Alaska denied oil check benefits to gay couples, dependents




Alaska discriminated against some same-sex spouses for years in wrongfully denying them benefits by claiming their unions were not recognized even after courts struck down same-sex marriage bans, court documents obtained by The Associated Press show.

The agency that determines eligibility for the yearly oil wealth check paid to nearly all Alaska residents denied a dividend for same-sex spouses or dependents of military members stationed in other states for five years after a federal court invalidated Alaska’s ban on same-sex marriage in 2014, and the Supreme Court legalized the unions nationwide in June 2015, the documents show.

In one email from July 2019, a same-sex spouse living out-of-state with his military husband was denied a check because “unfortunately the state of Alaska doesn’t recognize same sex marriage yet,” employee Marissa Requa wrote to a colleague, ending the sentence with a frown face emoji.

This Permanent Fund Dividend Division practice continued until Denali Smith, who was denied benefits appealed and asked the state to start including her lawyer in its correspondence.

Smith later sued the state, seeking an order declaring that state officials violated the federal court decision and Smith’s constitutional rights to equal protection and due process

Smith and the state on Wednesday settled the lawsuit. Alaska admitted denying benefits to same-sex military spouses and dependents for five years in violation of the permanent injunction put in place by the 2014 U.S. District Court decision. The state also vowed to no longer use the outdated state law, to deny military spouses and dependents oil checks going forward, and updated enforcement regulations.

There were no financial terms to the settlement. In fact, Smith had to pay $400 out of pocket to file the federal lawsuit to get her oil check, and her attorney worked pro bono.

In Alaska, the oil wealth check is seen as an entitlement that people use to buy things like new TVs or snowmobiles, fund college savings accounts or, in rural Alaska, weather high heating and food costs. The nest-egg fund, seeded with oil money, has grown into billions of dollars. A portion traditionally goes toward the checks, but the amount varies. Last year, nearly every single resident received $992. The year before, the amount was $1,606.

About 800 pages of emails provided by the state for the lawsuit show a clear misunderstanding or outright disregard of the 2014 precedent and reluctance to reach out to the attorney general’s office for guidance.

The emails, redacted of identifying information about oil check applicants, show as late as 2019, division employees were claiming Alaska does not recognize same-sex marriages, often pointing to an outdated and unenforceable section of state law still on the books as justification.

“It seems like none of them all the way up to the director understood that this was a permanent injunction, meaning if you enforce the law after this date, you’re in violation of a court order and you’re violating people’s rights,” said Anchorage attorney Caitlin Shortell, one of the lawyers who successfully sued to overturn the state’s ban on gay marriage and later filed the lawsuit on behalf of Smith. “Nobody understood that.”

The state Department of Law released a statement saying the now-unenforceable law will remain as part of the state’s statutes until there is legislative action to remove it.

“As for the application of that law which led to the recently settled lawsuit, that policy has been corrected by the Department of Revenue. DOR is ensuring that every PFD-eligible Alaskan receives their PFD as the Governor directed after hearing about this issue in 2019,” the statement to the AP says.

The department did not respond to other questions from the AP, including how many spouses were improperly denied checks and how many of those were retroactively paid, whether the attorney general’s office advised the division on the changes enacted by the court decisions or if the division didn’t seek guidance and decided for itself what the law meant.

The emails also show a disregard of a direct order from a deputy revenue commissioner to stop the practice, that efforts were made to keep incorrect language about the state not recognizing gay marriage in its literature and that the computer system was programmed to reference the unenforceable state statute in form denial letters.

Smith, who accompanied her wife out of state, was denied an oil wealth fund check in 2019. Shortell also represented another woman whose wife was stationed out-of-state, and the woman and the couple’s two children were denied benefits.

The state later reversed its policy. Division staff listed about 40 people who were denied. Four were marked for further review but the emails don’t reference what came of those applications.

“Based on their ignorance of and disregard for the law throughout the disclosures, I do not trust their analysis was correct,” Shortell said, adding the number of people incorrectly denied benefits could be higher.

All four of Shortell’s clients eventually received their oil checks.

Of the settlement, Shortell said she was pleased the state would follow federal and U.S. Supreme Court orders that same-sex couples “are entitled to have their marriages recognized and to receive all of the benefits attendant on marriage, including the PFD.”

“It is disturbing that it took five years and a federal lawsuit to force the State to follow the law and stop its discriminatory policy,” she added.

The first indication that the law was not being followed, according to the emails, came on Feb. 26, 2015, when someone emailed employee Bradley Johnson on whether gay marriage is legal, and Johnson sought clarification from Kimberly Lane, the division’s eligibility manager.

That same day, another employee, Jennifer Cason, told Lane she knew that same sex marriage is legal in Alaska. “I just want to make sure that everyone knows what the law is here so it can be followed.”

On March 9, 2015, Lane asked appeals manager Robert Pearson for clarification. Pearson writes back, “1st thought – punt to AG,” followed by a smiley face.

“I don’t think the law has been officially struck down, as yet, but I could be wrong,” he continued. “So, 2nd thought, let’s wait until the Supreme Court decision and then we won’t have to take anything back that we’ve already done.”

Lynne Church, another employee, emailed Lane and Pearson on Aug. 8, 2016, about an applicant who would most likely be denied the following year because they would be accompanying their military spouse out of state. “Federal law and Alaska law are not aligned at this time,” Church wrongly stated.

On Jan. 26, 2017, Pearson emailed Sara Race, then the division director, and Anne Weske, then the division’s operations manager, summarizing the appeal by a woman who was denied a check when her wife was stationed out of state. The 2016 denial, he wrote, “is based solely on her not qualifying as a military spouse. If she were male she would be eligible.”

Five days later, Weske sent an email to Pearson with the subject line, “Same Sex Spouses.” The entire body of the email was redacted.

The most definitive directive about approving such claims for same-sex spouses and dependents was given March 9, 2017, by Jerry Burnett, then the deputy revenue commissioner. He left little doubt in an email to Race and Weske, saying the U.S. Supreme Court decision invalidated all opposing laws at the state or local level. Since the ruling, the division “ has not been able to use the definition of marriage found in the Alaska Statutes or Constitution,” he wrote.

Any oil checks denied for that reason must be paid immediately, and staff need to use a definition of marriage that doesn’t conflict with the legal decisions, he wrote.

Race responded that the denial had been overturned and the person paid. “Also, 110% understood that future eligibility decisions would need to follow suit.”

Two years later, emails show same-sex couples were still being denied. In April 2019, emails show a woman who was denied a dividend was given a supervisor’s contact information to appeal.

After another applicant who had been denied complained to their lawmaker, the issue was escalated to Weske, who by then was the division’s director and who had received Burnett’s 2017 directive to recognize same sex marriages.

“I seem to recall possible guidance from the prior administration in stating that we COULD allow them,” Weske wrote Sept. 23, 2019, noting that she’d check, but “if they were denied there is law stating that we don’t recognize same sex marriage,”

By Oct. 7, 2019, just weeks before Smith’s lawsuit was filed, the policy had changed. Lane emailed staff to treat same-sex marriages the same as opposite-sex couples.

In that email, Lane said Alaska’s definition of marriage “has been struck down as unconstitutional by U.S. District Court and U.S. Supreme Court in two separate cases,” without mentioning those cases had been decided five and four years earlier, respectively.

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