Alaska Miners Association v. Holman

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THE SUPREME COURT OF THE STATE OF ALASKA
ALASKA MINERS ASSOCIATION, )
COUNCIL OF ALASKA ) Supreme Court No. S-15885
PRODUCERS, and RICHARD )
HUGHES, ) Superior Court No. 4FA-13-01296 CI
)
Appellants, ) OPINION
)
v. ) No. 7180 – June 16, 2017
)
JOHN H. HOLMAN; MARK NIVER; )
CHRISTINA SALMON; MEAD )
TREADWELL, LIEUTENANT )
GOVERNOR OF THE STATE OF )
ALASKA; and STATE OF ALASKA, )
DIVISION OF ELECTIONS, )
)
Appellees. )
_______________________________ )
Appeal from the Superior Court of the State of Alaska,
Fourth Judicial District, Fairbanks, Paul R. Lyle, Judge.
Appearances: Matthew Singer and Robert J. Misulich,
Holland & Knight LLP, Anchorage, for Appellants. Timothy
A. McKeever and Stacey C. Stone, Holmes Weddle &
Barcott, P.C., Anchorage, for Appellees Holman, Niver, and
Salmon. Notice of nonparticipation filed by Elizabeth M.
Bakalar, Assistant Attorney General, and Craig W. Richards,
Attorney General, Juneau, for Appellees Treadwell and State
of Alaska, Division of Elections.
Before: Stowers, Chief Justice, Winfree, Maassen, Bolger,
and Carney, Justices.
STOWERS, Chief Justice.
I. INTRODUCTION
Richard Hughes, Alaska Miners Association, and Council of Alaska
Producers (Hughes plaintiffs) challenged the certification of a ballot initiative that would
subject large-scale mining operations in the Bristol Bay region to additional legislative
approval. It is undisputed that this initiative, if passed, would impact the Pebble Project,
a potential large-scale mining project in the Bristol Bay region. The initiative’s sponsors,
John H. Holman, Mark Niver, and Christina Salmon (Holman intervenors), intervened
on the side of the State, and the State and intervenors moved for summary judgment to
establish the legality of the initiative. The superior court granted the State’s and the
Holman intervenors’ motions for summary judgment and we affirmed on the merits.1
The Holman intervenors then moved for full reasonable attorney’s fees as
constitutional claimants under AS 09.60.010.2 The Hughes plaintiffs opposed, arguing
1
Hughes v. Treadwell, 341 P.3d 1121, 1134 (Alaska 2015).
2
AS 09.60.010(c) states in part,
In a civil action or appeal concerning the
establishment, protection, or enforcement of a right under the
United States Constitution or the Constitution of the State of
Alaska, the court (1) shall award, subject to (d) and (e) of this
section, full reasonable attorney fees and costs to a claimant,
who, as plaintiff, counterclaimant, cross claimant, or
third-party plaintiff in the action or on appeal, has prevailed
in asserting the right.
AS 09.60.010(d) states in part,
(continued...)
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that they themselves were constitutional claimants and that the Holman intervenors were
not constitutional claimants because they were intervenor-defendants. The superior court
determined that the Holman intervenors were constitutional claimants. It also found that
because Pebble Limited Partnership (Pebble) financed at least part of the litigation for
the Hughes plaintiffs, Pebble was the real party in interest; the court further found that
Pebble did not qualify as a constitutional claimant because it had sufficient economic
incentive to bring the action. The court therefore awarded the Holman intervenors full
reasonable attorney’s fees. The Hughes plaintiffs appeal. We hold that because this case
is fundamentally about constitutional limits on the ballot-initiative process and not
whether the Pebble Project should go forward, the Hughes plaintiffs did not have
sufficient economic incentive to remove them from constitutional-claimant status, and
we therefore reverse the award of attorney’s fees.
II. FACTS AND PROCEEDINGS
This appeal involves an attorney’s fees dispute following a superior court
decision upholding Lt. Governor Mead Treadwell’s certification of the “Bristol Bay
Forever” ballot initiative. The initiative was approved to be placed on the November
2014 ballot. It required additional legislative approval for “a large-scale metallic sulfide
mining operation located within the watershed of the Bristol Bay Fisheries Reserve.”
In January 2013 Richard Hughes filed suit against Lt. Governor Treadwell
and the State of Alaska, Division of Elections seeking declaratory and injunctive relief
and asserting that the initiative was contrary to the subject matter restrictions in
2
(...continued)
In calculating an award of attorney fees and costs
under (c)(1) of this section, . . . (2) the court shall make an
award only if the claimant did not have sufficient economic
incentive to bring the suit, regardless of the constitutional
claims involved.
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article XI, section 7 of the Alaska Constitution.3 Hughes also alleged that the initiative
violated separation of powers. Hughes’s Amended Complaint added as a plaintiff the
Alaska Miners Association, and his Second Amended Complaint added the Council of
Alaska Producers. The initiative’s sponsors, John H. Holman, Mark Niver, and Christina
Salmon, moved to intervene as defendants, and the superior court granted that motion.4
In February 2014 the superior court granted summary judgment in favor of
the State and the Holman intervenors,5 and on appeal we affirmed the superior court’s
decision.6
After the superior court entered final judgment the Holman intervenors
moved for an award of full attorney’s fees and costs, claiming that they were
constitutional claimants or in the alternative that they were entitled to attorney’s fees and
costs under Alaska Rules of Civil Procedure 797 and 82.8 The Holman intervenors
3
See Hughes, 341 P.3d at 1124. Article XI, section 7 provides,
The initiative shall not be used to dedicate revenues,
make or repeal appropriations, create courts, define the
jurisdiction of courts or prescribe their rules, or enact local or
special legislation. The referendum shall not be applied to
dedications of revenue, to appropriations, to local or special
legislation, or to laws necessary for the immediate
preservation of the public peace, health, or safety.
4
Hughes, 341 P.3d at 1124.
5
Id.
6
Id. at 1134.
7
Alaska R. Civ. P. 79(a) provides,
Unless the court otherwise directs, the prevailing party
is entitled to recover costs allowable under paragraph (f) that
(continued...)
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supported their motion with affidavits from Holman, Niver, and Salmon. All claimed
that they did not have an economic incentive for pursuing litigation; rather, they asserted
that they were primarily concerned with protecting their rights to get the initiative on the
ballot.9
The Hughes plaintiffs opposed the motion and raised two primary
arguments: (1) they were constitutional claimants and thus immune from attorney’s fees
under AS 09.60.010(c); and (2) the statute was intended to protect persons who raised
constitutional claims against the State but not to protect intervenor-defendants against
7
(...continued)
were necessarily incurred in the action. The amount awarded
for each item will be the amount specified in this rule or, if no
amount is specified, the cost actually incurred by the party to
the extent this cost is reasonable.
8
Alaska R. Civ. P. 82(b)(2) provides,
In cases in which the prevailing party recovers no
money judgment, the court shall award the prevailing party
in a case which goes to trial 30 percent of the prevailing
party’s reasonable actual attorney’s fees which were
necessarily incurred, and shall award the prevailing party in
a case resolved without trial 20 percent of its actual attorney’s
fees which were necessarily incurred. The actual fees shall
include fees for legal work customarily performed by an
attorney but which was delegated to and performed by an
investigator, paralegal or law clerk.
9
Niver declared that he worked for part of the year as a commercial
fisherman in Bristol Bay. Holman declared that he owned a sport-fishing lodge in the
Lake Clark area but that his lodge was about 60 miles from the proposed Pebble Mine
and that the mine therefore would not impact his business. Salmon declared that she
engages in subsistence gathering, fishing, and hunting in the Bristol Bay region.
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private parties.10 In support of their argument that they were constitutional claimants,
they filed affidavits from Hughes; Deantha Crockett, Executive Director of the Alaska
Miners Association; and Karen Matthias, Managing Consultant of the Council of Alaska
Producers. Each disclaimed any economic interest in the litigation. Notably, their
opposition did not allege that the Holman intervenors had an economic incentive to
litigate and were therefore not constitutional claimants. They also contended that the
Holman intervenors’ fees were excessive.
In their reply brief in superior court, the Holman intervenors asserted that
the Hughes plaintiffs had economic incentive to bring the action and suggested that
Pebble was actually the entity paying for the litigation. The Holman intervenors attached
an affidavit from Scott Kendall, an attorney working for them. Kendall attached a
number of publications to his affidavit connecting the Hughes plaintiffs to Pebble.
At oral argument counsel for the Hughes plaintiffs conceded that plaintiffs’
litigation fees had been paid for by the Alaska Miners Association, the Council of Alaska
Producers, and Pebble. He also conceded that Pebble had agreed to indemnify all of the
named plaintiffs in the event of an adverse attorney’s fees ruling. But he argued that if
the Hughes plaintiffs’ interests in mining could exclude them from constitutional-
claimant status, then the Holman intervenors’ interests in commercial fishing should
likewise disqualify them from constitutional-claimant status.
The superior court awarded full fees to the Holman intervenors in the
amount of $63,944. The court first concluded that the intervenors were claimants under
AS 09.06.010(c) because “[their] summary judgment motions sought declarations that
[the initiative] was constitutional and [they] sought dismissal of [the Hughes plaintiffs’]
10
The Hughes plaintiffs claimed that the Holman intervenors were not
“plaintiff[s], counterclaimant[s], cross claimant[s], or third-party plaintiff[s]” under
AS 09.60.010(c)(1).
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complaint. [Their] claims were, therefore, in substance, counterclaims to [the plaintiffs’]
claims: [they] sought the exact opposite result [the plaintiffs] sought.” The court found
that this was true even though the Holman intervenors failed to raise counterclaims in
their answer.
The court next sought to determine whether the Hughes plaintiffs were
constitutional claimants and therefore exempt from paying fees. The court decided that
“[t]hey filed non-frivolous constitutional claims on which they did not prevail and [were]
subject to paying full, reasonable attorney’s fees and costs only if they had an economic
incentive to bring the action.” The court then found that they had an economic incentive
to bring the claim because “[t]he only entity actually paying the intervenors’ fees[,
Pebble,] will be the entity with an undeniably ‘sufficient economic incentive to file suit
even if the action involved only narrow issues lacking general importance.’ ”11 The court
did not make findings whether the Holman intervenors had a sufficient economic
incentive to preclude constitutional-claimant status.
The court provided an alternate ruling in the event that on appeal this court
determined the court was not permitted to consider Pebble’s funding of the litigation.
The court found that “[the Alaska Miners Association’s] and [the Council of Alaska
Producers’] affidavits fail to make a prima facie showing of the interests of their typical
members so that the court can assess the organizational economic incentives.” The
Council noted only that it was a trade group “representing Alaska’s large metal mining
industry”; the court found that the Council therefore failed to provide it with sufficient
evidence to determine the Council’s constitutional-claimant status under
AS 09.60.010(c)(1). Similarly, the court found that the Alaska Miners Association
11
(The superior court quoted Citizens Coalition for Tort Reform, Inc. v.
McAlpine, 810 P.2d 162, 171 (Alaska 1991) (discussing economic incentive under
former public-interest-litigant doctrine).
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identified classes of members, but it failed to provide information concerning its
members’ typical economic interests. The court concluded that the two organizations
therefore waived their claims to constitutional-claimant status.
The court next analyzed whether Hughes was a constitutional claimant.
The court noted that his affidavit disclaimed any economic interest in the litigation and
that he therefore had made a prima facie showing that he had no financial interest in the
litigation. But the court concluded that the Holman intervenors “submitted evidence
tending to rebut [this] prima facie showing.” Because the ongoing relationship between
Hughes and Pebble was unclear, the court stated that the Holman intervenors would be
permitted discovery on that issue if this court disagreed with the superior court’s primary
ruling. Finally, the superior court found that most of the Holman intervenors’ fees were
reasonable.
The Hughes plaintiffs appeal.
III. STANDARD OF REVIEW
“Interpretation of AS 09.60.010 is a question of law to which we apply our
independent judgment. When interpreting statutes, ‘[w]e look to “the meaning of the
language, the legislative history, and the purpose of the statute in question” ’ and ‘adopt
“the rule of law that is most persuasive in light of precedent, reason, and policy.” ’ ”12
IV. DISCUSSION
In 2003 the Alaska Legislature passed AS 09.60.010(c), which provides for
an award of reasonable attorney’s fees to successful constitutional claimants and an
12
Alaska Conservation Found. v. Pebble Ltd. P’ship, 350 P.3d 273, 279
(Alaska 2015) (alterations in original) (first quoting Fancyboy v. Alaska Vill. Elec.
Coop., Inc., 984 P.2d 1128, 1132 (Alaska 1999); then quoting Krone v. State, Dep’t of
Health & Soc. Servs., 222 P.3d 250, 252 (Alaska 2009)).
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exemption from paying attorney’s fees for unsuccessful constitutional claimants.13 This
statute abrogated and replaced Alaska’s common-law public-interest-litigant doctrine.14
In crafting the constitutional-claimant provision, the legislature incorporated the
“sufficient economic incentive” exception that we had earlier developed in our public-
interest-litigant cases15:
In a civil action or appeal concerning the
establishment, protection, or enforcement of a right under the
United States Constitution or the Constitution of the State of
Alaska, the court . . . may not order a claimant to pay the
attorney fees of the opposing party devoted to claims
concerning constitutional rights if the claimant as plaintiff,
counterclaimant, cross claimant, or third-party plaintiff in the
action or appeal did not prevail in asserting the right, the
action or appeal asserting the right was not frivolous, and the
claimant did not have sufficient economic incentive to bring
the action or appeal regardless of the constitutional claims
involved.[16]
The parties agree that the Hughes plaintiffs sought “the establishment, protection, or
enforcement of a right under . . . the Constitution of the State of Alaska”; the only
disagreement concerns the question of “sufficient economic incentive.” The superior
court ruled that Pebble, and not the named plaintiffs, was the real party in interest and
that Pebble had “sufficient economic incentive to bring the action.”
The superior court’s determination that Pebble was the real party in interest
may have been based on our comment in Alaska Conservation Foundation v. Pebble
13
Id. at 280.
14
Id.
15
Id. at 281.
16
AS 09.60.010(c)(2).
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Limited Partnership where we said, “We do not suggest that there never could be a third
party seeking some direct economic benefit by funding a nominal plaintiff’s
constitutional litigation, and we agree that in such an instance the third party’s direct
economic incentive might be relevant to an attorney’s fees award under AS 09.60.010.”17
But we have never actually held that a third party could be the real party in interest for
the purposes of this statute. We do not reach this question today because we hold that
this case is fundamentally about constitutional limits on the ballot-initiative process and
that therefore the Hughes plaintiffs did not have “sufficient economic incentive” to
remove them from constitutional-claimant status.
This case is the mirror image of Alaska Conservation Foundation. In that
case individual Alaskans and a non-profit organization sued the State for alleged
constitutional violations in issuing land and water use permits to Pebble.18 Pebble
intervened on the side of the State, and the State and Pebble were ultimately victorious.19
The plaintiffs in that case sought to prove constitutional-claimant status to avoid an
award of attorney’s fees.20 Pebble sought and the superior court granted discovery to
determine the plaintiffs’ funding sources.21 We reversed that discovery order.22
17
Alaska Conservation Found., 350 P.3d at 285.
18
Id. at 275.
19
Id.
20
Id.
21
Id. at 276-78.
22
Id. at 275.
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We explained that “[e]conomic interest need not take the form of
damages,”23 but “courts must ‘look to the facts of the case to determine the litigant’s
primary motivation for filing the suit.’ ”24 We concluded that there was not “sufficient
economic incentive” because the “case [was] only about constitutional limitations on the
State’s issuance of land and water use permits to Pebble and not about whether the
Pebble Project should proceed or whether the Pebble Project may harm Bristol Bay
fisheries.”25 “We reiterate[d] and emphasize[d] the necessity of direct economic benefit
from constitutional litigation for ‘sufficient economic incentive’ ” and cautioned that
“[f]ocusing on the funding of constitutional litigation rather than on the litigation itself
to determine primary purpose . . . can lead easily to the wrong result.”26 Regardless of
the sources of their funding, the plaintiffs in Alaska Conservation Foundation qualified
as constitutional claimants.
The same analysis applies here. This case is about constitutional limitations
on the ballot-initiative process and not about whether the Pebble Project should proceed.
The Holman intervenors argue that Pebble had a direct economic incentive to bring the
action because the initiative “injects uncertainty on the question of whether the Pebble
Project will ultimately be approved by the legislature.” They note that uncertainty alone
“can scare off financing and derail the [P]roject at very early stages” and “have an
immediate impact in the form of lowering the stock prices of companies associated with
the Project, such as [Pebble].” But we held in Alaska Conservation Foundation that “it
23
Id. at 282 (quoting Matanuska-Susitna Borough Sch. Dist. v. State, 931
P.2d 391, 403 (Alaska 1997)).
24
Id. (quoting O’Callaghan v. State, 920 P.2d 1387, 1390 (Alaska 1996)).
25
Id. at 284.
26
Id. at 285.
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was error for the superior court to look at future possibilities and contingencies well
outside the contours of the litigation.”27 The same is true here: uncertainty or possible
future gains or losses do not constitute “sufficient economic incentive to bring the
action” where the primary purpose of the litigation was to bring constitutional challenges
to a ballot initiative.
It is undoubtedly true that requiring legislative approval for the Pebble
Project will add to the level of uncertainty around the Pebble Project. But we have never
required that parties seeking constitutional-claimant status — or public-interest-litigant
status under our former framework — be completely disinterested in the case.28 Doing
so would likely eliminate the constitutional-claimant rule altogether. This case is
fundamentally about the ballot-initiative process and not a case about whether the Pebble
Project should go forward. We have repeatedly underscored the public-interest nature
of suits involving elections.29
27
Id. at 284.
28
See, e.g., Ninilchik Traditional Council v. Noah, 928 P.2d 1206, 1218-19
(Alaska 1996) (holding that a marginal economic incentive for the litigants did not
preclude them from asserting public-interest-litigant status); Kodiak Seafood Processors
Ass’n v. State, 900 P.2d 1191, 1193, 1198-99 (Alaska 1995) (holding that seafood
producers were public interest litigants because they would only benefit from the
litigation if other administrative barriers were overcome).
29
See, e.g., Municipality of Anchorage v. Citizens for Representative
Governance, 880 P.2d 1058, 1062 (Alaska 1994) (“The proposition that our democratic
society has a strong public interest in fair elections is tautological.”); id. at 1061-63
(reviewing past public-interest-litigant cases and noting that “a number of cases stand for
the proposition that normal compensation of an elected office is not sufficient economic
incentive to defeat the public interest status of an officeholder or candidate seeking to
vindicate a public interest”).
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We reiterate and emphasize — again — that direct economic benefit is
needed for there to be “sufficient economic incentive to bring the action.” Possible or
speculated impact is not enough. We hold that because this case concerns the
constitutionality of a ballot initiative, Hughes, the Alaska Miners Association, and the
Council of Alaska Producers did not have a “sufficient economic incentive to bring the
action.” Therefore, they are protected from an award of attorney’s fees pursuant to
AS 09.60.010(c) regardless of the real party in interest and regardless of the economic
interests of the Alaska Miners Association’s and the Council of Alaska Producers’
typical members.30
V. CONCLUSION
We REVERSE the superior court’s award of full attorney’s fees to Holman,
Niver, and Salmon.
30
We do not reach the superior court’s ruling that it would permit discovery
into Hughes’s relationship with Pebble. But we again reiterate that “[f]ocusing on the
funding of constitutional litigation rather than on the litigation itself to determine primary
purpose . . . can lead easily to the wrong results” and that discovery orders of this nature
could raise constitutional concerns. Alaska Conservation Found., 350 P.3d at 285. We
also do not address whether intervenor-defendants can be constitutional claimants under
AS 09.60.010. It is sufficient for purposes of this case to hold that because the plaintiffs
were unsuccessful constitutional claimants who did not have a “sufficient economic
incentive to bring the action,” they are protected from an award of attorney’s fees.
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