You can
search the entire site.
or go to the recent opinions, or the chronological or subject indices.
Aloha Lumber Corporation v. University of Alaska (12/30/99) sp-5225
Aloha Lumber Corporation v. University of Alaska (12/30/99) sp-5225
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
ALOHA LUMBER CORPORATION, )
) Supreme Court No. S-8346
Appellant, )
) Superior Court No.
v. ) 3AN-96-1071 CI
)
UNIVERSITY OF ALASKA, BOARD ) O P I N I O N
OF REGENTS, STATEWIDE OFFICE )
OF LAND MANAGEMENT, and ) [No. 5225 - December 30, 1999]
WASSER & WINTERS COMPANY, )
)
Appellees. )
______________________________)
)
ALOHA LUMBER CORPORATION, ) Supreme Court No. S-8445
)
Appellant, ) Superior Court No.
) 3AN-96-1071 CI
v. )
)
UNIVERSITY OF ALASKA, BOARD )
OF REGENTS, STATEWIDE OFFICE )
OF LAND MANAGEMENT, WASSER & )
WINTERS COMPANY, and STATE )
OF ALASKA, )
)
Appellees. )
______________________________)
Appeals from the Superior Court of the State
of Alaska, Third Judicial District, Anchorage,
Peter A. Michalski, Judge.
Appearances: C.R. Kennelly, Stepovich,
Kennelly & Stepovich, P.C., Anchorage, Stephen P. Ryder, Stephen P.
Ryder, P.S., Seattle, Washington, and Michael E. Gossler,
Montgomery, Purdue, Blankinship & Austin, P.L.L.C., Seattle,
Washington, for Appellant. James D. Linxwiler, Michael S.
McLaughlin, and Barbara F. Fullmer, Guess & Rudd, Anchorage, for
Appellees the University of Alaska, the University of Alaska Board
of Regents, and the University of Alaska Statewide Office of Land
Management. Patrick B. Gilmore, Atkinson, Conway & Gagnon,
Anchorage, for Appellee Wasser & Winters Company. Brian
Bjorkquist, Assistant Attorney General, Anchorage, and Bruce M.
Botelho, Attorney General, Juneau, for Appellee the State of
Alaska.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
The University of Alaska rejected as non-responsive Aloha
Lumber Corporation's bid for university timber rights. Aloha
challenges the university's actions in two consolidated appeals.
Because Aloha did not provide requested information material to
evaluating its proposal, we hold in Case No. S-8346 that the
university reasonably rejected Aloha's proposal as non-responsive.
This conclusion moots Aloha's collateral attacks on the sale in
Case No. S-8346. In Case No. S-8445 we reject Aloha's breach of
trust claims on the merits and its antitrust claims for lack of
standing. And because the Unfair Trade Practices and Consumer
Protection Act does not apply here, we affirm the dismissal of
Aloha's claims under that Act in Case No. S-8445. Because the
superior court did not find that Aloha's claims were vexatious or
brought in bad faith in Case No. S-8346, we reverse the awards of
full attorney's fees against Aloha in that case and remand.
II. FACTS AND PROCEEDINGS
A. Facts
In December 1995 the University of Alaska State Office of
Land Management awarded a contract for Gulf Coast Timber Sale #1 to
Wasser & Winters Company (Wasser). The timber sale involved the
sale of university timber rights on Cape Yakataga. The timber
rights were part of the university land trust created by the
federal government for the university's exclusive use and benefit.
[Fn. 1] Because the sale area is very remote, has limited access
and infrastructure, and is subject to extensive environmental
controls, the university's land management office did not offer the
timber sale on a competitive bid basis. Instead it issued a
request for proposals (RFP) soliciting proposals from qualified
individuals or firms.
The RFP outlined the land management office's goals for
the timber sale: to maximize revenue, ensure appropriate harvesting
of the timber and future regeneration, and meet all legal and
regulatory commitments and obligations. To guarantee that the land
management office met these goals, the RFP stated that the land
management office sought to award the contract to an individual or
firm with:
proven experience harvesting timber in remote,
preferably Alaskan locations, involving difficult logistical
support and harsh climactic and marine conditions; a high level of
operational efficiency; the financial capability to properly and
timely complete the project; extensive experience marketing
domestic and export logs; and a commitment to environmentally sound
logging practices.
The RFP preserved the possibility of a negotiated sale,
in which the land management office would not be obligated to
accept the highest dollar offer but could award the contract to any
responsive and responsible proposer that offered satisfactory
compensation, so long as the proposal served the university's best
interests.
The RFP also notified potential proposers that it was
subject to a right of first refusal due to "previous contractual
obligations made by the University." In 1993 Wasser had purchased
the university's timber rights at White River in the Cape Yakataga
area. In connection with that purchase (the "White River sale"),
Wasser secured a right of first refusal through 1997 of all timber
rights the university might acquire at Cape Yakataga. Wasser's
right of first refusal encompassed the 1995 timber sale now in
dispute.
Four companies submitted proposals in response to the
timber sale RFP: Aloha; Silver Bay Logging, Inc.; Sealaska Timber
Corporation; and Rayonier, Inc. Because Aloha and Silver Bay made
the highest financial offers, the land management office carefully
scrutinized both proposals.
To enable the land management office to evaluate a
proposer's ability to meet the land management office's goals, the
RFP expressly required proposers to provide certain information
(i.e., "Information Which Must Be Contained in a Proposal"). It
also defined three specific categories for rating proposals:
"responsive,""non-responsive,"and "deficient."
The land management office also retained Clare Doig, a
professional forester with Forest and Land Management, Inc., to
independently review the two highest-valued proposals and to
determine responsiveness and responsibility. Doig concluded that
Aloha's proposal was "non-responsive"[Fn. 2] based on its failure
to provide (1) concrete operating and development plans, (2)
evidence that it had ever undertaken a similar project, and (3)
current financial information. Moreover, he noted that Aloha did
not own or control the facilities or equipment necessary to
complete the project and did not demonstrate that it had the
financial resources to meet the requirements of the RFP.
In contrast, Doig determined that Silver Bay's proposal
was responsive and concluded that Silver Bay had "a proven track
record of experience with similar projects, . . . the personnel,
organizational structure, equipment, and financial ability to
successfully complete [the] project." Doig recommended awarding
the contract to Silver Bay despite Aloha's significantly higher
financial offer.
Martin Epstein, the land management office director, and
Richard Rogers, a land management office staff member, evaluated
the proposals. Epstein and Rogers concurred with Doig's
conclusions regarding Aloha's proposal and rejected it as non-
responsive. They did not ask Aloha to supplement its proposal
because they believed that doing so would result in the university
essentially writing the operating plan on Aloha's behalf, an
opportunity not extended to other proposers. In their view, such
an opportunity would have given Aloha competitive advantage,
compromising the integrity of the RFP process.
In contrast, Epstein and Rogers determined that Silver
Bay's proposal was "deficient"in several minor respects. [Fn. 3]
At Rogers's solicitation, Silver Bay provided the missing
information. [Fn. 4] After evaluating the information, Epstein and
Rogers determined that Silver Bay's proposal was responsive.
The land management office then issued a notice of intent
to award the timber sale contract to Silver Bay, subject to
Wasser's right of first refusal. Shortly thereafter, Wasser
exercised its right of first refusal and entered into a contract
with the university for the timber rights to the timber sale.
B. Proceedings in S-8346
As permitted by the RFP, Aloha protested the contract
award, arguing that the land management office erred in rating
Aloha's proposal as non-responsive. The director of the land
management office upheld its determination.
Aloha appealed to the university's Chief Procurement
Officer, raising twenty-two issues. The appeal principally
questioned the propriety of the land management office's evaluation
of Aloha and Silver Bay's proposals, the propriety of denying Aloha
the opportunity to supplement its proposal while allowing Silver
Bay to supplement, and the validity of Wasser's right of first
refusal.
Both sides presented arguments and witnesses at a five-
day hearing, and submitted affidavits and deposition testimony.
The hearing officer found against Aloha on all issues and
recommended affirming the land management office's award of the
timber sale contract to Wasser. The university adopted the hearing
officer's recommended decision.
Aloha appealed to the superior court, which affirmed the
hearing officer's decision, finding it supported by the facts and
reasonably based in the law. The court held that the land
management office properly rejected Aloha's bid as non-responsive
because Aloha failed to meet the RFP's explicit requirement that
proposers provide detailed information concerning their timber
harvesting plans for the timber sale. The court refused to reach
the collateral issues Aloha raised because the court determined
that the land management office's valid rejection of Aloha's
proposal rendered them moot. Because the superior court found that
Aloha's claims on appeal were frivolous, it awarded the university
and Wasser full attorney's fees and costs in the amounts of
$185,643 and $20,076, respectively, under Alaska Appellate Rule
508. Aloha appeals these rulings.
C. Proceedings in Case No. S-8445
While Aloha's superior court administrative appeal was
pending, Aloha filed a separate complaint against the university,
the state, and Wasser collaterally attacking the timber sale.
Aloha accused the university and Wasser of violating state
antitrust laws and engaging in unfair competition. It also claimed
that the university and the state had breached their fiduciary
duties under the trust.
The university, the state, and Wasser moved to dismiss
Aloha's claims under Alaska Civil Rule 12(b)(6). The superior
court dismissed Aloha's claims on the same day it denied Aloha's
administrative appeal. It also found that Aloha's claims were
frivolous; citing Alaska Civil Rules 82(b)(2) and (b)(3), it
awarded the university and the state full attorney's fees and costs
of $53,074 and $37,466, respectively. Aloha appeals these rulings.
III. DISCUSSION
A. Case No. S-8346
1. The land management office had a reasonable basis
for rejecting Aloha's proposal for the timber sale.
In reviewing the merits of an administrative
determination, we give no deference to the decision of a superior
court acting as an intermediate court of appeal. [Fn. 5] Because
the university's decision to reject Aloha's proposal as non-
responsive is a contracting decision involving agency expertise, we
review its decision under the deferential "reasonable basis"
standard. [Fn. 6]
Aloha argues that the land management office arbitrarily
and capriciously rejected its proposal as non-responsive. In
support it cites Chris Berg, Inc. v. State, Department of
Transportation, [Fn. 7] in which we equated non-responsiveness with
a "material variance"from the terms of the bid. [Fn. 8] Aloha
maintains that its proposal is responsive under Chris Berg because
the alleged defects in its proposal did not materially vary the
terms of the RFP. Aloha notes that it was still bound by the RFP's
terms even if it failed to provide sufficient detail as to how it
intended to comply with those terms.
We reject Aloha's argument because Chris Berg involved a
competitive bidding process in which, under the circumstances of
that case, price was the only information essential to evaluating
the bid. We expressly noted that the responsibility of the bidder
was not at issue. [Fn. 9] That situation is not present here.
Price was not the only factor relevant to the timber
sale. The land management office director stated in an affidavit
that the information requested by the RFP was necessary to
"determine whether a proposer had the understanding, capability,
experience and willingness to properly harvest [the timber sale]
timber in a manner which would protect the University's long term
interests." For example, the timber sale RFP expressly required
that proposals detail the proposer's conceptual operating plan,
including at a minimum a description of the proposer's logging and
transportation methodology and equipment; an outline of the
proposer's methodology for meeting the applicable regulations; the
proposer's management and organizational plan; the proposer's
estimated time-line; and a description of the proposer's
methodology for controlling and suppressing fires.
Although Aloha did not submit this information with its
proposal, Silver Bay did. Aloha's failure made it impossible for
the land management office to compare Aloha's proposal with other
proposals. This is why proposals for public contracts must
substantially conform with all requirements contained in the RFP.
[Fn. 10]
Aloha claims that the level of detail the land management
office ultimately required of proposals for the timber sale did not
comport with Aloha's prior experience with the land management
office and with the advice and instructions the land management
office personnel gave to Aloha. Aloha therefore argues that the
land management office is estopped from applying a higher standard
to Aloha in evaluating Aloha's timber sale proposal. We disagree.
Aloha's experience in a prior RFP involving a different
timber sale is irrelevant to determining responsiveness under this
timber sale RFP. The timber sale RFP expressed the requirements
and criteria upon which proposals would be evaluated. It did not
refer to prior RFPs or imply that the university's prior practices
would control the timber sale.
Moreover, the parties contested the substance of Aloha's
conversations with the land management office personnel at the
administrative hearing. The hearing officer reviewed the evidence
and rejected Aloha's assertion that the conversations altered the
RFP requirements. The hearing officer concluded that a telephone
conversation may have occurred in which land management office
staff member Rogers, Aloha consultant Abrahamson, and Aloha
president Roderick discussed the subject of the RFP requirements.
But he found that
there was insufficient evidence, particularly
in view of inconsistent versions of the conversation as appear in
the Roderick affidavit, and his testimony at the hearing, and the
affidavit and deposition of Abrahamson, to establish by a
preponderance of the evidence that Mr. Rogers represented . . . to
Mr. Roderick . . . in any clear terms upon which he could
reasonably rely, that Aloha need not comply with any requirements
of the [timber sale] RFP, or modified those requirements in any
material respect.
On appeal, Aloha does not contest the hearing officer's
finding. The affidavits and deposition testimony that the hearing
officer relied on substantially support his conclusion. In light
of this factual finding, Aloha cannot argue that the land
management office orally modified or waived any requirements of the
timber sale RFP.
Aloha further argues that even if its proposal was non-
responsive, when the university elected to negotiate with Silver
Bay and to permit it to supplement its proposal, the rule of
equality in public contracting required the land management office
to afford Aloha the same opportunities.
The hearing officer concluded that the land management
office did not treat Aloha unfairly when it denied Aloha the right
to supplement its proposal. We agree. Agencies must treat all
proposers equally when determining whether bids are responsive,
deficient, or non-responsive. But the law does not require that a
proposer be permitted to supplement a non-responsive proposal
because the agency has permitted another proposer to supplement a
deficient proposal. [Fn. 11]
Aloha's proposal omitted substantive information
expressly requested by the RFP and essential to an evaluation under
the stated criteria. The land management office was consequently
not required to solicit the missing information from Aloha. As the
land management office concluded, such a solicitation likely would
have resulted in the land management office effectively writing
Aloha's proposal. The land management office designed the RFP to
ensure that the timber sale contract would be awarded to a proposer
capable of meeting the university's best interests. As we stated
in McBirney and Associates v. State, [Fn. 12] "[t]he requirement of
public bidding is for the benefit of property holders and
taxpayers, and not for the benefit of the bidders."[Fn. 13]
The RFP specified the standard for determining
responsiveness. Aloha did not meet the standard. We conclude that
the land management office did not err in rejecting Aloha's
proposal as non-responsive.
2. Aloha's other arguments do not establish grounds
for invalidating the timber sale.
Aloha argues that the university violated Aloha's right
to procedural due process because the hearing officer lacked
subpoena power. It asserts that "the absence of subpoena power
precluded effective preparation and presentation of the facts by
Aloha." But Aloha does not specify what evidence it was unable to
obtain as a result or how that evidence might have changed the
hearing officer's decision. Further, Aloha could have requested a
trial de novo in the superior court or, at the least, subpoenaed
witnesses and supplemented the record in the superior court. [Fn.
14] But Aloha made no such request.
The superior court, in reviewing the university's
procedures for handling bid protests in the timber sale, concluded
that those procedures "conform[ed] to our basic understanding of
due process as articulated in [Sisters of Providence v. State, 648
P.2d 970, 978 (Alaska 1982)]." We agree. As noted by the hearing
officer, "the parties were both given remarkably broad latitude in
examining and cross-examining witnesses, making arguments,
injecting comments and fully exploring every issue with every
witness that could possibly relate to the range of factual and
legal issues, under the most broadly construed view of those
issues." Aloha was not denied due process in the administrative
proceeding.
Aloha also argues that the land management office treated
it unfairly by making an assessment of Aloha's responsibility. The
land management office conducted a due diligence review of the
public record in Washington for deeds, records, filings, and
litigation involving Aloha and its principals. Aloha charges that
this investigation tainted the evaluation process. Because we
conclude that the land management office did not err in rejecting
Aloha's proposal as non-responsive, the "fairness"of any
investigation into Aloha's responsibility is irrelevant and moot.
Aloha contends that Wasser's right of first refusal
violated federal and state law and university regulations and
breached the trust. Aloha also alleges that the university lacked
jurisdiction to adjudicate its bid protest. Because we conclude
that the land management office did not err in rejecting Aloha's
proposal as non-responsive, these issues are moot and we decline to
reach them. [Fn. 15]
B. Case No. S-8445
We review de novo a superior court decision dismissing a
complaint under Alaska Civil Rule 12(b)(6), taking all factual
allegations in the complaint as true. [Fn. 16]
1. Aloha has standing to raise breach of trust claims
against the state.
Aloha asserts that the state breached its duties as
trustee by transferring the ownership and management of the trust
from the State of Alaska to the university through the 1983
Settlement Legislation. As a result, Aloha asks us to invalidate
the Settlement Legislation, void the transfer of lands to the
university, recover all assets improperly disposed of, and
reconstitute the trust. Presumably this would invalidate the
university's award of the timber sale contract to Wasser.
The university argues that Aloha does not have standing
to raise breach of trust claims against the state. We note that
Aloha is not a beneficiary of the trust, nor is it a student,
potential student, or a part of the university. Under traditional
notions of trust law, persons who are not trust beneficiaries but
who would nonetheless obtain an advantage from enforcing a
trustee's duty to a beneficiary, as would Aloha here, cannot
maintain an action to assert trust duties. [Fn. 17] But we agree
with Aloha's assertion that, as a citizen-taxpayer, it had standing
sufficient to assert the breach of trust claims. [Fn. 18] It is
difficult to imagine a person more likely to be an appropriate
party to raise the issues Aloha raises. And the issues themselves,
relating to disposition of state resources, are of substantial
general importance. Aloha has sufficient economic interest to
assure that it is not a sham plaintiff with no true adversity of
interest. [Fn. 19]
2. Did the university breach the trust by granting a
right of first refusal to Wasser?
Aloha claims that the right of first refusal was a breach
of trust because it conferred a special benefit on Wasser at the
expense of the beneficiary, the university. But Aloha does not
explain how the right of first refusal injured the university.
A trustee enjoys the discretion to make decisions
regarding the disposition of the trust corpus, provided that he or
she acts prudently. [Fn. 20] He or she is not obligated to accept
the highest offer, if there are advantages to accepting the offer
of another bidder. He or she cannot, however, direct benefits to
non-beneficiaries at the expense of the beneficiaries. [Fn. 21]
The university argues that the right of first refusal was
in the long-term financial interest of the trust. The hearing
officer agreed with the university, finding that "the record on
appeal, taken as a whole, does not support Aloha's contention, that
the University breached its trust obligations . . . particularly
since the right of first refusal did not preclude the University
from considering and accepting a proposal which would be to the
University's greatest advantage." Aloha provides no evidence
undermining this finding. Therefore, we reject Aloha's breach of
trust argument.
3. Did the university breach the trust by refusing to
negotiate with Aloha?
Aloha contends that the university breached its trust
duty to obtain the maximum economic gain possible because it failed
to negotiate with Aloha, the highest bidder.
The university argues that because of the unique nature
of the timber sale, there were advantages to considering factors
other than the amount of the financial offer. "A high dollar
figure could not overcome operating difficulties in remote,
mountainous terrain, could not make an otherwise inexperienced
operator into a suitable operator, and could not ensure compliance
with the strict environmental and other land and water
protections."
The hearing officer rejected Aloha's claim. We are not
persuaded that he erred in doing so. As we note above, a trustee
has discretion to make decisions regarding the disposition of the
trust corpus. [Fn. 22] Aloha does not contend that the university
awarded the timber sale contract for less than fair market value.
The university's arguments for considering criteria other than the
financial offer to protect the university's best interests are
persuasive given the unique circumstances surrounding this timber
harvest. Therefore, we conclude that the trust did not require the
land management office to negotiate with the highest bidder.
4. Aloha does not have standing to maintain a suit
against the university or Wasser for violations of Alaska's
antitrust laws.
Alaska's antitrust laws forbid contracts, conspiracies,
monopolies, or combinations in restraint of trade. [Fn. 23] Aloha
alleges that the university and Wasser violated these laws by
fixing the prices of the White River sale and the timber sale,
monopolizing the facilities at Cape Yakataga so as to prevent
others from competing for timber rights in that area, unreasonably
restraining trade and refusing to deal with competitors by agreeing
to a right of first refusal on future timber sales, and colluding
to treat proposers in the timber sale unfairly.
The superior court dismissed Aloha's antitrust claims
against the university because it determined that the university is
an entity of the state and therefore is not a "person"to which
Alaska's antitrust statutes apply. The liability of the state
under its antitrust laws is a question of first impression in this
court. It is not answered -- directly or indirectly -- by the
antitrust statutes themselves, [Fn. 24] nor is the legislative
history conclusive. [Fn. 25] But we need not resolve this question
here because Aloha lacks standing to raise antitrust claims against
the university and Wasser.
A private litigant seeking damages for violation of the
antitrust laws must establish that it has standing to bring suit.
[Fn. 26] To establish standing, a plaintiff must allege an injury
that is causally related to the antitrust violation and that the
injury is of the type the antitrust statutes were intended to
prevent. [Fn. 27]
In this case, Aloha does not show that the university's
or Wasser's allegedly anti-competitive conduct caused damage to
Aloha. Aloha's damage claims, and consequently its standing, are
contingent upon a finding that "but for"the defendants' allegedly
anti-competitive conduct it would have received the timber sale
contract. But, given our disposition in Case No. S-8346, we cannot
make such a finding. Aloha's failure to submit a responsive
proposal, not the defendants' allegedly anti-competitive conduct,
prevented Aloha from receiving the timber sale contract.
Aloha does not directly allege that the antitrust
violations allegedly committed by the university or Wasser caused
Aloha to submit a non-responsive proposal. At best, the complaint
indicts the evaluation process as a "sham"and suggests that the
university unfairly rejected Aloha's proposal. The hearing officer
addressed identical allegations by Aloha in Aloha's administrative
challenge to the timber sale award. The hearing officer found that
the university treated Aloha fairly throughout the evaluation
process. He dismissed Aloha's charges that the evaluation process
had been "tainted"by Clare Doig's independent investigation into
Aloha's responsibility. He also agreed with the land management
office's conclusion that Aloha's proposal was non-responsive. As
did the superior court, we upheld the hearing officer's findings of
fact and conclusions of law on the responsiveness issue in Case No.
S-8346. [Fn. 28]
Aloha cannot now relitigate the responsiveness of its
proposal. The determinations of administrative adjudications are
given preclusive effect in later court proceedings. [Fn. 29]
Collateral estoppel bars relitigation of an issue between two
parties when the identical issue was resolved by a final judgment
in a prior proceeding involving the same parties or a party in
privity with a party to the first action. [Fn. 30] All three
elements of collateral estoppel are present. The hearing officer
concluded that Aloha's proposal was non-responsive, thus
determining the identical issue which Aloha would have to
relitigate in this case to establish standing. His conclusion
regarding Aloha's responsiveness was essential to his final
judgment. Although the administrative adjudication involved Aloha
and the university, the benefits of collateral estoppel extend to
Wasser because Wasser is in privity with the university as to this
issue.
Our general conclusion that the hearing officer's
findings should carry preclusive effect does not end the inquiry.
"The preclusive use of prior administrative findings must always be
fair. Fairness at a minimum requires that the administrative
procedure entailed 'the essential elements of adjudication.'"[Fn.
31]
Aloha argues that the administrative procedure was
fundamentally unfair because it denied Aloha the right to engage in
third-party discovery and to subpoena witnesses. We addressed an
identical challenge by Aloha to the administrative procedure in
Case No. S-8346 and held that the administrative procedure did not
deny Aloha due process. [Fn. 32] We therefore conclude that it is
fair to use the hearing officer's findings to preclude relitigation
of Aloha's responsiveness.
Because Aloha lacks standing to raise antitrust claims
against the university and Wasser, we affirm the superior court's
decision to dismiss those claims. [Fn. 33]
5. The Unfair Trade Practices and Consumer Protection
Act does not apply to the timber sale.
Aloha alleges that the 1993 White River sale and the 1995
timber sale were unfair and anti-competitive acts that violated
Alaska's Unfair Trade Practices and Consumer Protection Act (Act).
[Fn. 34] The superior court dismissed Aloha's claim, holding that
because standing timber is not a "consumer good,"but real
property, the timber sales at issue are beyond the scope of the
Act.
We agree. In State v. First National Bank of Anchorage,
[Fn. 35] we stated that "the entire thrust of [the Act] is directed
at regulating practices relating to transactions involving consumer
goods and services."[Fn. 36] Based on the pleadings before the
court, we conclude that the standing timber involved in the White
River sale and the timber sale is not a "consumer"good.
Aloha's complaint describes the White River sale as
comprising "the largest of the trust's timber cutting rights in the
Yakataga Area, covering 3,411 acres and consisting of approximately
94 million board feet of timber." It describes the timber sale as
having "a total minimum value of approximately $15 million." From
these descriptions we conclude that the disputed transaction cannot
be viewed as involving "consumer goods." Consumer goods are
generally understood to mean goods "used or bought for use
primarily for personal, family, or household purposes."[Fn. 37]
Aloha appears to concede tacitly that the trees are not
consumer goods; in its briefing, Aloha does not dispute the
superior court's characterization of the trees as real property.
Instead, Aloha argues that the Act is divisible into two
independent sections, the first addressing anti-competitive
practices ("unfair methods of competition"), and the second
addressing deceptive consumer practices. According to Aloha, only
this latter section is restricted to consumers, while the former is
essentially an antitrust provision enforceable against anyone.
Aloha's argument is unpersuasive. We do not read the Act
to be divisible into two separate parts, and cannot discern a
justification for doing so. But if the anti-competitive part of
the Act could be read to be a generally applicable, antitrust
statute, Aloha would need antitrust standing to complain. For
reasons discussed above in Part III.B.4, Aloha lacks that standing.
We therefore affirm the superior court's dismissal of
Aloha's claims under the Unfair Trade Practices and Consumer
Protection Act.
C. Attorney's Fees and Costs
Aloha argues that the superior court erred in awarding
the appellees full attorney's fees in both cases. We review an
award of attorney's fees and costs for an abuse of discretion. [Fn.
38]
Alaska Civil Rule 82 and Alaska Appellate Rule 508 govern
the fee award in Case No. S-8346, because Aloha's superior court
complaint in that case was eventually treated as an administrative
appeal. Alaska Civil Rule 82 governs the fee award in Case No. S-
8445, because the superior court there had original jurisdiction.
Although both rules permit awards of full attorney's fees, [Fn. 39]
we have held that an award of substantially "full attorney's fees
is manifestly unreasonable in the absence of bad faith or vexatious
conduct by the non-prevailing party."[Fn. 40] The superior court
found that Aloha's claims were frivolous in both cases. But
although it also expressly found that Aloha litigated in bad faith
in Case No. S-8445, the superior court made no such finding when it
awarded full fees in Aloha's administrative appeal. In the latter
case, it found that Aloha had brought its claims "simply for
purposes of delay."
The superior court made the findings needed for awarding
full fees in Case No. S-8445, and the record in that case contains
evidence supporting those findings. We see no abuse of discretion
and therefore affirm the award of full fees in that case.
The failure to find bad faith in Case No. S-8346 requires
that the award of full attorney's fees in that case be reversed.
But the record in Case No. S-8346 would not preclude a finding that
Aloha litigated vexatiously or in bad faith. We therefore do not
foreclose the superior court in that case from reconsidering the
request for full fees on remand.
In Case No. S-8346 Aloha also argues that no costs or
fees should have been awarded to Wasser for its participation in
the administrative proceeding. [Fn. 41] But Aloha commenced this
superior court proceeding by filing a verified complaint seeking
injunctive and declaratory relief; the complaint named Wasser as an
indispensable party. The superior court remanded to the university
to complete the administrative review process. The case later
proceeded as an administrative appeal.
Wasser's argument that Aloha's lawsuit forced Wasser to
incur substantial fees to monitor the administrative proceeding and
Aloha's ancillary litigation forays is persuasive. Aloha chose to
interject extraordinary complexity into what should have been a
relatively simple administrative appeal. Its choice arguably
caused Wasser to incur substantial expense. We have previously
approved an award of fees under Appellate Rule 508 in a case in
which some of the fees were incurred before the party intervened in
the administrative appeal. [Fn. 42] In this case the superior
court had discretion to award Wasser fees for services in addition
to those provided exclusively in the superior court, but only if
they closely related to and were made necessary by the superior
court proceeding.
It appears that the superior court knowingly exercised
its discretion in awarding fees to Wasser. The court initially
denied Wasser's fees motion because its motion was factually
unsupported; the court then allowed Wasser to itemize its fees. In
doing so, the court noted that it required the itemization so that
it could determine "that the fees incurred relate to the action
before the court and not some other proceeding." Given this
language, we conclude that the superior court, in granting Wasser's
motion, must have determined that Wasser's fees related to the
superior court proceeding. We find no abuse of discretion in this
regard.
Because the absence of a finding of bad faith or
vexatious conduct in Case No. S-8346 requires reversal and remand
of the awards of full fees, the superior court on remand will have
to revisit Wasser's request for full fees.
IV. CONCLUSION
In Case No. S-8346, we AFFIRM the superior court's
dispositive rulings, but VACATE the awards of full attorney's fees
and REMAND for further consideration of the fees issue. In Case
No. S-8445, we AFFIRM as to all issues.
FOOTNOTES
Footnote 1:
See State v. University of Alaska, 624 P.2d 807, 810-13
(Alaska 1981) (detailing history of university land trust).
Footnote 2:
The RFP defined "non-responsive"as: " Any proposal which
modifies or fails to conform in any material respect to an
essential requirement of the RFP. A non-responsive rating at any
stage of the evaluation will eliminate a proposal from further
consideration."
Footnote 3:
The RFP defined "deficient"as:
Any proposal which fails to supply all
information necessary to make a determination as to whether the
proposal is responsive or non-responsive but which appears
reasonably likely to become responsive with additional information
clarifying the proposal and/or a proposal which is not non-
responsive and, with minor modifications, would be acceptable to
the University.
Footnote 4:
Silver Bay's proposal was deficient because it had not
verified the receipt of the three amendments to the RFP, it had not
included an equipment list in its proposal, and it had not
identified its proposed marketer.
Footnote 5:
See Handley v. State, Dep't of Revenue, 838 P.2d 1231, 1233
(Alaska 1992).
Footnote 6:
Id.; see also Chris Berg, Inc. v. State, Dep't of Transp., 680
P.2d 93, 94 (Alaska 1984).
Footnote 7:
680 P.2d 93 (Alaska 1984).
Footnote 8:
Id. at 94.
Footnote 9:
See id. at 94 n.5.
Footnote 10:
See King v. Alaska State Hous. Auth., 512 P.2d 887, 892
(Alaska 1973).
Footnote 11:
See, e.g., Parcel 49C Ltd. Partnership v. United States, 31
F.3d 1147, 1151 (Fed. Cir. 1994) (requiring government to "consider
fairly and honestly all responsive bids"); cf. Alaska Movers Ass'n
v. Brown, 445 F. Supp. 363, 364 (D.D.C. 1987) (granting all parties
equal opportunity to seek government contracts, but not requiring
that government permit non-responsive proposers to supplement their
proposals).
Footnote 12:
753 P.2d 1132 (Alaska 1988).
Footnote 13:
Id. at 1136 (quoting Gostovich v. City of West Richland, 452
P.2d 737, 740 (Wash. 1969)).
Footnote 14:
See Alaska R. App. P. 609(b) (granting superior court
discretion to hold trial de novo in whole or in part in appeal from
administrative agency). See also State v. Lundgren Pac. Constr.
Co., 603 P.2d 889, 895 (Alaska 1979) (holding that right to trial
de novo in superior court is created if administrative adjudicative
procedure does not afford due process).
Footnote 15:
We may consider whether or not an issue is moot even if the
parties do not argue mootness. See City of Valdez v. Gavora, Inc.,
692 P.2d 959, 960 n.2 (Alaska 1984); Johansen v. State, 491 P.2d
759, 761 (Alaska 1971).
Footnote 16:
See Kollodge v. State, 757 P.2d 1024, 1025-26 (Alaska 1988).
Footnote 17:
See Restatement (Second) of Trusts sec. 200 cmt. c, at 440
(1959); see also 3 Austin W. Scott & William F. Fratcher, Scott on
Trusts sec. 200 (4th ed. 1988); Sergeson v. Delaware Trust Co., 413
A.2d 880, 882 (Del. 1980) (denying standing to enforce trust to
persons who were not beneficiaries of private trust and merely
sought to purchase corporate stock from trust); Thompson Coal Co.
v. Pike Coal Co., 412 A.2d 466, 469 (Pa. 1979) (adopting rule in
Restatement (Second) Trusts sec. 200).
Footnote 18:
See Baxley v. State, 958 P.2d 422, 428 (Alaska 1998) (holding
citizen-taxpayer had standing where case was of public significance
and plaintiff was "'appropriate' party to bring the case").
Footnote 19:
See id.
Footnote 20:
See Restatement (Second) of Trusts sec. 187 (1959); Baxley,
958
P.2d at 434. We have held that the law of private trusts applies
to the University land trust at issue here. In State v. University
of Alaska, 624 P.2d 807, 813 (Alaska 1981), we stated that "private
trust law principles are to apply to federal land granted to the
states for school purposes." Cf. State v. Weiss, 706 P.2d 681, 683
n.3 (Alaska 1985) (applying common law principles of private trust
law to public trust created by federal grants of land to State of
Alaska in trust for benefit of mentally ill).
Footnote 21:
See County of Skamania v. State, 685 P.2d 576, 580 (Wash.
1984).
Footnote 22:
See supra Part III.B.2.
Footnote 23:
See AS 45.50.562-.596.
Footnote 24:
See id.
Footnote 25:
See, e.g., 1975 Senate Journal 598-99; House Judiciary Comm.
(Feb. 19, 21, 27, Mar. 28, Apr. 19, 1975); Senate Judiciary Comm.
(Mar. 21, 25, 1975).
Footnote 26:
See KOS v. Alyeska Pipeline Serv. Co., 676 P.2d 1069, 1073
(Alaska 1983).
Footnote 27:
See id. at 1073-74.
Footnote 28:
See supra Part III.A.
Footnote 29:
See Calhoun v. State, Dep't of Transp. & Pub. Facilities, 857
P.2d 1191, 1195-96 (Alaska 1993); Colville Envtl. Servs., Inc. v.
North Slope Borough, 831 P.2d 341, 345 n.4 (Alaska 1992); Jeffries
v. Glacier State Tel. Co., 604 P.2d 4, 8 (Alaska 1979). See also
Restatement (Second) of Judgments sec. 83 (1982).
Footnote 30:
See McGee v. McGee, 974 P.2d 983, 993-94 (Alaska 1999); State
v. United Cook Inlet Drift Ass'n, 895 P.2d 947, 950-51 (Alaska
1995).
Footnote 31:
Johnson v. Alaska Dep't of Fish & Game, 836 P.2d 896, 908
(Alaska 1991) (quoting Restatement (Second) of Judgments sec. 83(2)
(1982)).
Footnote 32:
See supra Part III.A.2.
Footnote 33:
The hearing officer also dismissed Aloha's attacks on Wasser's
right of first refusal. Collateral estoppel does not preclude
relitigation of the validity of the right of first refusal because
the issue presented here is not identical to the issue presented to
the hearing officer. The hearing officer evaluated the validity of
the right of first refusal under university regulations, Alaska
statutes, and the terms of the trust. The issue in this case is
whether the right of first refusal is anti-competitive and,
therefore, invalid under antitrust statutes. See Borough of
Ellwood City v. Pennsylvania Power Co., 570 F. Supp. 553, 559 (W.D.
Pa. 1983) (allowing relitigation of agency determination that
defendant had not imposed anti-competitive price squeeze upon
plaintiffs because agency only considered defendant's actions under
Federal Power Act, not Sherman Act).
Footnote 34:
See AS 45.50.471 - .561.
Footnote 35:
660 P.2d 406 (Alaska 1982).
Footnote 36:
Id. at 412.
Footnote 37:
AS 45.09.109.
Footnote 38:
See Messerli v. Department of Natural Resources, 768 P.2d
1112, 1122 (Alaska 1989), abrogated on other grounds by Olson v.
State, Dep't of Natural Resources, 799 P.2d 289, 292 (Alaska 1990).
Footnote 39:
See Alaska R. Civ. P. 82(b)(3); Alaska R. App. P. 508(e).
Footnote 40:
Marathon Oil Co. v. ARCO Alaska, Inc., 972 P.2d 595, 604
(Alaska 1999) (quoting Alaska R. Civ. P. 82, note to Supreme Court
Order 1118am).
Footnote 41:
Aloha cites McMillan v. Anchorage Community Hosp., 646 P.2d
857, 867 (Alaska 1982). See also Stepanov v. Homer Elec. Ass'n,
Inc., 814 P.2d 731, 737 (Alaska 1991) (holding that Rule 508 fees
award should not include fees incurred in prior administrative
proceeding).
Footnote 42:
See Cook Inlet Pipeline Co. v. Alaska Pub. Util. Comm'n, 836
P.2d 343, 354 (Alaska 1992) ("While these fees were not 'incurred
in court' they were related to the appeal.").
