Case: Alaska v. Schmidt

In Alaska, AS 29.45.030(e) (the “Tax Exemption”) exempts qualifying senior citizens and disabled veterans in Alaska from taxation on up to $150,000 of the assessed value of their home. Married couples were able to claim the full $150,000 Tax Exemption regardless of whether the property was held in the name of the husband, wife, or both. However, same-sex domestic partners—who were barred from marrying or having their marriages recognized under Alaska law—were entitled to, at most, half of the full exemption.

On August 3, 2010, three same-sex couples, all with at least one person qualifying for the Tax Exemption, brought this lawsuit against the state of Alaska and the municipality of Anchorage in the Third Judicial District in the Superior Court for the State of Alaska. Represented by the ACLU, the ACLU of Alaska, and private counsel, Plaintiffs argued that defendants’ disparate treatment of them under the Tax Exemption law violated their rights under Article I of the Alaska Constitution, which guarantees equal rights, opportunities, and protection under the law (Art. 1, § 1), the right to be free from sex discrimination (Art. 1, § 3), and the right to privacy (Art. 1, § 22). Plaintiffs asked for declaratory relief stating that defendants’ application of the Tax Exemption violated their rights under the Alaska Constitution, and injunctive relief requiring defendants to equally apply the Tax Exemption to Plaintiffs as they would to any couple whose marriage was legally recognized. This case was assigned to Judge Frank Pfiffner.

After some discovery, Plaintiffs filed a motion for partial summary judgment on May 11, 2011, and defendants filed their opposition and a cross-motion for summary judgment on July 11, 2011. On September 16, 2011, the court granted Plaintiffs’ motion and denied Defendants’. 2011 WL 8879217. Citing to ACLU v. State as precedent, in which the Alaska Supreme Court found that a marital classification in a state employment benefits scheme violated the Alaska Constitution's equal protection clause, the Court found that the Tax Exemption’s application violated Alaska’s equal protection clause because it disparately burdened similarly situated taxpayers. The Court further found that defendants’ application of the Tax Exemption was facially discriminatory because it created a marital classification that discriminated against same-sex couples, and that the Marriage Amendment—which defined marriage under Alaska law to only include marriage between a man and woman—did not preclude the Court from considering Plaintiffs’ claims. Finally, the court found that all Plaintiffs qualified for the Tax Exemption, and the disparate application by defendants of the Tax Exemption to Plaintiffs thereby violated their right to equal protection under Alaska law. The Court did not determine whether the disparate application of the Tax Exemption violated Plaintiffs’ right to be free from sex discrimination or right to privacy.

Given the Court’s summary judgment order, Plaintiffs moved for an entry of final judgment on September 29, 2011. On October 12, the Court entered judgment on the pleadings for Plaintiffs, and Plaintiffs then moved for attorneys’ fees and costs in the amount of $135,475.50. Defendants argued that the proposed amount was excessive and reflected duplicative costs. The Court granted attorneys’ fees in the full amount to Plaintiffs on December 12, 2011.

On November 18, 2011, Defendants appealed the Court’s summary judgment order to the Alaska Supreme Court (S-14521). On April 25, 2014, the Alaska Supreme Court largely affirmed the trial court’s summary judgment order. 323 P.3d 647. In a 4-1 decision with one justice writing a separate concurrence, the Supreme Court found that defendants’ application of the Tax Exemption facially violated the rights of same-sex couples to equal protection under the law. As to the Plaintiffs in this case, the court found defendants had violated the equal protection rights of two of the three same-sex couples. The third couple, the court found, was not entitled to the Tax Exemption because the qualifying senior member of the couple had no ownership stakes in the property at issue. Finally, the Supreme Court vacated the attorneys’ fees order and remanded it back to the trial court for reconsideration given that one of the three same-sex couples was no longer a prevailing party.

Back at the trial court, the Court awarded Plaintiffs $118.169.35 in attorneys’ costs and fees on December 15, 2014. This case is now closed.