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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. RBG Bush Planes, LLC v. Alaska Public Offices Commission (11/25/2015) sp-7063

RBG Bush Planes, LLC v. Alaska Public Offices Commission (11/25/2015) sp-7063

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  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, email  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                      

RBG  BUSH  PLANES,  LLC,                                        )  

                                                                )          Supreme  Court  No.  S-15397  

                     Appellant,                                 )  


                                                                )          Superior Court No. 3AN-11-13052 CI  

           v.                                                   )  


                                                                )          O P I N I O N  


ALASKA PUBLIC OFFICES                                           )  


                                                                )          No. 7063 - November 25, 2015  


                     Appellee.                                  )  


_______________________________ )  


                     Appeal from the Superior Court of the State of Alaska, Third  


                     Judicial District, Anchorage, Catherine M. Easter, Judge.  


                     Appearances:  Timothy A. McKeever and Scott M. Kendall,  


                     Holmes Weddle & Barcott, PC, Anchorage, for Appellant.  


                     Janell M. Hafner, Assistant Attorney General, and Michael C.  


                      Geraghty, Attorney General, Juneau, for Appellee.  


                     Before: Winfree, Stowers, and Bolger, Justices. [Fabe, Chief  


                     Justice, and Maassen, Justice, not participating.]  


                      STOWERS, Justice.  



                     Alaska  law  forbids  corporations  from  making  direct  contributions  to  

                                              1  And in 2010 a corporation that provided a service to a  

candidates for public office.                                                                                                             

candidate for less than a "commercially reasonable rate" or the "normal charge . . . in the  


           1         AS   15.13.074(f).  

----------------------- Page 2-----------------------

market" was deemed to have made a contribution to the candidate equal to the difference                                                                            


between the commercially reasonable rate and the amount charged.                                                                                   

                            In September 2010 RBG Bush Planes, LLC (Bush Planes) allowed two  


candidates for the Lake and Peninsula Borough Assembly to travel on a series of pre- 


existing flights throughout the borough.  Bush Planes charged the candidates a fraction  


of the fuel costs associated with those flights.  The Alaska Public Offices Commission  


(Commission)  investigated  these  charges,  determined  that  Bush  Planes'  fractional  


fuel-cost methodology did not represent a commercially reasonable rate, and assessed  


a $25,500 fine against Bush Planes for making illegal corporate contributions.  Bush  


Planes appealed to the superior court, which affirmed the Commission.  


                            Bush Planes again appeals, arguing (1) that the Commission erred when it  


found  Bush  Planes  had  violated  Alaska  law  and  (2)  that  the  fine  the  Commission  


imposed was unconstitutionally excessive. Bush Planes also appeals the superior court's  


denial  of  Bush  Planes'  motion  to  supplement  the  record  with  allegedly  recently  


discovered evidence and related briefing suggesting Commission bias against Bush  


Planes.  We affirm the superior court's decisions for the reasons discussed below.  




              A.            Facts  

                            Bush  Planes  is  a  limited  liability  company  that  holds  title  to  several  


airplanes.  It is owned by a revocable trust created for Robert B. Gillam, and it operates  


as a private carrier under Part 91.3  


              2             2AlaskaAdministrativeCode(AAC)50.250(a)(3)(G),(c)(2006). Wenote                                                                                     

that 2 AAC 50.250 has since been amended, but this appeal concerns the pre-amendment                                                                   

language in effect in 2010.                   

              3              General Operating and Flight Rules, 14 C.F.R. pt. 91 (2015).  As a Part 91  



                                                                                         -2-                                                                                 7063

----------------------- Page 3-----------------------

                                             Gillam is involved in the politics surrounding mining development in the                                                                                                                                                                    

Bristol Bay area, and he hired George Jacko to be his "eyes and ears in Bristol Bay."                                                                                                                                                                                           

Jacko traveled throughout the Lake and Peninsula Borough and flew on Bush Planes'                                                                                                                                                                                          

aircraft for his travel.                                                 Jacko asked Gillam if he could offer flights to two candidates for                                                                                                                                               

the Lake and Peninsula Borough Assembly, Nana Kalmakoff and Michelle Ravenmoon.                                                                                                                                                                          

Gillam consulted counsel and later approved allowing the two candidates to fly with                                                                                                                                                                                                 

Jacko on Bush Planes' flights. But Gillam also required that the fuel costs for each flight                                                                                                                                                                                       

be recorded.   

                                             In 2010 Jacko traveled with Kalmakoff and Ravenmoon on two separate                                                                                                                                                        

trips:    one from September 3 through September 6 and another from September 17                                                                                                                                                                                                           

through September 18.                                                           While some of the flights included both candidates, on others                                                                                                                                  

only Kalmakoff or Ravenmoon was present.                                                                                                                    Bush Planes invoiced Ravenmoon and                                                                                         

Kalmakoff for a fractional portion of the fuel costs related to the flights they took.                                                                                                                                                                                                           4  

Ravenmoon paid a total of $351.55, and Kalmakoff paid $1,184.60.  


                                             After the election the Commission received two complaints from the Lake  


and Peninsula Borough regarding the trips Ravenmoon and Kalmakoff took with Jacko.  


The Commission dismissed the complaints without filing charges, but the Commission  


staff continued investigating the allegations.  


                                             By March 9, 2011, the investigation had produced sufficient information  


that  the  Commission's  assistant  director,  Jerry  Anderson,  intended  to  have  the  




operator Bush Planes may only charge a candidate for public office an amount that does  


not                "exceed                             the                amount                            required                              under                       the                applicable                                 state                   or             local  


law." 14 C.F.R.  91.321(a)(3).  

                       4                     Bush Planes intended to bill the candidates for half of the fuel used on each  


flight. Bush Planes actually billed the candidates more than one-half of the fuel costs due  


to an accounting error.  That discrepancy does not affect our decision.  


                                                                                                                                              -3-                                                                                                                                  7063

----------------------- Page 4-----------------------

Commission's staff file a complaint.                                                   By March 30, 2011, Anderson directed one of the                                                                

Commission's staff attorneys to begin drafting a complaint. But the Commission's staff                                                                                                             

continued investigating the allegations into April, and the Commission's staff did not file                                                                                                           

a complaint until July 7, 2011.                            

                B.              Proceedings  

                                The Commission staff's complaint alleged that Bush Planes had violated                                                                                    

AS   15.13.074(f),   which   prohibits   a   corporation   from   making   a   contribution   to   a  



                             "Contribution" is defined in both AS 15.13.400 and former 2 AAC 50.250.  


Relevant here are two definitions previously contained in 2 AAC 50.250.   The first  


definition specifically excluded from the meaning of "contribution" the "provision of a  


service  .  .  .  to  a candidate .  .  .  if the entity  providing the service .  .  .  is paid  at a  

                                                                                                                                                                           6     The second  



commercially reasonable rate within a commercially reasonable time." 

definition stated:  


                                The provision of goods or services without charge, or at a  


                                charge that is less than the normal charge for the goods and  


                               services in the market, is a contribution unless a lower rate is  


                                extended to all campaigns.  If goods or services are provided  


                                at less than the normal charge in the market, the amount of  


                                the nonmonetary contribution is the difference between the  


                               normal charge for the goods or services at the time of the  


                                                                                                                        [  ]  

                                contribution and the amount charged. 7 


                                The staff alleged that charging Ravenmoon and Kalmakoff fractional fuel  


costs alone was not commercially reasonable.  The staff also alleged that a fuel-only  


                5               The complaint also included allegations against Gillam, McKinley Capital                                                                                    

Management, Ravenmoon, and Kalmakoff.                                                                    Only the charges against Bush Planes are                                                     

relevant to this appeal.             

                6               2 AAC 50.250(a)(3)(G) (2006) (emphasis added).  


                7               2 AAC 50.250(c) (2006) (emphasis added).  


                                                                                                   -4-                                                                                           7063

----------------------- Page 5-----------------------

valuation "ignore[d] all of the other normal and customary expenses associated with                                                                                                                                                                                                                                               

aircraft use" and noted the following additional expenses: "[o]il,                                                                                                                                                                                        maintenance, an engine  

reserve . . . , a propeller reserve . . . , insurance, hang[a]r fees, . . . inspection fees," and                                                                                                                                                                                                                                      

the   pilot's   salary.     Thus,   the   staff   claimed   that   Bush   Planes   had   not   charged   a  

commercially reasonable rate and had made a prohibited corporate contribution to both                                                                                                                                                                                                                                               


                                                     1.                        The Commission hearing                                                   

                                                     The Commission members heard the case against Bush Planes during one                                                                                                                                                                                                              

day of testimony presided over by an administrative law judge.                                                                                                                                                                                            One of the main issues                                             

during the hearing was whether Bush Planes had charged the candidates a commercially                                                                                                                                                                                                       

reasonable rate.   

                                                     Gillam testified regarding Bush Planes' costs. He stated that he owned the                                                                                                                                                                                                           

hangar in Anchorage where Bush Planes stored its aircraft and personally paid for the                                                                                                                                                                                                                                                    

"heat, lights, taxes, [and] maintenance" related to the hangar.                                                                                                                                                                                       He did not testify as to                                                               

how much he paid, nor did he provide Bush Planes' maintenance costs or the cost to run                                                                                                                                                                                                                                                  

each of Bush Planes' aircraft on a per-hour basis.                                                                                                                                                  Gillam noted that McKinley Capital                                                                                   

paid the pilots' salaries and benefits in exchange for Bush Planes making its aircraft                                                                                                                                                                                                                                  

available to McKinley Capital when it needed them for its business.                                                                                                                                                                     

                                                     Greg    O'Keefe,   McKinley   Capital's   chief   financial   officer,   testified  

                                                                                                                     8       O'Keefe testified that the amount of time Bush Planes'  

regarding Bush Planes' costs.                                                                                                                                                                                                                                                                                           

aircraft spent in the air did not affect Bush Planes' fixed costs.  But he did not provide  


values for these fixed costs or the agreement between McKinley Capital and Bush Planes  


regarding piloting services.  




                                                     It appears McKinely Capital handles certain accounting functions for Bush  


                                                                                                                                                                      -5-                                                                                                                                                                          7063  

----------------------- Page 6-----------------------

                                           O'Keefe further testified that Bush Planes does not set aside money for                                                                                                                                                        

maintenance reserves or propeller reserves and that Bush Planes' maintenance costs do                                                                                                                                                                                      

not   depend  on  the   number   of   hours   flown   other   than   "a   hundred-hour   annual"  

maintenance.   He testified that the variable costs, the ones "you would incur as a result                                                                                                                                                                     

of operating the plane," would be "the fuel, perhaps a little bit of oil, maybe some                                                                                                                                                                             

Windex . . . and maybe some minor supplies like air sickness bags, things like that."                                                                                                                                                                            

                                           Glen Alsworth testified regarding airfare. Alsworth, the mayor of the Lake                                                                                                                                               

and Peninsula Borough, was also the president of a for-profit air carrier, Lake Clark Air.                                                                                                                                                                                            

Alsworth was provided with the flight plan for the trips the candidates took, and he                                                                                                                                                                                       

asserted that it would cost $950 per hour multiplied by the flight hours to charter these                                                                                                                                                                          

flights and that there would be standby and overnight charges.                                                                                                              

                                                                                                                                                   9 for each leg of the two itineraries. These  

                                          Alsworth also provided seat fares                                                                                                                                                                                     

fees  ranged  from  $60  to  $400.                                                                                       Alsworth  stated  that  $1,240  "would  be  just  


a . . . screaming deal" for a passenger taking all of the flights in the first trip and that  


$500 for the entire second trip was possible but would be "the steal of the century."10  


                                           David Wilder, owner of Lake and Peninsula Airlines,11  testified that the  


charter cost for the first trip would be approximately $10,450 and the seat fare would be  


$2,500.  For the second trip, Wilder estimated a charter cost of $2,800 and a seat fare of  


                     9                    As used in the hearing, a seat fare is the amount a carrier would charge                                                                                                                                            

someone who wanted to purchase a seat on a pre-existing charter flight.                                                                                                                                          

                      10                  Using Alsworth's seat fares, Kalmakoff should have paid $1,125 for her  


participation in the first trip and $560 for her participation in the second trip. Kalmakoff  


paid Bush Planes $1,184.60.                                                                          Similarly, Alsworth's seat fares indicate Ravenmoon  


should  have  paid  $1,040  for  her  participation  in  the  first  trip  and  $100  for  her  


participation in the second trip, but Ravenmoon only paid $351.55.  


                      11                   Wilder was also a member of the Lake and Peninsula Borough Assembly  


until he lost his seat to Ravenmoon in the 2010 election.  


                                                                                                                                     -6-                                                                                                                            7063

----------------------- Page 7-----------------------


approximately $700.                                                            When asked about charging $306                                                                                                          for a seat fare on the first                                                      

itinerary, Wilder indicated that it would be "impossible for us . . . .                                                                                                                                                                        It doesn't make                                      

economic sense . . . when somebody else is paying $9,000 for a charter and you go well,                                                                                                                                                                                                                

we're going to let two more people hop on for 300 bucks, . . . I wouldn't do that."                                                                                                                                                                                                                        He  

noted that $306 was "not in the ballpark."                                                                         

                                                2.                      The Commission's decision                                                 

                                                TheCommission,with theadministrativelawjudge's assistance,foundthat                                                                                                                                                                                         

the lowest commercially reasonable rates supported by the evidence presented were the                                                                                                                                                                                                                         

seat fares to which Alsworth had testified. Comparing those seat fares with the amounts                                                                                                                                                                                                   

Bush   Planes   charged   the   candidates,   the   Commission   found   that   Bush   Planes   had  

undercharged Ravenmoon by $788.45 and Kalmakoff by $500.40.                                                                                                                                                      

                                                The Commission specifically addressed whether Bush Planes' fuel-only                                                                                                                                                                   

methodology   represented a commercially reasonable rate.                                                                                                                                                                   It noted that one of the                                                       

Commission's advisory opinions had indicated that it might be sufficient to charge a                                                                                                                                                                                                                                


candidate the "actual cost" of a flight,                                                                                                                                                                                                                                                           

                                                                                                                                              but it (1) disavowed the concept of using actual  


costs when a candidate flies on a company plane "in an area where market rates for seat  


fares can be ascertained" and (2) held that even under an actual-cost methodology, Bush  


Planes needed to account for both its variable and fixed costs.   But the Commission  


found that Bush Planes had failed to provide a "credible cost-based valuation taking all  


costs into account."  

                        12                      Bush Planes charged Ravenmoon $306.21 for the first set of flights.                                                                                                                                                          

                        13                      See  STATE OF                                     ALASKA, D                                EP 'T OF                   ADMIN., A                              LASKA  PUB. O                                      FFICES  COMM'N  

ADVISORY                                         OP .,                     AO                    06-03-CD,                                          at              5            (Oct.                        31,                  2006),                            available                                    at  

                                   (hereinafterP                                                                                                                                                                                                                           EREZ  


                                                                                                                                                        -7-                                                                                                                                            7063

----------------------- Page 8-----------------------

                                         TheCommission                                        next considered thepenalty                                                          toimpose                       on Bush Planes and  

discussed several factors.                                                       It noted that Gillam was Bush Planes' principal and that he                                                                                                                        

had previous experience with the Commission, including a $100,000 settlement in 2010                                                                                                                                                                        

related to alleged campaign disclosure violations.                                                                                                            The Commission found that Bush                                                               

Planes had "substantial assets and . . . sophisticated management" and that its conduct                                                                                                                                                  

had "great potential to alter the outcome of elections to the detriment of candidates not                                                                                                                                                                        

so favored." The Commission further found that Bush Planes "engaged in a questionable                                                                                                                                             

practice without adequately exploring its legality, . . . embroil[ing] two unsophisticated                                                                                                                                 

candidates in itswrongdoing." Therefore,theCommission                                                                                                                             concluded "astrong                                            deterrent  

fine [was] necessary" and imposed a penalty of $25,500.                                                                                                                         14  

                                         The Commission also imposed $10,668 in investigation and adjudication  


                                                                                                              15  Thus, the Commission's final award against Bush  

costs and $19,100 in attorney's fees.                                                                                                                                                                                                                       


Planes was for $55,268:  $25,500 in fines, $10,668 in adjudication and investigation  


costs, and $19,100 in attorney's fees.  


                                         3.                   The superior court's ruling  


                                         BushPlanesappealedtheCommission's decisionsto thesuperior court, and  


the parties completed their briefing in November 2012. Approximately six months later,  


shortly before the scheduled oral argument, Bush Planes filed a motion to supplement  


the record arguing that it had recently obtained "clear evidence that [the Commission]  


                     14                  The maximum statutory penalty is $50 per day per violation until the                                                                                                                                                    

violation is remedied. AS 15.13.390(a).                                                                                        Despite each candidate participating in two                                                                                     

separate   itineraries,   the   Commission   based   the   fine   on   a   single   violation   for   each  

candidate and calculated the number of days since the violation until the violation was                                                                                                                                           

remedied as 255 days.                                                  Thus, $50 x 255 days x 2 violations = $25,500.                                                                                                        

                     15                  Alaska  Statute  15.13.390(b)  states  that  when  the  Commission  finds  a  


violation "the commission shall assess . . . the commission's costs of investigation and  


adjudication[] and . . . reasonable attorney fees."  


                                                                                                                                  -8-                                                                                                                       7063

----------------------- Page 9-----------------------

and the [Commission's] Staff . . . were biased and prejudiced against it."                                                                                                                                                                                                                                                                            Bush Planes   

argued that                                         thenewevidencedemonstratedthatBushPlanes was                                                                                                                                                                                                      denied"its                                         fundamental  

due process right to an impartial tribunal."                                                                                                             

                                                              Bush Planes claimed that it only obtained the new evidence after the close                                                                                                                                                                                                                                                   

of the briefing and that the importance of the evidence, along with its unavailability to                                                                                                                                                                                                                                                                                                                 

Bush   Planes   during   the   earlier   briefing,   justified   supplementing  the   record   and   its  

briefing.   The Commission opposed the motion, noting that Bush Planes had obtained                                                                                                                                                                                                                                                                   

much of the evidence it wanted to introduce approximately four months earlier and that                                                                                                                                                                                                                                                                                                            

none of the evidence was sufficient to demonstrate impermissible bias or prejudice.                                                                                                                                                                                                                                                                                

                                                               Superior   Court Judge Catherine M.                                                                                                                                          Easter   affirmed   the Commission's   

decision   regarding   Bush   Planes'   liability.     She   also   held   that   the   fine   was   not  

unconstitutionally excessive and that it was not an abuse of discretion.                                                                                                                                                                                                                                                                             Judge Easter   

denied the motion to supplement the record without comment and did not reach the                                                                                                                                                                                                                                                                                                                   

merits of Bush Planes' due process argument.                                                                                                                          

                                                              Bush Planes now appeals the Commission's finding of liability and the                                                                                                                                                                                                                                                                 

penalty it imposed, as well as the superior court's denial of its motion to supplement the                                                                                                                                                                                                                                                                                                           

record and file a supplemental brief.                                                                                                          

III.                            STANDARD OF REVIEW                                                                    

                                                               "Where the superior court is acting as an intermediate court of appeals, we                                                                                                                                                                                                                                                            

                                                                                                                                                                          16 using one of four standards of review depending  

directly review the agency decision"                                                                                                                                                                                                                                                                                                                              

on the issues on appeal:  


                                                               The "substantial evidence" test is used for questions of fact.  


                                                               The  "reasonable  basis"  test  is  used  for  questions  of  law  


                                16                            Alaska Police Standards Council v. Parcell                                                                                                                                                                      , 348 P.3d 882, 886 (Alaska                                                                     

2015) (quoting                                                           West v. Municipality of Anchorage                                                                                                                                    , 174 P.3d 224, 226 (Alaska 2007))                                                                                                   

 (internal quotation marks omitted).                                                                                    

                                                                                                                                                                                                    -9-                                                                                                                                                                                      7063

----------------------- Page 10-----------------------

                         involving agency expertise.                          The "substitution of judgment"          

                         test   is   used   for   questions   of   law   where   no   expertise   is  

                         involved.   The "reasonable and not arbitrary" test is used for                                            

                         review of administrative regulations.                                [17]  

                         We review a superior court's ruling on a motion to supplement the record  


for  abuse  of  discretion.18                      The  superior court  abuses  its  discretion when  it  acts  in  a  



manifestly unreasonable manner.19  


IV.          DISCUSSION  

                         Bush Planes  argues that (1) the Commission erred in finding that Bush  


Planes  made  an  illegal  corporate  contribution  to  a  candidate;  (2)  the  Commission  


imposed an unconstitutionally excessive fine on Bush Planes; and (3) the superior court  


abused its discretion when it denied Bush Planes' motion to supplement the record and  


allow its supplemental brief.  We conclude that none of these decisions was erroneous  


and affirm.  


             A.          The Commission Did Not Err When It Found That Bush Planes Made  


                         An Illegal Corporate Contribution.  


                         Bush Planes challenges the Commission's determination that Bush Planes  


violated the prohibition on corporate contributions to candidates.  Bush Planes argues  


that  (1)  the  phrase  "commercially  reasonable  rate"  is  ambiguous;  (2)  because  


"commercially reasonable rate" is ambiguous, the Commission should have deferred to  


             17          Skvorc v. State, Pers. Bd.                    , 996 P.2d 1192, 1196-97 (Alaska 2000) (quoting                            

Handley v. State, Dep't of Revenue                                , 838 P.2d 1231, 1233 (Alaska 1992)).                      

             18          Southwest Marine, Inc. v. State, Dep't of Transp. &Pub. Facilities, Div. of  


Alaska Marine Highway Sys. , 941 P.2d 166, 172 (Alaska 1997).  


             19          Tobeluk  v.  Lind,  589  P.2d  873,  878  (Alaska  1979)  ("We  will  not  


interfere . . . unless it is shown that the court abused its discretion by issuing a decision  


which is arbitrary,capricious,manifestlyunreasonable, or which stemsfroman improper  



                                                                             -10-                                                                       7063

----------------------- Page 11-----------------------

Bush Planes' actual-cost methodology; and (3) the Commission ignored Bush Planes'   

evidence that it did not incur any costs other than the variable fuel costs it charged the                                                                                                     


                               1.	            The           Commission's                            Perez              Opinion                  rendered                   the          terms  

                                              "commercially   reasonable   rate"   and   "normal   charge   in   the  

                                              market" ambiguous.   

                               The   Commission's   finding   that   Bush   Planes   is   liable   for   campaign  

violations   centers   on   the   proper   interpretation   of   two   phrases:     (1)   "commercially  

reasonable rate" and (2) "normal charge in the market."                                                                            20  


                                                                                                                                          Bush Planes argues these  


phrases are ambiguous while the Commission disagrees.  


                               A regulation is ambiguous when "[it] is capable of two or more equally  



logical interpretations."                                  And "ambiguous statutory or regulatory requirements must be  


strictly construed in favor of the accused before an alleged breach may give rise to a civil  



penalty."                  This rule has its genesis in the doctrine of vagueness, which requires that the  



law "give the ordinary  citizen  fair  notice of what is  and what is not prohibited." 


"People should not be required to guess whether a certain course of conduct is one which  

               20              2 AAC 50.250(a)(3)(G), (c) (2006). Bush Planes briefly argues that using                                                                                   

two different phrases in the regulation makes the regulation inherently ambiguous, but                                                                                                         

we disagree and interpret them similarly here.                                                

               21              State v. Bernard, 625 P.2d 311, 313 (Alaska 1981) (per curiam).  Because  


the question of regulatory ambiguity presented here is a question of law not involving  


agency expertise, we review it under the substitution of judgment standard. See Alaska  


Pub. Offices Comm'n v. Stevens, 205 P.3d 321, 324-26 (Alaska 2009).  


               22              Stevens, 205 P.3d at 326.  


               23             Id.  at  325  (quoting  VECO Int'l,  Inc.  v.  Alaska  Pub.  Offices  Comm'n,  


753 P.2d 703, 714 (Alaska 1988)).  


                                                                                              -11-	                                                                                       7063

----------------------- Page 12-----------------------


is apt to subject them to criminal or serious civil penalties."                                                                  But to take advantage of                        

any regulatory ambiguity, the accused party's interpretation may not be "strained or                                                                        



                            In the abstract, "commercially reasonable rate" and "normal charge in the  


market" do not appear ambiguous because they focus the analysis on the price available  


on the open market.  But the Commission injected ambiguity into these phrases when it  



released a 2006 advisory opinion referred to as the Perez Opinion. 

                            The Perez Opinion considered whether Alaska law required the governor  


to reimburse the state for travel on state aircraft when the governor engages in both state  


business and campaign-related activities.27                                                   The opinion noted that the state may not  


make a contribution to a candidate and concluded that "if the governor's reelection  


campaign reimburses the state at a reasonably commercial rate . . . for state-provided  


              24             VECO Int'l             , 753 P.2d at 714 (citing                         Gottschalk v. State                    , 575 P.2d 289, 290              

(Alaska 1978)).   

              25            See Bernard, 625 P.2d at 313 ("That one [interpretation] is more logical  


than the other does not cure the ambiguity of the regulation when the less logical method  


is not strained or outlandish."); see also Theodore v. State, 407 P.2d 182, 189 (Alaska  


 1965) ("We agree with appellant that a vague . . . regulation, the breach of which carries  


a criminal penalty, should be strictly construed in favor of the accused.  However, we  


believe  that  a  common  sense,  unstrained,  reading  of  both  descriptions  provides  a  


reasonably  concise  description  of  the  areas  and  leaves  no  room  for  the  argument  


advanced by appellant.").  


              26            See  PEREZ   OP.,   supra   note   13.     The   opinion   is   known   as   the   "Perez  


Opinion" because it was requested by Governor Frank Murkowski's Administrative                                                                        

Director, Linda Perez.                          Id.  at 1.   

              27            Id. at 1.  


                                                                                      -12-                                                                                 7063

----------------------- Page 13-----------------------


travel, state-provided travel would not be a prohibited contribution."                                                                                                       The opinion   


                               Because reimbursement is required . . . , we must address                                                                  

                               what             constitutes                  a       commercially                         reasonable                    rate         for  

                               reimbursement.   There are probably many possibilities.                                                                            One  

                               obvious method might be to determine the state's actual costs                                                                     

                               and reimburse those costs                                     .  Another method is suggested in                                          

                                federal regulation . . . . Using either of these methods for                                                                         

                                determining the value of state-provided travel would satisfy                                                                 

                               the requirement of payment at a commercially reasonable                                                             


                               But  "actual  cost"  is  inconsistent  with  the  market-based  approach  that  


"commercially reasonable rate" and "normal charge in the market" seem to require.  


Actual cost leaves no accounting for profit margin, an almost ever-present aspect of a  


commercially reasonable rate. And an actual-cost methodology changestheregulation's  


focus from a broad, market-based analysis of available fares to identifying the costs  


specific to an individual service provider.  Thus, the Commission's interpretation of the  


regulation in the Perez Opinion inserted ambiguity into the regulation's meaning.  In  


light of this ambiguity, we will strictly construe the regulatory language in Bush Planes'  


favor so long as Bush Planes' interpretation of the regulation is not strained.  


                               2.	             Bush  Planes'  interpretation  of  the  actual-cost  methodology  


                                               endorsed in the Perez Opinion is strained.  


                               Bush Planes argues that the Perez Opinion "can reasonably be read as  


contemplating that the primary purpose [of a flight] must pay for all costs the primary  


                28             Id.  at 5.   

                29             Id.   at 5-6 (emphasis added).                                           The Perez Opinion went on to endorse a                                                           

valuation   method   involving   first-class,   coach,   and   charter   fares   depending   on   the  

circumstances, but it specifically noted that the Commission was not precluding other  


valuation methods.                            Id.  at 6.   

                                                                                                 -13-	                                                                                          7063

----------------------- Page 14-----------------------

purpose would otherwise incur, and candidates pay only those actual costs caused by                                                                                                                                                                                                        

their additional activity."                                                           Bush Planes asserts that the evidence before the Commission                                                                                                        

was that the only additional costs Bush Planes incurred because of the candidates'                                                                                                                                                                         

presence on its flights were for fuel and minor incidentals. Thus, Bush Planes contends,                                                                                                                                                                            

these additional costs are all Bush Planes needed to charge the candidates under an                                                                                                                                                                                                        

actual-cost methodology.   

                                             The Commission responds that an actual-cost methodology must account                                                                                                                                                        

for fixed costs and that other companies incorporate fixed costs into their fares.                                                                                                                                                                                                  The  

Commission arguesthat                                                            BushPlanes' failure to include                                                                        these costs renders                                            its actual-cost  

methodology invalid.                                                    30  

                                             We conclude that Bush Planes' interpretation of "actual cost" is strained.  


Bush Planes' additional-costs methodology fails to recognize that Bush Planes is the  


beneficiary of unique advantages: it does not pay for pilots or hangar fees. The idea that  


Bush Planes could use its "actual costs" when it possesses these advantages is patently  


unreasonable, especially considering that the Perez Opinion gave no indication that the  


 State enjoyed  similar  advantages  when the Perez Opinion endorsed  the actual-cost  


methodology. As Gillamtestified, "Ifyou knowanything aboutAlaskaairplanes, there's  


a lot of expense."  That expense is not simply the cost of fuel.  It is all of the costs that  


surround the operation of the plane.  


                                             Bush Planes' interpretation of the relevant language is clearly not what was  


intended by "actual cost" in the Perez Opinion.   The Perez Opinion was providing  


                       30                    Determining whether Bush Planes adopted a strained interpretation of the                                                                                                                                                                     

regulations at issue here is a question of law that does not implicate agency expertise.                                                                                                                                                                                                               

Therefore, we apply our independent judgment when reviewing this issue.                                                                                                                                                                                           Skvorc v.   

State, Pers. Bd.                                   , 996 P.2d 1192, 1196-97 (Alaska 2000) (quoting                                                                                                                    Handley v. State, Dep't                                    

of Revenue                            , 838 P.2d 1231, 1233 (Alaska 1992)).                                                                    

                                                                                                                                           -14-                                                                                                                                    7063

----------------------- Page 15-----------------------


guidance regarding what would be a commercially reasonable rate.                                                                                                            No reasonable   

person   would   read   the   Perez   Opinion   and   believe   that   in   trying   to   determine   a  

commercially reasonable rate, he could charge only his additional costs when he was the                                                                                                                    

recipient of significant cost reductions not generally available.                                                               

                                Bush Planes' argument to the contrary is not persuasive.                                                                                         Its argument   

ignores the regulation's attempt to place all candidates in the same position by creating                                                                                                      

a level playing field.                              This is best exemplified by the fact that the regulation requiring a                                                                                        

service   provider   to   bill   for   the   normal   charge   in   the   market   did   not   apply   if   the  

                                                                                                                      32     Additionally, the practical effect of  

discounted charge was offered to all candidates                                                                      .                                                                                       

requiring  a  commercially  reasonable  rate  is  that  it  prevents  one  candidate  from  


benefitting from an advantage that other candidates may not have because they are not  


as well connected.  


                                Bush  Planes  also  argues  that  its  fuel-only  approach  was  a  reasonable  


interpretation of its allegedly competing obligations under state and federal law.  But  


Bush Planes' basic premise - that there is tension between state and federal law - is  


incorrect. 14 C.F.R.  91.321(a)(3) permits a private air carrier to charge candidates for  


elected office an amount that does not "exceed the amount required under applicable  


state or local law."  Bush Planes contends that to ensure compliance with this federal  


regulation  it  must  charge  the  candidates  the  lowest  possible  rate  and  to  ensure  


compliance with state law it must charge the highest possible rate.  


                31              PEREZ  OP.,  supra  note   13,  at  5-6.  

                32              2  AAC  50.250(c)  (2006).  

                                                                                                    -15-                                                                                                       7063  

----------------------- Page 16-----------------------

                         We read 14 C.F.R.  91.321(a)(3) as a carve-out provision to allow private                                                  


air carriers to operate within the boundaries of state law.                                                                                          

                                                                                                                   So long as Bush Planes  


complies with state law, including the Commission's regulations, it will not violate  

                                               34   There is no reason to believe that a fuel-only approach was  



 14 C.F.R.  91.321(a)(3). 

necessary to avoid violating federal regulations.  


                         Thus,  we  hold  that  Bush  Planes'  interpretation  of  the  actual-cost  


methodology approved in the Perez Opinion was strained.  As a result, we affirm the  


Commission's decision because the Commission was not required to defer to Bush  


Planes'   interpretation   and   could   enforce   its   own   reasonable   interpretation   of  


"commercially reasonable rate."35  


            B.	          The Fine The Commission Imposed Against Bush Planes Was Not  


                         Unconstitutionally Excessive.  


                         The Commission assessed a $25,500 fine against Bush Planes, as well as  


$29,768 in investigation and adjudication costs and attorney's fees. Noting that its total  


contribution was $1,288.25 - the amount the candidates underpaid for the flights using  


the  Commission's  calculations  -  Bush  Planes  argues  that  the  award  against  it  is  


            33           The        Federal            Aviation            Administration's                    public          notice         regarding  

promulgation of 14 C.F.R.  91.321(a) stated that the regulation permitted the carrier "to                                                                  

acceptpayment                in accordancewith                   stateor       local law."CarryingCandidatesin Elections,                      

70   Fed.  Reg.  4980-01   (Jan.   31,   2005)   (emphasis   added)   (codified   at   14   C.F.R.     


            34           Bush Planes cites no cases where a Part 91 carrier was found to have acted  


permissibly under state law and impermissibly under 14 C.F.R.  91.321(a)(3), nor has  


our independent research identified such a case.  


            35           BecauseweconcludetheCommissiondid not need to defer to Bush Planes'  


interpretation of "commercially reasonable rate" and "normal charge in the market," we  


do not address Bush Planes' claim that the Commission ignored evidence regarding its  


actual costs.  


                                                                            -16-	                                                                      7063

----------------------- Page 17-----------------------


unconstitutionally excessive and cites to our punitive damages cases for support.                                                                                                                                                                                                                                                                                                                                                                                                                                                     Bush  

 Planes    also    discusses    a    number    of    factors    that    it    believes    demonstrates    the  

unreasonableness of the penalty. These factors include (1) that Bush Planes made a good                                                                                                                                                                                                                                                                                                                                                                                                                                           

 faith effort to comply with ambiguous regulations; (2) that this was Bush Planes' first                                                                                                                                                                                                                                                                                                                                                                                                  

 violation; (3) that the violation was a "one-time event"; (4) that Bush Planes was trying                                                                                                                                                                                                                                                                                                                                                                                                                                        

 to comply with the Perez Opinion and federal law; (5) that this was not a particularly                                                                                                                                                                                                                                                                                                                                                                                              

 serious violation; (6) that the amount of the illegal contribution was not so large as to                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

 imply corruption; and (7) that there was no special harm because there was no indication                                                                                                                                                                                                                                                                                                                                                                                                                

 that   the   candidates   would   not   have   taken   these   flights   if   charged   the   seat   fare   the  

 Commission endorsed.   

                                                                                      Bush Planes additionally argues that the Commission's fine calculation,                                                                                                                                                                                                                                                                                                                                

 which relied on the number of days between the offense and when the violation was                                                                                                                                                                                                                                                                                                                                                                                                                                                             

 remedied,   was   not   reasonably   related   to   the   offense   and   that   the   Commission   was  

 actually ready to file a complaint in March but chose to wait to file to trigger a higher                                                                                                                                                                                                                                                                                                                                                                                                                                     

 fine.   Bush Planes contends that the days after March should not have been counted                                                                                                                                                                                                                                                                                                                                                                                                                                

 against it when calculating the fine.                                                                                                                                                               

                                           36                                         Bush Planes argues that we should consider both the fine and the costs and                                                                                                                                                                                                                                                                                                                                                                                  

 fees awarded against it when determining whether the penalty was excessive.                                                                                                                                                                                                                                                                                                                                                                                                                                                               We  

 disagree. The costs and fees awarded here appear similar to those awarded under Alaska                                                                                                                                                                                                                                                                                                                                                                                                                                      

 Rule of Civil Procedure 82, which are intended "to partially compensate a prevailing                                                                                                                                                                                                                                                                                                                                                                                                         

party for the costs to which he has been put in the litigation in which he was involved."                                                                                                                                                                                                                                                                                                                                                                                                            

De Witt v. Liberty Leasing Co. of Alaska                                                                                                                                                                                                                           , 499 P.2d 599, 602 (Alaska 1972) (discussing                                                                                                                                                                                

 attorney's fees under Alaska Rule of Civil Procedure 82).                                                                                                                                                                                                                                                                                                                        The compensatory nature of                                                                                                                                               

 these costs and fees means that they are not intended to penalize a person who commits                                                                                                                                                                                                                                                                                                                                                                                                                           

 a violation of Alaska's campaign finance laws and are imposed without specific regard                                                                                                                                                                                                                                                                                                                                                                                                                                         

 for the seriousness of the offense. Thus, we hold that the costs and fees awarded against                                                                                                                                                                                                                                                                                                                                                                                                                                  

 Bush Planes are not part of the excessive-penalty analysis.                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                         -17-                                                                                                                                                                                                                                                              7063

----------------------- Page 18-----------------------

                                            The Commission asserts that the fine is constitutional because Bush Planes                                                                                                                                                  

"committed a serious campaign violation with the potential to significantly harm the                                                                                                                                                                                              

electoral process" and argues that comparisons to punitive damages cases are not on                                                                                                                                                                                                 

point.     The   Commission   also   argues   that   it  fairly   considered   Bush   Planes'   assets,  

experience, and filing history and that a substantial fine was appropriate considering that                                                                                                                                                                                      

Bush Planes' principal is a sophisticated participant in Alaska's election process and                                                                                                                                                                                          

Bush   Planes'   actions   caused   two   novice   candidates   to   violate   the   Commission's  

regulations. The Commission contends that its inclusion of the days between the end of                                                                                                                                                                                                

March and when the complaint was filed in July was reasonable because (1) Bush Planes                                                                                                                                                                                   

"knew or should have known it was charging far less than a commercially reasonable                                                                                                                                                                       

rate for the services it offered" and (2) the Commission was still investigating and                                                                                                                                                                                            

seeking documents in April.                                               

                                            1.	                   TheCommissiondidnot                                                                  impose anunconstitutionallyexcessive                                                                   


                                            We have held that the a penalty is unconstitutionally excessive when it is  



obviously unreasonable.                                                                                                                                                                                                                                                              

                                                                                           "The penalty cannot be 'so severe and oppressive as to be  

                                                                                                                                                                                                                                              38  The federal  


wholly [disproportionate] to the offense and obviously unreasonable.' " 

case both parties cite, United States v. Bajakajian, similarly holds that a fine "must bear  


some relationship to the gravity of the offense that it is designed to punish."39  


                      37                     VECO   Int'l,   Inc.   v.   Alaska   Pub.   Offices   Comm'n,   753   P.2d   703,   716  

(Alaska 1988). We note that because this is a question of constitutional law "[we] apply                                                                                                                                                                                   

our   independent   judgment."   State,   Dep't   of   Revenue   v.   Andrade,   23  P.3d  58,   65  

(Alaska 2001).   

                      38                     VECO  Int'l,  753  P.2d  at  716  (quoting  St.  Louis  Iron  Mountain  &  


Southern Ry .Co. v. Williams, 251 U.S. 63, 67 (1919)).  


                      39                    524 U.S. 321, 334 (1998).  


                                                                                                                                        -18-	                                                                                                                                7063

----------------------- Page 19-----------------------

           The prohibition on corporate contributions was part of a broad campaign finance                                           


reform   bill   in   1996.                                                                                                                 

                                           That  reform  had  several  purposes.                            Relevant  here  is  the  


legislature's  finding  that  "organized  special  interests  are  responsible  for  raising  a  


significant  portion  of  all  election  campaign  funds  and  may  thereby  gain  an  undue  

                                                           41  The legislature was also concerned that "penalties  


influence over . . . elected officials." 

for violations of the existing campaign finance laws [were] far too lenient to deter  


misconduct."42              The legislature intended "to substantially revise Alaska's campaign  


finance laws in order to restore the public's trust in the electoral process and to foster  


good government."43                  In so doing, it also increased the per-day statutory penalty from  


$10 to $50.44  


                      Bush  Planes  attacks  the  fine  imposed  as  unconstitutionally  excessive  


because the amount of its contribution was substantially less than the amount of the fine.  


Bush Planes also asserts that its violation "was not particularly grave" because it gave  


"only  slightly  more than  double  what  an  individual  could  have  contributed  to  one  


                   45   Bush Planes notes that candidates who expect to raise or spend less than  


$5,000 may seek an exemption from reporting contributions to their campaigns,46  


           40         See  ch.  48,     1,  SLA   1996.  

           41         Ch.  48,     1(a)(3),  SLA   1996.  

           42         Ch.  48,     1(a)(6),  SLA   1996.  

           43         Ch.  48,     1(b),  SLA   1996.  

           44         Ch.  48,    22,  SLA   1996.  

           45         See   AS    15.13.070(b)(1)   (limiting   individual   contributions  to  certain  

individuals  and  organizations  to  $500  per  year).  

           46         AS   15.13.040(g);  see  also  2  AAC  50.286(a).  

                                                                     -19-                                                               7063

----------------------- Page 20-----------------------

Bush Planes argues demonstrates that the legislature would not consider its contributions                                                                                                    

to Ravenmoon and Kalmakoff a threat to the democratic process.                                                                                     

                                  But Bush Planes' focus on the amount of the fine compared to the amount                                                                                                  

of   the   improper   contribution   fails   to   account   for   the   problems   the   legislature   was  

attempting to solve. The legislature believed that the public had lost faith in the electoral                                                                                                            

process and that organized special interests, which ostensibly included corporations, had                                                                                                                            

gained undue influence over elected officials by contributing substantial sums of money                                                                                                                      

                       47        And  the  legislature  appears  to  have  decided  to  ban  direct  corporate  

to   them.                                                                                                                                                           

contributions to individual candidates for these reasons.  


                                  In this context Bush Planes did not simply donate approximately $1,200  


illegally.                   Bush  Planes'  actions  called  into  question  the  fairness  of  the  Lake  and  


Peninsula Borough's 2010 election and the impartiality of these newly elected assembly  


members.  Bush Planes flew the candidates throughout the borough, a borough where  


many  communities  can  only  be  accessed  by  plane.                                                                                            And  this  travel  allowed  the  


candidates to promote themselves to individual voters face-to-face.  


                                  Moreover, the fine both punishes Bush Planes and serves as a deterrent to  


other corporations that might consider flouting the prohibition on direct contribution.  


Absent  a  substantial  fine,  a  corporation  may  be  tempted  to  provide  illegal  direct  


contributions and write off those contributions and any associated fine as a cost of doing  


business. A substantial fine sends the signal that the Commission treats these violations  


seriously.  Given these concerns, the fine was not obviously unreasonable and thus not  


unconstitutionally excessive.  




                                  Ch. 48,  1(a)(1), (a)(3), (b), SLA 1996.  

                                                                                                          -20-                                                                                                             7063  

----------------------- Page 21-----------------------

                                          2.	                  Punitive damages case law is either irrelevant or supports the                                                                                                                                      


                                          Bush Planes argues that we should look to punitive damages case law for                                                                                                                                                   

guidance and that the fine imposed here would be impermissible if this were a punitive                                                                                                                                                           

damages case.                                 But our prior discussions of punitive damages case law does not support                                                                                                                                 

Bush Planes' argument.                     

                                          The federal due process analysis that guides the determination of when                                                                                                                                            

punitive damages are unconstitutional flows from the concept that the tortfeasor should                                                                                                                                                                 


have some "notice of the magnitude of the sanction that a state might employ."                                                                                                                                                                             Here,  


Bush Planes had notice of the magnitude of the sanction the State might employ because  



the sanction the Commission employed was the maximum statutory penalty. 


                                          And we have never endorsed a particular "fixed ratio, or range of ratios,  

                                                                                                                                                                                                           50      We have approved  


between punitive and compensatory damages" under Alaska law. 

                     48                   Casciola v. F.S. Air Serv., Inc.                                                             , 120 P.3d 1059, 1067 (Alaska 2005) (citing                                                                       

BMW of North Am., Inc. v. Gore                                                                        , 517 U.S. 559, 574-75 (1996)).                                          

                     49                  Hutton v. Realty Execs., Inc., 14 P.3d 977, 980 (Alaska 2000) ("As a  


general rule, people are presumed to know the law.").  


                     50                   Casciola,  120  P.3d  at  1064  (citing Fyffe  v.  Wright,  93  P.3d  444,  457  


(Alaska 2004)).  


                                                                                                                                 -21-	                                                                                                                        7063

----------------------- Page 22-----------------------

                                                                                                                     51          52                 53  

previous punitivedamagesawards                             with ratiosofapproximately                       26:1,       18:1,   and 50:1.                


The ratio in this case is approximately 20:1.  Our case law does not indicate that a 20:1  


ratio is inherently impermissible.  


                       Instead of taking a strict mathematical approach, we have considered the  

                                                                     54   These factors involve considerations similar  


seven factors listed in AS 09.17.020(c). 

to those the Commission discussed in this case, including the likelihood of harm, the  


defendant's awareness of the likely harm, the duration of the conduct, the defendant's  


financial condition, and deterrence.55  


                       A  review  of  those  factors  supports  the  Commission's  imposition  of  a  


significant  fine.              Bush  Planes  is  a  sophisticated  entity  with  substantial  assets  and  


knowledgeable management. Its actions called into question the fairness of the Lake and  


Peninsula  Borough's  2010  election.                                  A  $25,500  fine  sends  a  message  that  the  


Commission takes these kinds of violations seriously and helps deter other corporations  


from engaging in similar misconduct. In sum, the award is not so excessive that it would  


violate Alaska or federal law regarding punitive damages.  


            51         Laidlaw Transit, Inc. v. Crouse ex rel Crouse                                      , 53 P.3d 1093, 1096-97     

(Alaska 2002) (affirming an award of $500,000 in punitive damages and $19,259 in                                                                    

compensatory damages).   

            52         IBEW, Local 1547 v. Alaska Util. Constr., Inc., 976 P.2d 852, 853-55  


(Alaska 1999) (affirming an award of $212,500 in punitive damages and compensatory  


damages of $11,622.05).  


            53         Norcon,  Inc.  v.  Kotowski,  971  P.2d  158,  161,  174-77  (Alaska  1999)  


(remitting  a  $3,000,000  punitive  damages  award  to  $500,000  on  a  compensatory  


damages award of $10,000).  


            54         Casciola, 120 P.3d at 1065.  


            55         AS 09.17.020(c)(1)-(c)(2), (c)(4), (c)(6)-(c)(7).  


                                                                        -22-                                                                  7063

----------------------- Page 23-----------------------

                    3.	       The Commission's fine bore a reasonable relationship to Bush  


                              Planes' offense.  


                    Bush Planes also argues that the method the Commission used to calculate  


the fine bears no reasonable relationship to the offense.  Bush Planes contends that the  


fine served a minimal deterrent and remedial function because for at least the first 90  


days after the violations, Bush Planes was unaware, and could not have known, that the  


Commission's staff was investigating it. Bush Planes also alleges that the Commission's  


staff purposely waited almost 120 days after they began drafting a complaint in March  


2011 before filing it as a way of increasing the penalty.  


                    First, we find no support in the record for Bush Planes' latter assertion.  


While the record  indicates that the Commission's staff may have begun  drafting  a  


complaint  as  early  as  the  end  of  March  2011,  the  evidence  also  indicates  that  the  


Commission's staff was continuing to investigate the allegations.  Moreover, there are  


no allegations of bias against the attorney who was involved in drafting the complaint;  


nor has Bush Planes presented any evidence that suggests a deliberate delay.  


                    Second, Bush Planes' contentionthat theCommission improperly included  


days before Bush Planes became aware that the Commission's staff thought Bush Planes  


had violated the law in calculating the fine is unpersuasive.  Bush Planes argues that  


imposing a fine before it became aware of the staff's concerns "achieves no reasonable  


deterrent or remedial goal." But there is no requirement that a violator of campaign laws  


must be made aware that it violated the law before a fine can be imposed.  Even if Bush  


Planes were unaware, a fine calculated based on the time Bush Planes was unaware of  


the violation still serves a punitive function even if it does not serve a remedial function.  


And while including the time when Bush Planes was not aware that the Commission's  


staff believed there was a violation may not have a short-term deterrent effect, it may  


have a long-term deterrent effect on Bush Planes and other actors that Bush Planes'  

                                                              -23-	                                                        7063

----------------------- Page 24-----------------------

argument does not take into account.                                                     Thus, we hold that the fine bore a reasonable                                     

relationship to the alleged offense.                                          56  


                C.	            The Superior Court Did Not Abuse Its Discretion When It Denied  


                              Bush Planes' Motion To Supplement The Record And Briefing.  


                              Finally,  Bush  Planes  argues  that  its  due  process  rights  were  violated  


because the Commission and its staff were biased against it.  But the evidence of any  


potential due process violation is not properly before us because the superior court  


denied Bush Planes' motion to supplement the record with the materials Bush Planes  


alleges shows evidence of bias.  Bush Planes claims that the superior court abused its  



discretion in denying the motion, but we disagree. 


                              First, the motion was not timely.  Briefing on Bush Planes' appeal to the  


 superior court ended in early November 2012.  Bush Planes then learned of and appears  


to have obtained much of the information it sought to add to the superior court record by  


the end of January 2013.  Despite that, Bush Planes waited approximately three months  


until it moved to supplement the record shortly before oral argument.  

               56              Our approval of the fine imposed in this case should not be considered                                                                      

blanket approval of the statutory penalty. While we hold the total fine imposed here was                                                                                                    

not excessive, we can envision a case where the application of the $50 per day maximum                                                                                        

 fine would be unconstitutionally excessive.                                                        The determination is fact-intensive and an                                                 

individualized assessment of the penalty is the correct analysis.                                                           

               57             We review the denial of a motion to supplement the record for abuse of  


discretion.  Southwest Marine, Inc. v. State, Dep't of Transp. & Pub. Facilities, Div. of  


Alaska Marine Highway Sys. , 941 P.2d 166, 172 (Alaska 1997).  We may affirm the  


 superior court's denial on any basis supported by the record. Smith v. Stafford, 189 P.3d  


 1065, 1070 (Alaska 2008).  


                                                                                              -24-	                                                                                      7063

----------------------- Page 25-----------------------

                        Second, it does not appear that the evidence Bush Planes wanted to submit                                              


would have changed the outcome of the liability determination.                                                                                  

                                                                                                                    Whether Bush Planes  


violated   Alaska's   campaign   finance   laws   ultimately   depended   on   the   proper  


determination of "commercially reasonable rate," and we have reviewed that issue using  


a standard that not only granted no deference to the Commission's interpretation but  


actually favored Bush Planes.  Thus, any bias that the Commission or its staff may have  


had against Bush Planes would have had no effect on the liability issue.  


                        Finally, the State persuasively argues that the evidence Bush Planes sought  


to introduce was irrelevant given the context and the timing of the case. We note that the  


majority of the material Bush Planes wanted to introduce alleged that staff members  


Anderson and Dauphinais - and to a lesser extent Commission Chair Hickerson -  


were biased against Bush Planes.  The allegations against the other Commissioners -  


all of whom concurred in the liability, fine, and costs and fees decisions - were based  


mainly on an affidavit from a former staff member.  That staff member recalled specific  


interactions with Anderson, Dauphinais, and Hickerson that caused him to believe those  


three were biased against Gillam and his companies.   The staff member's affadavit  


complained that the Commission had rejected an advisory opinion he drafted "without  


a legal basis and primarily because of who requested it," but Bush Planes never provided  

any foundation for that allegation.  The same lack of specificity significantly weakens  


the staff member's claim that it would be "impossible for [Gillam] . . . to get a fair shake  

                                                                                  59   Overall, there was little, if any, reliable  


from . . . certain members of the Commission." 

            58          Southwest Marine, Inc.                    , 941 P.2d at 179-80.         

            59          We   recognize   the   parties   continue   to   litigate   issues   of   bias   in   other  

proceedings.  See, e.g.                 ,  RBG Bush Planes LLC, et al. v. Alaska Pub. Offices Comm'n                                                     ,  

Case No. 3AN-14-06497 CI.  Our discussion here should in no way be interpreted as  



                                                                          -25-                                                                    7063

----------------------- Page 26-----------------------

evidence that the other members of the Commission were biased individually or even                                                                                                                                                                                                                                                                                   

that   the   alleged   bias   of   Hickenson   or   the   staff   members   affected   the   proceeding.  

Furthermore, Dauphinais's allegedly biased statement was made nine months after the                                                                                                                                                                                                                                                                                                       

administrative decision was issued, suggesting that the allegations have little weight                                                                                                                                                                                                                                                                                  

given the timing of this case.                                                                              

                                                             Therefore, we hold that the superior court did not abuse its discretion when                                                                                                                                                                                                                                       

it denied Bush Planes' motion to supplement the record.                                                                                                                                                                                                             Given the delay in filing the                                                                                         

motion to supplement, the standard of review we applied to the liability determination,                                                                                                                                                                                                                                               

and the lack of specificity regarding the allegations against the Commissioners, the                                                                                                                                                                                                                                                                                                     

superior court's decision was not manifestly unreasonable.                                                                                                                                                 

V.                             CONCLUSION  

                                                             For the reasons stated above, we AFFIRM the superior court's decision to                                                                                                                                                                                                                                                           

affirm  the  Commission's  determination  that  Bush  Planes  made  illegal  corporate  


contributions   to   candidates   for   elected   office,   AFFIRM   the   fine   the   Commission  

imposed, and AFFIRMthe superior court's denial of Bush Planes' motion to supplement                                                                                                                                                                                                                                                                 

the record.   



expressing an opinion regarding the evidence in those other matters.  

                                                                                                                                                                                            -26-                                                                                                                                                                                   7063  

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