska Railroad Corporation and Municipality of Anchorage

This is the third appeal arising out of the Alaska Railroad Corporation's
quarry operations on culturally significant land adjacent to the Native Village of Eklutna,
which lies within the boundaries of the Municipality of Anchorage. Eklutna sought a
preliminary injunction to enjoin the Railroad from blasting and all other quarry activities,
arguing that the Railroad does not have a conditional use permit to operate a gravel pit
in that area as Anchorage Municipal Code (AMC) 21.40.240(D)(4) requires. The
Municipality of Anchorage intervened as a plaintiff. The trial court denied Eklutna the
preliminary injunction and entered judgment as a matter of law in favor of the Railroad,
concluding that the Railroad is not subject to local planning and zoning ordinances.
Eklutna and the Municipality of Anchorage appeal. Because the legislature did not
clearly express its intent to exempt the Railroad from local zoning laws, we reverse and
remand.

II. FACTS AND PROCEEDINGS

A. Factual History

1. Cultural significance and history of the Eklutna quarry site

The quarry is located on one of two hills, or "knobs," adjacent to Eklutna.
Dr. James Fall, a cultural anthropologist, prepared a report for the Railroad that
explained the Eklutna quarry site's significance as the source of the village's name:

The Dena'ina name for the village [of Eklutna] is "Idlughet,"
"The Place by the Plural Objects" . . . . The "plural objects"
referenced in these place names are the two hills, or to use the
term used by many Eklutna residents today, the "knobs,"
located between the village and Knik Arm, just north and east
of the community.

For purposes of this appeal, the parties agree that Eklutna considers the knobs within the
quarry property to be culturally significant.

The Alaska Railroad, at the time owned by the United States government,
owned and operated the Eklutna quarry from an undetermined date in the 1940s until
1985. 1 In 1985, under the Alaska Railroad Transfer Act of 1982, the Railroad was turned
over to the State of Alaska, which operated it through the then newly created Alaska
Railroad Corporation.2 In 1987 Eklutna, Inc. and the Alaska Railroad Corporation
entered into an agreement settling their respective claims over property under the Alaska Native Claims Settlement Act 3 and under the Alaska Railroad Transfer Act.4 Under that
agreement, the Alaska Railroad Corporation was granted the land containing the quarry
until it ceases to use the land "in connection with furnishing mass or bulk transportation,"
at which time the land is to be conveyed to Eklutna.

2. Previous proceedings regarding the Eklutna quarry

The larger of the two Eklutna knobs has been the subject of two previous
appeals before this court. In July 1995 the National Bank of Alaska, which owned part
of the quarry operated by the Railroad, filed an application for a conditional use permit
to conduct a granite mining operation there.5 The Municipality of Anchorage's Planning
and Zoning Commission approved the conditional use permit, and the Anchorage Board
of Adjustment and the superior court affirmed this decision.6 We reversed and remanded
in 2000, concluding that "the Board's finding that ‘no cultural resources will be
adversely affected' was unsupported by substantial evidence in light of the whole
record."7

The second case, Alaska Railroad Corp. v. Native Village of Eklutna, arose
after the Railroad entered into a licensing agreement in 1995 granting Damco Paving
Corporation the exclusive use of the quarry for commercial quarrying operations in exchange for the Railroad receiving royalty payments for the rock quarried.8 In 1997
Eklutna filed suit to enjoin Damco's quarrying operations, alleging that the quarry was
a nonconforming use of the land and that neither the Railroad nor Damco had sought a
conditional use permit to proceed with the commercial quarrying operation.9 In May
1999 the superior court granted judgment in favor of Eklutna, requiring Damco to obtain
a conditional use permit before it could continue with quarrying operations.10 We
affirmed in February 2002. 11 Not addressed in that decision was the question now before
us: whether the Railroad enjoys sovereign immunity from local zoning laws in its own
operation of the quarry.

3. Quarry operations in recent years

After the superior court entered its decision in Alaska Railroad Corp. in
May 1999, 12 the Railroad resumed direct operation of the quarry. The Railroad began
removing rock and other materials from the quarry in May or June 2000, and it blasted
in the quarry on July 26, 2000.

On January 12, 2001, the Railroad notified Eklutna that "no operations or
blasting would occur at the site until March, 2001." However, at a January 19, 2001
meeting, the Railroad informed Eklutna that blasting would occur on January 26, 2001.

B. Procedural History

On January 22, 2001, Eklutna filed a complaint and motion for preliminary
injunction to stop the blasting. Following expedited briefing, an evidentiary hearing, and
oral argument, the trial court denied Eklutna's request for a preliminary injunction.
Although the trial court recognized that "[t]hese hills are vital cultural resources for the
Village inhabitants and the Denaina Athabascan Indians as a people," it concluded that
the municipal ordinance could not prevent the Railroad's quarry operation and entered
final judgment in favor of the Railroad as a matter of law, because "the legislature
intended that [the Railroad] not be subject to local planning and zoning ordinances."

On March 1, 2001, the Municipality of Anchorage moved to intervene in
the litigation in order to seek declaratory relief endorsing its position that the Railroad
must comply with municipal zoning. The superior court set aside its jud gment while it
considered the Municipality's motion. After granting the motion to intervene and
reviewing supplemental briefing by the parties, the court reinstated its previous final
judgment. Eklutna appealed the judgment and the Municipality filed a cross-appeal
against the Railroad.

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