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Democko v. Iowa Dept. of Natural Resources

Supreme Court of Iowa

December 6, 2013

Joseph W. DEMOCKO, Donald Jones and James Samis, Appellants,

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John A. Pabst of Pabst Law Firm, Albia, for appellants.

Thomas J. Miller, Attorney General, David R. Sheridan and David L. Dorff, Assistant Attorneys General, for appellee.

APPEL, Justice.

In this case, we consider whether the Iowa Department of Natural Resources (DNR) can revoke resident hunting licenses previously granted to Joseph Democko, Donald Jones, and James Samis on the basis they do not qualify as residents under Iowa Code chapter 483A. On judicial review, Democko, Jones, and Samis claim that the agency's decision was not supported by substantial evidence and, in the alternative, that Iowa Code section 483A.24, which grants certain hunting privileges to resident landowners but not to nonresident landowners, is unconstitutional. For the reasons expressed below, we hold substantial evidence supports the agency's determination and section 483A.24 does not violate the Privileges and Immunities Clause contained in Article IV,

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Section 2 of the United States Constitution. We therefore affirm.

I. Factual and Procedural Background.

During July 2010, the DNR issued notices to Democko, Jones, and Samis indicating that, following a review of documents submitted to the DNR, each did not meet the criteria to claim resident status under Iowa Code section 483A. 1A(9) and that establishing residency solely for the purposes of hunting was improper under Iowa Code section 483A.1A(10). The DNR further indicated its intention to revoke the resident hunting licenses held by each and invited them to reapply for nonresident hunting licenses. Democko, Jones, and Samis filed separate appeals with the Administrative Hearings Division of the Iowa Department of Inspections and Appeals. In each case, an administrative law judge (ALJ) affirmed the DNR's decision. Democko, Jones, and Samis appealed to the Iowa Natural Resource Commission, which also affirmed. Democko, Jones, and Samis then filed a consolidated petition for judicial review.

Because Democko, Jones, and Samis allege there is not substantial evidence to support the agency's decisions, we set forth the facts specific to each as detailed in the stipulations that each entered into individually with the DNR prior to his contested case hearing and as detailed by the ALJs following the contested case proceedings. We then set forth the findings of the district court.

A. Joseph Democko.

According to Democko's stipulation, he has substantial ties to North Carolina. He is a doctor of chiropractic medicine licensed to practice in North Carolina. He maintains a chiropractic practice in North Carolina. Though he actively treats patients in North Carolina, Democko spends most of his time running the chiropractic business and leaves the business of seeing patients primarily to three other chiropractors he employs. Democko also owns, supervises, and manages three other businesses in North Carolina. Democko's wife and three minor children live in North Carolina. His car insurance bill, though obtained through an Iowa insurance agent, is forwarded to his North Carolina address, a large home held in his wife's name. Democko files nonresident tax returns in North Carolina. Finally, he holds a lifetime nonresident hunting license issued by the State of North Carolina.

The stipulation also contains facts showing that Democko has ties to Iowa. He holds a chiropractic license in Iowa, provides consulting services to a chiropractor in Albia, is an adjunct professor at Palmer College of Chiropractic in Davenport, and has provided " hands on" chiropractic services in Iowa since February 1, 2010. Democko owns a farm in Monroe County and is president of Wild Lands for the Future, Ltd., an Iowa corporation owning farm real estate in Monroe County. Democko is registered to vote in Iowa and voted in person in Iowa in the 2008 and 2010 general elections. He has also filed resident income tax returns in Iowa since 2006 without challenge from the Iowa Department of Revenue. Democko has consistently held a resident hunting license in Iowa since he established Iowa residency. His utility and other business bills are forwarded to his Iowa address. Democko states Iowa is the place of his true, fixed, and permanent home and the place to where, whenever he is absent, he intends to return.

The ALJ found additional facts. The home Democko claims in Iowa is a small, rustic, cabin-like structure with no landscaping or other indicators of occupancy. Democko admits he is an avid deer hunter

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and purchased his properties, in part, for the purpose of hunting deer. Democko is typically in Iowa during hunting season and spends at least part of each month in Iowa. Although the parties stipulated that Democko spends approximately thirty-five percent of his time in Iowa, the ALJ noted calendars in evidence showed Democko only spent twenty percent of his time in the state during a recent 225-day period. The same calendars indicated Democko spent approximately forty-five percent of his time in North Carolina and the rest in other states.

The ALJ noted the question of residence, which the ALJ equated with domicile, is a fact-intensive question. The ALJ further noted that, according to the definitions of " principal and primary residence or domicile" and " resident" contained in Iowa Code section 483A.1A(9) and (10), Democko is not an Iowa resident for the purposes of chapter 483A. Instead, the ALJ found that Democko has " stronger, more permanent, and more enduring ties to other states, in particular North Carolina."

The ALJ reasoned that North Carolina is the place to which Democko always returns from travel. According to the ALJ, Democko's " frequent travels to such places as Iowa, New York, and other states are almost always book-ended by his presence in North Carolina." Further, the ALJ found it significant that Democko spends approximately forty-five percent of his time in North Carolina, as compared to twenty percent in Iowa. The ALJ noted that " [w]hile the percentage of time spent in Iowa as compared to that percentage spent outside of Iowa is not necessarily dispositive to the question of residency, I do find it to be a relevant inquiry." The ALJ also noted North Carolina is where Democko's immediate family, including an infant, reside. The ALJ found it " hard to conclude that [Democko] intends to reside apart from his young and recently enlarged family" based on the lack of any indication Democko's wife or children intend to move to Iowa or become residents of Iowa. In addition, the ALJ noted Democko's business interests in Iowa are " less permanent and presumably less lucrative in nature than his North Carolina businesses." Finally, the ALJ contrasted the rustic cabin in Iowa with the home in North Carolina, an expensive home in an upscale golf and lake development. Based on the above facts, the ALJ concluded Democko does not meet the criteria for obtaining resident hunting and fishing privileges under chapter 483A.

B. Donald Jones.

According to Jones's stipulation, he spends the majority of his time outside of Iowa. Jones's spouse lives in New Jersey. The couple's New Jersey residence is solely in his wife's name. Jones primarily derives income from his ownership of a UBS financial services office located outside Iowa. Jones is transitioning into retirement, and the business is now operated by Jones's son, though Jones still maintains an advisory role. Jones has obtained nonresident hunting or fishing licenses in Arizona, Kansas, Missouri, New Jersey, New Mexico, and Wyoming.

The stipulation also indicates Jones has contacts with Iowa. For instance, Jones established Iowa residency in 2007. Jones has held an Iowa driver's license since 2007 and was selected to be a juror in Monroe County. Jones does not individually hold properties or vehicles in Iowa, but such assets are owned by Hobbs Lake, LLC and Powderhorn Ridge, LLC, Iowa companies equally owned by Jones and his wife. The companies have filed Iowa resident income tax returns since 2007. Jones himself has filed Iowa resident income tax returns since 2009. Though the companies

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formerly maintained a New Jersey mailing address, to which mail such as United States Department of Agriculture and Farm Service Agency correspondence was sent, currently all mailings for the companies are sent to their corporate offices in Iowa. Further, the State of Iowa has acknowledged that Jones's companies are actively engaged in farming in Iowa. The crops are insured in the names of the companies, and Jones assumes the financial risk of farming. Jones is registered to vote in the State of Iowa.

The ALJ found Jones spends more than fifty percent of his time outside of Iowa and returns home to New Jersey, where his family lives. The ALJ noted that although Jones plans to build a house in Iowa after his son fully takes over his business in New Jersey, these events have not yet occurred. As a result, the ALJ found Jones does not qualify as a resident of Iowa for the purposes of obtaining resident licensing privileges under chapter 483A.

C. James Samis.

According to Samis's stipulation, since 2006 he has claimed Iowa residency, held an Iowa driver's license, been a registered Iowa voter, regularly voted in general and special elections in Iowa, and filed Iowa resident income taxes. In 2010, Samis applied for a homestead tax credit in Iowa. Samis resides in the lower portion of his home in Iowa and rents out the upper portion year round. Samis and his wife own approximately eighty acres in Monroe County. He and his wife own Chesapeake Adventures, LLC, which owns three farms in Iowa. Samis actively farms his eighty acres and the three other farms. He does not employ a third party to oversee the farming operations. Further, just over fifty percent of the company's income is derived from Iowa. Finally, Samis acts as a sales representative in Iowa for numerous companies.

The stipulation also contains Samis's admission that he spends the majority of his time outside of Iowa. In particular, the stipulation shows ties to Maryland. Prior to 2006, Samis claimed Maryland residency. He owns a small business in Maryland. His wife is a Maryland resident employed at a university in Maryland. Further, the limited liability company he owns with his wife is registered in Maryland. Samis has obtained nonresident hunting and fishing privileges in every state other than Iowa.

The ALJ found Maryland was the state to which Samis returned home and where Samis's family lives. The ALJ noted that Samis and his wife own a home and a business in Maryland and that Samis spent a significant amount of time outside Iowa during the year preceding the hearing taking care of his mother who had been ill. The ALJ acknowledged Samis and his wife also own a home and business in Iowa. In light of the evidence, however, the ALJ concluded Samis was not a resident for the purpose of obtaining resident licensing privileges under Iowa Code chapter 483A.

D. District Court Review of Agency Action.

After the natural resource commission affirmed the decisions of the ALJs, Democko, Jones, and Samis filed a consolidated petition for judicial review in the district court. They claimed Iowa Code section 483A.24(1), which grants special hunting privileges to resident landowners, was unconstitutional either on its face or as applied to them. Democko, Jones, and Samis further challenged the ALJs' interpretations of Iowa Code section 483A.1A(10) as requiring their physical presence in Iowa for not less than ...

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