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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.
