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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Tesoro Petroleum Corp. v. State (2/15/2002) sp-5539

Tesoro Petroleum Corp. v. State (2/15/2002) sp-5539

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878.



            THE SUPREME COURT OF THE STATE OF ALASKA


TESORO PETROLEUM CORPORATION  )
and TESORO ALASKA COMPANY,    )    Supreme Court No. S-9379
                              )
             Appellants,      )    Superior Court No.
                              )    3AN-99-8544 CI
     v.                       )
                              )    O P I N I O N
STATE OF ALASKA and BRUCE     )
M. BOTELHO, in his official   )    [No. 5539 - February 15, 2002]
capacity as ATTORNEY GENERAL  )
OF THE STATE OF ALASKA,       )
                              )
             Appellees.       )
______________________________)




          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage,
                   Peter A. Michalski, Judge.


          Appearances:   Douglas J.  Serdahely,  Patton
          Boggs,   LLP,   Anchorage,   and   James   C.
          Slaughter,   Fulbright   &   Jaworski,   LLP,
          Houston,  Texas,  for  Appellants.    Douglas
          Gardner,  Assistant  Attorney  General,   and
          Bruce  M. Botelho, Attorney General,  Juneau,
          for Appellees.


          Before:    Fabe,  Chief  Justice,   Matthews,
          Bryner,  and Carpeneti, Justices.  [Eastaugh,
          Justice, not participating.]


          FABE, Chief Justice.
          MATTHEWS, Justice, dissenting.


I.   INTRODUCTION

          Tesoro   Petroleum   Company   challenges   the   civil

investigative  demand  (CID) served on the  company  by  Alaska's

attorney  general  as  part  of  an investigation  into  gasoline

prices.  Tesoro contends that the CID was overbroad and that  the

State  impermissibly disclosed to outside counsel documents  that

Tesoro  produced in response to the CID.  Because Spencer  Hosie,

outside counsel to the attorney general, should be considered "an

authorized   employee  of  the  state"   for   purposes   of   AS

45.50.592(e),  we affirm the superior court's decision  to  allow

disclosure  of the documents to Hosie.  Moreover, we  affirm  the

superior court's decision that the CID was not "unreasonable  and

oppressive."

II.  FACTS AND PROCEEDINGS

          Upon  determining  that the public  interest  would  be

served  by an investigation of possible violations of the  Alaska

Antitrust  Act  by  Tesoro, the State served  a  CID  on  Tesoro,

pursuant  to AS 45.50.592.  The CID described the subject  matter

of  the investigation as "possible price fixing, combinations  in

restraint  of  trade,  and other anticompetitive  fuel  refining,

marketing,  pricing,  distribution, and sales  practices  in  the

State of Alaska."

          The   CID  contained  forty-six  specific  demands  for

documents.  With the exception of Demand No. 35, which covers the

time  period of January 1, 1985 through the date of service,  the

CID   covers  Tesoro's  business  practices  over  a  period   of

approximately  ten years, from January 1, 1990  to  present.   As

described   by  the  State,  the  demands  "request   information

regarding prior statements or testimony, organizational charts to

identify potential witnesses, product exchange documents, reports

analyzing   margins,  returns  on  capital,   pricing   component

information,    refining    input   and    output    information,

transportation costs, etc."  The State engaged Spencer Hosie  and

his  law firm, Hosie, Frost & Large, as outside legal counsel  to

assist   in   the   Tesoro  investigation;  a  written   contract

established an independent contractor relationship between  Hosie

and the State.

          Tesoro,  pursuant to AS 45.50.592(f),1 filed a petition

to  modify  the  CID.  Tesoro's arguments to the  superior  court

encompassed two main issues: disclosure of documents  to  outside

counsel and overbreadth of the CID.

          First,  Tesoro argued that the CID should be set  aside

or  limited because its requirements are "too burdensome and thus

contain requirements which would be unreasonable and improper  if

contained  in  a subpoena duces tecum issued by a court  of  this

state."   At oral argument before Superior Court Judge  Peter  A.

Michalski,  Tesoro  specified four areas in  which  the  CID  was

overly  burdensome: it covers too many employees, it  covers  too

long a time period, it covers too broad a range of products,  and

it covers too broad a geographic scope.

          Second,  Tesoro objected to the disclosure of documents

produced  under  the  CID  to  the State's  outside  counsel  and

requested that the court prohibit such disclosure.  Tesoro argued

that  the statute does not authorize Hosie and his firm to review

documents  produced  pursuant to the CID because  Hosie  and  his

          firm, as outside counsel, are not "authorized employee[s]" under

AS 45.50.592(e) and because Tesoro did not consent to disclosure.

          In  response,  the  State contended that  the  document

requests  reasonably facilitated investigation of the high  price

of  petroleum  products in Alaska.  The State explained  that  in

order to determine whether antitrust violations had occurred,  it

required  documents  from other Pacific  markets,  regarding  all

types  of petroleum products, and over a time period long  enough

to  determine trends.  The State also argued that Hosie should be

considered  an  "authorized  employee  or  designee"  under   the

statute, and that he is therefore permitted to receive responsive

documents.

          On October 7, 1999, Judge Michalski issued a Memorandum

and   Order  deciding  Tesoro's  petition.   The  superior  court

determined   that  a  reference  to  Hosie  as  an   "independent

contractor"  in the contract between Hosie and the State  is  not

relevant to the CID statute.  Therefore, the superior court found

that  "Spencer Hosie is considered an 'employee of the State'  in

his  role  as  outside counsel in the Attorney  General's  Alaska

Petroleum Products Pricing Investigation for the purposes  of  AS

45.50.592(e)."   The  court also determined that  "the  'consent'

restriction  and the term 'authorized employee or  designee'  was

not  meant to apply to situations where the state employs outside

counsel."

          Additionally, the superior court held that "as a  whole

the  CIDs are not 'unreasonable and oppressive.'"  Based on  "the

scope of the Attorney General's authority under the statute,  and

the  deference  given  to  agencies with statutory  investigative

powers,"  the court found that the CIDs were neither unreasonable

nor improper.  The superior court did, however, modify the CID in

several  ways.   It permitted Tesoro to produce  responses  on  a

rolling  basis, starting ten days following the issuance  of  the

order.  The court also limited the CID to cover documents held by

personnel  with decision-making authority, rather than  documents

held by any Tesoro employees.  In response to Tesoro's complaints

about the geographical scope of the CID, the superior court  also

held  that  Tesoro  did  not need to submit  documents  regarding

operations  in the Far East.  Finally, the superior court  struck

two demands as confusing and internally inconsistent.

III. DISCUSSION

     A.   Standard of Review

          Whether  the  superior court correctly  interpreted  AS

45.50.592 to hold that Spencer Hosie was an "authorized  employee

of  the  state"  is  a  question of statutory  construction.   We

exercise   our  independent  judgment  in  matters  of  statutory

interpretation.2 The related issues of Tesoro's right to petition

for  relief and the appropriate relief under AS 45.50.592(e)  are

also  matters  of statutory construction to which  we  apply  our

independent judgment.3

          We  have  previously  reviewed  superior  court  orders

granting  access to documents produced pursuant to  AS  45.50.592

under  an  abuse  of  discretion standard.4  More  generally,  we

commonly   "review  rulings  on  discovery  for   an   abuse   of

discretion."5   Because we hold that the superior  court  applied

          the appropriate standard to its review of the CID, we review the

superior court's order under an abuse of discretion standard.6

     B.   The Superior Court Did Not Err by Allowing the Attorney
          General  to  Pass  Documents  to  its  Outside  Counsel
          Because Hosie Is an "Authorized Employee of the  State"
          and a "Designee" Under AS 45.50.592(e).
          
          Tesoro  argues that the superior court erred by holding

that  Hosie  is  an "authorized employee" of the state  under  AS

45.50.592(e)  and  allowing him, therefore,  to  review  the  CID

documents.    Alaska   Statute   45.50.592(e)   establishes   the

situations in which documents produced in response to a  CID  may

be disclosed or used:

          Documentary material produced pursuant  to  a
          demand,  or  copies of it,  unless  otherwise
          ordered  by  a superior court for good  cause
          shown, may not be produced for inspection  or
          copying by, nor may its contents be disclosed
          to,  anyone other than an authorized employee
          of  the  state  without the  consent  of  the
          person  who  produced the material.  However,
          under  those reasonable terms and  conditions
          the  attorney general prescribes,  copies  of
          the  documentary material shall be  available
          for  inspection and copying by the person who
          produced   the  material  or  an   authorized
          representative of that person.  The  attorney
          general, or a designee, may use copies of the
          documentary material as the attorney  general
          or   designee  considers  necessary  in   the
          enforcement   of   this  chapter,   including
          presentation   before   a   court;   however,
          material that contains trade secrets may  not
          be  presented except with the approval of the
          court  in  which the action is pending  after
          adequate notice to the person furnishing  the
          material.

(Emphasis added.)

          1.   Alaska  Statute  45.50.592(e)  relates  to   post-
               production disclosure.

          Alaska   Statute  45.50.592(e)  --  like  its   federal

          counterpart, former 15 U.S.C.  1313(c) -- addresses only post-

production  disclosure of materials produced under  a  subsection

.592(a) CID.  Thus, subsection (e)'s literal language operates to

restrict  production of materials already produced, stating  that

"material produced pursuant to a demand . . . may not be produced

.  . . [or] disclosed" except in accordance with the subsection's

provisions.  The federal cases discussed by the dissent bear this

out.   They all address issues of "production" after the original

production.

          Thus,  subsection (e) addresses cases in which a second

generation  of  production or disclosure would be  necessary;  it

does not purport to address who may be authorized by the attorney

general  to  inspect  the originally produced  materials  without

triggering  a  second  round of disclosure or  production.   That

issue   is  partly  covered  in  subsections  .592(a)  and   (b).

Subsection  (a)  gives the attorney general  authority  to  issue

CIDs.7  And subsection (b) gives the attorney general unqualified

power to name any "state employees or representatives" to receive

produced materials "for inspection and copying."8

          Here,   the  attorney  general  issued  the   CID   for

production  directly  to  the attorney general's  office.   These

actions are expressly allowed under subsections .592(a) and  (b).

Since  the  attorney general authorized Hosie  to  represent  the

State  in investigating Tesoro, and thus could have named him  as

the  specific "representative" to whom the materials were  to  be

produced for inspection, it is impossible to conclude that giving

Hosie  access  to  those materials upon their production  to  the

          attorney general would amount to an additional round of

"production"   or   "disclosure"  within  the  contemplation   of

subsection  .592(e).   As  part of the  team  that  the  attorney

general  has  assembled  to  conduct the  Tesoro  investigation's

regular work, then, Hosie and his firm fall within the circle  of

those  having direct authority to inspect the materials  produced

under  the  CID,  without  any further production  or  disclosure

occurring.

          2.   Contractual definitions

          Moreover, even if it addressed the permissible scope of

disclosure for the original production of documents under a  CID,

subsection .592(e) would not preclude disclosure to Hosie in  the

present  case.   Tesoro points to the language  of  the  contract

between Hosie and the attorney general in support of its argument

that  Hosie  was  not an employee of the state to whom  documents

could be disclosed.  The contract specifies: "The contractor  and

any  agents and employees of the contractor act in an independent

capacity and are not officers or employees or agents of the State

in  the  performance  of  this contract."   Tesoro  reasons  that

because Hosie is an independent contractor under the contract, he

cannot  be an "authorized employee of the state" as described  in

AS 45.50.592.

          We  are  unpersuaded  by  Tesoro's  argument  that  the

retainer  contract  should,  as a  matter  of  law,  control  the

construction  of  the  statute.   In  this  matter  of  statutory

interpretation, we look to the policy behind the statute and  the

reality   of  the  relationship,  rather  than  to  the  parties'

contractual  statement of the relationship.9  Also,  because  the

terms  "independent  contractor" and  "employee"  have  different

ramifications in different areas of the law,10 contractual use of

the  term "independent contractor" cannot be determinative.   The

statutory  term "authorized employee of the state"  need  not  be

understood  as the equivalent of the common law term  "employee,"

which  is  typically mutually exclusive of the term  "independent

contractor."11 Instead "authorized employee" should be understood

in its statutory context as a grant of investigative power to the

attorney  general.   In  that context, it  can  sensibly  include

private  lawyers  hired  by  the state  to  assist  in  antitrust

investigations.12

          Alaska  Statute  45.50.592 is arguably ambiguous.   The

statute  does not define its critical terms "authorized  employee

of  the  state," "representative," or "designee," and it  is  not

facially obvious whether a private attorney hired by the attorney

general should qualify as an "authorized employee." Definition of

the  relevant  terms  in this context is a  matter  of  statutory

construction.  The purpose of statutory construction is "to  give

effect to the intent of the legislature, with due regard for  the

meaning   that  the  statutory  language  conveys  to  others."13

Statutory  construction begins with the language of  the  statute

construed  in  light of the purpose of its enactment.14   If  the

statute  is  unambiguous and expresses the legislature's  intent,

statutes   will   not  be  modified  or  extended   by   judicial

construction.15   If  we  find a statute ambiguous,  we  apply  a

sliding scale of interpretation, where "the plainer the language,

          the more convincing contrary legislative history must be."16

          3.   Legislative history

          Although  the  legislative  history  does  not   reveal

specific  intent  for  the  meaning  of  the  relevant  statutory

language,  we  discern  two legislative  concerns:  (1)  granting

sufficient power to the attorney general to conduct thorough pre-

litigation   investigation,  and  (2)   implementing   procedural

safeguards to protect companies from unfair treatment.

          A February 10, 1975 letter from Governor Jay S. Hammond

announcing the signing of AS 45.50 explained that "[a]  provision

of  this  nature is desirable because detection of violations  of

the  antitrust laws is often a difficult matter requiring  review

of  numerous  business transactions which have occurred  over  an

extended period of time."17  Governor Hammond went on to  explain

the  dual  concerns behind the law in question: "to  provide  the

attorney  general with the power he needs, but  also  to  provide

detailed  procedural  controls  which  will  prevent  unfair  and

arbitrary action by the attorney general."18

          When  the  legislature  enacted AS  45.50.592,  it  had

already  recognized  the attorney general's authority  to  manage

state litigation;19 therefore, according to the State, it clearly

intended to give the attorney general broad investigative powers.

The  statutory  term "authorized employee of the state,"  in  the

State's view, "simply allows the attorney general the flexibility

consistent with AS 44.23.020 . . . to hire outside counsel at the

attorney  general's  discretion, which is the attorney  general's

longstanding practice in complex cases."20  Furthermore, the State

          argues, the United States Department of Justice has similar power

under  15  U.S.C.   1313(c)(3) and Aluminum  Co.  of  America  v.

United States Department of Justice.21

          It  seems  unlikely that the legislature, while  giving

broad investigatory powers to the attorney general, would wish to

restrict  the  attorney  general's  ability  to  effectuate  such

investigations,  or  that  it would  create  such  a  restriction

without  expressly  indicating its intent.   Indeed,  an  implied

restriction  of  this kind would conflict with AS  45.50.592(e)'s

express language granting the attorney general broad power to use

the  demanded  materials  in any way that  the  attorney  general

"considers necessary in the enforcement of this chapter,"  except

when prior approval might prevent unwarranted disclosure of trade

secrets  in  open  court.   Moreover,  it  is  the  long-standing

practice  of  the Department of Law to hire outside  counsel  for

complex  matters.22   To  the extent  that  the  legislature  was

concerned with confidentiality of documentation, it imposed  upon

outside  counsel, and any others who review documents  responsive

to  a CID, the same restrictions that AS 45.50.592 imposes on the

attorney   general.   Outside  counsel  may  not   disclose   any

information to a third party unless authorized by the  respondent

or  a court.  Thus, interpreting the term "authorized employee of

the   state"  to  encompass  outside  attorneys  addresses   both

legislative  policies behind AS 45.50.592: adequate investigatory

power of the state and confidentiality of respondents.

          4.   Outside counsel as designee

          Alaska  Statute 45.50.592(e) states that "the  Attorney

          General, or a designee, may use copies of the documentary

material  as the Attorney General or designee considers necessary

in  the  enforcement of this chapter."  (Emphasis added.)  Tesoro

argues that "the word 'designee' in [this] sentence simply  means

the  State employee who is designated by the Attorney General  as

authorized  to see CID documents, i.e., the 'authorized  employee

of  the  state' referred to in the first sentence of AS 45.50.529

[sic]  (e)."   Because a "designee" can only  be  an  "authorized

employee  of  the  state,"  Tesoro  argues,  Hosie  cannot  be  a

"designee"  who  "may  use  copies of the  documentary  material"

produced  by Tesoro.  We disagree.  The legislature's  choice  of

the  term "designee" indicates an intent to include persons other

than "employees" of the attorney general within the group allowed

access  to  CID-responsive  documents.   Although  one  may   not

commonly  think  of  outside counsel as  an  "employee,"  outside

counsel easily falls within the common usage of "designee."

          5.   Good cause

          Tesoro   suggests  that  the  attorney   general   must

demonstrate  good  cause to reveal documents to  outside  counsel

without    consent   of   the   respondent.     Alaska    Statute

45.50.592(b)(4)   requires  that  each  demand  for   documentary

evidence identify the "state employees or representatives to whom

the  documentary material is to be made available for  inspection

and  copying."   (Emphasis added.)  Alaska  Statute  45.50.592(e)

requires  that  material produced pursuant to a CID  may  not  be

disclosed "unless otherwise ordered by a superior court for  good

cause  shown . . . [to] anyone other than an authorized  employee

of  the state without the consent of the person who produced  the

material."    (Emphasis   added.)   Tesoro   asserts   that   the

legislature's  failure  to  refer to both  "state  employees  and

representatives"  in  AS  45.50.592(e),  as   it   does   in   AS

45.50.592(b)(4),    demonstrates   its    intent    to    exclude

representatives from the category of people to whom documents can

be  disclosed  without  consent.  According  to  Tesoro,  because

Hosie,   as   outside   counsel,  is  properly   defined   as   a

"representative"  of  the  State,  he  is  not,   therefore,   an

"employee"   who   can  have  access  to  documents   without   a

demonstration of good cause.  Moreover, Tesoro contends  that  AS

45.50.592(b)(4)'s  use  of  the term "representatives"  does  not

expand the term "authorized employee" used in AS 45.50.592(e).

          Tesoro's contention is unpersuasive.  The legislature's

inclusion of "representatives" in AS 45.50.592(b)(4) indicates an

intent  to  grant  representatives who are  not  otherwise  state

employees the same access to documents as that afforded to  state

employees  under this section.  By specifying that the  CID  must

identify  state  employees or representatives, AS 45.50.592(b)(4)

places  employees  and  representatives  on  equal  footing   for

purposes of receiving documents produced in response to the CID.

          Moreover, we agree with the superior court's conclusion

that the "good cause" section of AS 45.50.592(e) is intended  for

situations  in  which  a third party seeks access  to  responsive

documents, as was the case in Novak v. Orca Oil Co.23   It  seems

unlikely  that the legislature intended to restrict the  attorney

general's authority to conduct an investigation by requiring  the

          attorney general to show good cause each time he or she requires

outside legal expertise.

     C.   The  Superior  Court Applied the Correct  Standard  for
          Reviewing the CID.

          Tesoro contends that the superior court inappropriately

reviewed  the  breadth and scope of the CID under  a  deferential

"prosecutorial discretion" standard.24

          Tesoro   argues   that   deference   to   prosecutorial

discretion is not warranted because this case raises no issues of

separation of powers or unique regulatory expertise.   The  State

responds  that  important policy considerations support  granting

broad   investigatory   power  to  the   attorney   general   and

interpreting  the  attorney general's antitrust  subpoena  powers

consistently with Alaska Civil Rule 26(b):25  "If the scope of the

attorney general's antitrust subpoena power is any less than that

allowed by Civil Rule 26(b), the attorney general will be put  in

the  untenable position of having to decide whether to file  suit

first to get adequate information."

          The  language  of the statute provides the  appropriate

starting  point  for  analysis.  Alaska  Statute  45.50.592(c)(2)

provides that a CID may not "contain a requirement that would  be

unreasonable or improper if contained in a subpoena  duces  tecum

issued  by a court of the state."  (Emphasis added.)  Civil  Rule

45(b)(1), which governs subpoenas duces tecum, permits courts  to

"void   or   modify  the  subpoena  if  it  is  unreasonable   or

oppressive."26

          We have not yet had an opportunity to explain in detail

          when a CID should be held unreasonable, improper, or oppressive.

The  State  argues that our decision in Matanuska Maid,  Inc.  v.

State27 should control this analysis.  There, we adopted the three

requirements that federal courts use to examine CIDs:   "[I]t  is

sufficient  for  fourth amendment purposes that the  subpoena  is

issued pursuant to lawful authority, relevant to the inquiry  for

which  it  is issued and contains adequate specification  of  the

documents to be produced."28

          But  in Matanuska Maid, we considered CIDs issued under

AS 45.50.495 and former AS 45.50.20029 in light of constitutional

provisions  prohibiting unreasonable search and  seizure.30   The

reasonableness  standard  set forth in Matanuska  Maid  therefore

pertains  to  search  and  seizure, but not  necessarily  to  the

statute and Civil Rule 45.

          Federal courts have adopted the same standard described

in   Matanuska  Maid  for  judicial  review  of  CIDs  and  other

administrative subpoenas as well.31  In re Sealed Case involved a

motion  to  compel  the production of documents  pursuant  to  an

administrative subpoena duces tecum.32  The Circuit Court for the

District  of  Columbia  applied  a  standard  of  review   almost

identical to the Matanuska Maid standard: "Our role in a subpoena

enforcement  proceeding  is limited to  determining  whether  the

inquiry is within the authority of the agency, the demand is  not

too   indefinite  and  the  information  sought   is   reasonably

relevant."33

          Federal  courts  have shown deference to administrative

agencies when reviewing administrative subpoenas for relevance.34

          The In re Sealed Case court explained that courts must "defer to

the  agency's appraisal of relevancy, which must be  accepted  so

long  as  it is not 'obviously wrong'"35  For federal courts,  an

inquiry  must be "reasonably relevant to the general purposes  of

the  agency's investigation."36  The government agency may define

the boundaries of the investigation "quite generally."37  When an

agency  claims the information sought is relevant, federal courts

"require  the  party challenging the investigation  to  bear  the

burden   of   demonstrating  that  the  information   sought   is

irrelevant."38   This  deference  in  establishing  relevance  is

appropriate because "[a]t the investigatory stage, the Commission

does not seek information necessary to prove specific charges; it

merely has a suspicion that the law is being violated in some way

and wants to determine whether or not to file a complaint."39

          The  deferential approach to establishing relevance  is

sound.   It  is  also supported by our holding in Matanuska  Maid

that the respondent bears the burden of proving whether a CID  is

reasonable.40  We therefore hold that when a trial court reviews a

CID under AS 45.50.592, it should examine whether the subpoena is

"[1]  issued  pursuant to lawful authority, [2] relevant  to  the

inquiry  for  which  it  is  issued  and  [3]  contains  adequate

specification of the documents to be produced."41  We  adopt  the

federal  courts'  deferential reasonable  relevance  standard  to

determine  whether the subpoena is relevant to  the  inquiry  for

which it is issued.

          We disagree with Tesoro that the superior court applied

a  criminal  law-based "prosecutorial discretion"  standard.   We

          look to the superior court's written decision to ascertain the

standard applied.42  That decision explained: "Given the scope of

the  Attorney  General's authority under  the  statute,  and  the

deference given to agencies with statutory investigative  powers,

the  Court  finds  that  the CIDs are  not  unreasonable."   This

statement  reflects  the permissive relevance  standard  outlined

above.   We conclude that the superior court applied the  correct

standard of review for a CID.

     D.   The  Superior  Court Did Not Abuse  Its  Discretion  by
          Holding the CID to be Reasonable and Not Oppressive.

          1.   CID as a whole

          Tesoro  contends  that  the  superior  court  erred  by

failing  to  modify the CID because the CID, which  Tesoro  calls

"sweeping  in  scope," contains twenty-five pages,  covers  broad

subject  matter, and is "unreasonable and oppressive" under  Rule

45(b)(1).  Such a demand, argues Tesoro, is insupportable because

it is "out of proportion to the end sought."43

          Because  the  court  applied the  correct  "deferential

reasonable relevance" standard of review, we review the  superior

court's application of that standard to the facts in the case for

an  abuse  of discretion.44  Given the superior court's extensive

factual   and   legal  inquiry,  as  well  as   the   substantial

modifications it made to the CID, we conclude that  the  superior

court did not abuse its discretion.

          In   the  attorney  general's  opposition  to  Tesoro's

petition  to modify the CID, the State explained the  purpose  of

the investigation:

               Why  are  prices so high  when  sizeable
          volumes   of  gasoline  and  other  petroleum
          products  are  refined here  in  Alaska?  Are
          prices higher due to higher labor or refining
          costs  in  Alaska? Are prices higher  due  to
          increased transportation costs to Alaska?  If
          gasoline  prices  are  so  high,  why  aren't
          traditional  market forces  attracting  other
          companies  to  Alaska to  compete  for  these
          abnormally  large  margins?  With  such  high
          prices,   why  has  gasoline  actually   been
          shipped out of Alaska, instead of being  sold
          to  Alaskans for the highest retail price  in
          the  nation?  Are there agreements  in  place
          between  the  companies not to  compete  thus
          altering competition and other natural market
          forces?  Have  the companies  "volumetrically
          divided"  the Alaska gasoline market  amongst
          themselves?  Are  there illegal  barriers  to
          entry  in  the market? Or, are there economic
          factors  that can be identified and explained
          that  are  driving Alaska's  gasoline  prices
          through the roof?

Because  it  gave appropriate deference to the State's definition

of  the  investigation,  the superior court  did  not  abuse  its

discretion  in  holding  that  the  CID,  while  broad,  was  not

unreasonable  or  oppressive  in light  of  the  breadth  of  the

investigation.

          That  the  court  modified the CID in substantial  ways

also  speaks  to  the court's proper use of its discretion.   The

court  modified Instruction No. 1, which originally  covered  all

Tesoro  personnel,  to  apply only to  "personnel  with  decision

making authority, significant control over operations, marketing,

acquisition  or  disposition of materials, pricing  and  sale  of

gasoline  in  Alaska,  or strategy, or any other  personnel  that

might  assist,  through  research and drafting  of  memoranda  or

reports."  Additionally, the court struck two vague and confusing

requests  in  accordance  with the requirement  that  demands  be

adequately specific,45 and excluded Tesoro's operations in the Far

East  from  the  scope  of  the CID.  We disagree  with  Tesoro's

contentions  that  the court's amendments were  superficial.  The

superior  court's  modifications show that it balanced  the  wide

scope  of  the  investigation with the burden  of  compliance  to

Tesoro.46

          Furthermore, Tesoro's citation of Williams v.  City  of

Dallas47 is unpersuasive.  In Williams, the court did not defer to

the  issuer  of  a  subpoena  duces  tecum  on  the  question  of

relevance, but in that case the issuer was a private civil rights

litigant.48  As described above, questions of reasonableness  and

relevance  of  administrative  subpoenas  duces  tecum  must   be

analyzed  showing  appropriate deference  to  the  administrative

entity issuing the document demand.

          That  this  case involves possible antitrust violations

also  militates toward holding that the superior court's findings

regarding the CID are not clearly erroneous. In general, there is

a  "policy  of allowing liberal discovery in antitrust  cases."49

"Particularly  where allegations of conspiracy or  monopolization

are involved," as in this case, "broad discovery may be needed to

uncover evidence of invidious design, pattern or intent."50

          2.   Temporal scope

          Tesoro  argues that the State's investigation, although

nominally  broad, actually covers only one to two  years  because

the  phenomenon  the attorney general has decided to  investigate

has  only  recently  occurred.  As  evidence  of  the  supposedly

limited  scope  of  the  inquiry, Tesoro relies  on  the  State's

          explanation for its need for the investigation as a response to

the "Alaska Paradox," that even though Alaska has the largest oil

field in North America, Alaskan consumers and businesses pay  the

highest  retail tax-excluded gasoline prices in the country.   To

explain  the  "Alaska  Paradox," the State supplies  two  graphic

comparisons  of  gasoline and gasoline  tax  prices.   One  graph

represents  figures  from  1997 and one represents  figures  from

1998.   Therefore,  reasons Tesoro, the  investigation  is  aimed

solely at explaining gasoline prices from the past several years.

          Tesoro  argues, citing Kellam Energy, Inc. v. Duncan,51

that  "[c]ourts  have recognized that the temporal  limits  of  a

subpoena in the antitrust context can be ascertained by reference

to the time period of the claims at issue."  Based on the limited

scope  of the investigation, Tesoro suggests that the time period

of  discoverable documents should be five years, beyond which the

State  could  request documents only after a "proper showing"  to

the  superior court.  According to Tesoro, this two-step approach

would  prevent  the  imposition of undue burden  and  expense  to

Tesoro while permitting the attorney general to perform its  duty

of   investigation.   We  decline  to  impose  Tesoro's  two-step

approach;  such an approach has no statutory basis and  has  been

rejected by courts.52

          Tesoro's attempt to portray the investigation  as  only

concerning  recent gasoline pricing is wholly unconvincing.   The

two  illustrative graphs in the State's trial brief are just that

--  illustrative.  They do not limit or define the temporal scope

of  the  investigation.  In addition, numerous courts  have  held

          that "the temporal scope of discovery in antitrust suits should

not  be confined to the limitations of the antitrust statutes."53

In light of the discussion of general deference to the government

in investigative subpoenas, and the representations in the record

which  support the court's finding,54 the superior court did  not

abuse  its discretion by finding that documents dating  back  ten

years are relevant to the investigation.

          3.   Product scope

          The  CID  requests  documents  relating  to  "petroleum

products,"  defined as "any of the following  fuels:  motor  fuel

gasoline,  No.  2 diesel, low sulfur fuel oil, high  sulfur  fuel

oil,  heating  oil,  jet  fuel, 'JP4'  jet  fuel,  aviation  gas,

bunker/fuel  oil  and  marine diesel."  Tesoro  argues  that  the

investigation  only  focuses  on  one  product,  gasoline,55  and

therefore  the CID should pertain only to documents  relating  to

that product.

          Tesoro  contends  that  the statute's  judicial  review

provisions  and the judiciary's role is weakened if the  attorney

general can control the parameters of the request through its own

definition of the investigation.  As Tesoro correctly  notes,  AS

45.50.592   interposes  the  power  of  the   courts   into   the

administrative  process to protect the public  from  unreasonable

demands by the attorney general.

          The  superior  court  justified its  holding  that  the

State's  request for documents regarding all "petroleum products"

was  reasonable with the statement that such documents would help

the  attorney general to "better understand how the  movement  of

          certain products within the market affects pricing of gasoline

products."

          Tesoro   raises   two   objections   to   the   court's

explanation.  On  one  hand, Tesoro argues that  "[t]he  Superior

Court's reasoning is simply wrong.  The pricing of such unrelated

products  as  heating  fuel  or jet fuel,  for  example,  has  no

relevance  to the pricing of gasoline."  On the other hand,  even

if  that  information was relevant, in Tesoro's view,  the  court

erred  by not considering the burden to Tesoro in producing these

documents  in  relation to the attorney general's burden  if  the

documents were not produced. According to Tesoro, "[t]he marginal

relevance  that  documents  relating to  fundamentally  different

petroleum products may have with respect to the issue of gasoline

pricing  is  vastly outweighed by the burden and  expense  Tesoro

will incur in producing such documents to date."

          At  oral  argument  to  the superior  court  the  State

addressed Tesoro's contention that the State's investigation only

involved the issue of gasoline.  The State argued that

          the  reason  we  have asked  for  information
          beyond  just  gasoline is that a  barrel,  of
          course, is cut many different ways, depending
          on the hydrocarbons that are in the oil. Some
          parts of the oil are refined differently.  We
          feel  that  in order to explain a  particular
          margin  on  . . . one cut of the  barrel,  we
          have  to  understand what the  companies  did
          with the other part.

Given  the  State's  explanation of how documents  regarding  all

types of petroleum products relate to the investigation, and  the

deference due such explanations,56 the superior court's holding is

not  clearly  erroneous.   The  superior  court  demonstrated   a

rational   foundation  for  its  holding:  "The  definition   for

'petroleum  products'  shall  remain  intact  as  it  is  not  an

unreasonable request in order for the Attorney General to  better

understand how the movement of certain products within the market

affects pricing of gasoline products."

          In support of its request to limit the CID to gasoline-

related documents, Tesoro cites Covey Oil Co. v. Continental  Oil

Co.,  a  case  in  which one petroleum company alleged  antitrust

violations by another, relating to the price of gasoline.57 After

the  defendant company served a subpoena duces tecum  on  a  non-

party  witness, the district court modified the subpoena to cover

only  gasoline  products.58  Tesoro argues that  here  a  similar

modification  should  have been ordered in  accordance  with  its

requests for relief.

          We  agree with the State that the holding in Covey  Oil

is  inapt.   Covey Oil dealt with a private antitrust action;  in

contrast  to  an  agency investigation, the private  petitioner's

request  did  not warrant deference.  Moreover, the opinion  does

not  clearly indicate the scope of the products at issue  in  the

case.   The trial court's modifications to the subpoena  did  not

necessarily  have  anything to do with  the  range  of  petroleum

products included in the subpoena.59  That Tesoro was able to find

a case discussing a subpoena which covered only gasoline does not

persuade  us  that  a  similar  subpoena  is  appropriate   here,

particularly  where the burden of proof rests with Tesoro.60   We

therefore  affirm the superior court's holding that  Tesoro  must

produce  documents relating to "petroleum products" as originally

          defined in the CID.

IV.  CONCLUSION

          Because Hosie, as outside counsel to the State,  should

be  considered "an authorized employee of the state" for purposes

of  AS 45.50.592(e), because the superior court reviewed the  CID

under  the  correct standard, and because the superior court  was

within   its  discretion  in  holding  that  the  CID   was   not

unreasonable,  improper, or oppressive, we  AFFIRM  the  superior

court's decision in all respects.

MATTHEWS, Justice, dissenting.

          Is  the law firm retained by the state an "employee  of

the state" under AS 45.50.592(e)?  I answer "no" because ordinary

usage   controls  the  meaning  of  undefined  statutory   terms,

"employee" in ordinary usage means a natural person employed  for

a  wage  or salary, and the firm meets neither of these elements.

Further, this conclusion is consistent with cases interpreting  a

similar   federal   statute,   better   protects   the   intended

confidentiality  of  CID material, and is not  inconsistent  with

other terms of the statute.

          Alaska Statute 45.50.592(e) prohibits the disclosure of

documentary material produced pursuant to an investigatory demand

to "anyone other than an authorized employee of the state" unless

the  person  who produced the documents consents  or  unless  the

superior  court  "for good cause shown" permits disclosure.1   In

determining  what  a  statute means, "unless  otherwise  defined,

words will be interpreted as taking their ordinary, contemporary,

common meaning."2  The ordinary, contemporary, and common meaning

of  the term "employee of the state" "means a person employed  by

the  state  who is paid a wage or salary but does not  include  a

person  hired  by the state to work as an independent  contractor

.  .  . ."3  As today's opinion acknowledges, the term "employee"

"is   typically  mutually  exclusive  of  the  term  'independent

contractor.'"4   "Employee" is synonymous with "servant"  and  is

often used in contradistinction to "independent contractor."5  In

common  usage,  a  person who performs services  for  another  is

either an employee or an independent contractor, and an important

          factor in determining one from the other is the right to control

retained  by the person contracting for the services.6   Further,

the  word  "employee" denotes in ordinary usage a natural  person

rather  than  a  partnership or a corporation.7   In  prohibiting

disclosure  to "anyone other than an authorized employee  of  the

state"  the legislature's usage is in accordance with the meaning

of  "employee" as a natural person.  In this case the  particular

independent contractor with which we are concerned is  a  private

San  Francisco  law firm, Hosie, Frost & Large, Attorneys-at-Law.

There  is no dispute that "one may not commonly think of  outside

counsel as an 'employee' . . . ."8  Based on the rule that  words

should  be  interpreted  in accordance with  their  ordinary  and

common meaning, I believe that Hosie, Frost & Large, Attorneys-at-

Law, is not "an employee of the state" under AS 45.50.592(e).

          Alaska Statute 45.50.592 was enacted in 1975 as part of

a  comprehensive  act prohibiting monopolies and combinations  in

restraint of trade.9  Governor Hammond's letter to the Speaker of

the  House  transmitting the bill that became this act  makes  it

clear  that the bill is patterned on federal law.10  The Governor

noted  that  what  is  now section .592  contained  a  number  of

procedural protections and limitations:

          Section     [.592]    establishes    specific
          guidelines for the contents of the demand and
          method  of serving the demand upon a  person,
          where  the  material demanded is  documentary
          evidence.   It  provides that no  demand  may
          seek material which is privileged nor may  it
          be   unreasonable.   Subsection  (e)  forbids
          disclosure  of  the documentary  evidence  to
          anyone   other   than  an  authorized   state
          employee without the permission of the person
          who produced the material.[11]

Concerning these limitations the Governor wrote:

          The  theory  behind Article 3  [dealing  with
          investigatory  powers]  is  to  provide   the
          attorney general with the power he needs, but
          also  to provide detailed procedural controls
          which   will  prevent  unfair  and  arbitrary
          action  by  the  attorney  general.   Section
          [.592] of the bill prescribes the contents of
          a   demand  and  establishes  limits  on  the
          breadth and scope of the demand.[12]

Governor  Hammond also noted the similarity between  federal  law

and  the  proposed bill with respect to the power to  compel  the

production  of documents:  "Article 3 of the bill grants  to  the

attorney general the power to compel production of documents  and

testimony  prior  to filing an action in court.   Several  states

have enacted similar provisions.  The federal government also has

similar powers to compel production of documents . . . ."13

          Federal  law  as of 1975 prohibited the  disclosure  of

documentary material produced pursuant to an investigative demand

"by  any individual other than a duly authorized officer, member,

or  employee  of the Department of Justice."14  This was  changed

somewhat in 1976.  Section 1313(c) of 15 U.S.C. was divided  into

four subsections.  The third subsection prohibited the disclosure

of  documentary  material to "any individual other  than  a  duly

authorized official or employee of the Department of Justice."

          Both   of  these  versions  of  section  1313(c)   were

interpreted  by  courts  as imposing a firm  prohibition  on  the

disclosure  of produced materials to individuals not employed  by

the  Department  of  Justice.  Thus in  ALCOA  v.  United  States

Department  of  Justice, the court observed concerning  the  1970

version  of  section  1313(c):  "The statute  .  .  .  absolutely

          prohibited disclosure to third parties . . . ."15  In United

States v. GAF Corp. the district court similarly interpreted  the

language  of  section  1313(c)  to  preclude  an  examination  of

produced   material   "by  anyone  outside  the   Department   of

Justice."16   On  appeal  in the same  case  the  Second  Circuit

interpreted 15 U.S.C.  1313(c)(3) to preclude disclosure  of  CID

materials outside the Department:  "That subsection provides that

no material obtained by CID may be made available for examination

by anyone other than the Department of Justice."17  And in United

States   v.   AT&T  the  court  stated  that  section  1313(c)(3)

"specifically prohibits disclosure of CID material to persons not

members of the Justice Department."18

          Thus,   courts   interpreting   "authorized   employee"

language   in  the  federal  statute  on  which  the  "authorized

employee"  language  in  the  state  statute  is  patterned  have

interpreted  that language to refer to employees, not independent

contractors.  In my view we should do likewise.19

          Interpreting  "employee  of the  state"  in  subsection

.592(e)  to  have  its  ordinary meaning is consistent  with  the

policy  of  the act and does not create necessary conflicts  with

other  provisions  of  the  act.  In his  letter  of  transmittal

Governor  Hammond  mentions  the "detailed  procedural  controls"

imposed  on investigatory demands.  One such control is  inherent

in the distinction between employees and independent contractors.

By definition of the respective terms, the state has much greater

control  over the actions of its employees than it does over  the

actions   of   independent  contractors.   Moreover,  independent

          contractors may serve many masters simultaneously, while state

employees work only for the state.  Independent contractors  thus

can have collateral uses for investigatorily demanded information

and  they  may  be  tempted  to use  such  information.20   State

employees,  by contrast, are less likely to be able  to  use  CID

information  in  the service of others, and  they  are  thus  not

subject to the same temptations as independent contractors.

          Another  control  is  inherent  in  the  fact  that  an

employee is a natural person, whereas independent contractors may

be  partnerships or corporations having, in turn, many employees.

Both  legally  and  practically the state  has  more  ability  to

control  the activities of its actual employees than it does  the

employees of its independent contractors.

          Construing  "employee  of the state"  in  its  ordinary

sense would not mean an end to the use by the attorney general of

outside  counsel.   What it would mean is  that  before  material

produced  may  be disclosed to personnel employed by  contracting

law  firms the attorney general must make a showing of good cause

under  the  first sentence of AS 45.50.592(e).  The reasons  that

justify  hiring outside counsel might well generally  suffice  to

justify  disclosure.  But the good cause hearing would  give  the

target  company an opportunity to give case-specific  reasons  to

oppose  the  disclosure, and depending on the circumstances,  the

court   might   impose  special  conditions  and  safeguards   in

connection with the disclosure.

          Construing "employee of the state" to have its ordinary

meaning  also does not conflict with the "designee"  language  in

          the last sentence of subsection (e).  This sentence authorizes

the  attorney general to appoint a "designee."  But this does not

imply that the designee must not also qualify as a person to whom

disclosure may lawfully be made.  Statutes should be construed so

that  each  term  has  meaning if this  is  reasonably  possible.

Constructions  in  which  one term  negates  another  are  to  be

avoided.21  Thus the power of the attorney general to  appoint  a

designee  should  not be construed in a way that  eliminates  the

protection  built into the statute by the disclosure  limitations

expressed  in  the first sentence of subsection  (e).   This  can

readily be accomplished by construing subsection (e) as requiring

that  the  attorney general's designee be a person who  qualifies

for  disclosure  of CID material.  In other words,  the  designee

must  either be an authorized employee or a person authorized  to

receive disclosures by a court order following a showing of  good

cause.   Similarly, the term "representatives" used in subsection

(b)(4)  should mean, if all the terms of the statute  are  to  be

harmonized, either authorized employees or persons authorized  by

a court to receive disclosures.

          The  final sentence of subsection (e) provides that the

attorney  general  or  his  designee  "may  use  copies  of   the

documentary material as he considers necessary in the enforcement

of  this chapter, including presentation before a court . . .  ."

There  is  a  tension between this provision and the  disclosure-

restricting  provision of the first sentence of  subsection  (e).

What  if  the  use decided upon by the attorney general  involves

disclosure  to non-state employees?  But this tension  exists  no

          matter how "employee of the state" is defined.  Similar tension

existed in the 1976 version of the federal act.  Under 15  U.S.C.

  1313(d)  an  attorney  designated to  appear  in  any  case  or

proceeding  could use CID material "in connection with  any  such

case  .  .  .  or  proceeding as such attorney determines  to  be

required."   This  language  is not greatly  different  from  the

discretionary  authority  granted  in  the  fourth  sentence   of

subsection  (e)  ("use  .  . . as the . .  .  designee  considers

necessary in the enforcement of this chapter").  But the presence

of  this provision did not prevent the federal courts from giving

a  literal  interpretation to "authorized  .  .  .  employee"  in

subsection (c)(3).22

          It would be presumptuous in this dissent to try to work

out  all the possible ramifications of the interplay between  the

provisions of the first and last sentences of subsection .592(e).

But I believe that one key to understanding how they interact  is

found in the fact that the final sentence relates to enforcement.

The  1975  act  is  divided  into  four  articles:   "Article  1.

Substantive  Provisions,"  "Article 2.  Enforcement  Provisions,"

Article  3.   Investigatory  Powers,"  and  "Article  4.  General

Provisions."  The final sentence of subsection .592(e) is limited

to  uses  for  "enforcement."  Thus it may not apply,  given  the

structure  of  the  act,  to investigative proceedings  conducted

under  the  third article of the act.23  Under this  construction

there  is  no  necessary conflict between the use clause  of  the

final  sentence  of  subsection (e) and interpreting  "authorized

employee"  in  the  disclosure restricting clause  of  the  first

          sentence to refer only to actual state employees.  Disclosure

outside  the  circle of authorized state employees is  authorized

under the use clause if a case reaches the enforcement stage, but

not until then.

          In  summary, I believe that "employee of the state"  in

AS  45.50.592(e) should be construed to communicate  the  meaning

that  the  term "employee of the state" would convey in  ordinary

and  common usage.  As so construed, subsection .592(e) would bar

the  disclosure without court approval of CID documents to a  law

firm  with a contract with the state.  For these reasons I  would

reverse  the decision of the superior court and remand this  case

for  a  hearing  to  determine whether there  is  good  cause  to

disclose  Tesoro's records to the law firm retained by the  state

in this case.

_______________________________
     1    AS 45.50.592(f) provides:

          At  any time before the return date specified
          in  the  demand, or within 20 days after  the
          demand  has been served, whichever period  is
          shorter, a petition to extend the return date
          for,  or  to  modify or set  aside  a  demand
          issued  under  (a)  of this section,  stating
          good  cause,  may  be filed in  the  superior
          court  for  the judicial district  where  the
          parties  reside.  A petition by a  person  on
          whom  a demand is served, stating good cause,
          to  require  the attorney general or  another
          person   to  act  in  accordance   with   the
          requirements of (e) of this section, and  all
          other  petitions in connection with a demand,
          may  be  filed in the superior court for  the
          judicial district in which the person on whom
          the demand is served resides.
          
     2    See In re Johnstone, 2 P.3d 1226, 1231 (Alaska 2000).

     3    See id.

     4     See  Novak v. Orca Oil Co., 875 P.2d 756, 763  (Alaska
1994).

     5     Cockerham  v.  State, 933 P.2d 537,  539  n.9  (Alaska
1997).

     6     See  In  re Sealed Case, 121 F.3d 729, 740  (D.C.  Cir
1997)   (holding  that while federal appellate  courts  generally
review district court's ruling on subpoena for the production  of
documentary   evidence  only  for  arbitrariness  or   abuse   of
discretion,  deference is not given if ruling is  unsupported  by
the  record or relevant legal standard); see also Novak, 875 P.2d
at 763.

     7    AS 45.50.592(a) states:

          If  the  attorney general determines  that  a
          person  is in possession, custody, or control
          of a documentary evidence, wherever situated,
          that  the  attorney general  believes  to  be
          relevant to an investigation authorized in AS
          45.50.590,  the attorney general may  execute
          in  writing and cause to be served upon  that
          person an investigative demand requiring  the
          person  to  produce the documentary  material
          and permit inspection and copying.
          
     8    AS 45.50.592(b) states:

          Each demand must

               (1)   state  the  specific  statute  the
          alleged   violation   of   which   is   under
          investigation, and the general subject matter
          of the investigation.

               (2)      describe,    with    reasonable
          specificity  so  as fairly  to  indicate  the
          material  demanded, the documentary  material
          to be produced;
               (3)   prescribe  a  return  date  within
          which  the  documentary  material  is  to  be
          produced; and

               (4)   identify  the state  employees  or
          representatives   to  whom  the   documentary
          material   is   to  be  made  available   for
          inspection and copying.
          
     9    Because the meaning of "authorized employee" presents a
matter  of statutory interpretation, we reject Tesoro's  argument
that  we  should  apply  the "substantial evidence  standard"  to
determine whether Hosie is an "authorized employee."

     10    In medical negligence cases, for example, we have held
that a hospital is not liable for a physician's negligence if the
physician  is an independent contractor selected by the  patient.
See,  e.g., Ward v. Lutheran Hosp. & Homes Soc'y, 963 P.2d  1031,
1035  n.5  (Alaska 1998) (explaining that the non-delegable  duty
doctrine simply makes explicit that "the hospital bears vicarious
liability   for   the   torts   of   at   least   some   of   its
independent-contractor    physicians").     In    the    workers'
compensation  context  we  have held that  to  determine  whether
someone is employee or independent contractor, "[i]f worker  does
not hold himself out to public as performing independent business
service,  and  regularly devotes all or most of  his  independent
time  to  particular  employer,  he  is  probably  an  "employee"
regardless  of  other  factors, which might indicate  independent
contractor  status.  See Benner v. Wichman,  874  P.2d  949,  952
(Alaska 1994).

     11     See generally Ward, 963 P.2d at 1034-35 (finding that
an independent contractor is not an employee).

     12     The  State points out that the attorney  general  may
require  additional  expertise to effectively  enforce  antitrust
laws:

          Antitrust cases can be complex, and literally
          touch  the lives of hundreds of thousands  if
          not  millions of consumers. . . .  Where such
          complex   antitrust  investigations   require
          national  expertise, the  department  of  law
          retains lawyers and economists to assist.
          
     13     City of Dillingham v. CH2M Hill Northwest, Inc.,  873
P.2d 1271, 1276 (Alaska 1994).

     14    See Konecky v. Camco Wireline, Inc., 920 P.2d 277, 281
(Alaska 1996).

     15    See id.

     16    Id. (internal quotation omitted).

     17    Letter from Jay S. Hammond, Governor, to Mike Bradner,
Speaker of the House of Representatives.  1975 House Journal 156,
159.

     18    Id.

     19     See AS 44.23.020 (detailing the powers and duties  of
the  attorney general); Public Defender Agency v. Superior Court,
534  P.2d  947 (Alaska 1975) (holding that it would  violate  the
doctrine  of  separation of powers for the court to  control  the
exercise  of  the attorney general's discretion whether  to  take
action in particular cases).

     20    See generally Atlantic Richfield Co. v. State, Dep't of
Revenue, 723 P.2d 1249, 1252 (Alaska 1986) (establishing recovery
of  attorney's fees where the State is represented  by  both  the
attorney general's office and private counsel).

     21    444 F. Supp. 1342 (D.C. Cir. 1978).

     22     We  accordingly authorize awards of prevailing  party
attorney  fees  to the State for outside counsel  services.   See
Atlantic  Richfield  Co., 723 P.2d at 1252 ("When  the  state  is
represented  by  both private counsel and the attorney  general's
office, it may recover partial attorney's fees for both.").

     23    875 P.2d 756, 762-63 (Alaska 1994).

     24     Tesoro  identifies two statements  of  the  court  as
evidence  that  it  granted deference to  the  attorney  general.
First, Tesoro notes that in its written order, the superior court
held:  "Given the scope of the Attorney General's authority under
the  statute, and the deference given to agencies with  statutory
investigative  powers,  the Court finds that  the  CIDs  are  not
unreasonable  or  improper."  (Emphasis added.)   Second,  Tesoro
quotes from the superior court's statements at oral argument:  "I
do  have  some questions, and they relate to the tension  between
this  statute  and  the discretion, of course, the  prosecutorial
discretion,  and -- that is held by the attorney general  --  and
I'll need to think that through."  (Emphasis added.)

     25    Civil Rule 26(b)(1) establishes the scope of discovery:

          Parties  may  obtain discovery regarding  any
          matter,  not privileged which is relevant  to
          the  subject  matter involved in the  pending
          action,  whether it relates to the  claim  or
          defense of the party seeking discovery or  to
          the  claim  or  defense of any  other  party,
          including the existence, description, nature,
          custody, condition and location of any books,
          documents, or other tangible things  and  the
          identity  and  location  of  persons   having
          knowledge  of any discoverable  matter.   The
          information sought need not be admissible  at
          the  trial if the information sought  appears
          reasonably   calculated  to   lead   to   the
          discovery of admissible evidence.
          
     26     Alaska  R. Civ. P. 45(b)(1) (emphasis added).   Civil
Rule 45(b) provides in full:

          For  Production of Documentary  Evidence.   A
          subpoena may also command the person to  whom
          it  is directed to produce the books, papers,
          documents,   or  tangible  things  designated
          therein;  but  the  court, upon  motion  made
          promptly  and in any event at or  before  the
          time specified in the subpoena for compliance
          therewith,   may  (1)  void  or  modify   the
          subpoena if it is unreasonable and oppressive
          or  (2)  condition denial of the motion  upon
          the advancement by the person in whose behalf
          the subpoena is issued of the reasonable cost
          of  producing the books, papers, documents or
          tangible things.
          
     27    620 P.2d 182 (Alaska 1980).

     28    Id. at 189.

     29    Id. at 184.  AS 45.50.590 was formerly AS 45.50.200.

     30    620 P.2d at 188.

     31     Antitrust  CIDs  are administrative  subpoenas.   See
United States v. Markwood, 48 F.3d 969, 976 (6th Cir. 1995)  ("It
is  clear  from the legislative history that Congress  viewed  an
antitrust  CID  as  a  type  of administrative  subpoena.");  cf.
Matanuska  Maid,  620 P.2d at 189 (relying on  federal  cases  on
administrative   subpoenas  as  authority  in   CID   challenge).
Matanuska  Maid  establishes precedent  for  looking  to  federal
authority in the antitrust investigation context.  Id. at 192.

     32    42 F.3d 1412, 1414 (D.C. Cir. 1994).

     33     Id.  at  1415  (internal quotation omitted)  (quoting
United States v. Morton Salt Co., 338 U.S. 632, 652 (1950)).

     34    See e.g., In re Sealed Case, 42 F.3d at 1419; see also
Markwood,  48  F.3d  at 977 (establishing federal  standards  for
acceptability of administrative subpoenas).

     35    In re Sealed Case, 42 F.3d at 1419 (internal quotation
omitted)  (quoting  Federal Trade Comm'n v. Invention  Submission
Corp., 965 F.2d 1086, 1089 (D.C. Cir. 1992)).

     36    Id. (internal quotations omitted).

     37    Invention Submission Corp., 965 F.2d at 1090.

     38    In re Sealed Case, 42 F.3d at 1419.

     39    Invention Submission Corp., 965 F.2d at 1090.

     40     See  Matanuska Maid, 620 P.2d at 192 ("The burden  of
showing that an agency subpoena is unreasonable remains with  the
respondent,  .  .  .  and where, as here, the agency  inquiry  is
authorized  by law and the materials sought are relevant  to  the
inquiry,  that burden is not easily met.") (quoting Securities  &
Exch. Comm'n v. Brigadoon Scotch Distrib. Co., 480 F.2d 1047  (2d
Cir. 1973)).

     41    Matanuska Maid, 620 P.2d at 189.

     42    Even though Judge Michalski mentioned the prosecutorial
discretion  held  by  the attorney general, the  context  of  the
statement  indicates  that  the judge intended  to  consider  the
tension between that discretion and the relevant statute.

     43     McMann v. Securities & Exch. Comm'n, 87 F.2d 377  (2d
Cir. 1937).

     44     See Invention Submission Corp., 965 F.2d at 1089 ("If
the  district  court  finds that the information  sought  by  the
agency  is relevant, we will affirm unless that determination  is
clearly erroneous.").

     45    See Matanuska Maid, 620 P.2d at 189.

     46     Tesoro  argues  that compliance with  the  CID  would
require it to produce vast quantities of irrelevant documents  at
great  expense.   Tesoro's  in-house counsel  estimates  that  to
respond  to  the  CID,  Tesoro would need  to  copy  hundreds  of
banker's  boxes  of documents over the course of  six  to  twelve
months at a cost of hundreds of thousands of dollars.

     47     178 F.R.D. 103 (N.D. Tex. 1998).  The Williams  court
held  that  reasonableness must be determined by  the  particular
facts  of the case, including the party's need for documents  and
the  nature and import of the litigation. See 178 F.R.D. at  109.
Under  Williams, "[a]mong the factors that the court may consider
in  determining  whether there is an undue burden are  relevance,
the  need  of  the party for the documents, the  breadth  of  the
document  request,  the time period covered by it,  particularity
with which the documents are described, and burden imposed."  Id.
(quotation omitted).

     48    See id. at 106.

     49     Kellam Energy, Inc. v. Duncan, 616 F. Supp. 215,  217
(D. Del. 1985).

     50    Id.

     51    Id.

     52     See In re Sealed Case, 42 F.3d 1412, 1417 (D.C.  Cir.
1994);  Federal Trade Comm'n v. Texaco, Inc., 555 F.2d  862,  874
(D.C. Cir. 1977).

     53     Kellam,  616 F. Supp. at 218 (citing Wilder  Enters.,
Inc.  v.  Allied Artists Pictures Corp., 632 F.2d 1135 (4th  Cir.
1980); Empire Volkswagen, Inc. v. World-Wide Volkswagen Corp., 95
F.R.D. 398 (S.D.N.Y. 1982); Maritime Cinema Serv. Corp. v. Movies
en  Route,  Inc.,  60  F.R.D. 587 (S.D.N.Y. 1973);  Quonset  Real
Estate  Corp.  v. Paramount Film Distrib. Corp.,  50  F.R.D.  240
(S.D.N.Y.  1970);  Schenley Indus., Inc. v.  New  Jersey  Wine  &
Spirit Wholesalers Ass'n, 272 F. Supp. 872, 887 (D.N.J. 1967)).

     54     At  oral  argument, the State explained that  "trends
require  a  period of time.  If we're limited  to  a  very  small
period,  we  don't believe that we'll be able to see  the  trends
that  we  need to in order to determine whether or not there  are
any  kind of combinations in restraint of trade."  The State also
pointed  to the closure of Chevron's refinery in the early  1990s
as  support  for  the discretionary finding that  the  CID  could
reasonably cover ten years.

     55    Tesoro refers to the attorney general's explanation of
the "Alaska Paradox" for the focus of the investigation: "Alaskan
consumers pay the highest retail tax-excluded gasoline prices  in
the country."

     56    See In re Sealed Case, 42 F.3d at 1419.

     57    340 F.2d 993 (10th Cir. 1965), implicitly overruled on
other grounds by United States v. Ryan, 402 U.S. 530 (1971),  see
Federal Trade Comm'n v. Alaska Land Leasing, Inc., 778 F.2d  577,
578 (10th Cir. 1985).

     58    340 F.2d at 996.

     59    See id. at 997.

     60     See Matanuska Maid, Inc. v. State, 620 P.2d 182,  192
(Alaska 1980).

1    AS 45.50.592 provides in relevant part:

               (a)  If  the attorney general determines
          that  a person is in possession, custody,  or
          control  of a documentary evidence,  wherever
          situated, that the attorney general  believes
          to be relevant to an investigation authorized
          in  AS  45.50.590, the attorney  general  may
          execute  in  writing and cause to  be  served
          upon  that  person  an  investigative  demand
          requiring   the   person   to   produce   the
          documentary  material and  permit  inspection
          and copying.
               (b) Each demand must
               . . . .
               (4)  identify  the  state  employees  or
          representatives   to  whom  the   documentary
          material   is   to  be  made  available   for
          inspection and copying.
               . . . .
               (d)  The  demand may be  served  by  the
          attorney  general  or  the  designee  of  the
          attorney general . . . .
               (e)    Documentary   material   produced
          pursuant to a demand, or copies of it, unless
          otherwise  ordered  by a superior  court  for
          good  cause  shown, may not be  produced  for
          inspection  or  copying  by,  nor   may   its
          contents  be disclosed to, anyone other  than
          an  authorized employee of the state  without
          the  consent  of the person who produced  the
          material.   However, under  those  reasonable
          terms  and  conditions the  attorney  general
          prescribes,   copies   of   the   documentary
          material  shall  be available for  inspection
          and  copying  by the person who produced  the
          material  or an authorized representative  of
          that  person.   The attorney  general,  or  a
          designee,  may use copies of the  documentary
          material  as the attorney general or designee
          considers  necessary in  the  enforcement  of
          this chapter, including presentation before a
          court; however, material that contains  trade
          secrets may not be presented except with  the
          approval of the court in which the action  is
          pending  after adequate notice to the  person
          furnishing the material.
               . . . .
               (h)  Nothing in this section impairs the
          authority  of  the  attorney  general  or   a
          designee to lay before a grand jury  of  this
          state  evidence concerning a violation of  AS
          45.50.562 - 45.50.596, to invoke the power of
          a  court to compel the production of evidence
          before  a  grand  jury, or to  file  a  civil
          complaint or criminal information alleging  a
          violation of AS 45.50.562 - 45.50.596.
          
     2     State  v.  Niedermeyer, 14 P.3d 264, 272 n.38  (Alaska
2000).

     3     This  definition is contained in the  state  personnel
act, AS 39.25.990(4).

     4      Slip   Op.  at  11.   An  example  of  the  customary
exclusivity  of the terms "employee" and "independent contractor"
is  found in the contract entered into by state in this case with
Hosie,  Frost  &  Large,  Attorneys-at-Law.   Article  8  of  the
contract  provides:   "Independent  Contractor.   The  contractor
[Hosie,  Frost  &  Large] and any agents  and  employees  of  the
contractor act in an independent capacity and are not officers or
employees  or  agents  of the State in the  performance  of  this
contract."

     5    Black's Law Dictionary "Employee" (Rev. 4th ed.).

     6     See  Bobich  v. Stewart, 843 P.2d 1232,  1235  (Alaska
1992); Sievers v. McClure, 746 P.2d 885, 888 (Alaska 1987) ("[I]n
determining  whether a person is an employee  or  an  independent
contractor, the most important factor is the right to control the
manner and means by which the work is to be performed.").

     7      Webster's  Third  New  International  Dictionary  743
(1966):  employee:   "1: one employed by  another  usually  in  a
position  below the executive level and usually for wages  2:  in
labor  relations: any worker who is under wages or salary  to  an
employer  and who is not excluded by agreement from consideration
as such a worker."

     8    Slip Op. at 15.

     9    See ch. 53, SLA 1975.

     10   "The substantive provisions of this bill follow closely
the language of the corresponding federal law.  The advantage  to
using language closely paralleling the federal anti-trust laws is
that  a  large  body of case law interpreting  this  language  is
already in existence."  1975 House Journal 156.

     11   1975 House Journal 158 (emphasis added).

12   Id. at 160.

     13   Id.

     14   15 U.S.C.  1313(c) (1970).

15   444 F. Supp. 1342, 1344 (D.D.C. 1978) (emphasis added).

     16   449 F. Supp. 351, 353 (S.D.N.Y. 1978).

     17    United States v. GAF Corp., 596 F.2d 10, 12  (2d  Cir.
1979)  (emphasis added), reversing on other grounds the  district
court opinion.

     18   86 F.R.D. 603, 647 (D.D.C. 1979) (emphasis added).

     19   Congress amended section 1313 for a third time in 1980.
In  the 1980 amendments the permitted class of those who may view
CID  material  is  expanded to include "duly  authorized  .  .  .
agent[s]  of the Department of Justice" as well as officials  and
employees  of the department.  See 15 U.S.C.  1313(c)(3)  (1980).
"Agent"  in  turn  was defined in terms broad enough  to  include
independent  contractor attorneys retained by the  Department  of
Justice.   See 15 U.S.C.  1311(j) ("Agent" "includes  any  person
retained  by  the  Department of Justice in connection  with  the
enforcement  of  the anti-trust laws.").  In the  1980  amendment
Congress  also made an "agent" subject to criminal penalties  for
disclosure of confidential information.  See 18 U.S.C.  1905.

20      Concern    about   collateral   uses   that   independent
contractors  may have for CID materials is more than  theoretical
in  this  case.   Tesoro argued before the  superior  court  that
Spencer  Hosie, one of the partners of Hosie, Frost &  Large,  is
acting  as  the attorney for the State of Hawaii in an anti-trust
suit  brought against Tesoro.  Counsel suggested that Hosie  will
obtain, under the Alaska CID, material that was denied him  by  a
court in the Hawaii litigation.

21    See  In  re  Estate of Hutchinson, 577 P.2d  1074,  1075-76
(Alaska 1978).

22   See cases cited supra, pp. 37-38.

     23    Such  a construction is also supported by the language
"including presentation before a court" in the final sentence  of
subsection  (3).  This language independently suggests  that  the
broader  uses  that are permitted must be related to  enforcement
proceedings.