| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
This site is possible because of the following site sponsors. Please support them with your business.
|
| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
|
|
This site is possible because of the following site sponsors. Please support them with your business.
|
You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Roberts v. State, Dept. of Revenue (06/22/2007) sp-6134
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
| PETER ROBERTS, | ) |
| ) Supreme Court No. S- 12180 | |
| Appellant, | ) |
| ) Superior Court No. | |
| v. | ) 3AN-03-05534 CI |
| ) | |
| STATE OF ALASKA, | ) O P I N I O N |
| DEPARTMENT OF REVENUE, | ) |
| Wilson L. Condon, Commissioner, | ) No. 6134 - June 22, 2007 |
| and Larry Meyers, Deputy Director, | ) |
| and STATE OF ALASKA, | ) |
| DEPARTMENT OF LAW, Bruce | ) |
| M. Botelho, Attorney General, | ) |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Sen K. Tan, Judge.
Appearances: Peter Roberts, pro se,
Anchorage, Appellant. Dan N. Branch,
Assistant Attorney General, and David W.
M rquez, Attorney General, Juneau, for
Appellees.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
FABE, Chief Justice.
I. INTRODUCTION
Peter Roberts, owner of Downtown Bicycle Rental, Inc.,
filed a complaint objecting to the Alaska Department of Revenues
issuance of a gaming permit to Earth, a nonprofit organization.
The superior court dismissed several counts of the complaint as
an invalid assignment of claims from Downtown Bicycle Rental,
which had no attorney, to Roberts. The court granted summary
judgment for the State on all remaining counts, declared that
Roberts was not a public interest litigant, and ordered him to
pay attorneys fees. Roberts appeals. Because the assignment of
claims was an invalid attempt to circumvent statutory
requirements, and because the Department of Revenue did not abuse
its discretion or violate public policy or Robertss
constitutional rights when it approved Earths permit application,
we affirm the superior courts ruling. Because Roberts had
economic incentive to sue, we also affirm the superior courts
determination that he was not a public interest litigant.
II. FACTS AND PROCEEDINGS
A. Facts
Peter Roberts owns Downtown Bicycle Rental, a bicycle
rental business located in downtown Anchorage. Roberts objected
to a free bicycle loan program that Earth funded with proceeds of
a state gaming permit.
Earth applied for and was granted a charitable gaming
permit from the Alaska Department of Revenue. Earth conducted
gaming activities under the permit, received over $39,000 in
gaming proceeds, and spent approximately $7,000 on its Earth
Cycle Program.
In June 2000 Earth operated the Earth Cycle Program,
offering bicycles to the public for use free of charge from a
location in front of the Old Federal Building in Anchorage.
Peter Roberts and other bicycle rental business owners sent a
letter to the federal General Services Administration, asking
that Earths permit to operate on federal property be revoked.
The General Services Administration revoked the permit. Earth
then moved its program to another downtown location. In
response, Roberts complained to the owner of the land, and Earth
moved again. In July 2000 Earth relocated to the grounds of the
Anchorage International Youth Hostel. Roberts then asked the
hostel to discontinue allowing Earth to operate the program from
its property. The hostel refused to revoke its permission.
In the summer of 2000 Roberts complained to the
Department of Revenue about Earths use of gaming funds to operate
the Earth Cycle Program. Dissatisfied with the Departments
response, Roberts wrote to Attorney General Bruce Botelho and
Commissioner of Revenue Wilson Condon, demanding a halt to the
program and claiming that the program was not educational and not
charitable because it did not lessen neighborhood tensions.
Commissioner Condon issued a written response, indicating that
the Department would not take the action Roberts requested.
In September 2001 Roberts filed a complaint with the
Alaska Ombudsman, asking the Ombudsman to investigate the
Department of Revenues handling of his complaint. Several months
later Roberts filed another complaint with the Ombudsman,
expressing concerns about the Department of Laws handling of the
issue. In March 2002 Assistant Ombudsman Linda Lord-Jenkins
wrote to Roberts, explaining that she was closing the complaints
because she found no evidence of impropriety, serious flaws in
the decision-making process or evidence that the decision [was]
completely insupportable. She also informed Roberts that Earth
had surrendered its gaming permit in September 2000 and had given
the twenty-five bicycles to the hostel to distribute.1 In May
2002 Acting Ombudsman Maria Moya wrote to Roberts, sustaining
closure of the complaint.
B. Proceedings
Appearing pro se, Roberts filed a complaint in October
2002 in Anchorage Superior Court on behalf of himself and
Downtown Bicycle Rental. The complaint named the State of
Alaska, Revenue Commissioner Condon, Attorney General Botelho,
and Deputy Director Larry Meyers of the Department of Revenue as
defendants. On December 2, 2002, Judge Peter A. Michalski
dismissed the case without prejudice pursuant to AS
22.20.040(a)(2) because Downtown Bicycle Rental was not
represented by an attorney, as Alaska law requires of
corporations.2 Roberts did not appeal Judge Michalskis order.
In December 2002 Downtown Bicycle Rental assigned its
claims to Roberts. In March 2003 Roberts appeared pro se and
filed a new complaint in Anchorage Superior Court, naming the
same defendants as the first suit.3 The complaint contained
fourteen claims: (1) negligence; (2) violation of AS
05.15.150(a); (3) violation of AS 05.15.140(a); (4) violation of
public policy; (5) bad faith/abuse of discretion; (6) breach of
fiduciary and statutory duties; (7) violation of the public
purpose clause of the Alaska Constitution; (8) a taking of
property without just compensation; (9) violation of procedural
due process; (10) impairment of freedom to contract; (11)
violation of substantive due process; (12) violation of inherent
rights/privileges and immunities; (13) tortious interference; and
(14) violation of 42 U.S.C. 1983.
In July 2003 Judge Tan declared Downtown Bicycle
Rentals assignment of claims to Roberts invalid as an attempt to
circumvent the requirement that corporations be represented by
counsel and dismissed all claims arising under the assignment.
In March 2004 Roberts filed an amended complaint, adding claims
of violation of state antitrust statutes and equal protection.
In August 2004 the superior court issued an order dismissing all
claims for compensatory and punitive damages arising from the
assignment; the claims for declaratory relief remained. The
order noted Robertss voluntary dismissal of four of his claims.4
The judge dismissed Robertss negligence claim because the
complaint did not allege harm to Roberts individually and
dismissed Robertss 42 U.S.C. 1983 claim because such claims
cannot be brought against state officials acting in their
official capacity. The court also dismissed Robertss claim of an
antitrust violation because the alleged injury was not the type
of injury the state antitrust statute intended to protect, the
claimed loss was not incurred by Roberts individually, and the
statute was not intended to prevent the State from operating the
charitable gaming program.
Nine claims for declaratory relief remained after the
superior courts August 2004 ruling. After cross-motions for
summary judgment, the superior court granted summary judgment for
the State on all remaining counts. The State moved for a Civil
Rule 82 award of attorneys fees. The court found that Roberts
was not a public interest litigant and ordered him to pay
attorneys fees of $5,226. Roberts appeals the superior courts
ruling as to the alleged violation of gaming statutes and public
policy, bad faith and breach of fiduciary and statutory duty, and
violations of substantive due process and privileges and
immunities. He also argues the superior court erred in declaring
the assignment invalid and contends that the court abused its
discretion in determining that he is not a public interest
litigant.5
III. DISCUSSION
A. Standard of Review
We affirm a grant of summary judgment if there are no
genuine issues of material fact and if the movant is entitled to
judgment as a matter of law. When making this determination, we
draw all reasonable inferences in favor of the non-movant.6 For
questions of law, we adopt the rule of law that is most
persuasive in light of precedent, reason, and policy.7 We review
a superior courts determination of a partys public interest
litigant status for an abuse of discretion.8
When the superior court acts as an intermediate court
of appeal, we independently review the merits of the
administrative decision.9 We review discretionary actions that
do not require formal procedures for an abuse of discretion.10
This is the standard we applied in another challenge to the
administration of gaming statutes, Malone v. Anchorage Amateur
Radio Club, Inc.11 In Malone, we reviewed the Revenue
Commissioners denial of a request to operate computerized bingo
games and applied the arbitrary, unreasonable or an abuse of
discretion standard of review after concluding that the statute
committed the question of equipment to the Departments
discretion.12
Here, the statutory provisions at issue also grant
considerable discretion to the Department. Alaska Statute
05.15.100(a) provides that [t]he department may issue a permit to
a municipality or qualified organization. Alaska Statute
05.15.130 provides that [t]he department may supplement the
definitions of qualified organizations and activities by . . .
adding . . . additional requirements that the department
considers necessary for the best interests of the public.
Although the Department has not supplemented those definitions,
this provision suggests that the legislature intended to grant
the Department considerable discretion in administering the
statutes. Alaska Statute 05.15.140(a) allows the Department to
make a determination whether issuance of a permit is in the best
interests of the public.13 This discretion, coupled with the lack
of formal procedures,14 make the abuse of discretion standard
appropriate.
B. The Superior Court Properly Declared the Assignment
Invalid and Dismissed Claims Arising out of the
Assignment.
Judge Michalski dismissed the first case because
Downtown Bicycle Rental was not represented by an attorney as
required by AS 22.20.040(a)(2).15 Roberts did not appeal this
decision. After the dismissal Downtown Bicycle Rental assigned
its claims to Roberts, who filed a new complaint before Judge
Tan. Judge Tan declared the assignment invalid as an attempt to
circumvent the statute and dismissed all claims arising out of
the assignment. The court noted the lack of an applicable
statutory exception and ruled that the assignment was invalid
because it would circumvent the requirement . . . that
corporations be represented by counsel. Roberts appeals,
claiming the assignment was valid.
Roberts asks us to make a common law exception to the
statute and allow the assignment, given that he is the alter ego
of Downtown Bicycle Rental. He also urges us to lift[] the
corporate veil to prevent an injustice, contending that a device
designed to protect investors has been hijacked by government
officials.
We conclude that the superior court correctly declared
the assignment invalid and refused to recognize an exception to
AS 22.20.040(a)(2).16 Roberts does not argue to this court that
the assignment changes the applicability of AS 22.20.040(a)(2).
As the State noted in its motion before the superior court, most
courts have rejected such assignments as invalid attempts to
circumvent the rule that corporations be represented by counsel.17
As explained by the Second Circuit in Jones v. Niagara Frontier
Transportation Authority, [i]n light of the[] policy reasons for
preventing a lay person from representing a corporation in
litigation, the federal courts have . . . disapproved any
circumvention of the rule by the procedural device of an
assignment of the corporations claims to the lay individual.18
Although some states have made an exception where a
closely held corporation is the litigants alter ego,19 such cases
are inapposite in Alaska given the statutes clear command that
any exception be explicitly made by law.20 This language suggests
that the legislature intended to restrict any exceptions to those
specifically set out in statute, precluding the development of
common law exceptions. Because the statutory scheme
unequivocally requires representation by counsel, the superior
court was correct to reject assignment as a procedural device to
circumvent the requirement. Piercing the corporate veil in this
case, as Roberts advocates, would effectively recognize a common
law exception to the statute, which is inappropriate given the
statutes clear requirement that any exceptions be explicitly
made.
Moreover, unlike traditional veil piercing, where the
court pierces the veil to recognize that the corporation is an
alter ego, Roberts essentially argues that he should be allowed
to pierce the veil to serve his own interests. To allow an
individual the protections of the corporate form, as well as the
option to shed the corporate form when it serves his or her
interest, undermines the purposes of corporate law. We affirm
Judge Tans ruling that the assignment was an invalid attempt to
circumvent AS 22.20.040(a)(2) and affirm his dismissal of all
counts arising out of the assignment.
C. The Superior Court Properly Granted Summary Judgment to
the State on Robertss Statutory Claims.
1. Issuance of the permit did not violate the
statutes limitation on the use of proceeds
provision.
Roberts appeals the superior courts ruling that the
gaming permit did not violate state gaming laws. He first
appeals Judge Tans grant of summary judgment to the State on his
claim that issuance of the permit violated the limitation on use
of proceeds provision of the Alaska gaming laws. This
limitation, found in AS 05.15.150(a), provides that authority to
conduct gaming activity is contingent upon dedication of the net
proceeds to the awarding of prizes to contestants or participants
and to political, educational, civic, public, charitable,
patriotic, or religious uses in the state.21
The superior court found that the Department acted
reasonably when it determined that the program was charitable and
consistent with the limitation on use of proceeds provision. The
court noted the definition of charitable organization in the
statute22 and the broad construction of charity we applied in
Fairbanks North Star Borough v. Dena Nena Henash.23 The superior
court reasoned that
Earths articles of incorporation state that
its purpose was to teach and practice
individual lifestyles which enhance clean
earth, air and water. Earths stated purpose
fits within the statutory definition of a
charitable organization. Traffic in any
urban area is a public concern and the
Department reasonably could have determined
that a free bicycle program would help to
alleviate the concern. In addition, riding a
bicycle is a healthy activity, and promotes
good health among its citizens. The
Department made a reasonable determination
that Earth and its bicycle program fit within
the statutorily defined restrictions for
charitable purposes.
The superior court further noted that [t]he statutory language is
very broad, and the literal language of the statute covers
matters of public welfare.
Roberts contends that the superior court erred because
Earths use of proceeds for its free bicycle program does not fall
within the statutory limitations. He also maintains that the
court relied on a theory that the State did not argue and that
was not supported by sufficient facts. Roberts also challenges
the superior courts interpretation of the statute, arguing that
the court gave the term public concern greater importance than
other terms of the statute.
We conclude that the superior court properly granted
summary judgment to the State. The statutory language
encompasses a vast array of possible programs and allows proceeds
to be used for a broad range of uses, including political,
educational, civic, public, charitable, patriotic, or religious
uses.24
This broad reading of the statutory language is
supported by our decision in Botelho v. Griffin, where we held
that [b]y requiring a portion of the money spent on charitable
gaming to benefit the public generally, Alaskas gaming laws
create the effective equivalent of a charitable trust.25 The
Restatement (Third) of Trusts enunciates a broad definition of
charitable trusts, providing that
[a] trust purpose is charitable if its
accomplishment is of such social interest or
benefit to the community as to justify
permitting the property to be devoted to the
purpose in perpetuity and to justify the
various other special privileges that are
typically allowed to charitable trusts.[26]
This broad definition of charitable trust is consistent
with the broad common law definition of charity we have applied
in other contexts.27 Within this broad conception of charitable
purposes, the Departments grant of a permit to Earth to use
proceeds for the Earth Cycle Program is not an abuse of
discretion.28 The stated purpose of Earths programs, to awaken
groups to the importance of a clean environment and to teach
lifestyles which support a clean environment, falls within the
range of uses permitted by the statute. The Earth Cycle Program,
which provided free bicycles for use by the general public,
rationally falls within the organizations stated purpose of
teaching lifestyles that support a clean environment. Moreover,
as the superior court found, the Department could reasonably have
determined that riding bicycles promotes health and alleviates
traffic, both of which are public concerns and provide social
interest or benefit to the community. The Earth Cycle Program is
rationally related to the objectives of the organization, and
those objectives fall within the broad range of charitable
purposes envisioned by the statute.29 We therefore also reject
Robertss argument that the superior court erred by giving the
words public concern greater importance than other terms in the
statute. The superior court properly interpreted the statute to
allow a broad array of charitable programs, including the Earth
Cycle Program.
Roberts argues that the superior court decided this
issue on an unargued theory. But the State made a similar
argument before the superior court when it noted Earths objective
to teach and practice individual lifestyles which enhance clean
earth, air and water. The State contended that [i]t is certainly
conceivable that a person using a free bike might decide to adopt
a lifestyle that promotes ecological values. Moreover, Roberts
addressed the programs impact on traffic in his summary judgment
memorandum.
We reject Robertss argument that quasi-estoppel
precludes the State from arguing that the program is charitable.30
Quasi-estoppel, which applies when a party advances a position so
inconsistent with a previous position that it would be
unconscionable to allow the party to assert the second position,31
is inapposite. The crux of Robertss argument appears to be that
the Department should be estopped from defending its action
because of its refusal to explain its decision in writing and
because Deputy Director Larry Meyers allegedly told the Ombudsman
that an organization need be only a qualified organization, and
not a charitable organization, to qualify for a permit. But the
State is not taking an inconsistent position; it has consistently
maintained that Earth qualified for a permit.32 Any slight
variations in the States explanation such as whether Earth was a
charitable organization or fell into the more broad category of
qualified organization do not rise to the level of inconsistency
or unconscionability required for application of quasi-estoppel.
Roberts also argues that the superior court erred by
rejecting his argument that federal law preempts state law and
does not allow the permit program to extend to the Earth Cycle
Program. Roberts maintains that because Earth is a tax exempt
organization under 26 U.S.C. 501(c)(3), federal law preempts any
state law that would permit Earth to use gaming proceeds without
a demonstration of operational nexus between how the proceeds are
used and the organizations charitable goals. But as authority
cited by Roberts recognizes, conflict preemption applies only
where it is impossible for a private party to comply with both
state and federal law, and where under the circumstances of [a]
particular case, [the challenged state] law stands as an obstacle
to accomplishment and execution of the full purposes and
objectives of Congress. 33 Because Roberts does not allege that
it would be impossible for an entity to comply with both state
gaming laws and federal laws of tax exemption, conflict
preemption does not apply. The superior court properly granted
summary judgment for the State with respect to the limitation on
use of proceeds provision.
2. Issuance of the permit did not violate the
statutes satisfactory proof requirement.
Roberts argues that the permit also violated gaming
statutes because the State approved Earths permit without
satisfactory proof that the permit would not be detrimental to
the bests interests of the public. The satisfactory proof
requirement is found in AS 05.15.140(a), which provides:
The department may not issue or renew a
permit except upon satisfactory proof that
the applicant is a municipality or qualified
organization, the activity may be permitted
under this chapter, and the issuance of a
permit is not detrimental to the best
interests of the public. Upon request of the
department, the applicant shall prove
conclusively each of these requirements
before a permit may be issued or renewed.
Roberts argues that the permit was detrimental to the
best interests of the public because no benefit to society
accrues when government provides tourists with recreation that
they would otherwise pay for. But the superior court found that
Roberts was equating his business interests and profits with the
best interests of the public. The superior court further
determined that the Department of Revenue had a reasonable basis
for its grant of a permit to Earth and concluded that [e]ven if
this court substituted its judgment, and applied the law to the
undisputed facts, approving a permit to provide free bicycles to
the public is not detrimental to the best interests of the
public.
In the space for Dedication of Net Proceeds, Earths
application indicated that [t]he net proceeds will be used to
awaken social, political, and fraternal groups to the importance
of clean earth, air, and water; to teach and practice individual
lifestyles which enhance clean air, earth, and water; to operate
the Earth Cycle Program and to distribute food which is presently
being wasted in the State of Alaska.34 This information was
provided under penalty of unsworn falsification.
Based on this information provided by Earth, combined
with the brief explanation of intended uses of the proceeds in
the application, Earths status as a nonprofit organization at the
time, and the absence of any information to suggest that the use
of proceeds would be detrimental, the Department reasonably
determined that Earth provided satisfactory proof that the permit
would not be detrimental to the publics best interests.
As the superior court noted, Robertss argument that the
program harmed the public interest relies on the assumption that
something detrimental to his business interests would be
detrimental to the public interest. But even if the program had
interfered with his business a fact that was not established
such interference does not render the program detrimental to the
public interest as a whole.35
Roberts does not allege that anything in Earths
application should have suggested to the Department that issuance
of the permit would be detrimental to the public interest.
Rather, he suggests the Department should have asked different
questions and obtained more information from Earth before issuing
the permit. But the statutory scheme extends discretion to the
Department to determine how to evaluate permit requests.36 In
other contexts where an agency has considerable discretion, we
have been reluctant to intrude on agency decision making. For
example, in Vick v. Board of Electrical Examiners, a private
citizen sought to compel the board to file an accusation against
another party.37 We declined to extend this power to a private
citizen, noting that to allow private citizens to compel the
board to file accusations would likely create an enormous burden
on public officials.38 We reasoned that [j]udicial intrusion into
areas traditionally committed to executive discretion would make
the processes of government more cumbersome and less efficient.
In the absence of obvious and compelling reasons, that is a
result which should be avoided.39
Although Roberts does not seek enforcement action, our
reasoning in Vick applies. Robertss interpretation of the
substantial proof requirement would impose a much higher standard
of proof than the Departments interpretation. In this case, the
legislature has delegated discretion to the Department to
determine whether a permit would be detrimental to the public
interest and to assess the information necessary to support its
determination. The public interest is a vague concept and
requires the Department to weigh complex public policies,
particularly where gaming is involved. Where such delegation has
occurred and where Earths application on its face does not
suggest it would be detrimental to the public interest, the
Department did not abuse its discretion by determining that the
satisfactory proof requirement was met. While we do not suggest
that a case could not arise where the substantial proof
requirement was clearly not met, this is not such a case. The
superior court properly granted summary judgment for the State on
Robertss claim that issuance of the permit violated the
satisfactory proof requirement of AS 05.15.140(a).
D. The Superior Court Properly Granted Summary Judgment to
the State on Robertss Nonstatutory Claims.
1. Issuance of the permit did not violate public
policy, fiduciary or statutory duties.
Roberts argues that the States grant of a permit to
Earth violated public policy. He cites a federal statute (the
declaration of policy of the United States Small Business
Administration), a state statute (AS 10.15.565),40 and DeArmond v.
Alaska State Development Corp.,41 as bases for public policies
allegedly violated by issuance of the permit.
The superior court relied on Camps Newfound/Owatonna,
Inc. v. Town of Harrison, Maine42 for the proposition that
nonprofit organizations may engage in commerce and compete with
for-profit entities. The court concluded that no public policy
prohibits nonprofit entities from competing in the marketplace
and granted summary judgment for the State on the claim for
violation of public policy.
We agree. As explained above, we uphold the superior
courts ruling that issuance of the permit did not violate gaming
statutes. Those statutes embody the public policy of gaming as
announced by the legislature. Because we hold that issuance of
the permit was consistent with those statutes, it was therefore
consistent with the legislatures policy. Robertss claim is
without merit.
We also uphold the superior courts grant of summary
judgment to the State on Robertss claims of bad faith and breach
of fiduciary and statutory duties. On Robertss bad faith claim,
the superior court noted that it is not clear what claim is being
pled but reasoned that the tort of bad faith arises in the
context of an insurer and insured and was inapposite. Roberts
failed to provide us with any legal basis for his claim.
Moreover, as the superior court noted, even if there
were an applicable bad faith cause of action, Robertss bad faith
claim depends on the notion that the State made a mistake and
refused to correct it. Because we hold that issuance of the
permit complied with statutory requirements, we agree with the
superior court that the Department made no mistake in the
issuance of the permit . . . [and therefore had] no duty to
correct any mistake.
Similarly, Robertss claims for breach of statutory and
fiduciary duties also fail. We assume without deciding that such
claims have a legal basis. But we hold that the State acted in
accordance with the gaming statutes in issuing the permit, and
compliance with the statute negates any claim for breach of
statutory or fiduciary duty.
2. Issuance of the permit did not violate Robertss
constitutional rights.
Roberts argues the State was not entitled to summary
judgment on his claim that the State violated his substantive due
process right to gainful employment and to earn a living or his
claim that the State violated his fundamental right to earn a
living in violation of article I, section 1 of the Alaska
Constitution and the Privileges and Immunities Clause of the
United States Constitution. He argues that the superior court
erred by applying rational basis review to the legislatures
enactment of the gaming laws. He also contends that his
challenge was directed not at the gaming statutes, but rather at
the executive branchs authorization of the Earth Cycle Program.
The superior court concluded that the statute met rational basis
scrutiny.43
We uphold the superior courts ruling. Under our
jurisprudence, rational basis is the appropriate test unless a
fundamental right is at issue; the party seeking to establish a
violation under rational basis review has a heavy burden.44 Not
only has Roberts failed to articulate how the statutes violate
his right to earn a living,45 but the State identified a rational
purpose for the gaming laws to permit qualified organizations to
raise money through authorized gaming activities.
Roberts argues that the superior court misread his
argument as a challenge to the statutes and failed to recognize
that he challenged executive action, but he does not explain why
the State is not entitled to summary judgment on a challenge to
executive action. The Earth Cycle Program did not prevent
Roberts from operating his own business the most generous
reading of the facts suggests at most that the Earth program
competed with that business. Not only did Roberts fail to show
that his right to earn a living was infringed upon, but he also
failed to meet the heavy burden of showing that the Departments
actions in granting the permit to Earth were not rationally
related to the purpose of the program it administered. Moreover,
our holding that issuance of the permit was consistent with the
statute forecloses any debate over whether the Department acted
rationally in issuing the permit.
We also uphold the superior courts grant of summary
judgment on Robertss privileges and immunities claim. The
Privileges and Immunities Clause does not . . . protect the
citizens of a State against the legislative power of their own
State.46 Roberts does not allege that he is an out-of-state
citizen adversely affected by this states statute or program.
The privileges and immunities clause does not restrict the States
actions in this case. The superior court properly granted
summary judgment to the State.
E. The Superior Court Did Not Abuse Its Discretion When It
Ruled that Roberts Did Not Qualify as a Public Interest
Litigant.
The superior court awarded $5,225 in attorneys fees to
the State as the prevailing party. Roberts argues that he should
be considered a public interest litigant. Because Roberts filed
this case in March 2003,47 the four-factor test for public
interest litigant status applies. This test asks: (1) is the
case designed to effectuate strong public policies; (2) would
numerous people benefit if the litigant succeeded; (3) could only
a private party have been expected to bring the suit; and (4)
would the litigant have lacked sufficient economic incentive to
file suit?48
Roberts argues that he meets all four factors of the
test. He contends that he advances public policy because the
case related to statutory language on matters of public welfare.
He argues that the second factor is met, contending that numerous
people benefit from the case because all citizens benefit when
the States legal position is consistently applied and
transparently explained in writing. He argues that the third and
fourth factors are met, maintaining that he had no economic
incentive because once assigned economic injury was removed from
the case, the only claims that could possibly remain are public
interest claims.
The superior court found that it was doubtful but
conceivable that the first factor was met, but concluded that the
second factor was not met because the case would only benefit
businesses that rent bicycles in downtown Anchorage. The court
found that although the third factor was perhaps met, Roberts
could not meet the fourth factor because he had economic
incentive to sue. Because the superior courts decision turned on
the fourth factor, we focus our analysis on that factor.49 The
superior courts finding that Roberts had economic incentive to
sue is consistent with our decisions in Abbott v. Kodiak Island
Borough Assembly50 and Stein v. Kelso.51 In Abbott, several
homeowners appealed a zoning decision of the Kodiak Assembly,
arguing that it amounted to an unconstitutional taking of
property.52 The superior court upheld the Assemblys decision and
found that the homeowners did not qualify as public interest
litigants. In affirming the decision, we reasoned that where
homeowners believed the economic harm facing them was so
substantial that they felt they had a viable taking without just
compensation claim, the superior courts finding that owners had
an economic interest in litigation was not an abuse of
discretion.53 Similarly, in Stein v. Kelso, we upheld an award of
attorneys fees against miners who challenged an administrative
permit decision as an unconstitutional taking.54 Noting that the
miners pleadings sought a ruling that they had lost their
property rights and must be justly compensated, we rejected the
miners claim that they had no economic interest in the suit.55
Like the plaintiffs in Stein and Abbott, Robertss
initial complaint requested personal economic relief. As the
State recognizes, this suggests that Roberts did not lack
financial incentive to bring suit. Roberts suggests that he
became a public interest litigant after the superior courts order
dismissing all claims for relief, except declaratory relief.
While it is true that Roberts did not abandon his suit after the
financial claims were eliminated, he also appeals the superior
courts ruling that the assignment failed. This assignment ruling
is the basis for the superior courts elimination of all but the
claim for declaratory relief; presumably if we had reversed it,
Robertss claims for compensatory damages could be viable. Given
his pursuit of compensatory relief in this initial claim and
indirectly in this appeal, the superior courts ruling on public
interest litigant status was not an abuse of discretion.
IV. CONCLUSION
We hold that the superior court properly granted
summary judgment for the State on Robertss remaining claims,
properly dismissed the assigned claims as invalid, and properly
concluded that Roberts was not a public interest litigant. We
therefore AFFIRM the decision of the superior court.
_______________________________
1 According to an affidavit submitted by an employee of
the hostel, Earth donated the bicycles to the hostel in 2001.
The hostel offered the bicycles to the public for a brief period
in 2001, until a group of bicycle rental businesses . . .
complained and threatened the hostel with a lawsuit. The hostel
discontinued offering the bicycles to the public and began
restricting their use to hostel guests by the end of the 2001
summer.
2 AS 22.20.040 provides in relevant part:
(a) An action or proceeding may be
prosecuted or defended by a party in person
or by attorney. However,
. . . .
(2) a corporation, either public or
private, shall appear by an attorney in all
cases unless an exception to the corporations
appearance by an attorney has been explicitly
made by law.
3 Roberts did not appeal Judge Michalskis order, instead
filing a new case, which was assigned to Superior Court Judge Sen
K. Tan. It is Judge Tans decision that Roberts appeals in the
instant case.
4 Roberts voluntarily dismissed his claims alleging a
taking of property without just compensation, impairment of
freedom to contract, tortious interference, and violation of
equal protection.
5 Although the State has not argued before us that this
case is moot, we note that even if the case were moot, we would
hear it to determine the prevailing party for attorneys fees
purposes. See, e.g., LaMoureaux v. Totem Ocean Trailer Express,
Inc., 651 P.2d 839, 840 n.1 (Alaska 1982).
6 Alakayak v. British Columbia Packers, Ltd., 48 P.3d
432, 447 (Alaska 2002) (internal citations omitted).
7 Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
8 Abbott v. Kodiak Island Borough Assembly, 899 P.2d 922,
923 (Alaska 1995).
9 Handley v. State, Dept of Revenue, 838 P.2d 1231, 1233
(Alaska 1992).
10 Olson v. State, Dept of Natural Res., 799 P.2d 289, 292-
93 (Alaska 1990) (noting the standard appropriate for quasi-
executive determinations).
11 781 P.2d 576 (Alaska 1989).
12 Id. at 578.
13 AS 05.15.140(a) provides:
The department may not issue or renew a
permit except upon satisfactory proof that
the applicant is a municipality or qualified
organization, the activity may be permitted
under this chapter, and the issuance of the
permit is not detrimental to the best
interests of the public. Upon request of the
department, the applicant shall prove
conclusively each of these requirements
before a permit may be issued or renewed.
14 The State Administrative Procedure Act does not require
formal procedures for the issuance of gaming permits. AS
44.62.330. Though the gaming statutes provide for basic
requirements, such as the satisfactory proof requirement in
subsection AS 05.15.140, these requirements are minimal.
Moreover, the statutes grant the department discretion to
determine whether to impose any additional requirements. AS
05.15.130.
15 AS 22.20.040(a)(2) provides that a corporation shall
appear by an attorney in all cases unless an exception to the
corporations appearance by an attorney has been explicitly made
by law.
16 The State argues that Robertss arguments are precluded
by his failure to appeal Judge Michalskis order in the first
case. But because no assignment had occurred at that time, the
order did not address the question of assignment and issue
preclusion does not apply. See McElroy v. Kennedy, 74 P.3d 903,
907 (Alaska 2003) (noting that issue preclusion requires that the
issue be identical to the issue decided in the first action).
17 See Jay M. Zitter, Annotation, Propriety and Effect of
Corporations Appearance Pro Se Through Agent Who Is Not Attorney,
8 A.L.R. 5th 653 12b (1992).
18 722 F.2d 20, 23 (2d Cir. 1983).
19 See Zitter, supra note 17 14a14b.
20 AS 22.20.040(a)(2).
21 AS 05.15.150(a) further provides that
[p]olitical, educational, civic, public,
charitable, patriotic, or religious uses
means uses benefiting persons either by
bringing them under the influence of
education or religion or relieving them from
disease, suffering or constraint, or by
assisting them in establishing themselves in
life, or by providing for the promotion of
the welfare and well-being of the membership
of the organization within their own
community . . . .
22 AS 05.15.690(7) defines charitable organization as an
organization, not for pecuniary profit, that is operated for the
relief of poverty, distress, or other condition of public concern
in the state.
23 88 P.3d 124, 132 (Alaska 2004) (applying the broad
common law definition of charity in determining whether Native
nonprofit corporation qualified for charitable purposes tax
exemption).
24 AS 05.15.150(a).
25 25 P.3d 689, 693 (Alaska 2001).
26 Restatement (Third) of Trusts 28 cmt. a (2003). The
purposes of charitable trusts identified in the Restatement
largely mirror those of the statute, and include the relief of
poverty, the advancement of religion, the promotion of health,
government and municipal purposes, and other purposes that are
beneficial to the community. Id. at 28.
27 See, e.g., Fairbanks N. Star Borough, 88 P.3d at 132.
28 Because we hold that issuance of the permit was
consistent with the statutory scheme establishing a charitable
trust, we reject Robertss argument that the program is
inconsistent with the States position in Botelho v. Griffin.
29 Robertss argument, unsupported by any authority, that
the program is over and underinclusive does not apply. As the
State correctly notes, the statute does not require that all
proceeds be dedicated to poor citizens.
30 The State argues that Roberts waived this argument,
along with several other arguments, because he relied on
incorporated material from his memoranda before the superior
court. But because pro se litigants are held to less demanding
standards and because Robertss briefing before this court adds to
his arguments below, we do not consider Robertss arguments waived
and address the merits. See, e.g., Gilbert v. Sperbeck, 126 P.3d
1057, 1062 (Alaska 2005) (noting that we hold pro se litigants to
less demanding standards).
31 Keener v. State, 889 P.2d 1063, 1067 (Alaska 1995).
32 Cf. Brandal v. State, Commercial Fisheries Entry Commn,
128 P.3d 732, 741 (Alaska 2006) (holding that quasi-estoppel did
not apply where the Commission had consistently advanced the
position that appellant did not qualify for a permit).
33 Crosby v. Natl Foreign Trade Council, 530 U.S. 363, 372-
73 (2000) (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).
34 This information mirrors that listed on Earths Articles
of Incorporation. Earth indicated on its application that it was
a 501(c)(3) charitable organization, and the superior court found
that Earth was tax exempt for the period in question.
35 Roberts argues that the States position in Botelho v.
Griffin entitles him to summary judgment on this basis. But
Griffin held that the gaming statutes create a charitable trust,
and charitable trusts broadly define the public interest. 25
P.3d at 693. Griffin buttresses the superior courts holding.
36 AS 05.15.140(a) provides that [u]pon request of the
department, the applicant shall prove conclusively each of these
requirements before a permit may be issued or renewed.
37 626 P.2d 90, 92 (Alaska 1981).
38 Id. at 95.
39 Id.
40 Roberts cites AS 10.15.565 of the Alaska Cooperative
Corporation Act, but the page he references from his summary
judgment motion below quotes the text of AS 10.15.570, entitled
Declaration of public policy that cooperatives are not in
restraint of trade. Robertss motion quotes the statutes
provision that provides:
It is the public policy of the state to
encourage the efficient production and
distribution of agricultural and other
products derived from its natural resources
or labor resources.
41 376 P.2d 717, 721-22 (Alaska 1962) (holding that
appropriation of funds for the Alaska State Development
Corporation was consistent with the public purpose clause of the
Alaska Constitution and noting that encouraging new business was
a legitimate public purpose).
42 520 U.S. 564 (1997).
43 The superior court described these claims as difficult
to decipher but concluded that Roberts was alleging that the
gaming statutes violate [Robertss] right [to] earn a living by
allowing non-profit entities to compete with his for-profit
business.
44 See Concerned Citizens of S. Kenai Peninsula v. Kenai
Peninsula Borough, 527 P.2d 447, 452 (Alaska 1974); see also Dunn
v. Municipality of Anchorage, 100 P.3d 905, 909 (Alaska App.
2004). Robertss brief does not assert that the right to earn a
living is a fundamental right.
45 Judge Tans ruling notes that Roberts continues to run
his business and that right has not been taken away. . . . [T]he
burden to Mr. Roberts . . . [ ] competition [ ] is not an
unreasonable burden.
46 Craigmiles v. Giles, 110 F. Supp. 2d 658, 665 (E.D.
Tenn. 2000), affd, 312 F.3d 220 (6th Cir. 2002) (holding that
statute at issue did not violate the Privileges and Immunities
Clause).
47 In May 2003 the legislature passed House Bill 145,
which amended AS 09.60.010 to prohibit discrimination in the
award of attorneys fees based on the nature of the policy or
interest advocated by the party, the number of persons affected
by the outcome of the case, whether a governmental entity could
be expected to bring or participate in the case, the extent of
the partys economic incentive to bring the case, or any
combination of these factors. Ch. 86, 2, SLA 2003. The act
applies to all civil actions and appeals filed on or after
September 11, 2003. Ch. 86, 4, SLA 2003. Because Roberts filed
the complaint in this case on March 14, 2003, this case predates
the effective date of the statute, and the previous public
interest litigant doctrine applies.
48 Abbott v. Kodiak Island Borough Assembly, 899 P.2d 922,
923 (Alaska 1995).
49 The superior court also found that Robertss case
benefitted only downtown bicycle renters. While this is true of
his requests for compensatory damages, Robertss request for
declaratory relief concerning the scope of the gaming statutes
could benefit a larger population. But we need not address this
issue because the superior courts ruling on the fourth factor was
not an abuse of discretion.
50 899 P.2d 922.
51 846 P.2d 123 (Alaska 1993).
52 899 P.2d at 923.
53 Id. at 925.
54 846 P.2d at 127.
55 Id.
 |
| Case Law Statutes, Regs & Rules Constitutions Miscellaneous |
|
