| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
|
You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Toni 1 Trust v. Wacker (3/2/2018) sp-7228
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
corrections@akcourts.us.
THE SUPREME COURT OF THE STATE OF ALASKA
TONI 1 TRUST, by its Trustee )
DONALD TANGWALL, ) Supreme Court No. S-16153
)
Appellant, ) Superior Court No. 4FA-15-01603 CI
)
v.
) O P I N I O N
)
BARBARA WACKER, individually ) No. 7228 - March 2, 2018
and jointly and severally, WILLIAM )
WACKER, individually and jointly and )
severally, and LARRY D. COMPTON, )
Bankruptcy Trustee, individually and )
jointly and severally, )
)
Appellees. )
)
Appeal from the Superior Court of the State of Alaska,
Fourth Judicial District, Fairbanks, Michael A. MacDonald,
Judge.
Appearances: S. Jason Crawford, Layton, Utah, for
Appellant. Erik LeRoy, Erik LeRoy P.C., Anchorage, for
Appellees Wacker. Cabot Christianson, Law Offices of
Cabot Christianson, P.C., Anchorage,for AppelleeCompton.
Before: Stowers, Chief Justice, Winfree, Maassen, Bolger,
and Carney, Justices.
BOLGER, Justice.
----------------------- Page 2-----------------------
I. INTRODUCTION
After a Montana state court issued a series of judgments against Donald
Tangwall and his family, the family members transferred two pieces of property to the
"Toni 1 Trust," a trust allegedly created under Alaska law. A Montana state court and
an Alaska bankruptcy court found that the transfers were made to avoid the judgments
and were therefore fraudulent. Tangwall, the trustee of the Trust, then filed this suit,
arguing that Alaska state courts have exclusive jurisdiction over such fraudulent transfer
actions under AS 34.40.110(k). But we conclude that this statute cannot unilaterally
deprive other state and federal courts of jurisdiction. We therefore affirm the superior
court's judgment dismissing Tangwall's complaint.
II. FACTS AND PROCEEDINGS
In 2007 Donald Tangwall sued William and Barbara Wacker in Montana
state court. The Wackers counterclaimed against Tangwall; his wife, Barbara Tangwall;
his mother-in-law, Margaret "Toni" Bertran; and several trusts and businesses owned or
run by the family. In the ensuing years, several default judgments were entered against
Tangwall and his family.
In 2010, before the last of these judgments was issued, Bertran and Barbara
Tangwall transferred parcels of real property to an Alaska trust called the "Toni 1 Trust"
1 The Wackers filed a fraudulent transfer action under Montana law in
(the Trust).
Montana state court, alleging that the transfers were made to avoid the judgments.
1 The appellees argue that (1) the Trust is not an Alaska trust at all and
(2) even if it is, the Trust is not subject to the Alaska statute because it was not created
in compliance with applicable statutory requirements. The superior court did not resolve
these factual questions, and we assume, without deciding, that the Trust is an Alaska trust
subject to AS 34.40.110.
-2- 7228
----------------------- Page 3-----------------------
Default judgments in the fraudulent transfer action were entered against Barbara
Tangwall, the Toni 1 Trust, and Bertran.
Afterthefraudulenttransferjudgments wereissued, theWackerspurchased
Barbara Tangwall's interest in one of the parcels at a sheriff's sale, as part satisfaction
of their judgment against Tangwall and family. But before they could purchase the
remaining half interest, Bertran filed for Chapter 7 bankruptcy in Alaska. Her interest
in the trust property was therefore subject to the jurisdiction of a federal bankruptcy
court.
In December 2012, Donald Tangwall, as trustee of the Trust, filed a
complaint in the bankruptcy court against the Wackers and bankruptcy trustee Larry
Compton. Among other things, Tangwall alleged that service on the Trust in the
Montana fraudulent transfer action was defective, rendering the judgment against the
Trust void. Rather than litigate whether service in Montana was proper, Compton
elected to bring a fraudulent transfer claim against Tangwall under the federal
bankruptcy fraudulent transfer statute. A default judgment in Compton's action was
entered against Tangwall. His appeals from this judgment were dismissed.
Tangwall next sought relief in Alaska state court, where he filed the
complaint that led to this appeal. The crux of his argument was that AS 34.40.110 grants
Alaska courts exclusive jurisdiction over any fraudulent transfer actions against the
2 Specifically, he argued that the Trust contains a provision restricting the transfer
Trust.
2 Tangwall argued that AS 13.36.035(f) had a similar effect. However,
AS 13.36.035 concerns the internal affairs of trusts, including "the administration and
distribution of trusts, the declaration of rights, and the determination of other matters
involving trustees and beneficiaries of trusts." AS 13.36.035(a). The judgments that
Tangwall seeks to avoid concern fraudulent transfers, not the internal affairs or
management of the Trust. We conclude that AS 13.36.035 does not apply to this case,
(continued...)
-3- 7228
----------------------- Page 4-----------------------
of the beneficiary's interest, and that AS 34.40.110(k) grants Alaska courts "exclusive
jurisdiction over an action brought under a cause of action or claim for relief that is based
on a transfer of property to a trust" containing such transfer restrictions. On this basis,
Tangwall sought a declaratory judgment stating that all judgments against the Trust from
other jurisdictions are void and that no future actions can be maintained against the Trust
3
because the statute of limitations has run.
The superior court dismissed the complaint, and Tangwall appeals. Most
of Tangwall's arguments on appeal are supported by little or no citation to relevant legal
authority and are therefore waived.4 However, he has preserved his argument that the
state and federal judgments against the Trust are void for lack of subject matter
jurisdiction under AS 34.40.110(k). While reviewing this appeal, we requested
supplemental briefing on the question whether state or federal courts are required to
follow a statute that purports to retain exclusive jurisdiction over a fraudulent
5
conveyance action.
2 (...continued)
and we decline to address it further.
3 Tangwall's complaint also included two "harassment"claims. Theseclaims
have not been preserved on appeal.
4 Hagen v. Strobel, 353 P.3d 799, 805 (Alaska 2015).
5 See Toni 1 Trust v. Wacker, No. S-16153 (Alaska Supreme Court Order,
July 13, 2017). This case, and the issue referred to the parties, arguably implicates the
constitutionality of AS 34.40.110. Thus, pursuant to Alaska Appellate Rule 514(e), we
also notified the Attorney General of Alaska of the case and invited supplemental
briefing from the State. Id. Tangwall and Compton filed supplemental briefs; the
Wackers and the State did not.
-4- 7228
----------------------- Page 5-----------------------
III. DISCUSSION
We review an order granting a motion to dismiss for a failure to state a
claim de novo.6
We presume all factual allegations in the complaint to be true, and draw
7
all reasonable inferences in favor of the non-moving party.
A. Alaska Statute 34.40.110(k) Purports To Grant Alaska Courts
Exclusive Jurisdiction Over Fraudulent Transfer Actions Against The
Trust.
Alaska Statute 34.40.110 governs Alaska trusts containing a "transfer
restriction" - a provision stating that trust property may not be transferred before
8
payment or delivery of the property to the beneficiary of the trust. The statute provides
that these restrictions, which allow for the creation of so-called "self-settled spendthrift
9 10
trusts," are generally enforceable. However, subsection (b)(1) creates a limited cause
of action for fraudulent transfers: a creditor of the settlor of the trust can reach trust
property if the creditor can prove that the settlor's transfer of property to the trust "was
11
made with the intent to defraud that creditor."
6 Kollodge v. State , 757 P.2d 1024, 1026 n.4 (Alaska 1988).
7 Id. at 1026; see also Linck v. Barokas &Martin , 667 P.2d 171, 173 (Alaska
1983).
8 AS 34.40.110(a).
9 See Jeremy M. Veit, Self-Settled Spendthrift Trusts and the Alaska Trust
Act: Has Alaska Moved Offshore? , 16 ALASKA L. R EV. 269, 279-81 (1999).
10
See AS 34.40.110(b) ("If a trust contains a transfer restriction . . . , the
transfer restriction prevents a creditor existing when the trust is created . . . from
satisfying a claim out of the beneficiary's interest in the trust . . . .").
11 AS 34.40.110(b)(1). Creditors must also satisfy additional criteria
enumerated in AS 34.40.110(d).
-5- 7228
----------------------- Page 6-----------------------
AlaskaStatute34.40.110(k) enumerates two additionallimitsonfraudulent
transfer claims. First, an action "may not be brought . . . for an attachment or other
provisional remedy against property of a trust subject to this section or to avoid a transfer
of property to a trust that is the subject of this section unless the action is brought under
12 In other words, the (b)(1) fraudulent transfer cause of action is
(b)(1) of this section."
the exclusive means by which a litigant can prevent a transfer of or reach property in an
Alaska self-settled spendthrift trust. Second, the statute provides that Alaska courts have
"exclusive jurisdiction over an action brought under a cause of action or claim for relief
that is based on a transfer of property to a [self-settled spendthrift] trust" - a class that
obviously includes fraudulent transfer actions.13 This second limit, Tangwall claims,
deprived the bankruptcy court and the Montana court of jurisdiction.
Tangwall's argument is not frivolous. He is correct that a judgment is void
if the court that entered the judgment lacked subject matter jurisdiction over the case.14
Furthermore, AS34.40.110(k)purportstograntAlaskacourtsexclusivejurisdiction over
fraudulent transfer claims against Alaska self-settled spendthrift trusts. And having
reviewed the legislative history of AS 34.40.110(k), we have no doubt the Alaska
legislature's purpose in enacting that statute was to prevent other state and federal courts
12 AS 34.40.110(k).
13 Id.
14
Leisnoi, Inc. v. Merdes & Merdes, P.C., 307 P.3d 879, 891 (Alaska 2013).
-6- 7228
----------------------- Page 7-----------------------
from exercising subject matter jurisdiction over fraudulent transfer actions against such
15
trusts.
The question, however, is whether AS 34.40.110(k) can achieve that intended
result. We conclude that it cannot.
B. Alaska Statute 34.40.110(k) Cannot Limit The Scope Of Other States'
Jurisdiction.
More than 100 years ago, the United States Supreme Court held that
[e]ach state may, subject to the restrictions of the Federal
Constitution, determine the limits of the jurisdiction of its
courts, the character of the controversies which shall be heard
in them, and, specifically, how far it will, having jurisdiction
of the parties, entertain in its courts transitory actions where
[16]
the cause of action has arisen outside its borders.
And just a few years later, the Court held that states are not constitutionally compelled
to acquiesce to sister states' attempts to circumscribe their jurisdiction over such
actions.17
This latter rule arose from a case much like the one before us now. An
employee sued his employer in a Georgia court, relying on an Alabama statutory cause
of action; his employer countered that Alabama state courts retained exclusive
jurisdiction over the suit under the Alabama Code, and that the Full Faith and Credit
Clause compelled Georgia courts to respect Alabama's assertion of exclusive
15 See Minutes, House Jud. Comm. Hearing on S.B. 344, 23d Leg., 2d Sess.
(Apr. 14, 2004), http://www.legis.state.ak.us/pdf/23/M/HJUD2004-04-141345.PDF
(comment from David G. Shaftel, Attorney at Law, explaining that the purpose of the
provision is to require a fraudulent transfer action against an Alaska trust to be brought
in Alaska court).
16 St. Louis, Iron Mountain &S. Ry. Co. v. Taylor, 210 U.S. 281, 285 (1908).
17 See Tenn. Coal, Iron, & R.R. Co. v. George, 233 U.S. 354, 360 (1914).
-7- 7228
----------------------- Page 8-----------------------
jurisdiction. 18 The Supreme Court found that "Full Faith and Credit" does not require
states to go quite so far. Instead, "jurisdiction is to be determined by the law of the
court's creation, and cannot be defeated by the extraterritorial operation of a statute of
another state, even though it created the right of action." 19
Alaska Statute 34.40.110(k) crosses the limit recognized by Tennessee
Coal: it purports to grant Alaska courts exclusive jurisdiction over a type of transitory
action against Alaska trusts.20 We acknowledge that the analogy is imperfect; the
Montana court's judgment against Tangwall was based not on a fraudulent transfer cause
of action created by an Alaska statute, but rather on a cause of action arising under
Montana law relating to an Alaska trust.21 Nevertheless, Tennessee Coal controls. The
18 Id. at 358. The Full Faith and Credit Clause requires states to give "Full
Faith and Credit" to "the public Acts, Records and judicial Proceedings of every other
State." U.S. Const. art. IV, § 1.
19 Tenn. Coal, 233 U.S. at 360.
20 "If the transaction on which [an] action is founded could have taken place
anywhere, the action is generally regarded as transitory; but if the transaction could only
have happened in a particular place . . . the action is local." Action , BLACK 'S LAW
DICTIONARY (10th ed. 2014) (omission in original) (quoting 92 C.J.S. Venue § 8 (1955)).
Fraudulent transfer actions are founded on a fraudulent transfer of property, which can
take place anywhere even if the property being transferred is immovable. See, e.g. ,
Tcherepnin v. Franz , 439 F. Supp. 1340, 1345-46 (N.D. Ill. 1977) ("In Illinois, an action
to set aside a fraudulent conveyance . . . [is] a transitory action properly cognizable
wherever jurisdiction can be obtained over the defendant.").
21 Mont. Code Ann. § 31-2-326 to -342, (outlining provisions of Montana's
Uniform Fraudulent Transfer Act). Tangwall could have argued that the first sentence
of AS 34.40.110(k) makes the cause of action created in AS 34.40.110(b)(1) the
exclusive means of attaching Trust property; he may have attempted to do so in his
supplemental brief. In any case, an Alaska statute cannot prevent Montana courts from
applying Montana fraudulent transfer law. See Pac. Emp'rs Ins. Co. v. Indus. Accident
(continued...)
-8- 7228
----------------------- Page 9-----------------------
Tennessee Coal court held that the Full Faith and Credit Clause does not compel states
to follow another state's statute claiming exclusive jurisdiction over suits based on a
22 The clear
cause of action " even though [the other state] created the right of action."
implication is that the constitutional argument rejected in Tennessee Coal would be even
less compelling were a state to assert exclusive jurisdiction over suits based on a cause
of action it did not create.
In seeking to void the Montana court's judgment for lack of jurisdiction,
Tangwall effectively argues that AS 34.40.110(k) can deprive Montana courts of
jurisdiction over cases arising under Montana law. This is simply a more extreme
interpretation of the "full faith and credit" principle than the interpretation considered
23
and rejected in Tennessee Coal.
We acknowledge that the Alaska legislature's attempt to grant Alaska
courts exclusive jurisdiction over a class of claims in some circumstances is hardly
24 And we acknowledge that several of our sister states have concluded that
unique.
21 (...continued)
Comm'n of Cal., 306 U.S. 493, 502 (1939) ("[T]he full faith and credit clause does not
require one state to substitute for its own statute, applicable to persons and events within
it, the conflicting statute of another state, even though that statute is of controlling force
in the courts of the state of its enactment with respect to the same persons and events.").
22 Tenn. Coal, 233 U.S. at 360 (emphasis added).
23 Other courts that have considered attempts to assert exclusive jurisdiction
over a broad class of claims have reached the same conclusion. See, e.g., Marine
Midland Bank v. United Mo. Bank, 643 N.Y.S.2d 528, 531 (N.Y. App. Div. 1996) ("Nor
can we accept defendant's argument that the courts of this State are divested of subject
matter jurisdiction by [a Kansas statute that] grants the Kansas probate court exclusive
jurisdiction over all controversies involving Kansas estates.").
24 See generally Verity Winship, Bargaining for Exclusive State Court
(continued...)
-9- 7228
----------------------- Page 10-----------------------
25
similar statutes do, in fact, restrict their jurisdiction. However, those courts have relied
on reasoning that is not applicable to AS 34.40.110(k). First, "[s]ome state courts have
applied state-law distinctions between local and transitory actions to make discretionary
26 Tennessee
decisions whether to stay or dismiss an action in favor of another forum."
Coal established that "a state cannot create a transitory cause of action and at the same
time destroy the right to sue on that transitory cause of action in any court having
jurisdiction"27 - which suggests that states are not barred from asserting exclusive
jurisdiction when the cause of action is local rather than transitory. However,
AS 34.40.110(k) grants Alaska courts exclusive jurisdiction over fraudulent transfer
actions against Alaska trusts, and fraudulent transfer actions are transitory actions.28
24 (...continued)
TAN. J. C OMPLEX LITIG. 51(2012). See also, e.g. , Del. Code Ann. tit. 6,
Jurisdiction, 1 S
§ 18-305(f) (West 2017); Del. Code Ann. tit. 8, §§ 145(k), 220(c) (West 2017); Del.
Code Ann. tit. 12, § 3572(a) (West 2017); Ga. Code Ann. § 33-36-6(g) (West 2017); La.
Stat. Ann. § 22:2058(C)(1) (2017) (insurance guaranty funds); S.D. Codified Laws
§ 55-16-13 (2018); Utah Code Ann. § 25-6-502(11)(b) (West 2017) (asset protection
trusts).
25 See, e.g., Carbone v. Nxegen Holdings, Inc., No. HHDCV136039761S,
2013 WL 5781103, at *4-5 (Conn. Super., Oct. 3, 2013); Wilson v. Celestial Greetings,
Inc., 896 S.W.2d 759, 761-62 (Mo. App. 1995); State ex rel. U. S. Fid. & Guar. Co. v.
Mehan, 581 S.W.2d 837, 840 (Mo. App. 1979); Foti v. W. Sizzlin Corp., No. CH03-862,
2004 WL 2848398, at *1-2 (Va. Cir. Feb. 6, 2004).
26 Winship, supra note 24, at 75; see also Wilson, 896 S.W.2d at 761; Mehan,
581 S.W.2d at 838-39.
27 Tenn. Coal, 233 U.S. at 360 (emphasis added).
28 See supra note 20.
-10- 7228
----------------------- Page 11-----------------------
Other courts have declined to hear cases on the basis of an exclusive
29
jurisdiction provision without addressing the Tennessee Coal rule.
One of these - a
Virginiacourt -elected torespect anassertion ofexclusivejurisdiction because"comity
suggests that limitations one state's legislature places on its own laws be universally
30 But comity is not a legal rule; rather it is "a principle under which the
acknowledged."
courts of one state give effect to the laws of another state . . . out of deference or
respect."31 In other words, while courts may elect to follow a statute like AS 34.40.110
out of comity, they are not compelled to do so.32 Furthermore, AS 34.40.110 is more
than a "limitation[] [Alaska's] legislature place[d] on its own laws"33 - it purports to
deprive other states of jurisdiction over all fraudulent transfer actions concerning Alaska
trusts, even those based on causes of action arising under that state's own law.
Tangwall directs our attention to several Delaware statutes that purport to
grant the Delaware Court of Chancery exclusive jurisdiction over certain suits,34 and he
correctly asserts that some state courts have concluded that these statutes limit their
35 In 2014, however - following these decisions - the Delaware Court of
jurisdiction.
29 See e.g., Carbone, 2013 WL 5781103, at *4.
30 Foti, 2004 WL 2848398, at *1.
31 16A AM. JUR. 2D Constitutional Law § 224 (2017).
32 See Marine Midland Bank v. United Mo. Bank, 643 N.Y.S.2d 528, 531
(N.Y. App. Div. 1996) ("Comity does not require or suggest that the courts of this State
should surrender their interest in adjudicating disputes . . . .").
33 Foti, 2004 WL 2848398, at *1.
34 See supra note 24.
35 See Carbonev.Nxegen Holdings, Inc.,No. HHDCV136039761S, 2013 WL
(continued...)
-11- 7228
----------------------- Page 12-----------------------
36
Chancery reached the opposite conclusion. In IMO Daniel Kloiber Dynasty Trust , the
court noted that "courts outside of Delaware are divided as to whether Delaware can
37 Citing Tennessee Coal, it
establish an exclusive forum for certain state law claims."
38 that had "declined to interpret the exclusive jurisdiction
sided with those courts
languagein Delaware'sstatutes as precluding themfromhearing acase,"39 reasoning that
"Delaware . . . cannot unilaterally preclude a sister state from hearing claims under [that
state's] law."40
We agree with the Court of Chancery and with those courts that have
reached similar conclusions.41 The basic principle articulated in Tennessee Coal has not
changed in the last century.42 As applied to this case, it means that AS 34.40.110(k)'s
35 (...continued)
5781103, at *4-5 (Conn. Super., Oct. 3, 2013); Wilson v. Celestial Greetings, Inc., 896
S.W.2d 759, 761-62 (Mo. App. 1995); Foti, 2004 WL 2848398, at *1.
36 98 A.3d 924 (Del. Ch. 2014).
37 Id. at 940 n.6.
38 Id. at 940.
39 Id.
40 Id . at 939; see also id. at 939 n.4. All of the cases that Tangwall cites were
decided before Kloiber .
41 See, e.g., Anderson v. Children's Corner, Inc., No. CV106011812S, 2011
WL 925442, at *3 (Conn. Super., Feb. 15, 2011); Rudebeck v. Paulson, 612 N.W.2d 450,
454-55 (Minn. App. 2000); Sachs v. Adeli , 804 N.Y.S.2d 731, 733 (N.Y. App. Div.
2005).
42 See Marshall v. Marshall, 547 U.S. 293, 314 (2006) (quoting Tennessee
Coal in a more recent Supreme Court opinion); see also RESTATEMENT (SECOND) OF
CONFLICTS OF LAWS § 91 (AM. LAW INST . 1971) ("A State may entertain an action even
(continued...)
-12- 7228
----------------------- Page 13-----------------------
assertion of exclusive jurisdiction does not render a fraudulent transfer judgment against
an Alaska trust from a Montana court void for lack of subject matter jurisdiction. We
therefore cannot grant Tangwall the relief that he seeks from the Montana judgment.
C. Alaska Statute 34.40.110(k) Cannot Limit The Scope Of A Federal
Court's Jurisdiction.
Nor can we grant Tangwall relief from the federal judgment. While
Tennessee Coal addressed only a state's ability to restrict the jurisdiction of its sister
states, a more recent United States Supreme Court case confirmed that the Tennessee
Coal rule also applies to claims of exclusive jurisdiction asserted against federal courts.
In Marshall v. Marshall , the United States Supreme Court considered whether Texas
probate courts could retain exclusive jurisdiction over a transitory tort arising under
43
Texas law.
Relying on Tennessee Coal, the Court concluded that they could not: state
efforts to limit federal jurisdiction were invalid, "even though [the state] created the right
44
of action" giving rise to the suit.
42 (...continued)
though the state of the applicable law has provided that action on the particular claim
shall not be brought outside its territory.").
43 Marshall, 547 U.S. at 300-05. Specifically, the Court analyzed a Texas
probate court's ruling that Texas probate courts retained exclusive jurisdiction. The
basis for the probate court's ruling is not discussed in Marshall, but the Ninth Circuit
opinion from which appeal was taken suggests that the probate court relied on a statute
with an exclusive jurisdiction provision. See In re Marshall, 392 F.3d 1118, 1136 (9th
Cir. 2004) ("[A]ny cause of action appertaining to estates or incident to an estate shall
be brought in a statutory probate court . . . ." (alteration in original) (quoting Tex. Prob.
Code Ann. § 5A(b)).
44 Marshall, 547 U.S. at 314 (quoting Tenn. Coal, Iron, &R.R. Co. v. George,
233 U.S. 354, 360 (1914)). The Court's reasoning in Marshall echoed a similar holding
in Railway Co. v. Whitton's Administrator, 80 U.S. (1 Wall.) 270 (1871). The Whitton
(continued...)
-13- 7228
----------------------- Page 14-----------------------
Marshall - like Tennessee Coal - is not perfectly analogous to this case;
the Marshall Court concluded that Texas could not retain exclusive jurisdiction over
45 whereas the federal
suits based on a tort cause of action arising under Texas law,
bankruptcy court's judgment against Tangwall was based on a cause of action arising
under federal law.46 But just as Tennessee Coal should control whether AS 34.40.110(k)
can restrict state court jurisdiction, Marshall controls whether AS 34.40.110(k) can
restrict federal court jurisdiction. The fact that a state cannot restrict federal courts'
jurisdiction "even though [the state] created the right of action"47 implies that a state also
cannot restrict federal jurisdiction over suits based on a cause of action it did not create.
Tangwall notes that some federal courts have concluded that state law
"exclusivejurisdiction"provisions do in fact deprive themof jurisdiction.48 But only one
of the cases he cites is reported, and none address Marshall or Tennessee Coal. And
other federal courts have reached the opposite conclusion. The Sixth Circuit, for
instance, has held that "a state may not deprive a federal court of jurisdiction merely by
44 (...continued)
court held that when a federal court has jurisdiction over a right of action, that right of
action cannot "be withdrawn from the cognizance of [a] Federal court by any provision
of State legislation that it shall only be enforced in a State court." Id. at 286.
45 Marshall, 547 U.S. at 314.
46 See 11 U.S.C. § 548(a)(1)(A) (2012).
47 Marshall, 547 U.S. at 314 (quoting Tenn. Coal, 233 U.S. at 360).
48 See Lynch v. Basinger, No. 12-637, 2012 WL 6213781, at *5 (D.N.J.
Dec. 12, 2012); Yale S. Corp. v. Eclipse Servs., Inc., No. 10-CV-0337-CVE-FHM, 2010
WL 2854687, at *3-4 (N.D. Okla. July 19, 2010); Reserve Sols. Inc. v. Vernaglia, 438
F. Supp. 2d 280, 288-89 (S.D.N.Y. 2006).
-14- 7228
----------------------- Page 15-----------------------
49
declaring in a statute that it holds exclusive jurisdiction." Similarly, the Ninth Circuit
has held that "states . . . 'have no power to enlarge or contract the federal
50 The reasoning in these latter cases is both persuasive and consistent
jurisdiction.' "
with the approach set out in Marshall .
Lastly, we note that if AS 34.40.110(k) were "interpreted to deny parties
access to the [federal courts] without [those courts'] consent," the statute "might well run
afoul of the Supremacy Clause."51 The Marshall court did not invoke the preemption
doctrine or cite the Supremacy Clause from which the doctrine is derived; it relied
instead on the general principle that the jurisdiction of a sovereign nation's courts "is
determined 'by the law of the court's creation.' "52 However, several federal courts have
concluded that it is the Supremacy Clause that ultimately precludes state courts from
49 Superior Beverage Co. v. Schieffelin & Co., 448 F.3d 910, 917 (6th Cir.
2006).
50 Begay v. Kerr-McGee Corp., 682 F.2d 1311, 1315 (9th Cir. 1982) (quoting
Markham v. City of Newport News, 292 F.2d 711, 716 (4th Cir. 1961)); see also Duchek
v. Jacobi, 646 F.2d 415, 419 (9th Cir. 1981) (same).
51 Allstate Ins. Co. v. Gammon, 838 F.2d 73, 77 n.7 (3d Cir. 1988) (analyzing
Pennsylvania insurance statute with similar provision).
52 Marshall, 547 U.S. at 314 (quoting Tenn. Coal, 233 U.S. at 360). For
similar approaches, see Ry. Co. v. Whitton's Adm'r. , 80 U.S. (1 Wall.) 270, 286 (1871),
and Markham, 292 F.2d at 716.
-15- 7228
----------------------- Page 16-----------------------
53
limiting federal jurisdiction. And in Kloiber, the Delaware Chancery Court reached the
same conclusion when contemplating a situation much like the one before us now:
Assume that [a] non-Delawarean sued [a] Delaware
corporation in federal district court and sought to be
indemnified for $1 million [as permitted under Section 145 of
Delaware's General Corporation Law]. Any challenge to the
federal court's jurisdiction based on Section 145(k)
conferring exclusive jurisdiction on the Court of Chancery
would fail, defeated by the federal diversity statute, 28 U.S.C.
§ 1331, and the Supremacy Clause of the United States
Constitution.[54]
This case implicates a different federal jurisdictional statute, but our
reasoning is much the same. 28 U.S.C. § 1334(a) grants federal district courts "original
and exclusive jurisdiction of all cases under title 11."55 11 U.S.C. § 548(a)(1)(A), the
federal bankruptcy fraudulent conveyance statute, permits trustees to avoid fraudulent
transfers. Because AS 34.40.110(k) purports to grant Alaska courts exclusive
jurisdiction over all fraudulent transfer claims against Alaska trusts, and because
28 U.S.C. § 1334(a) grants federal courts jurisdiction over some of these claims, the
Alaska law "conflicts with . . . federal law to the extent that . . . it is impossible to comply
53 See, e.g. , Allstate , 838 F.2d at 77 n.7; Begay, 682 F.2d at 1315; U.S. ex rel.
Galmines v. Novartis Pharms. Corp. , No. 06-3213, 2013 WL 5924962, at *4 (E.D. Pa.
Nov. 5, 2013). Under federal preemption doctrine -which derives fromthe Supremacy
Clause - state law is preempted when it "conflicts with . . . federal law to the extent that
(a) it is impossible to comply simultaneously with both or (b) the state regulation
obstructs the execution of the purpose of the federal regulation." Interior Reg'l Hous.
Auth. v. James , 989 P.2d 145, 149 (Alaska 1999) (quoting In re J.R.B. , 715 P.2d 1170,
1172 (Alaska 1986)).
54 IMO Daniel Kloiber Dynasty Trust, 98 A.3d 924, 939 (Del. Ch. 2014).
55 28 U.S.C. § 157 allows district courts to refer title 11 cases and proceedings
to bankruptcy court. See Stern v. Marshall, 564 U.S. 462, 474 (2011).
-16- 7228
----------------------- Page 17-----------------------
56
simultaneously with both." We therefore cannot grant Tangwall the relief that he seeks
from the federal judgment.
IV. CONCLUSION
For the reasons we have explained above, we AFFIRM the judgment of the
superior court.
56 Interior Reg'l Hous. Auth., 949 P.2d at 149 (quoting J.R.B., 715 P.2d at
1172).
-17- 7228
 |
| Case Law Statutes, Regs & Rules Constitutions Miscellaneous |
|
