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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Bodkin v. Cook Inlet Region, Inc. (04/04/2008) sp-6246
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
| ELEANOR V. BODKIN and | ) |
| MARIA D. L. COLEMAN, | ) Supreme Court No. S- 11870 |
| ) | |
| Appellants, | ) Superior Court No. 3AN-03-07389 CI |
| ) | |
| v. | ) O P I N I O N |
| ) | |
| COOK INLET REGION, INC., | ) No. 6246 April 4, 2008 |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Dan A. Hensley, Judge.
Appearances: Fred W. Triem, Petersburg, for
Appellants. Bruce E. Gagnon and Jerome H.
Juday, Atkinson, Conway & Gagnon, Anchorage,
for Appellee.
Before: Fabe, Chief Justice, Eastaugh and
Carpeneti, Justices. [Matthews and Bryner,
Justices, not participating.]
FABE, Chief Justice.
I. INTRODUCTION
Eleanor Bodkin and Maria Coleman, shareholders of Cook
Inlet Region, Inc. (CIRI), appeal the superior courts dismissal
of their challenge to (1) the legality of CIRIs payments to
original shareholders over the age of sixty-five under the Alaska
Native Claims Settlement Act (ANCSA) and Alaska state law, and
(2) the constitutionality of ANCSA to the extent that it preempts
state law in order to permit these payments. Because the plain
language of ANCSA authorizes CIRIs distributions to elder
shareholders, and because Bodkin and Colemans constitutional
claims lack a sound legal basis, we uphold the superior courts
judgment.
II. FACTS AND PROCEEDINGS
In 1971 Congress passed the Alaska Native Claims
Settlement Act, 43 U.S.C. 1601 et seq., to achieve a fair and
just settlement of all aboriginal land [in Alaska] . . . with
maximum participation by Natives in decisions affecting their
rights and property.1 Toward that end, the Act established
twelve in-state Native regional corporations to hold land and
capital on behalf of Alaska Native shareholders.2 Except as
otherwise expressly provided, the Act gives these shareholders
all rights of a shareholder in a business corporation organized
under the laws of the State.3 In 1987 Congress amended ANCSA to
give each regional corporation the authority to establish
settlement trusts to promote the health, education, and welfare
of its beneficiaries and preserve the heritage and culture of
Natives.4 A 1998 amendment expressly authorized and confirmed
the regional corporations authority to pursue those objectives.5
It further stipulated that such benefits need not be based on
share ownership in the Native Corporation and such benefits may
be provided on a basis other than pro rata based on share
ownership.6
CIRI is an Alaska Native regional corporation organized
under ANCSA. In February 2000 the CIRI board of directors passed
a resolution creating the Elders Benefit Program. The program
established a revocable trust that provided quarterly payments of
$450 to any shareholder aged sixty-five or older who received
shares in CIRI as an original enrollee. The Board determined
that the program did not require a shareholder vote. Shortly
after the Board established the program, Emil Notti, a CIRI
shareholder who did not qualify for benefits, filed suit. CIRI
removed the case from superior court to the United States
District Court for the District of Alaska.
The district court granted summary judgment in CIRIs
favor. It upheld the validity of the Elders Benefit Program
because [s]tate law authorizes ANCSA corporations to take any
action authorized by ANCSA and ANCSA [ 7(r)] permits preferential
distributions. The Ninth Circuit Court of Appeals affirmed,
reasoning that [t]he plain language of 7(r) allows CIRI to make
the distributions made in this case.7 The United States Supreme
Court denied certiorari.8
In the meantime, federal tax reforms led CIRIs board of
directors to favor replacing the Elders Benefit Program with an
irrevocable trust, titled The Elders Settlement Benefit Trust.
Pursuant to ANCSA, 43 U.S.C. 1629b(a)(3) & (b)(1), the Board
passed a resolution to establish the trust and then sought the
approval of a majority of its shareholders. In April 2003 the
corporation distributed a Voters Guide and Supplemental Proxy
Statement detailing the proposed trust. These materials
explained that the trust would cause CIRIs assets [to] decline by
. . . $16 million, or about 2.1% of the book value of [2002]
assets and outlined several risk factors that could lead a
shareholder to vote against the proposal. At the corporations
June 7, 2003 annual meeting, CIRI obtained majority shareholder
approval to implement the trust. On September 2, 2003, CIRI
registered the trust with the superior court.
On May 8, 2003, Eleanor Bodkin filed this suit in
superior court against CIRI. Her complaint purported to state
five major claims, the most urgent of which challenged CIRIs
proxy materials as not provid[ing] adequate disclosure to the
rank-and-file shareholders. Appellant Maria Coleman joined
Bodkin in an amended class action complaint filed on January 26,
2004, after the CIRI shareholders approved the trust. The
amended complaint repeated allegations that the CIRI April 2003
proxy did not provide adequate disclosure and that the Elders
Benefit Program and the trust illegally discriminated among
shareholders. On March 8, 2004, CIRI moved to dismiss for
failure to state a claim upon which relief could be granted. The
corporation argued that ANCSA expressly permits the benefit
programs and that its proxy statement contained no material
misstatements or omissions. CIRI also filed a motion for
sanctions under Alaska Civil Rules 11 and 95, alleging that
Bodkin and Colemans counsel, who had also represented Emil Notti
in his lawsuit regarding the same issues, had no reasonable
excuse for his conduct in signing and submitting a [c]omplaint
that is not well-grounded in law or fact.
Bodkin and Coleman requested an extension of time to
respond to CIRIs motion to dismiss, and the superior court
granted that request. Bodkin and Coleman used this time to amass
an opposition memorandum of 150 pages, which included a cross-
motion for partial summary judgment. The superior court refused
to consider the summary judgment motion until after the court
resolved CIRIs motion to dismiss. Similarly, it stated its
intention to postpone hearing arguments on the other ripe
motions, including Bodkin and Colemans motion for class
certification. Nevertheless, Bodkin and Coleman persisted in
filing a reply to follow up on their cross-motion for partial
summary judgment. CIRI filed a motion challenging Bodkin and
Colemans reply as premature since it had yet to file its response
to Bodkin and Colemans motion for summary judgment, and would not
need to do so until after the court considered the Civil Rule
12(b)(6) motion.
The superior court eventually heard oral argument on
CIRIs motion to dismiss on July 28, 2004, and on September 24,
2004, the lower court issued its decision dismissing Bodkin and
Colemans suit. The superior courts opinion notes that several
courts have rejected [Plaintiffs] same or similar claims.
Specifically, the opinion cites our decision in Sierra v.
Goldbelt, Inc.9 and the Ninth Circuits decision in Broad v.
Sealaska Corp.10 for the proposition that ANCSA allows
distributions to subsets of shareholders. In addition to the
case law, the superior court relied on 7(r)s express language,
which stipulates that benefits need not be based on share
ownership.11
The superior court further buttressed its decision with
evidence from ANCSAs legislative history. The congressional
record directly addresses the benefits permitted under 7(r):
Examples of the type of programs authorized
include: scholarships, cultural activities,
shareholder employment opportunities and
related financial assistance, funeral
benefits, meals for the elderly and other
elders[] benefits including cash payments,
and medical programs.[12]
The superior court therefore concluded that Congress intended to
provide for cash distributions and that ANCSA authorizes the
Elders Benefit Program and Elders Settlement Trust.
The superior court refused to exercise jurisdiction
over Bodkin and Colemans constitutional taking challenge to CIRIs
benefit programs, reasoning that [i]f the plaintiffs have a claim
for taking their property, they must assert that claim against
the U.S. government which authorized the statute. The court went
on to reject the rest of Bodkin and Colemans constitutional
claims including their assertion that CIRIs benefit programs
deny them equal protection under the law. The court reasoned
that the constitution protects individuals from state action but
not from deprivations by private actors. Because CIRI is not a
governmental agency, the superior court concluded that Bodkin and
Coleman could not succeed on these claims.
Finally, the superior court disposed of Bodkin and
Colemans allegations regarding the adequacy and accuracy of CIRIs
proxy materials. The court found that CIRIs proxy materials
provided accurate and complete information regarding the impact
of the settlement trust on the corporation and the individual
shareholder. Addressing Bodkin and Colemans argument that CIRI
should have included estimates of the programs impact on
individual share prices, the superior court pointed out that
their objection failed to recognize the complexity of stock price
valuation, especially where shares may not be bought or sold on
the open market. Similarly, the court dismissed Bodkin and
Colemans claim that CIRIs proxy materials are misleading or not
useful because the font size is too small, reasoning that
[n]othing about the font size would lead a shareholder to
disregard the proxy materials.
Following the courts ruling, Bodkin and Coleman
submitted a motion for reconsideration, which was denied. Bodkin
and Coleman appeal.
III. STANDARD OF REVIEW
We review de novo a superior courts dismissal of a
complaint pursuant to Alaska Civil Rule 12(b)(6).13 This same
review applies to constitutional issues and any other questions
of law.14 We review a lower courts discovery rulings and its
decision to expressly exclude material beyond Rule 12(b)(6)
pleadings for abuse of discretion.15
IV. DISCUSSION
Bodkin and Coleman present three issues for review.
First, Bodkin and Coleman argue that the superior court erred in
excluding extrinsic evidence that they sought to submit with
their opposition to CIRIs motion to dismiss. Second, they claim
that ANCSA does not authorize CIRIs benefit program and trust.
Finally, they argue that even if ANCSA does authorize the benefit
program and trust, the distributions qualify as government action
giving rise to constitutional claims.
A. The Superior Court Did Not Abuse Its Discretion in
Declining To Consider Additional Evidence Presented by
Bodkin and Coleman Prior to Granting Appellees Rule
12(b)(6) Motion.
Bodkin and Coleman argue that the superior court erred
in declining to convert CIRIs motion to dismiss to a motion for
summary judgment. They contend that the evidence that they
sought to submit with their opposition to the motion to dismiss
would have entitled them to relief if the superior court had
considered the motion as one for summary judgment. This evidence
includes CIRIs admissions about its elders benefit programs, as
well as proffered expert testimony on the CIRI proxy materials.
We must decide whether the lower court abused its discretion in
excluding this material beyond the pleadings . . . offered in
conjunction with a Rule 12(b)(6) motion.16
We hold that it did not. Bodkin and Colemans brief
sheds no further light on the importance of their proffered
expert testimony and devotes scant attention to the adequacy of
CIRIs proxy materials in general. We have held before that where
a point is given only a cursory statement in the argument portion
of a brief, the point will not be considered on appeal.17 In
their sixty-nine-page brief with its various tables and over
fifty footnotes, Bodkin and Coleman limit their analysis of the
proxy materials to passing remarks contained within two sentences
and a footnote on a single page. Bodkin and Colemans reply brief
ignores the proxy materials issue altogether. Thus, without some
elaboration on how their expert testimony bears on the proxy
issue in their complaint, Bodkin and Coleman fail to convince us
that the superior court abused its discretion in excluding that
testimony.
Bodkin and Coleman similarly fail to persuade us that
the superior court abused its discretion in rejecting such other
materials as CIRIs admissions about its elders benefit programs,
which they sought to submit with their opposition to CIRIs motion
to dismiss.18 For the most part, the factual disputes that Bodkin
and Coleman cite seem neither factual nor disputed. For example,
references in CIRIs corporate statements to the elders benefit
payments as distributions or dividends do not alter our analysis
of whether CIRIs quarterly cash payments to original stockholders
over the age of sixty-five violated ANCSA. Bodkin and Coleman
cite other purportedly disputed issues of fact, including the
number of elders receiving benefits, or how much the program
costs on a per share basis, but again they fail to explain how
these issues relate to their claims.
B. The Superior Court Correctly Held that ANCSA Expressly
Authorizes CIRIs Elders Benefit Program and Elders
Settlement Benefit Trust, Thereby Preempting Alaska
Law.
When Congress amended ANCSA in 1998, it expressly
authorized each regional corporation to distribute benefits in
order to promote the health, education, or welfare of its
beneficiaries.19 This amendment, contained in ANCSA 7(r),
further stipulates that such benefits need not be based on share
ownership in the Native Corporation and such benefits may be
provided on a basis other than pro rata based on share ownership.20
Bodkin and Coleman argue that 7(r)s authorization of
benefits does not extend to the cash distributions that CIRI has
paid out in its elders benefit program and trust. They contend
that [i]n modern parlance, benefits refers to governmental or
institutional grants of charitable aid, assistance, or welfare
[and the term] is not used to mean corporate distributions or
dividends. When pressed by the superior court to elaborate on
the terms meaning, Bodkin and Coleman indicated that the statute
[is] limited to providing benefits by need only . . . . It means
some demonstrable need. Thats what the language [used] in 7(r)
means.
But the legislative history behind 7(r) casts doubt
upon this characterization. On the floor of the Senate, Senator
Frank Murkowski urged passage of the ANCSA amendment. He also
noted that [e]xamples of the type of programs authorized [by
7(r)] include: scholarships, cultural activities, shareholder
employment opportunities and related financial assistance,
funeral benefits, meals for the elderly and other elders[]
benefits including cash payments, and medical programs.21 Bodkin
and Coleman dismiss that legislative history, however, as
containing little more than Senator Murkowskis statement, which
they urge us to ignore. Bodkin and Coleman assert that the plain
meaning of benefits cannot include what CIRIs own promotional
literature characterizes as dividends. According to Bodkin and
Coleman, these terms are mutually exclusive. We disagree.
As the superior court pointed out, we have previously
considered an argument closely akin to the one Bodkin and Coleman
advance in this appeal. In Sierra v. Goldbelt, Inc., we
considered whether Goldbelt, Inc., another Native regional
corporation, could issue shares to original shareholders over the
age of sixty-five.22 In upholding Goldbelts share issuance, we
looked to Congresss intent and concluded that Native corporations
must have broad discretion to fashion elder benefit programs that
meet the needs of elders.23 We made note of certain restrictions
that do apply to Native regional corporation distributions. For
example, a Native regional corporation may not define classes of
beneficiaries . . . by reference to place of residence, family,
or position as an officer, director, or employee of a Native
Corporation.24 We clarified, however, that ANCSA permits limiting
beneficiaries to elders who owned original shares of stock.25
Here, Bodkin and Coleman advance no principled basis
for distinguishing Goldbelt. They emphasize the qualitative
difference between the issuance of corporate stock . . . and
discriminatory cash payments. According to Bodkin and Coleman,
the issuance of stock institutionalizes the ownership interest of
original shareholders in the corporation, but cash payments do
not. Yet the Goldbelt board agreed to redeem the shares they
issued to elders at a fixed price, and elders received the
equivalent of $1,000.26 Thus, for many elders, the Goldbelt
program differed only in its form and duration from CIRIs
quarterly cash distributions. Bodkin and Coleman fail to
assemble any support from the relevant statutory text,
legislative history, or case law to distinguish our holding in
Goldbelt from the case at hand.27
C. The United States Constitution Does Not Afford Bodkin
and Coleman Any Relief from this Court.
Bodkin and Coleman argue alternatively that if ANCSAs
provisions could be used as CIRI interprets and applies them
these statutes would violate the Fifth Amendment. In addition to
claiming an unconstitutional taking of their property, Bodkin and
Coleman contend that authorizing CIRIs elders benefit programs
interferes with other constitutional rights, including equal
protection to similarly situated but excluded shareholders and
due process, because the programs impos[e] retroactive liability
on the excluded shareholders. Bodkin and Coleman further assert
that CIRIs interpretation and application of ANCSA extinguish the
excluded shareholders vested contractual right to equal
distributions.
Bodkin and Coleman must pursue their takings claim
against the federal government in the United States Court of
Federal Claims. The federal Tucker Act28 vests that court with
jurisdiction to render judgment upon any claim against the United
States founded either upon the Constitution, or any Act of
Congress.29 Addressing a similar takings claim involving the same
benefit programs at issue here, the Ninth Circuit declined to
exercise jurisdiction because appellants must raise that claim
under the Tucker Act in the Federal Court of Claims.30 Federal
case law makes clear that Bodkin and Colemans takings claim is
premature until they have first presented a claim for
compensation pursuant to the Tucker Act.31 The superior court
thus correctly ruled that it lacked jurisdiction over those
claims.
The superior court concluded that Bodkin and Colemans
other constitutional claims fail for lack of state action. As
the superior court noted, the Ninth Circuit rejected similar
constitutional claims on this basis in Broad v. Sealaska.32 CIRI
argues persuasively that we should bypass any consideration of
Bodkin and Colemans constitutional claims on the merits and
affirm the superior court on alternative jurisdictional grounds
because the ANCSA Amendments of 198733 provide that the United
States District Court for the District of Alaska shall have
exclusive original jurisdiction over constitutional challenges to
ANCSA.34 Bodkin and Coleman address this argument with a single
sentence in their reply. Citing Louisville & Nash Railroad Co.
v. Mottley35 and Merrel Dow Pharmaceuticals, Inc. v. Thompson,36
they argue that [t]he federal court does not have jurisdiction of
this case because the federal question is brought in by way of
defense, not as part of plaintiffs case in chief. But this
argument is not responsive to CIRIs jurisdictional challenge,
given that Bodkin and Coleman rely on the Fifth Amendment to
challenge the legality of CIRIs elders benefit programs.
In any event, we need not decide this jurisdictional
question, which was not addressed by the superior court, because
it is unnecessary to rely on an alternative ground to affirm the
superior courts decision. We see no error in the superior courts
ruling on the merits of Bodkin and Colemans constitutional
claims. As the Ninth Circuit concluded in Broad, the federal
governments mere authorization of a Native corporation to create
an elders benefit trust does not implicate the Fifth Amendment.37
Bodkin and Coleman fail to advance any basis for differentiating
between CIRIs distributions and those of the Sealaska Corporation
that were at issue in Broad.38 Applying the same factors that led
the Ninth Circuit to conclude that Sealaskas elders benefit
programs were not state action, we agree that Bodkin and Colemans
constitutional claims must fail for lack of state action.
V. CONCLUSION
For the reasons detailed above, we AFFIRM the judgment
of the superior court.
_______________________________
1 Broad v. Sealaska Corp., 85 F.3d 422, 425 (9th Cir.
1996), cert. denied, 519 U.S. 1092 (1997).
2 See 43 U.S.C. 1606 (2006).
3 Id. 1606(h)(1).
4 Id. 1629e(b)(1).
5 Id. 1606(r).
6 Id.
7 Notti v. Cook Inlet Region, Inc., 31 F. Appx 586 (9th
Cir. 2002).
8 Notti v. Cook Inlet Region, Inc., 537 U.S. 1104 (2003).
9 25 P.3d 697, 702 (Alaska 2001).
10 85 F.3d 422 (9th Cir. 1996).
11 43 U.S.C. 1606(r).
12 144 Cong. Rec. S26254 (1998) (emphasis added).
13 Carlson v. Renkes, 113 P.3d 638, 640-41 (Alaska 2005).
14 Evans ex rel. Kutch v. State, 56 P.3d 1046, 1049
(Alaska 2002).
15 Marron v. Stromstad, 123 P.3d 992, 998 (Alaska 2005);
see also Martin v. Mears, 602 P.2d 421, 426-27 (Alaska 1979).
16 Martin, 602 P.2d at 426 (quoting 5 C. Wright & Miller,
Federal Practice and Procedure 1366 (1969 & Supp. 1979)).
17 Adamson v. Univ. of Alaska, 819 P.2d 886, 889 n.3
(Alaska 1991).
18 As CIRI points out, the bulk of Bodkin and Colemans
excerpt of record consists of this excluded material. Because we
hold that the superior court did not err in excluding these
materials, we will not consider them in our review of the lower
courts decision to dismiss Bodkin and Colemans complaint.
19 43 U.S.C. 1606(r).
20 Id.
21 144 Cong. Rec. S26254 (1998) (emphasis added).
22 25 P.3d 697 (Alaska 2001).
23 Id. at 702.
24 Id. (citing 43 U.S.C. 1606(g)(2)(B)(iii)(IV) (1986 &
Supp. 2000)).
25 Id.
26 The Goldbelt resolution approved the issuance of 100
shares to each eligible elder and authorized prompt redemption of
those shares at $10 per share. Id. at 700.
27 In contrast to CIRIs program, the Goldbelt elders
program issued shares to all original shareholders, including
those who no longer held any stock in the corporation. Bodkin
and Coleman do not, however, attach any significance to that
difference, perhaps because there is none to be gleaned.
28 28 U.S.C. 1491.
29 Id. 1491(a)(1).
30 Notti v. Cook Inlet Region Inc., 31 F. Appx 586, 587
(9th Cir. 2002).
31 See Bay View, Inc. v. Ahtna, Inc., 105 F.3d 1281, 1285
(9th Cir. 1997).
32 85 F.3d 422 (9th Cir. 1996).
33 Pub. L. No. 100-241, 16(a)(1), 101 Stat. 1813 (1988),
reprinted in Historical and Statutory Notes, 1988 Amendments, 43
U.S.C. 1601.
34 Id. at 16(b), 101 Stat. 1813-1814.
35 211 U.S. 149 (1908).
36 478 U.S. 804 (1986).
37 85 F.3d at 431.
38 Id.
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