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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Pyramid Printing Company v. Alaska State Commission for Human Rights (03/16/2007) sp-6112
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
| PYRAMID PRINTING COMPANY, | ) |
| ) Supreme Court No. S- 12046 | |
| Appellant, | ) |
| ) Superior Court No. | |
| v. | ) 3AN-03-12897 CI |
| ) | |
| ALASKA STATE COMMISSION | ) O P I N I O N |
| FOR HUMAN RIGHTS, PAULA M. | ) |
| HALEY, Executive Director, ex rel. | ) No. 6112 - March 16, 2007 |
| DEBRA A. TIERNAN, | ) |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Dan A. Hensley, Judge.
Appearances: Sean Halloran, Hartig Rhodes
Hoge & Lekishch, P.C., Anchorage, for
Appellant. William E. Milks, Assistant
Attorney General, and David W. M rquez,
Attorney General, Juneau, for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
CARPENETI, Justice.
I. INTRODUCTION
This is an appeal from the award and order in a sexual
harassment case decided by the Alaska State Commission for Human
Rights. The employer appeals the commissions decision, arguing
that the award should be reduced since the employee should have
mitigated her damages by accepting the employers offer of re-
employment, the commission should not have included vacation pay
in the employees backpay award, and the commission applied the
incorrect interest rate on the award. The employer also appeals
from the commissions order that the corporations owners undergo
sexual harassment training. We affirm the commissions award of
backpay and vacation pay, as well as its order for sexual
harassment training. However, because we believe the commission
applied the incorrect interest rate to the award, we vacate that
portion of the order and remand to the commission to recalculate
the award amount using a reasonable rate of interest.
II. FACTS AND PROCEEDINGS
Debra Tiernan worked for Pyramid Printing Company, an
Anchorage corporation, from September 1995 to December 1998. At
the time Tiernan worked there, Don and Francine Pintar each owned
fifty percent of the stock of the corporation. Don, who was
president of the corporation at the time, spent a couple of days
each week there paying bills, filing invoices, and conducting
other administrative tasks. Francine, who was ill, did not take
an active role in the business at the time Tiernan worked for
Pyramid, although she advised Don on business decisions. The
Pintars son Kirk worked as Pyramids general manager and was
Tiernans direct supervisor. Pyramid is a small business with
limited facilities and fewer than ten employees. Tiernan was the
only female employee during her tenure there.
It is undisputed that on several occasions during
Tiernans three years at Pyramid, Kirk touched her in an unwelcome
and inappropriate manner, called her at home outside of working
hours on subjects unrelated to her employment, suggested that
Tiernan have a sexual relationship with him, and acted in a
jealous and violent manner (such as throwing coffee cups against
walls, breaking a door off its hinges, and overturning a table).
After a particularly difficult episode in December 1998, Tiernan
quit her job. Shortly afterwards, she filed a claim with the
Alaska Department of Labor, listing sexual harassment as her
reason for leaving. When Don learned of the sexual harassment
allegation, he called Tiernan, asked her what he could do to fix
the situation, and offered to pay her unemployment benefits.
Tiernan declined Dons offer and refused to discuss the case with
him.
The Department of Labor held two days of hearings, the
first in January 1999, and the second in February 1999. Soon
after the first day of hearings, the Pintars, on behalf of
Pyramid, sent Tiernan a letter inviting her to return to her job.
The letter, dated February 5, 1999, stated in part:
If she wishes, Ms. Tiernan is welcome to
return to her job at the same wage she was
receiving when she quit. If she elects to
accept this offer and return to her job,
Pyramid will ensure that she will no longer
have to report directly to her former
supervisor. She will not have to work alone
with him, and work related contact with him
will be minimized to the extent feasible. In
keeping with Pyramids long standing policy of
providing the best possible working
environment to its employees, Pyramid will
work to ensure that Ms. Tiernan is not
subjected to harassment or discrimination on
the job.
Tiernan rejected the offer of re-employment. As her
attorney explained in a letter of response:
Ms. Tiernan rejected the offer to return to
work at Pyramid Printing because: (1) it was
not a practical remedy to the problem, i.e.,
she would still be working in a small shop
run by Kirk Pintar; (2) Kirk Pintar is
violent and sexually obsessed with Ms.
Tiernan; (3) Ms. Tiernan would be under
constant stress and in constant apprehension
of additional violent outbursts and sexual
harassment by Kirk Pintar; (4) Ms. Tiernan
has experienced a dramatic improvement in her
emotional well being since leaving Pyramid;
(5) it would be untenable for Ms. Tiernan to
work at Pyramid while she seeks monetary
compensation for her damages from the
Pintars; and (6) she does not believe the
offer was made in good faith.
The Department of Labor denied Tiernans benefits claim,
finding that she voluntarily left the job without good cause.
The department stated that, although Tiernan was subject to
inappropriate behavior by her supervisor, she failed to properly
bring her grievance to the attention of her employer.
Upon receiving the departments final decision, Tiernan
submitted a claim to the Human Rights Commission. The commission
conducted five days of hearings in August 2002, and it concluded
that Kirk had subjected Tiernan to sexual harassment sufficiently
severe to create a hostile work environment, that the harassment
was both objectively and subjectively objectionable, and that
Tiernan was justified in quitting her job.
Upon establishing liability, the commission awarded
Tiernan damages for lost wages, including back pay, vacation pay,
and yearly bonuses; the award totaled $50,972. Contrary to
Pyramids argument, the commission determined that Tiernan
reasonably rejected the written offer of re-employment. The
commission found that Pyramids offer had been made conditionally,
based on Francines testimony that Tiernan needed to clean up her
act. The commission alternatively concluded that, even if the
offer was unconditional, Tiernan acted reasonably in refusing it
because she risked continued harassment: [Tiernan] had reason to
believe that she would be subjected to the same conditions that
were present which caused her to leave. The commission also
noted that Tiernan sought to mitigate her damages by seeking a
new job after leaving Pyramid and by starting her own label
company.
The commission awarded Tiernan pre- and post-judgment
interest at the statutory rate of 10.5%. Finally, the commission
ordered Pyramid to adopt written policies on discrimination in
the workplace and to provide annual training to its employees,
managers, and owners in the areas of sexual harassment, sex
discrimination, and the Alaska Human Rights Act.
Pyramid appealed the decision to the superior court.
Superior Court Judge Dan A. Hensley affirmed the commissions
decision. Pyramid appeals.
III. STANDARD OF REVIEW
When the superior court acts as an intermediate court
of appeal from an agency decision we review the agency decision
directly.1 Whether or not an employees refusal to accept a job
offer is reasonable is generally a question of fact.2 A
determination of fact by the Human Rights Commission will stand
if it is supported by substantial evidence.3 Whether an agency
has complied with statutory requirements is a question of law.4
We apply the reasonable basis standard of review to questions of
law involving agency expertise, and the substitution of judgment
standard to questions outside the agencys expertise.5
IV. DISCUSSION
A. The Commission Did Not Err in Awarding Tiernan Lost Wages
After She Refused Pyramids Re-Employment Offer.
According to Pyramid, [t]here are no facts that support
the Commissions finding [that Tiernans rejection of the re-
employment offer was reasonable], and Ms. Tiernan is not entitled
to receive any damages for the period from February 12, 1999
forward. Pyramid argues that its letter of February 5, 1999
contained an unconditional and reasonable offer of re-employment
to Tiernan which she should have accepted in order to mitigate
her damages. We hold that the commissions decision that Tiernan
acted reasonably when she refused to accept the offer was
supported by substantial evidence. Because we affirm the
commissions decision on this ground, we do not reach the question
of whether the offer was unconditional.
In order to determine whether substantial evidence
supported the commissions conclusion that Tiernan acted
reasonably when she refused the offer of reinstatement, it is
necessary to consider the context of this dispute. Pyramid has
not appealed the commissions finding that Tiernan was subjected
to sexual harassment by Kirk, or that Kirk created a hostile
working environment in the form of unwelcome, inappropriate
touching, suggestions that they have a sexual relationship,
acting in a jealous manner whenever other males interacted with
her, [and] throwing objects. Pyramids offer of reinstatement
assured Tiernan only that she would not have to report directly
to Kirk or work alone with him, and that her contact with him
would be minimized to the extent feasible.6 But substantial
evidence supports the commissions conclusion that this promise to
minimize contact was unrealistic and that Tiernan had reason to
believe that she would be subjected to the same conditions that .
. . caused her to leave. Kirk managed the business and ran the
day-to-day operations, making it highly impractical, if not
completely impossible, to minimize contact or Kirks supervisory
role. Tiernan expressed her apprehension about returning to work
for Pyramid when she testified, I decided I wasnt going to go
back anymore because I didnt want to subject myself to that
behavior anymore . . . . [W]hen was it going to escalate into him
slamming me through a wall or something?
While an employee generally has an obligation to
mitigate damages by making a reasonable effort to secure suitable
alternative employment, that obligation does not extend to
employment that would create embarrassment or hardship.7 An
employee is not obligated to accept proffered employment if it
involves an increase in danger or discomfort vis-a-vis the
promised position, or if acceptance of the employment would
involve humiliation or degradation. . . .8
Constructive discharge occurs [w]here an employer makes
working conditions so intolerable that a reasonable person in the
employees position would have felt compelled to resign.9 Where
an employee has been subjected to intolerable working conditions,
it follows that reinstatement to unchanged conditions conditions
so intolerable that a reasonable person would resign rather than
endure them would involve danger, degradation, discomfort, or
humiliation. Thus, where a constructively discharged employee
reasonably believes that the intolerable conditions have not
changed, the duty to mitigate does not require that the employee
accept a reinstatement offer.10
Here, the commission concluded that Tiernan was
constructively discharged and had reason to believe that she
would be subjected to the same conditions that were present which
caused her to leave. Substantial evidence supports this
conclusion. Given Tiernans reasonable belief that the
intolerable conditions had not changed, she was not obligated to
accept re-employment in order to mitigate her damages. Thus, the
commission did not err in awarding her lost wages.
B. The Commission Did Not Err in Including Vacation
Pay in the Lost Wages Award.
Tiernans award included a yearly bonus and two weeks
vacation pay per year. Pyramid argues that the commissions award
of vacation pay amounts to double recovery for time that Tiernan
would have spent on vacation had she still worked at Pyramid, and
thus constitutes error. Pyramid also argues that Tiernan
voluntarily remained outside the workforce after leaving Pyramids
employment, [and therefore] she should not be permitted to assert
an entitlement to pay over and above compensation for each and
every week of the year even if such payments were permitted under
Pyramids vacat[]ion policies. Pyramid does not cite any
authority for this argument, which we reject.
An employee earns her vacation pay through her labor.11
It is established that vacation pay is not a gratuity or a gift,
but is, in effect, additional wages for services performed.12 The
consideration for vacation with pay is the employees year-long
labor.13 As Judge Augustus Hand wrote in explaining employees
rights to vacation pay under a collective bargaining agreement, A
vacation with pay is in effect additional wages. It involves a
reasonable arrangement to secure the well being of employees and
the continuance of harmonious relations between employer and
employee.14 Vacation pay is simply an alternate form of wages,
earned at the time of other wages, but whose receipt is delayed.15
Accordingly, the commission properly awarded Tiernan the vacation
pay she had earned through her employment at Pyramid.
Moreover, we note that under AS 18.80.130(a)(1) the
commission has broad discretion to order any appropriate relief
to remedy employment discrimination. The ability to award
Tiernan vacation pay clearly falls within the commissions power.
C. The Commission Did Not Err in Ordering Pyramids Owners
To Undergo Sexual Harassment Training.
The commission ordered Pyramid to provide at least six
hours of training to its owners, managers, and employees to
address prevention of sexual harassment and sex discrimination
and to promote greater understanding of the Alaska Human Rights
Law to its employees, managers, and owners. Pyramid objects to
the inclusion of owners in this order, arguing that the
commission cannot pierce the corporate veil in order to hold the
shareholder owners of the corporation accountable.
Piercing the corporate veil is not relevant to this
case. The doctrine of piercing the corporate veil is an
exception to the principles that the corporation exists as a
separate legal entity and that owner liability for the debts of
the corporation is limited.16 Piercing the corporate veil is a
means of assessing liability for the acts of a corporation
against the equity holder in the corporation.17 The doctrine of
corporate veil-piercing applies only to plaintiffs who seek
recovery against the personal assets of corporate shareholders or
directors.18 Here, however, there is no effort to get at
shareholder assets; rather, the question is whether the
shareholders two owners, in fact are amenable to a remedial
order. The commission has been granted broad remedial powers to
order any legal or equitable relief which is reasonably
calculated to prevent future violations of a similar nature.19
Given Don and Francines somewhat blurred roles as
owners and managers of the company, the breadth of the order
seems appropriate.20 As Tiernan points out, Don and Francine are
not only Pyramids owners but also its managers. Consequently,
they had the power to dictate terms and conditions of employment.
Tiernans point is well-supported by the record. When Tiernan
left her job in December 1998, Pyramids only stockholders were
Don and Francine Pintar. The record shows several instances of
Don and Francine participating in management decisions, including
Dons internal investigation of Tiernans claim; Don and Francines
regular discussions of business decisions; and the fact that both
Don and Francine authorized the letter offering re-employment to
Tiernan.
The commission did not err in ordering Pyramids owners,
including Don and Francine, to attend sexual harassment training.
D. The Commission Erred in Applying 10.5 Percent Interest
to the Award.
Pyramid argues that the commission erred in requiring
it to pay pre- and post-judgment interest at a rate of 10.5
percent. We agree.
Tiernan contends that the administrative regulation
which provides for the commissions remedial authority, former 6
AAC 30.480(b), was still in force when she left Pyramid in 1998
and thus the award of interest at 10.5% was proper. Under the
former version of 6 AAC 30.480(b)21 in effect as of the time of
the commissions 2003 order, the commission had the authority to
award prejudgment interest at the rate of 10.5%. The commission
presumably relied on the language of this regulation when
awarding Tiernan interest.
Pyramid contends that the commissions reliance on the
regulation was in error and that any award of interest should be
governed by the statutory rate set forth in Title 9 of the Alaska
Statutes. Consequently, Pyramid argues that the rate of interest
applicable to Tiernans award should be the statutory rate in
effect in August 2003: 3.75%.22
We reject Pyramids argument that Title 9 is applicable
to the commissions award. Title 9 by its very definition applies
to judicial actions.23 Alaska Statute 09.30.070(a) is plainly
limited to judgments and decrees. Nothing in the language of
Title 9 indicates it applied to administrative proceedings such
as this one. But rejection of Pyramids argument does not
inevitably lead to acceptance of Tiernans approach.
The regulation in effect as of the date of the 2003
order granted the commission broad remedial authority to order
relief which is reasonably calculated to prevent future
violations of a similar nature or which reasonably compensates
the complainant [] for losses incurred.24 It then provides that A
monetary award under this section will, in the commissions
discretion, include an order that interest on the amount due be
paid from the date of the discriminatory conduct.25 Thus while
the commission clearly had the authority to award interest under
the latter provision in subsection (b), any amount so ordered is
circumscribed by the preceding provision requiring that any award
made reasonably compensate the complainant. The commission was
therefore required to exercise its discretion in determining an
appropriate interest rate that accurately reflected the actual
cost of money and thus reasonably compensated Tiernan for her
lost wages.26
Between July 1, 1980 and the date of the commissions
decision in Tiernans case, 6 AAC 30.480(b) provided for an
interest rate of 10.5 percent annually. The former version of AS
09.30.070(a) in effect prior to 1997 had similarly provided for
an interest rate of 10.5% on judgments.27 But by 2003 it is clear
that this interest rate did not reasonably compensate[]
complainants for losses incurred it overcompensated them. 28
Because an award of prejudgment interest is intended to
compensate a claimant for the lost use of money,29 any award that
provides disproportionate monetary compensation may rightfully be
considered punitive in nature.30 In light of the market forces in
play at the time of the commissions award, as indicated by
changes to Title 9 and the 2004 amendment to 6 AAC 30.480(b), an
interest rate of 10.5% would have disproportionately compensated
Tiernan for her lost wages at the time the award was entered. We
therefore conclude that the commission abused its discretion in
awarding prejudgment interest that exceeded a rate of reasonable
compensation.
Because we hold that the commission abused its
discretion in awarding interest at a rate of 10.5%, we reverse
that portion of the commissions order and remand for
recalculation of the award. 31
V. CONCLUSION
Because Tiernan was not required to accept Pyramids
offer of re-employment, we AFFIRM the commissions decision to
award Tiernan backpay from January 1999 to August 2002. Because
Tiernan earned vacation pay as a separate component of her
compensation and because an award of vacation pay was well within
the commissions power to order any appropriate relief, we AFFIRM
the award of vacation pay as a part of the backpay award.
Because the commissions broad remedial powers also included the
power to order training concerning sexual harassment, we also
AFFIRM the commissions order that Pyramids owners, employees, and
managers undergo sexual harassment training. Finally, because
the commission abused its discretion in awarding an excessive
rate of interest, we VACATE the award and REMAND this case to the
commission to recalculate the award using a reasonable rate of
interest.
_______________________________
1 Garner v. State, Dept of Health & Soc. Servs., Div. of
Med. Assistance, 63 P.3d 264, 267 (Alaska 2003); Matanuska Elec.
Assn, Inc. v. Chugach Elec. Assn, Inc., 53 P.3d 578, 583 (Alaska
2002).
2 Restatement (Second) of Agency 455 cmt. d (1958).
Gates v. City of Tenakee Springs, 822 P.2d 455, 460 (Alaska 1991)
([W]hether efforts [to mitigate damages] were reasonable or
potential risk and expense were undue are questions of fact for
the trial court.); West v. Whitney-Fidalgo Seafoods, Inc., 628
P.2d 10, 18 (Alaska 1981) (What is a reasonable effort [to
mitigate damages] is a question of fact . . . .).
3 Alaska USA Fed. Credit Union v. Fridriksson, 642 P.2d
804, 808 (Alaska 1982) (citing Alaska State Commn for Human
Rights v. Yellow Cab, 611 P.2d 487, 490 (Alaska 1980)).
4 Allen v. State, Oil & Gas Commn, ___ P.3d ___, 2006 WL
2036576 *2 (Alaska 2006).
5 Leigh v. Seekins Ford, 136 P.3d 214, 216 (Alaska 2006).
6 Pyramid suggests in its briefing to this court that
Tiernan knew Kirk was ready to resign if she would agree to come
back to work. However, the record does not indicate that Tiernan
was informed of Kirks purported offer to resign at any time
before the commission hearings in August 2002. Kirks offer of
resignation, which he apparently made to his parents, was not
part of the offer made to Tiernan.
7 Univ. of Alaska v. Chauvin, 521 P.2d 1234, 1240 (Alaska
1974).
8 Id. at 1240 n.22 (citing Restatement (Second) of Agency
455 cmt. d at 373).
9 Cameron v. Beard, 864 P.2d 538, 547 (Alaska 1994).
10 Several federal courts have reached similar
conclusions in the Title VII and ADEA contexts. See, e.g., Smith
v. World Ins. Co., 38 F.3d 1456, 1464 (8th Cir. 1994) (holding
that based on the totality of circumstances, including employees
discomfort with employment offer and belief that conditions at
workplace had not changed, constructively discharged employee
reasonably rejected an offer of reinstatement); Lewis v. Fed.
Prison Indus., Inc., 953 F.2d 1277, 1279 (11th Cir. 1992) (where
evidence showed plaintiff could not return to former
discriminatory work environment without facing increase in
symptoms of depression court satisfied plaintiffs rejection of
offer of reinstatement reasonable); Wilcox v. Stratton Lumber,
921 F.Supp. 837, 843 (D.Me. 1996) (holding employee who prevailed
on sexual harassment claim reasonably declined reinstatement
where she had doubts that the work environment . . . had changed
and feared continued harassment); Naylor v. Georgia-Pacific
Corp., 875 F.Supp. 564, 582 (N.D. Iowa 1995) (holding that
reasonable concern of continued harassment may constitute an
exception to employees duty to mitigate by accepting
reinstatement); Maturo v. Natl Graphics, Inc., 722 F.Supp 916,
927 (D. Conn. 1986) (holding that constructively discharged
employee reasonably rejected reinstatement where she had been
subjected to a long history of harassment by someone with whom
plaintiff, given the relatively small workforce [at the employer]
would undoubtedly come in contact [with] on a recurring basis if
she returned). But see Robles v. Cox & Co., Inc., 154 F.Supp.2d
795, 807 (S.D.N.Y. 2001) (where employer gave assurances
returning employee would not be subject to further harassment and
plaintiff presented no evidence that assurances were insincere,
plaintiffs assertions that returning to work would cause her
metal anguish insufficient to create genuine issue of material
fact as to reasonableness of her rejection of offer).
11 See, e.g., Langager v. Crazy Creek Prods., Inc., 954
P.2d 1169, 1175 (Mont. 1998) ([V]acation pay is earned by virtue
of an employees labor and once it has accrued, it has by
definition been earned.).
12 Suastez v. Plastic Dress-Up Co., 647 P.2d 122, 125
(Cal. 1982).
13 Id.
14 In re Wil-Low Cafeterias, 111 F.2d 429, 432 (2d Cir.
1940).
15 Suastez, 647 P.2d at 125 (quoting Local Union No. 186,
Packinghouse Food & Allied Workers v. Armour & Co., 446 F.2d 610,
612 (6th Cir. 1971)).
16 See, e.g., Dole Food Co. v. Patrickson, 538 U.S. 468,
475 (2003); Sec. Investor Prot. Corp. v. Stratton Oakmont, Inc.,
234 B.R. 293, 321-22 (1999); Morris v. State, Dept of Taxation &
Fin., 623 N.E.2d 1157, 1160 (N.Y. 1993).
17 Village at Camelback Prop. Owners Assn, Inc. v. Carr,
538 A.2d 528, 532 (Pa. Super. 1990). See also 1 Fletcher
Cyclopedia of Corporations 41.10, at 578 (1999) (An attempt to
pierce the corporate veil is a means of imposing liability on an
underlying cause of action, such as tort or breach of contract.).
18 Leo Eisenberg & Co., Inc. v. Payson, 785 P.2d 49, 54
(Ariz. 1989). See also 1 Fletcher Cyclopedia of Corporations
41.20, at 589-90 ([C]ourts pierce the corporation veil for the
purpose of adjudging the rights and liabilities of parties in the
case.).
19 6 AAC 30.480(b). Additionally, the legislature has
recently amended AS 18.80.130 to specifically include training of
an employer, labor organization, or employment agency, and its
employees concerning discriminatory practice within the scope of
appropriate relief. Ch. 63, 4, SLA 2006.
20 In its reply brief, Pyramid states that Don and
Francine are no longer the owners of the corporation and
accordingly argues that they should not be subject to the order.
Pyramid relies on facts outside the record, and thus we will not
address its argument. Any request for relief based on corporate
changes that occurred during the appeals process should be
addressed to the commission upon remand.
21 Former 6 AAC 30.480(b) provides in relevant part:
The remedial authority of the commission
under AS 18.80.130(a) includes the authority
to order any legal or equitable relief which
is reasonably calculated to prevent future
violations of a similar nature or which
reasonably compensates the complainant or the
class for losses incurred as a result of the
unlawful conduct, including out-of-pocket
expenses. A monetary award under this
section will, in the commissions discretion,
include an order that interest on the amount
due be paid from the date of the
discriminatory conduct at six percent
annually before September 12, 1976, eight
percent annually between September 12, 1976
and July 1, 1980, and 10.5 percent annually
after July 1, 1980.
In 2004 6AAC 30.480 was amended to require awards of
interest to comply with AS 09.30.070.
22 The Alaska Court System has published statutory pre-
and post-judgment interest rate data on its web site for all
years since 1997. This information is available at
http://www.state.ak.us/courts/int.htm. In 2003, the rate of
interest for judicial actions was 3.75%.
23 AS 09.70.010 states This title governs all proceedings
in actions . . . .
24 6 AAC 30.480(b) (emphasis added).
25 Id. (emphasis added).
26 See North Slope Borough v. LeResche, 581 P.2.d 1112,
1115 (Alaska 1978) (Where, as here, the question is as to the
merits of an agency action on matters committed to agency
discretion, our scope of review is limited to whether the
decision was arbitrary, unreasonable[,] or an abuse of
discretion.).
27 Cf. Marine Solutions Inc. v. Horton, 70 P.3d 393, 415
(Alaska 2003).
28 In 1997 AS 09.30.070(a) was amended to establish a
floating prejudgment interest rate dependent on the Federal
Reserve discount rate in effect on January 2 of the year in which
the judgment or decree is entered. And in 2004, the year
following the commissions order in this case, 6 AAC 30.480(b) was
amended to ensure that the regulations interest rates tracked the
statutory floating rate set forth in Title 9. The amendment to 6
AAC 30.480(b) provided: A monetary award under this section may
include an order that interest on the amount due be paid as
provided in AS 09.30.070(a). These changes were effectuated to
ensure prejudgment interest rates would track the cost of money
and more accurately reflect market forces. See 18 and 55 ch 26
SLA 1997.
29 Liimata v. Vest, 45 P.3d 310, 322 n.44 (Alaska 2002).
30 See Cool Homes, Inc. v. Fairbanks North Star Borough,
860 P.2d 1248, 1257 (Alaska 1993) (Interest, however, is not
punitive. Rather, it is intended to compensate the party to whom
the sum is owed for the period of non-payment.).
31 On remand, the commission is free to adopt any
reasonable rate of interest, including the 12th Federal Reserve
District discount rate augmented by a reasonable amount to
reflect market reality. On October 1, 2003 the date of the
final order issued by the commission the 12th Federal Reserve
District discount rate was 0.75%, and the statutory pre- and post-
judgment interest rate in effect was 3.75%. For each of the
years for which the commission awarded Tiernan lost wages, the
individual statutory yearly interest rates were as follows: 1999
(7.5%), 2000 (8%), 2001 (9%), 2002 (4.25%), and 2003 (3.75%).
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