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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Lee v. State (08/11/2006) sp-6033
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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| DENNIS LEE d/b/a UNITED | ) |
| COMMUNITY SERVICES | ) Supreme Court No. S- 11396 |
| OF AMERICA, | ) |
| ) Superior Court No. 3AN-01-10170 CI | |
| Appellant, | ) |
| ) O P I N I O N | |
| v. | ) |
| ) No. 6033 - August 11, 2006 | |
| STATE OF ALASKA, | ) |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Morgan Christen, Judge.
Appearances: Dennis Lee, pro se,
Newfoundland, New Jersey. Cynthia C.
Drinkwater, Assistant Attorney General,
Anchorage, and David W. M rquez, Attorney
General, Juneau, for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
The State of Alaska filed a superior court complaint
against Dennis Lee alleging he violated Alaskas Unfair Trade
Practices and Consumer Protection Act by advertising
revolutionary technologies and a free electricity program. The
state also obtained a temporary restraining order enjoining Lee
from soliciting Alaskan consumers to buy his products or join his
discount buying club. Lee refused to participate meaningfully
in discovery, even after the superior court issued orders
compelling him to do so. In a thoughtful and well-reasoned
decision, the superior court imposed liability-establishing
discovery sanctions and civil penalties. We affirm.
II. FACTS AND PROCEEDINGS
On August 29, 2001 the State of Alaska filed a superior
court complaint against Dennis Lee doing business as United
Community Services of America (UCSA). The complaint alleged that
Lee, UCSA, and two associated corporate entities, Best World
Technologies and the International Tesla Electric Corporation
(ITEC), had engaged in and continued to engage in unfair or
deceptive acts or practices. It also alleged that the defendants
violated the Unfair Trade Practices and Consumer Protection Act
(UTPCPA)1 by falsely and deceptively advertising revolutionary
technologies and a free electricity program on the internet and
in the Anchorage Daily News.2 The ITEC website also announced
related opportunities to invest in NASDAC, a special discount
buying club, which, among other things, offered commissions to
members who became recruiters.
Lee was scheduled to conduct an August 30, 2001
Anchorage presentation at which he would demonstrate his
technologies and offer consumers an opportunity to sign up to
possibly get free electricity for life. Before the presentation
began, the state served Lee with its complaint and a temporary
restraining order (TRO) enjoining him from soliciting Alaskan
consumers to pay him for products, memberships, dealerships, or
other investments related to a free electricity program. The TRO
stated that Lee could still give the demonstration. Lee gave the
demonstration and distributed applications for membership and a
notice of right to cancel membership in the discount buying club.
As the states lawsuit against him proceeded, Lee
repeatedly thwarted the pretrial discovery process. The state
made numerous attempts by telephone and letter to obtain Lees
initial disclosures, but he never provided them. Lee responded
late to the states interrogatories and requests for production
and admission. Not satisfied with Lees responses, the state
moved to compel discovery and moved for attorneys fees. On
August 31, 2002 the superior court ordered Lee to answer some of
the states interrogatories and to produce specific documents in
response to the requests for production. He was to comply within
ten days. Lee filed a reconsideration motion, which the superior
court denied.
Lee did not provide the discovery the order required.
On November 1, 2002 the state filed a motion invoking Alaska
Civil Rule 37. The states motion asked for an order requiring
Lee to show cause why he should not be held in contempt for
failing to obey the courts discovery order. The state also
requested that, if Lee failed to respond to the courts order to
show cause, the facts alleged in the complaint be deemed
admitted. The superior court scheduled a show cause hearing and
warned Lee that if he did not appear at the hearing, the court
would consider accepting as established the factual allegations
in the states complaint. Lee did not attend the show cause
hearing. Following the hearing, the court issued an order on the
states motion. The order gave Lee one more week in which to
provide the ordered discovery responses. Lee did not provide the
responses. The court then issued a supplemental order granting
the states request that the facts alleged in the complaint be
deemed admitted.
In June 2003 the state moved for summary judgment. It
argued that there were no genuine issues of material fact because
the court had accepted all facts as alleged in the states
complaint. Lee responded. The superior court granted the states
motion, concluding that Lee had violated the UTPCPA.
The state then asked the superior court to impose civil
penalties against Lee. After a hearing on the issue, the court
issued a final judgment and order on the motion for civil
penalties. The court enjoined Lee from making unsubstantiated
claims about products offered for sale and from advertising or
soliciting for programs related to those products. The court
ordered Lee to refund payments for dealerships, memberships, or
products upon request by Alaska residents, and imposed civil
penalties of $30,000. The court also awarded costs and attorneys
fees to the state.
Lee appeals pro se.3
III. DISCUSSION
A. Standard of Review
We review discovery orders under the deferential abuse
of discretion standard.4 Reversal under this standard is
warranted only when, after reviewing the whole record, we are
left with a definite and firm conviction that the superior court
erred.5 But we apply our independent judgment in deciding the
legal question whether the superior court weighed the appropriate
factors in issuing a discovery order.6
A superior courts imposition of sanctions under Alaska
Rule of Civil Procedure 37(b) for a partys failure to comply with
a discovery order is also reviewed for abuse of discretion.7 But
we use our independent judgment to decide the legal issue whether
Civil Rule 37(b)(2) applies to a given fact situation.8 A
superior courts discretion to impose liability-establishing
sanctions is limited.9
Whether Lee violated the temporary restraining order is
a mixed question of law and fact. We review the superior courts
factual findings under the clearly erroneous standard.10 We
review questions of law de novo.11
B. The Superior Court Did Not Abuse Its Discretion when It
Granted the States Motion To Compel Discovery.
The superior court ordered Lee to answer some of the
states interrogatories and to produce some of the documents
requested. Lee argues that the court erred in compelling
discovery because (1) the state was pursuing irrelevant
information; (2) he tried to comply with the discovery requests;
(3) he requested a protective order; and (4) the discovery order
should have included specific findings of fact and conclusions of
law.
We find no merit in these contentions.
First, the superior court did not compel irrelevant
discovery. Lee argues that the courts relevancy determination
should have been based on the pleadings as filed. (Emphasis
omitted.) Alaska Rule of Civil Procedure 26(b)(1) provides:
Parties may obtain discovery regarding any
matter, not privileged which is relevant to
the subject matter involved in the pending
action . . . . The information sought need
not be admissible at the trial if the
information sought appears reasonably
calculated to lead to the discovery of
admissible evidence.
As we have previously explained, discovery rules are to be
broadly construed and relevance for purposes of discovery is
broader than for purposes of trial.12 Lee is therefore incorrect
in asserting that the superior court should have limited
discovery to information directly related to the pleadings. The
state requested information about Alaskan members in Lees
organizations and Alaskan consumers of Lees products, as well as
information about Lees companies technologies and employees. The
state also requested that Lee identify and produce certain
corporate documents. These requests related to Lees personal
jurisdiction defense and to the question whether Lee was
deceptively advertising. The superior court did not abuse its
discretion when it ordered Lee to respond to some of the states
discovery requests.
Second, Lee did not attempt to comply with the
discovery requests. Lee argues that he repeatedly offered to
demonstrate all products to [the state], in a private show, to
prove to [the state] that the products worked as claimed. The
civil rules do not allow for this kind of response to
interrogatories and requests for production.13 The state might
have chosen to withdraw some or all of its pending discovery
requests in exchange for accepting Lees demonstration offer, but
it was not obliged to do so. With regard to Alaska Civil Rule
26(a) disclosures, those initial disclosures are mandatory and a
private showing of Lees technology would not have supplied the
information the rule requires.14
Third, the superior court did not abuse its discretion
when it denied Lees request for a protective order after finding
that the request was improperly raised and untimely. Lee first
raised the issue of a protective order in his motion for
reconsideration after the court entered the order compelling
discovery. But a motion for reconsideration is not the proper
vehicle for seeking a protective order for the first time.15 And
issues raised for the first time in a motion for reconsideration
are untimely.16 Lee should have sought relief under Alaska Civil
Rule 26(c), but he did not do so before entry of the order
compelling discovery.17
Fourth, the superior court was not obligated to issue
findings of fact and conclusions of law in conjunction with its
orders compelling discovery and denying Lees motion to
reconsider. These orders were issued under authority of Civil
Rules 26 and 77. Civil Rule 52(a) states that [f]indings of fact
and conclusions of law are unnecessary on decisions of motions
under Rules 12 or 56 or any other motion except as provided in
Rule 41(b).18 Lee mistakenly reads our instruction in Coulson v.
Marsh & McLennan, Inc. that [t]rial courts should enter express
rulings on motions to compel discovery as a mandate to enter
findings of fact and conclusions of law.19 The superior court
here issued a written ruling on the states motion to compel
discovery and a written ruling on Lees motion for
reconsideration; it did not err by not issuing findings of fact
and conclusions of law in conjunction with those orders.
C. The Superior Court Did Not Err in Granting the States
Request for Civil Rule 37(b) Sanctions.
Eighteen months after the state filed its complaint,
the superior court granted the states motion for an order to show
cause why Lee should not be held in contempt.20 It decided that
the sanction of establishing facts that in turn establish
liability was warranted. The court found that Lees violations of
the courts orders were willful, that they prejudiced the state,
and that lesser sanctions would be ineffective at deterring
future violations. But in a final effort to give the parties an
opportunity to try the case on the merits, the court gave Lee one
additional week in which to provide discovery responses. The
court promised to enter an order deeming all allegations in the
states complaint admitted if no responses were filed. Lee did
not respond. In a supplemental order issued one week after its
original order on the states show cause motion, the superior
court granted the states request that the facts set forth in its
complaint be deemed admitted as a Rule 37(b) sanction.
Alaska Civil Rule 37(b) gives judges broad discretion
to enforce discovery orders through sanctions.21 Before imposing
Rule 37(b) sanctions, Rule 37(b)(3) requires the court to
consider:
(A) the nature of the violation, including
the willfulness of the conduct and the
materiality of the information that the party
failed to disclose;
(B) the prejudice to the opposing party;
(C) the relationship between the information
the party failed to disclose and the proposed
sanction;
(D) whether a lesser sanction would
adequately protect the opposing party and
deter other discovery violations;
(E) other factors deemed appropriate by the
court or required by law.[22]
Rule 37(b)(3) also prohibits the court from issuing an order that
has the effect of establishing or dismissing a claim or defense
or determining a central issue in the litigation without first
finding that the party acted willfully.23
The superior court followed the correct analysis in
applying the Rule 37(b)(3) factors. First, the court permissibly
found that Lees noncompliance was willful. We define willfulness
in the context of Civil Rule 37(b) as the conscious intent to
impede discovery, and not mere delay, inability or good faith
resistance.24 Lee argues that he was only seeking invocation of
the protections provided to him by law. But Lee repeatedly, in
papers filed in the court, at hearings through counsel in the
superior court, and here on appeal, has argued that the state has
no right to the discovery requested. As explained above in Part
III.B, Lee never properly moved for a protective order. Lees own
attorney admitted at the hearing on civil penalties that Lees
noncompliance was contemptuous and intentional.
Lee suggests that the superior court should have
informed him of his right to seek interlocutory review under
Appellate Rule 402 and that his failure to comply with the
discovery orders should be excused because he assumed that he
could not appeal the order compelling discovery. At the show
cause hearing, Lees corporate counsel argued that Lee wanted to
appeal the discovery order but had to wait until the court
entered a final judgment. Lees corporate counsel may have been
unfamiliar with interlocutory review in Alaska.25 But the
superior court had no duty to inform Lee a defendant represented
in the superior court by both local and corporate counsel that
he had a right to file a petition seeking interlocutory review.26
The courts job is to be a neutral arbiter, not an instructor.
Because Lee was trying to avoid discovery and because the court
had no obligation to inform him of the Alaska rules, the superior
court did not err when it found that Lees violation was a
knowing, willful refusal to comply with the order.27
Second, the superior court did not err in determining
that Lees violation prejudiced the state. As the superior court
found, Lees omissions delayed progress in the case and forced the
state to either depose Lee without the aid of written discovery
or conduct a trial without benefit of any meaningful discovery.28
Third, the superior court did not err in finding a
nexus between the withheld discovery and the proposed sanction.
A sanction under Rule 37(b)(2) must be sufficiently related to
the discovery violation.29 The test for the validity of a
discovery sanction that dismisses claims or orders facts or
issues to be taken as established under [Rule 37(b)(2)] is
whether these claims or issues are elements of the dispute that
cannot be determined on the merits without disclosure of the
evidence the court has ordered the party to produce.30 If the
issues established are not sufficiently related to the withheld
information, the discovery sanction is considered mere punishment
and is impermissible.31
All of the information withheld related to the question
whether Lee was making false claims or misrepresenting his
technologies. The states complaint alleged that Lee engaged in
false or deceptive advertising in the Anchorage Daily News and
internet advertisements. The state alleged that such conduct
constitutes unfair or deceptive acts or practices in violation of
AS 45.50.471(a) and AS 45.50.471(b)(12). Alaska Statute
45.50.471(a) declares that [u]nfair methods of competition and
unfair or deceptive acts or practices in the conduct of trade or
commerce are unlawful. Alaska Statute 45.50.471(b)(12) provides
that the terms unfair methods of competition and unfair or
deceptive acts or practices include
using or employing deception, fraud, false
pretense, false promise, misrepresentation,
or knowingly concealing, suppressing, or
omitting a material fact with intent that
others rely upon the concealment, suppression
or omission in connection with the sale or
advertisement of goods or services whether or
not a person has in fact been misled,
deceived or damaged.
The information withheld related to the question
whether Lee made false claims about his companies and products;
it also related to the question of penalties. As the state
explains, it had little information about Lee, his businesses,
his technologies, and his free electricity program. The state
could not take the chance that Lee, having failed to provide
adequate discovery responses, would attempt to demonstrate his
technologies and products at trial. We assume that the science
underlying the technologies and products Lee advertised is
sufficiently complex that, without pretrial discovery, the state
would have had inadequate time to examine and understand the
scientific principles pertinent to any demonstration, and
consequently might have been unable to dispute whether the
demonstration was valid or the principles were invalid.32 For
these reasons, the sanction imposed accepting the alleged facts
as admitted was sufficiently tailored to the discovery
violation.
Fourth, the superior court properly determined that
there were no viable alternative sanctions. A superior court may
not issue liability-establishing sanctions without first
exploring possible and meaningful alternatives to dismissal.33
Lee argues that no serious search for alternatives occurred. But
the superior court specifically considered imposing fees or
delaying trial, and found those sanctions inappropriate because
they would not deter future discovery violations or would
prejudice the state. The superior court had already given Lee
numerous opportunities to comply. And the court gave Lee another
week in which to comply before it issued the sanction. We think
the process the court followed is highly desirable because it
makes it clear on appellate review that no alternative lesser
sanctions were available or appropriate.
Finally, Lee argues that the superior court
inappropriately faulted Lee for not appearing at the show cause
hearing. But as the state points out, the superior court did not
find Lee culpable for missing the hearing. The court noted Lees
absence in one paragraph of its seven-page order, and in one
sentence of its supplemental order. It based its decision to
enter the liability-establishing sanction not on Lees
nonappearance, but on the evidence before it. The superior court
did not err or abuse its discretion in mentioning Lees absence
from the show cause hearing.
We think the superior courts rulings on the states
motion for sanctions contain a model analysis of the pertinent
factors and that its decision was appropriate in light of Lees
noncompliance.34
D. The Superior Court Did Not Err in Finding that Lee
Violated the TRO.
The superior court imposed civil penalties of $30,000
against Lee $25,000 for violating the TRO and $5,000 for
deceptive advertising.35 Lee argues that the superior court
erroneously accepted the states allegation that the pamphlets
handed out at the presentation were solicitations.
The TRO prohibited Lee from soliciting Alaskan
consumers to pay him money or anything of value for products,
memberships, dealerships or other investments relating to a plan,
scheme, or opportunity to provide free electricity. (Emphasis in
original.) The state presented unrebutted evidence that a state
trooper served Lee with the TRO before 4:00 p.m. on the day of
the presentation and that a civilian process server also served
him with the TRO at 6:52 p.m. The presentation started at 7:00
p.m. Lee admitted to distributing hand-outs before the
presentation. Those hand-outs included an Application for
Membership in the N.A.S.D.A.C. Program and a Notice of Right to
Cancel membership in NASDAC. The NASDAC membership application
stated that membership costs $15 and entitles members to
discounts on merchandise after the first $60 spent. It also
stated that members are automatically registered in a Free Energy
Program which entitles them to 26,000 kwh of free electricity
each and every year, possibly for the rest of [their lives], if
and when the free electricity technology is brought to market!
The superior court did not clearly err when it found
that Lee violated the TRO. The evidence presented to the
superior court shows that Lee distributed the handouts after
being served with the TRO. The handouts were solicitations.36 By
distributing the handouts, Lee was soliciting Alaskan consumers
he was seeking to obtain their business through the membership
applications.37
E. Lee Either Waived or Failed To Preserve His Other Arguments.
In his opening and reply briefs, Lee mentions other
tangential issues, including the use of hearsay evidence, the
late filing of the TRO violation, the states use of information
from other states attorneys general, the lack of a due date for
the initial disclosures, the use of rubber-stamp signatures, and
the amount of the penalty imposed. We decline to consider these
arguments because they either were not preserved below or have
been waived on appeal.38
IV. CONCLUSION
For these reasons, we AFFIRM the superior courts orders
and judgment. The superior court issued a model decision that we
AFFIRM here.
IN THE SUPERIOR COURT FOR THE STATE OF ALASKA
THIRD JUDICIAL DISTRICT AT ANCHORAGE
State of Alaska, )
)
Plaintiff, )
)
v. )
)
Dennis Lee d/b/a United Community )
Services of America, )
)
Defendant. )
) 3AN-01-10170 Civil
Order on Motion for Order to Show Cause
Why Defendant Should not be Held in Contempt
This is an action under the Unfair Trade Practices and
Consumer Protection Act, AS 45.50.471. It arises from an ad
placed in the Anchorage Daily News for a demonstration of
technology. The Complaint alleges that the ad claimed that
Defendants presentation would include proof that water can flow
up hill without using a pump, that one can burn pure water to cut
through thick steel and transmutate the nucleus of an atom to
neutralize radioactive waste. Complaint at page 2.
This Complaint was filed in August 2001. The file
demonstrates that Defendants delays have caused almost no
progress to be made since that time. The reasons for the delays
range from Defendants persistent filing of improper pleadings and
ignoring Alaska court rules to repeated requests for initial
disclosures and discovery responses being ignored by the
Defendant.1
On July 24, 2002, the State filed a Motion to Compel. I
granted the Motion by Order dated September 3, 2002. A Motion
for Reconsideration was filed by Defendant. I denied it on
September 20, 2002.
A Motion for Order to Show Cause was filed by the State on
November 1, 2002. The Motion alleges that the Defendant had not
filed supplemental discovery in response to my September 3rd or
September 20th Orders.
A hearing was held on March 12, 2003 on the motion for Order
to Show Cause. Ms. Drinkwater appeared at the hearing on behalf
of the State of Alaska. Ms. McMahon participated in the hearing
telephonically on behalf of the Defendant, having received
permission to participate in this matter pro hac vice. Local
Counsel, Ms. Sullivan, also appeared.
The issue at the hearing on the Motion for Order to Show
Cause was why Defendants should not be held in contempt for
failing to abide by the Order entered on the Motion to Compel.
Ms. McMahon addressed this issue at length, repeatedly explaining
that she and her client disagree with my ruling. Notably, she
made no argument that Defendant is unable to comply with my Order
on the Motion to Compel or lacked notice of it. Ms. McMahon
argued that her client is concerned that discovery provided in
this case might be shared with other attorneys general in other
parts of the country to the prejudice of her client.
Ms. McMahons strenuous argument left no doubt that her
client is willfully refusing to abide by court Orders. She
expressed the view that her client is not able to file an appeal
of my decision until a final judgment is offered, though no basis
for that opinion was offered. Defendant has local counsel to
provide advice regarding the provisions for challenging the
ruling without waiting for the entry of final judgment. See:
Appellate Rule 402.
I inquired several times at the hearing whether Defendant
had filed a Motion for Protective Order. Both the States counsel
and Ms. McMahon stated that no such Motion had been filed.2 In
fact, the Motion for Reconsideration raises that issue in passing
in its conclusion, at page 9 of the pleading. It was not
discussed at any length and was not properly raised in the
context of a Motion for Reconsideration. See: ARCP 77(k)
(setting forth grounds for motions for reconsideration).
Defendant had ample opportunity prior to my initial ruling to
raise this issue in response to the States Motion to Compel. The
Alaska Supreme Court has expressed quite clearly that issues
raised for the first time in Motions for Reconsideration are
untimely. See Denardo v. GCI Communications Corp., 983 P.2d
1288, 1290 (Alaska 1999).
I also inquired at March 12th oral argument regarding
whether there had been any attempt by the Defendant to file the
discovery in camera. Counsel responded that no such attempt had
been made.
Ms. McMahon argued that her client should be excused from
violating the Order on the Motion to Compel because she had been
ill for 3 months. The Courts file includes a letter from Mr. Lee
dated November 8, 2002 in which he advised that Ms. McMahon was
indeed ill, that she was expected to be out of work for an
additional four six weeks from that date and that her illness
had predated the filing of his November 8th letter by
approximately one month. The letter states that her illness left
the Defendant without counsel to prepare responses. Rather than
giving notice of an intention to appeal my ruling, or notice of
an intent to file a Motion for Protective Order or a Motion for
Incamera Inspection, Mr. Lees November 8th letter requested an
additional 45 days to comply with my Order. It is clear to me
after the March 12 hearing that no such compliance has been made.
Ms. McMahons illness does not explain the failure to comply with
the September 20th Order. Five months have lapsed since the
entry of the Order and, in spite of Ms. McMahons 3 month illness,
Defendant is represented by local counsel who could have assisted
in providing responses had Defendant made himself available.
There was no suggestion at oral argument that Mr. Lee had done
so.
The States Motion for Order to Show Cause was filed November
1, 2002. In the Order scheduling oral argument for February 21,
2003,3 I advised Mr. Lee that he must appear at the March 12,
2003 hearing or I would consider the States request that all
facts in the States Complaint be deemed admitted. The same order
gave Mr. Lee permission to appear at the hearing on the Motion
for Order to Show Cause telephonically. Mr. Lee did not appear
at the hearing, no explanation was offered for his absence, and
no testimony was taken to explain his failure to comply with the
subject Orders.
After considering all argument at the Motion for Order to
Show Cause, I am convinced by Ms. McMahons unambiguous statements
and representations that the Defendant remains entrenched in his
view that my original orders are in error and are not to be
followed.
ARCP 37 allows for broad discretion when fashioning
sanctions for violations of discovery orders. The States
requested sanction would effectively end this litigation. That
sort of sanction is to serve as a last resort. Per ARCP
37(b)(3), I must consider whether the violation of my Orders was
willful. Ms. McMahons argument leaves no doubt that it was. I
find that the violation was a knowing, willful refusal to abide
by the Order. I further find that the information that the
Defendant has failed to disclose is highly material to this
action. It consists of the initial discovery requests filed by
the State seeking very basic information concerning Defendants
business activities. Little progress can be made without
responses to the requests. Indeed, this case has been pending
since August of 2001 and almost no substantive progress has been
made. The prejudice resulting from Defendants delays is
significant and substantial, since Defendants omissions put the
State in the position of either deposing Mr. Lee without the
ability to review the written discovery first, or proceeding to
trial without having completed any meaningful discovery in this
case.4
As required by the rule, I have considered whether a lesser
sanction would adequately protect the State and whether it would
deter other discovery violations by Defendant. I do not find
that a lesser sanction is likely to protect the State, since
without the requested discovery the State will be unfairly placed
in the position of proceeding to trial with very little usable
discovery. A monetary sanction can compensate the State for its
attorneys fees, but not for the inability to prepare its case for
trial, and a delay in the trial date to allow another opportunity
to complete discovery prejudices the State, not the Defendant.
As noted, Ms. McMahons argument on record leaves me to conclude
that Mr. Lee has no intention of complying with future orders. I
find under the final factor in ARCP 37(b)(3) that there is
therefore little likelihood that other discovery violations by
Defendant will be deterred as a result of the Order I enter
today.
Because the Alaska Supreme Court has repeatedly ruled that
litigation-ending sanctions are to be avoided, as a final attempt
to put the parties in the position where this case can be fairly
tried on its merits, I order the State to file a Status Report,
directly in chambers, on March 21, 2003 regarding the status of
Defendants discovery responses. If no responses have been
received in the States offices by that date, I will enter an
order that all allegations contained in the States Complaint are
deemed admitted. I will also consider the States application for
an award of fees. The State is ordered to provide a fax number
to the Defendant by the close of business on March 14, 2003 so
that discovery responses may be served via fax. If faxed
responses are received by noon on March 21, 2003, the originals
may follow by mail.
The trial date currently scheduled for March 1, 2003 is
vacated. I will consider whether it is necessary to set a new
trial date when I receive the States Status Report on March 21,
2003.
DATED 3/14/03 /s/ Morgan Christen
Superior Court Judge
IN THE SUPERIOR COURT FOR THE STATE OF ALASKA
THIRD JUDICIAL DISTRICT AT ANCHORAGE
State of Alaska, )
)
Plaintiff, )
)
v. )
)
Dennis Lee d/b/a United Community )
Services of America, )
)
Defendant. )
) 3AN-01-10170 Civil
Supplemental Order on Motion for Order to Show Cause
Per the Order dated March 14, 2003, I have received and
considered the correspondence from the Defendant dated March 19,
2003, the correspondence from Defendant to the States attorney
dated March 18, 2003, the States responsive correspondence and
the States Status Report dated March 21, 2003.
For the reasons set forth in the Order dated March 14, 2003,
I now grant the States request that the facts set forth in its
Complaint be deemed admitted for purposes of this litigation.
Other sanctions for the Defendants refusal to comply with the
previous orders compelling discovery have been considered. None
are adequate. The Defendant did not appear at the hearing on the
Motion for Order to Show Cause. The Defendant has not served
even partial discovery responses in the wake of the most recent
order regarding the need to provide discovery responses by March
21, 2003. The Defendant did not serve objections or attempt to
identify the documents being withheld under claim of privilege.
No motion has been filed for a protective order. Merely sending
a letter demanding a protective order affording usual protections
is insufficient. Rather than attempting to comply with the most
recent Order, Defendant has demonstrated its continuing refusal
to abide by the order of the court.
DATED 3/26/03 /s/ Morgan Christen
Superior Court Judge
_______________________________
1 AS 45.50.471 et seq.
2 The advertisement appearing in the Anchorage Daily News
was entitled Prepare To Be Shocked By Technology The Government
And Big Business Do Not Want You To Know Exists! (Emphasis
omitted.) The advertisement stated that attendees at an
Anchorage presentation would witness with [their] own eyes
numerous things the experts say are impossible. The
advertisement included these statements:
$ We will prove water can flow up hill without using a pump.
Move a lake to a mountaintop.
$ You can burn pure water to cut through thick steel or even
use it as fuel for an internal combustion engine.
$ You can transmutate the nucleus of an atom to neutralize
radioactive waste. We will do it for our audience.
$ Use pickle juice, soda pop, water, sugar, crude oil or old
transmission gear oil, gas, soy sauce, even human urine, as fuel
to run an internal combustion engine with no contaminants
released to the environment.
$ Well demonstrate the worlds most efficient electric
generator ever built . . . The Sundance Generator.
$ Car engines can be modified to run on 80% water and 20% gas
right now! You can sign up to modify your car!
$ Buy a furnace that runs on fumes from your septic tank to
heat and cool your home and make all your hot water.
$ See the Tornado Engine that harnesses the awesome power of a
tornado to provide power for our generator.
The advertisement also stated that presentation attendees could
Sign Up To Possibly Get All Your Electricity For The Rest Of Your
Life Absolutely Free! (Emphasis omitted.) The internet page
advertising the Alaska presentation listed these and other
technologies that would be demonstrated at the presentation.
3 Lee was represented in the superior court by both
corporate and local counsel.
4 Coulson v. Marsh & McLennan, Inc., 973 P.2d 1142, 1146
(Alaska 1999).
5 Nelson-Lizardi v. Lizardi, 49 P.3d 236, 239 (Alaska
2002).
6 Coulson, 973 P.2d at 1146.
7 DeNardo v. ABC Inc. RVs Motorhomes, 51 P.3d 919, 922
(Alaska 2002).
8 McGilvary v. Hansen, 897 P.2d 605, 606 n.2 (Alaska
1995).
9 Id.
10 DeNardo, 51 P.3d at 992.
11 Webb v. State, Dept of Revenue, Child Support
Enforcement Div. ex rel. Webb, 120 P.3d 197, 198 (Alaska 2005).
12 Hazen v. Municipality of Anchorage, 718 P.2d 456, 461
(Alaska 1986); see also Carstens v. Carstens, 867 P.2d 805, 808-
09 (Alaska 1994) (holding that mental health and joint counseling
records of divorcing parties are relevant in divorce action
because they presumably contain information about parties conduct
toward each other).
13 See Alaska R. Civ. P. 33(b)(1) (Each interrogatory
shall be answered separately and fully in writing under oath,
unless it is objected to, in which event the objecting party
shall state the reasons for objection and shall answer to the
extent the interrogatory is not objectionable.); Alaska R. Civ.
P. 34(b) (The party upon whom the request is served shall serve a
written response within 30 days.).
14 See Alaska R. Civ. P. 26(a)(1).
15 See Alaska R. Civ. P. 77(k) (motion to reconsider used
to ask court to reconsider its previous decision when court
misapplied or failed to consider directly controlling law,
overlooked or misconceived material fact or issue, or when law
applied in ruling has since changed).
16 Stadnicky v. Southpark Terrace Homeowners Assn, 939
P.2d 403, 405 (Alaska 1997).
17 Alaska Rule of Civil Procedure 26(c) provides: Upon
motion by a party . . . the court . . . may make any order which
justice requires to protect a party . . . from annoyance,
embarrassment, oppression, or undue burden or expense.
18 Alaska R. Civ. P. 52(a) (emphasis added).
19 See Coulson v. Marsh & McLennan, Inc., 973 P.2d 1142,
1146 (Alaska 1999).
20 The states motion relied on Alaska Civil Rule
37(b)(2)(A) and (D). Civil Rule 37(b)(2) provides in part:
If a party . . . fails to obey an order to
provide or permit discovery . . . , the court
in which the action is pending may make such
orders in regard to the failure as are just,
and among others the following:
(A) An order that the matters regarding
which the order was made or any other
designated facts shall be taken to be
established for the purposes of the action in
accordance with the claim of the party
obtaining the order;
. . .
(D) In lieu of any of the foregoing
orders or in addition thereto, an order
treating as a contempt of court the failure
to obey any orders except an order to submit
to physical or mental examination . . . .
21 DeNardo v. ABC Inc. RVs Motorhomes, 51 P.3d 919, 922
(Alaska 2002); see also Alaska R. Civ. P. 37(b); Hawes Firearms
Co. v. Edwards, 634 P.2d 377, 378 (Alaska 1981) (quoting Oaks v.
Rojcewicz, 409 P.2d 839, 844 (Alaska 1966)).
22 Alaska R. Civ. P. 37(b)(3).
23 Alaska R. Civ. P. 37(b)(3); see DeNardo, 51 P.3d at 922-
23 (paraphrasing standard for imposing sanctions under Alaska R.
Civ. P. 37(b)(3)).
24 DeNardo, 51 P.3d at 923 (quoting Hawes Firearms, 634
P.2d at 378). The noncomplying party has the burden of proving
that his failure to comply was not willful. Id.
25 See Alaska R. App. P. 402.
26 See id.
27 See DeNardo, 51 P.3d at 923 (finding DeNardos
noncompliance willful, in part, because [r]ather than showing
that his failure to comply was not willful . . . DeNardo
repeatedly claimed that [the appellee] had no right to the
answers or documents).
28 See id. at 925 (noting that parties are entitled to
discovery of information relevant to their claims or defenses so
they can prepare for litigation).
29 McGilvary v. Hansen, 897 P.2d 605, 607 (Alaska 1995);
Underwriters at Lloyds London v. The Narrows, 846 P.2d 118, 119-
20 (Alaska 1993); Honda Motor Co. v. Salzman, 751 P.2d 489, 493
(Alaska 1988).
30 DeNardo, 51 P.3d at 926 (quoting Hazen v. Municipality
of Anchorage, 718 P.2d 456, 460 (Alaska 1986)) (internal
quotation marks omitted).
31 Honda Motor Co., 751 P.2d at 493 (internal quotation
marks omitted); see also DeNardo, 51 P.3d at 926.
32 For example, it is likely the state would have suffered
prejudicial surprise if, absent pretrial disclosure, Lee at trial
had demonstrated working examples of the Sundance Generator and
Tornado Engine that performed as advertised, or demonstrated the
use of water as fuel for an internal combustion engine.
33 Alaska R. Civ. P. 37(b)(3)(D); DeNardo, 51 P.3d at
926.
34 We attach the superior courts decision and supplemental
order as an appendix.
35 The superior court imposed penalties under AS
45.50.551(a) and (b).
36 Blacks Law Dictionary defines solicitation as (1) [t]he
act or an instance of requesting or seeking to obtain something;
(2) [a]n attempt to gain business. Blacks Law Dictionary 1427
(8th ed. 2004). Websters Dictionary defines solicit as [t]o try
to obtain by entreaty, persuasion, or formal application.
Websters II New Riverside University Dictionary 1106 (1994).
37 Whether the pamphlets are solicitations is a question
that was appropriately decided by the superior court judge.
Although Lee argues that a jury should have decided the question,
Lee requested an oral hearing, not a jury trial. He therefore
waived his right to a jury trial on the issue, see Alaska R. Civ.
P. 38(b)-(d), and the superior court did not make any obvious
mistake warranting a holding that it plainly erred. See Miller
v. Sears, 636 P.2d 1183, 1189 (Alaska 1981) (We decline to review
claims not raised below except to the extent that they may
constitute plain error. Plain error exists where an obvious
mistake has been made which creates a high likelihood that
injustice has resulted.).
38 See Alaska R. Evid. 103(a) (requiring timely objection
or motion to strike to preserve issue of erroneous evidentiary
ruling); Bird v. Starkey, 914 P.2d 1246, 1248 n.1 (Alaska 1996)
(holding hearsay objection waived when not raised before superior
court); see also Peterson v. Ek, 93 P.3d 458, 464 n.9 (noting
issues raised by pro se litigant in cursory fashion, without
citing any legal authority, are considered waived); Zok v. State,
903 P.2d 574, 576 n.2 (Alaska 1995) (holding pro se litigant
waived issue on appeal even though he developed issue in reply
brief); Miller, 636 P.2d at 1189 (deciding that issues not raised
below would not be considered on appeal unless they constitute
plain error).
1 On October 4, 2001, Defendant first requested an
extension of time to file an Answer because he was on a national
tour. Judge Joannides granted an extension until February 8,
2002. On February 11, 2002, the Court provided Defendants in-
house counsel with a copy of ARCP 81 regarding the admission of
counsel pro hac vice. Mr. Lee nevertheless filed Answers that he
signed himself, purporting to answer on behalf of a corporate
entity. Meanwhile, a Pretrial Scheduling Order was entered
requiring Initial Disclosures to be exchanged by May 14, 2002.
Defendant did not produce these, nor were the States initial
discovery requests answered. The State moved for the extension
of pretrial deadlines and filed its Motion to Compel on July 24,
2002. Defendants Opposition was late and offered no explanation
for the failure to provide Initial Disclosures, responses to
requests for admission or more than cursory responses to the
remaining discovery requests. The Motion to Compel was granted,
including the requirement that for withheld documents sufficient
information had to be provided in order for the State to
challenge any claims of privilege. A Motion for Reconsideration
was filed by Defendant, not signed by local counsel or counsel
for the Defendant, though this defect was later cured. The
Motion for Reconsideration argued the merits of the Motion to
Compel for the first time, but failed to specifically state the
grounds for reconsideration specified in ARCP 77(I). As noted,
the Motion for Reconsideration was denied by Order dated
September 20, 2002.
2 Within a few minutes after the hearing, my clerk
received a telephone call from Ms. Drinkwater and Ms. McMahon.
Both counsel asked to speak with me. It is not unusual for me to
discuss scheduling logistics with all counsel of record in
telephone calls, but I do not take up substantive matters off
record. I joined the call by asking who was on the line. I was
informed that Ms. Sullivan was not. I advised that she needed to
be involved. Ms. McMahon stated that she wanted me to know that
she had raised the issue of a protective order in the Motion for
Reconsideration filed in September. I advised that I was not
willing to have the call without Ms. Sullivan, as Ms. McMahon is
not local counsel and her statements at the earlier hearing had
caused me concern that she is not familiar with local rules. I
then terminated the call.
3 The hearing had to be rescheduled to March 12, 2003.
4 This case is set for trial the week of March 17, 2003.
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