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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Dan Reust v. Alaska Petroleum Contractors (10/28/2005) sp-5951

Dan Reust v. Alaska Petroleum Contractors (10/28/2005) sp-5951

     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,


) Supreme Court Nos. S- 10910/10919
Appellant/Cross-Appellee, )
) Superior Court No. 3KN-99-132 CI
v. )
) O P I N I O N
CONTRACTORS, INC., ) [No. 5951 - October 28, 2005]
Appellee/Cross-Appellant, )
and )
Intervenor. )

          Appeal  from the Superior Court of the  State
          of  Alaska,  Third Judicial District,  Kenai,
          Jonathan H. Link, Judge.

          Appearances:   Arthur S.  Robinson  and  Eric
          Derleth, Robinson & Associates, Soldotna, for
          Appellant/Cross-Appellee.  Douglas S. Parker,
          Preston    Gates    &   Ellis,    LLP,    for
          Appellee/Cross-Appellant.   Jason  T.  Mogel,
          Assistant  Attorney General,  Anchorage,  and
          Gregg  D.  Renkes, Attorney General,  Juneau,
          for Intervenor State of Alaska.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh, Fabe, and Carpeneti, Justices.

          EASTAUGH, Justice.
          BRYNER,  Chief Justice, with whom  CARPENETI,
          Justice, joins, dissenting in part.

          A  jury  awarded  Dan Reust compensatory  and  punitive
damages  after  finding that Alaska Petroleum  Contractors  (APC)
wrongfully  terminated  him  in  retaliation  for  testifying  in
previous  litigation between APC and another former APC employee.
APC and Reust both appeal.
          As  to the jury instructions to which APC preserved its
objections,  we discern no reversible error.  We also  hold  that
witness  retaliation is against the public policy of this  state,
that  APC  failed to preserve its arguments against the emotional
distress  award, and that sufficient evidence supported an  award
of  punitive damages.  But because no reasonable jury could  have
found  that the likely duration of Reusts employment would exceed
three  years,  we remand for reduction of the lost wages  awards.
We  reject  Reusts  challenges to the  constitutionality  of  the
statutes capping punitive damages awards and allocating  half  of
such awards to the state and hold that the superior court did not
err  in  allowing  the State of Alaska to intervene,  or  in  the
timing  of entry of judgment.  But because the court applied  the
wrong punitive damages cap, we also remand for application of the
correct cap.
          Dan   Reust  sued  Alaska  Petroleum  Contractors   for
wrongful termination, claiming his discharge violated the  public
policy of protecting witnesses. APC contends on appeal that Reust
was never actually hired.  We view the evidence in the light most
favorable to Reust as the party who prevailed at trial.1
          In April 1998 APC invited Dan Reust to interview for  a
project  manager position.  It had intermittently employed  Reust
in  the past.  Reust testified at trial that at the conclusion of
the  interview with APC manager Todd Pizzuto he was  offered  the
job  and was given a hire packet to complete.  Reust returned the
completed packet the next day, and Pizzuto asked him to report to
the  field  the  following  morning.   Reust  testified  that  he
believed  he  had  been hired when he returned the  hire  packet.
Pizzuto,  however, testified that he never offered Reust  a  job,
did  not hire him (and did not have the authority to do so),  and
did not give him a hire packet.
          The evening before Reust was to report to the field  he
received a telephone message from Pizzuto that instructed him  to
instead  meet with Pizzuto the next day. Reust testified that  at
that meeting he was informed that he was, in his words, being let
go  due  to his participation in previous litigation between  APC
and  another  former employee.  Reust had testified adversely  to
APC in a 1997 deposition in litigation brought by Richard Jantz.
          Pizzuto  testified  that he did not recall  whether  he
told  Reust  that  the  Jantz lawsuit  was  the  basis  for  APCs
decision.  According to the testimony of Michael Bailey, Pizzutos
superior,  it was Bailey who made the adverse decision  regarding
Reust,  and  Baileys decision was based on a conversation  Bailey
had  had  with  Gary  Buchanan in which  Buchanan  (according  to
Bailey)  stated  that  Reust  was  badmouthing  APC.   At  trial,
          however, Buchanan denied making this statement and asserted that
he did not even know Reust.
          The  trial  jury found for Reust, finding that  he  had
been  hired  by  APC  and  that  it subsequently  terminated  him
unlawfully.  The jury awarded Reust damages of $132,200 for  past
wage  loss, $156,800 for future wage loss, and $100,000 for  non-
economic  losses  for [e]motional [d]istress, [m]ental  [a]nguish
and  [a]nxiety.  It also found that Reust was entitled to recover
punitive damages.
          Following  the  second phase of  the  trial,  the  jury
awarded  Reust punitive damages of $4.3 million.  After  Superior
Court  Judge  Jonathan H. Link permitted the State of  Alaska  to
intervene,  Reust moved to have parts of the Alaska  tort  reform
legislation2 declared unconstitutional.  Judge Link denied Reusts
motion,  reduced  the punitive damages award to $500,000  per  AS
09.17.020(h),  and directed that fifty percent of  the  award  be
allocated to the state under AS 09.17.020(j).
          APC and Reust appeal.
     A.   Contract Formation Issues
          1.    There  was no reversible error in the failure  to
explicitly instruct                the jury that consideration is
an element of contract formation.

          The   superior  court  gave  the  jury  the   following
instruction concerning contract formation:
          In  order to find that an employment contract
          existed between Dan Reust and APC in April of
          1998 you must find that each of the following
          propositions  is more likely  true  than  not
          true:   (1)  that  APC  made  an   offer   of
          employment  encompassing the essential  terms
          of  employment, (2) that Dan Reust agreed  to
          the essential terms of employment offered  by
          APC  and  accepted APCs offer of  employment,
          and  (3)  that  both parties intended  to  be
          bound by the offer and acceptance.
          APC  argues that the instruction failed to include  the
necessary element of consideration.3  It apparently urges  us  to
reverse  the  jurys contract formation findings, contending  that
the  jury could not have found that Reust accepted the offer  and
supplied   return  consideration  because  he  did  not  actually
commence work.  APCs view is dependent on its conception  of  at-
will employment as a form of unilateral contract.  Reust responds
that by returning the completed hire packet and thereby promising
to  work  for APC, he accepted the offer and provided  sufficient
consideration; the jury instruction was therefore correct.4
          We  do  not need to resolve this instructional  dispute
because   any   possible  error  was  harmless.   Even   if   the
instructions   failure  to  explicitly  list   the   element   of
consideration tainted the jurys finding that APC hired Reust,  it
would  not have affected the jurys preliminary finding  that  APC
had  offered  Reust  a position.  Similarly, it  would  not  have
          affected the jurys finding that APCs decision to terminate (or
per APCs view, not to hire) was motivated by Reusts participation
in the Jantz litigation.  For reasons we discuss in Part III.B.1,
such  retaliatory  conduct  violates  public  policy  in  Alaska.
Therefore,  any  possible instructional error regarding  contract
formation would not have affected the finding that APC made Reust
an  employment offer and then withdrew it for an illegal  reason.
In  effect,  APC  is  relying on the fact  Reust  never  actually
started  work, a circumstance caused by APCs illegal  conduct  in
preventing him from commencing work.
          APC conceded at oral argument on appeal that, under its
view, a wrongfully terminated employee fired after one minute  on
the  job  would have a claim but the same employee would have  no
recourse  if termination occurred one minute before work  was  to
begin.   We  fail to see any value in this distinction  and  note
that  at  least  one  other court has ruled  that  public  policy
violations can sustain an at-will employees cause of action  even
if  work  was never actually commenced.5  Moreover, the  contract
law  principle of prevention supports our conclusion.6   APC  was
free  to  withdraw its at-will employment offer for a  legitimate
reason  but cannot now rely on Reusts lack of performance  caused
by APCs own illegal conduct as a shield against liability.
          Accordingly, APC would still be liable even if it  were
necessary for Reust to have actually commenced work in  order  to
accept the offer and supply consideration.  We therefore perceive
no  reversible  error because APC has not demonstrated  that  the
failure to instruct on the consideration element was prejudicial.
     B.   Reusts Claim of Public Policy Violation
          APC  contends that [i]f a public policy against witness
retaliation is to be adopted in Alaska as a basis for a  wrongful
discharge tort, it should not extend to those instances where  an
individual has testified falsely or with a reckless disregard for
whether  his testimony is true or false.  Before turning to  APCs
truthfulness  argument, we first address  whether  the  State  of
Alaska has an explicit public policy against witness retaliation.
          1.    Witness retaliation is against the public  policy
of Alaska.
          In  Kinzel  v. Discovery Drilling, Inc., we  recognized
that  a  retaliatory discharge in violation of an explicit public
policy  gives  rise to a tort as well as a contract  claim.7   We
concluded  that the State of Alaska has explicit public  policies
that  protect employees who make workers compensation claims  and
who serve as whistleblowers.8
          Several Alaska statutes demonstrate that the state also
has  an explicit policy of protecting witnesses from retaliation.
This  protective policy is most clearly stated in  AS  11.56.510,
which  makes it a crime to retaliate against a witness  by  using
force,  damaging  property, or making threats.9   Other  statutes
contain  witness  protection  provisions,  including  the  Alaska
Occupational Safety and Health Act,10 the Alaska Human Rights Law,11
and  the Alaska Assisted Living Homes Act.12  Through these laws,
the  state  has  clearly  stated a public  policy  of  protecting
witnesses  from  retaliation.  Even though APCs  alleged  conduct
probably does not violate the letter of any of these laws,13  its
actions  are  contrary to the policy reflected in  the  statutes.
Thus,  we hold that there is an actionable public policy tort  in
Alaska for retaliation against witnesses in legal proceedings.
          In  reaching this conclusion, we are persuaded by cases
from  other jurisdictions that have held various forms of witness
retaliation  to be contrary to public policy.14  For example,  in
Page  v.  Columbia  Natural Resources, Inc.,  the  West  Virginia
Supreme Court held that  it is against substantial public  policy
of  West  Virginia to discharge an at-will employee because  such
employee has given or may be called to give truthful testimony in
a  legal  action.15  The court found support for this  policy  in
state  laws  prohibiting wilful perjury and false  swearing[]  or
procuring  another  to  do  so  and prohibiting  intimidating  or
impeding  any witness[] or attempting to obstruct or  impede  the
administration of justice in any court.16
          Allowing  a tort remedy under these circumstances  also
furthers  the states interest in maintaining an effective  method
of  judicial  dispute resolution.  Subjecting employers  to  tort
liability for retaliating against employees who testify in  legal
proceedings  dissuades retaliatory conduct.  It also reduces  the
temptation  for employees, fearing adverse responses  from  their
employers, to provide false testimony or disobey a subpoena.17
          2.   A  truthfulness instruction was not required under
               these facts, and it is unlikely APC preserved  the
               issue for appeal.
          APC  argues that if witness retaliation is contrary  to
Alaskas public policy, the jury should have been instructed  that
only truthful testimony can be protected.18  It therefore asserts
that  the  failure  to instruct the jury on this  requirement  is
reversible  error because it deprived APC of a critical  defense.
But,  as  Reust points out, APC never asserted that it terminated
Reust  because he testified falsely.  In Page, the West  Virginia
Supreme Court addressed this same argument:
          Appellants argue additionally that Plaintiffs
          Instruction No. 3 failed to require that  the
          testimony be truthful.  While the failure  to
          testify  truthfully may present  an  occasion
          for  further  instruction in such  cases,  we
          find  that appellants were not prejudiced  by
          this  omission, since there is no  allegation
          that  [the plaintiff] was terminated  because
          her testimony was not truthful.[19]
We agree with this reasoning.  Because APC did not offer evidence
at  trial  that  Reusts  alleged lack  of  truthfulness  when  he
testified in the Jantz matter was the reason for his termination,
APC was not entitled to such an instruction.
          We  also observe that it is unlikely APC preserved this
issue.20   APC  claims  that  the  truthfulness  requirement  was
discussed  with  the superior court during an unrecorded  session
that   dealt   with  instructions;  it  points  to  circumstances
supporting  that contention, but it fails to establish  where  it
raised the truthfulness issue on the record.21  As a result, it is
impossible  for us to decide whether APC adequately  brought  the
issue  to the superior courts attention.  Such problems  must  be
avoided  by  conducting  all  jury instruction  sessions  on  the
record.    Our   disapproval   of  off-the-record   instructional
discussions is long-standing.22  The lack of a record prevents or
discourages  adequate  appellate  review.   It  may  prevent   an
appellant  from  establishing that a  meritorious  objection  was
made.   And  it may also prevent us from understanding  precisely
what  objection  was made and the reasoning of the  lower  court.
Because  the  objections actually made at trial often  differ  in
subtle but material ways from the objections appellants argue  on
appeal,  the  lack  of a record may also hamper  our  ability  to
affirm  a judgment.  Likewise, the lack of a record of the  trial
courts reasoning might deny us an opportunity to be persuaded  by
the courts own words or the circumstances the court relied on  in
     C.   Mixed-Motive Instruction
          1.   The  jury instruction on APCs motivation  was  not
               reversible error.
          The jury was instructed that
          [i]n  order  to prove his claim for  wrongful
          discharge Dan Reust must prove it more likely
          true  than  not true that . . . there  was  a
          causal  connection between Dan  Reust  having
          testified, or the fact that he might  testify
          in  the future, and the actions APC took.   A
          causal  connection  is  established  if   the
          testimony Dan Reust gave was a noteworthy  or
          motivating factor in the decision  APC  made.
          It  need  not  have been the only  factor  or
At  trial, APC unsuccessfully requested that the following phrase
be  added  to  the  last  sentence of the  instruction:  but  the
decision  would not have occurred without that factor or  reason.
On  appeal,  APC  argues that it was error  not  to  include  the
requested  phrase.   We  conclude that  APC  did  not  adequately
preserve  the  issue it argues on appeal and that  there  was  no
reversible error.
          Under  Alaska  law,  retaliatory discharge  claims  can
follow  different analytical frameworks depending on the type  of
evidence  presented.   When  there  is  no  direct  evidence   of
retaliation, a pretext framework is used.23  Under this analysis,
the  employee must first establish a prima facie case.24  If  the
employee  clears this hurdle, the burden of production shifts  to
the   employer   to   articulate  a   legitimate   nonretaliatory
explanation  for  the  discharge.25   If  the  employer  does  so
successfully, the burden reverts to the employee, who must  prove
that the explanation was a pretext for retaliation.26
          But  [i]n  cases  where  there is  direct  evidence  of
discrimination, we instead apply a mixed-motive analysis . . . .27
Here the plaintiff need only show that a prohibited reason was  a
motivating factor.28  Then [t]he employer must show that it would
have  made the same decision even absent considerations  of  [the
impermissible factor].29  Accordingly, if the plaintiff  employee
presents   direct  evidence  of  discrimination  or   retaliation
sufficient  to  permit  an  inference  that  such  factors   were
motivating factors, the jury should be instructed that if it does
draw  that inference the plaintiff is entitled to recover  unless
the  employer has established by a preponderance of the  evidence
that  the  employer  would  have taken the  same  action  without
consideration of the impermissible factor.30
          The jury instruction in this case can best be described
as  a partial mixed-motive instruction.  It correctly stated that
Reust  was  required to show that an impermissible factor  (i.e.,
his  act of testifying in Jantz) was a motivating factor for APCs
conduct; however, the instruction failed to inform the jury  that
Reust  should not prevail if APC established that it  would  have
made the same decision without consideration of the impermissible
factor.   APC  recognized that something  was  missing  from  the
instruction, but its requested language (but that decision  would
not  have  occurred  without that factor or  reason)  would  have
misapplied  the  burden.  It would have required Reust  to  prove
that  his participation as a witness in Jantz was a determinative
factor.  As we noted above, an employee who has presented  direct
evidence of retaliation does not have this burden under the mixed-
motive  framework.   There  was direct evidence  of  an  improper
motive  here.   Reust  testified that Pizzuto,  an  APC  manager,
informed him that APCs decision was due to Reusts involvement  in
the Jantz lawsuit.
          At  trial APC argued that Reust was not entitled  to  a
mixed-motive instruction because he had not pleaded such a theory
and because he maintained that APCs decision was based solely  on
his  involvement in the Jantz lawsuit.  Thus, according  to  APC,
Reust  was not entitled to a mixed-motive instruction because  he
had  not  argued in the alternative that his prior testimony  was
merely  a  motivating  factor.  But  the  mixed-motive  framework
applies  if the evidence is sufficient to allow a trier  to  find
both  forbidden  and  permissible motives;31  this  threshold  is
          satisfied if the plaintiff introduces direct evidence of an
impermissible factor.  It does not require the plaintiff to plead
that the defendants conduct was based on a combination of factors
instead of a single impermissible factor.32
          APC  might  have  asserted that there was  insufficient
direct evidence to warrant a mixed-motive instruction.  Had  that
argument   not  succeeded,  APC  should  have   asked  that   the
instruction include additional language that would also have made
it  clear  that APC had the burden of showing that it would  have
made  the  same  decision  based on legitimate  reasons  standing
alone.   But APC did not request such language, and the  language
it  proposed  would have erroneously shifted the burden  back  to
Reust.   Given Reusts repeated and correct observations  that  it
was APCs burden to show that a legitimate reason alone would have
produced   the  same  decision,  APC  was  on  notice  that   the
instructional change it sought contained a grave flaw.
          A  party  arguing instructional error must  demonstrate
that  the  grounds  were properly raised.33  To  the  extent  APC
objected  to  giving  a  mixed-motive instruction  instead  of  a
pretext instruction, we conclude that no error occurred.  To  the
extent  APC  objected to the incompleteness of  the  mixed-motive
instruction, we conclude that APC did not distinctly  raise  this
issue  at  trial.   Its failure to offer proposed  language  that
would have correctly allocated the burden of proof means that APC
did   not   provide  the  superior  court  with  an  identifiable
opportunity  to rule on the issue it now raises.34  We  therefore
review  the  instruction only for plain error which occurs  if  a
correct instruction would have likely altered the result.35
          Although it is conceivable the jury might have  reached
a  different result had a complete mixed-motive instruction  been
given, we cannot conclude that a different result would have been
likely.  For instance, if we assume that the jury disbelieved the
testimony   of  Gary  Buchanan  and  accepted  APCs   badmouthing
rationale,  had a proper instruction been given, the  jury  might
have  found  that  the badmouthing would have produced  the  same
decision  even absent Reusts participation in the Jantz  lawsuit.
But  this scenario requires too much speculation about the  jurys
findings  for  us  to conclude that a correct  instruction  would
likely have altered the result.
     D.   Lost Wages Awards
          1.   The   likely  period  of  employment   could   not
               reasonably have exceeded three years.
          The  jury awarded past wage loss for nearly three years
from  the date APC wrongfully terminated Reust in April  1998  to
the  beginning  of the trial on January 2, 2001.  The  jury  also
found  that the length of Dan Reusts future wage loss  was  seven
years.   The  jury thus awarded Reust lost wages for a  total  of
about  ten years.  APC argues that a wage-loss award for  a  ten-
year period was excessive, speculative, and not supported by  the
          Viewed,  as it must be, in the light most favorable  to
Reust,36  the  trial  evidence nonetheless  does  not  support  a
conclusion that Reust would have worked for APC continuously  for
ten  years.   APC manager Mike Bailey testified that APC  project
managers  typically work one to three years.  There was  evidence
that employment tenure in the construction industry is uncertain;
a  witness, when asked how long he would have been in  a  certain
job,  testified that there was no telling with construction work.
Moreover,  Reusts  own  employment  history,  including  previous
stints  with APC, undermines the likelihood of a ten-year tenure.
Reust  testified  that  he worked for APC  on  several  different
occasions  and  his  resume indicates that APC  employed  him  at
Prudhoe  Bay  from 1992 to 1995 and at Milne Point from  1995  to
          Reust  points to the testimony of Todd Pizzuto, another
APC  manager, who testified that Reusts position was not project-
specific.   This suggests that Reust could have been assigned  to
other  projects  once his initial assignment was  finished.   But
Pizzuto  also  testified  that  that  Reusts  position  could  be
terminated  due  to  a  reduction  of  force.37   Reusts  counsel
suggested  in closing argument that Reust would have  worked  for
APC  until  retirement in 2014.  This amounted to a  request  for
about  sixteen years of lost wages.  But the jurys award of  lost
wages for ten years implicitly rejected that claim.
          We  have  stated  that  [t]he normal  rule  is  that  a
wrongfully discharged employee is entitled to the total amount of
the  agreed  upon salary for the unexpired term of his employment
[contract]  .  .  .  .38   For example,  in  Central  Bering  Sea
Fishermens  Assn  v.  Anderson  (Anderson  I)  we  held  that   a
wrongfully discharged employees lost earnings should be  measured
by  the  amount  and duration of the contract that  [he  or]  she
expected to have with [the employer], which in that case was  one
year.39  In comparison, Reust had an at-will relationship  of  no
specified  term.   We  declined in Kinzel to  rule  on  what  the
appropriate measure of damages for lost wages would  be  for  the
tortious discharge of a whistleblower because the issue  was  not
fully  briefed.40  We now hold that when an at-will  employee  is
wrongfully discharged, damages are appropriately measured by  the
likely  duration  of  employment had the wrongful  discharge  not
          The  evidence in this case cannot support a finding  of
ten  years  as  the  likely duration of employment.   The  record
          reveals that Reust would have been employed for one to three
years  had  APCs  tortious conduct not intervened.   Viewing  the
evidence in the light most favorable to Reust, no reasonable jury
could  find  that  the likely duration of employment  would  have
exceeded three years.  Therefore, we vacate the jurys lost  wages
awards  and remand for entry of a revised judgment awarding  lost
wages for a period of three years.
          2.   The superior court did not abuse its discretion by
excluding                evidence that Reusts position  had  been

          APC   contends  that  the  superior  court  abused  its
discretion  by excluding evidence that Reusts position  had  been
eliminated  in  a corporate reorganization.42  APC  manager  Mike
Bailey  testified at trial on direct examination by APC  that  he
had  been advised the very morning he took the witness stand that
the  position has been eliminated.  After Reust raised a  hearsay
objection, the superior court conducted a lengthy conference  out
of  the  jurys  presence.  Bailey proffered additional  testimony
during this session that he had been told by APCs president, in a
telephone  call  that  morning, that  Reusts  position  had  been
          APC,  asserting  here that the superior court  excluded
the  testimony  as  a sanction for failure to  disclose  and  not
because it was hearsay, argues that the superior court was  first
required to ascertain whether a continuance would have provided a
reasonable  alternative to exclusion.  We do not need to  address
this  argument because APCs starting premise  that  the  superior
court  excluded  the  disputed testimony to  remedy  a  discovery
violation  is incomplete.  The superior court ruled the testimony
was  inadmissible hearsay, stating: Were going to start with  the
proposition that thats hearsay, and Im going to instruct the jury
that  that  testimony is stricken.  APC does not  challenge  this
ruling  on  appeal,  nor  do we see any indication  that  such  a
challenge would have been successful.43  As a result, we conclude
that  it  was  not  an  abuse of discretion  to  exclude  Baileys
testimony that Reusts position had been eliminated.44
          3.   APC has waived any argument that Reusts lost wages
               should be reduced due to after-acquired evidence.
          APC  argues  in a footnote in its reply brief  that  it
learned  for  the  first time at trial that  Reust  had  provided
reckless testimony in the Jantz lawsuit.  APC suggests that  this
after-acquired evidence would have caused APC to terminate  Reust
for  legitimate  reasons and therefore that his damages  arguably
should be limited to the date of the trial.45  APC has waived this
argument by first presenting it in its reply brief.46
     E.   Emotional Distress Damages
          1.   APC   did  not  preserve  its  challenge  to   the
               emotional distress damages award.
          The  jury  awarded Reust $100,000 in emotional distress
damages.   On  appeal  APC argues that this  award  was  improper
because  Reust  did  not  demonstrate  that  he  suffered  severe
emotional  distress.   APC waived this  argument  by  failing  to
          assert it below:47 As a general rule, this court will not consider
arguments attacking a judgment for the first time on appeal.48
          2.   Emotional  distress damages were not preempted  by
               the  exclusive  remedy  provision  of  the  Alaska
               Workers Compensation Act.
          APC  argues  that  Reusts claim for emotional  distress
damages  was  preempted by the Alaska Workers  Compensation  Act.
This  contention is without merit.49  Alaska Statute  23.30.05550
establishes  that  an  employers workers compensation  liability,
which  the  employer  must  pay irrespective  of  fault,  is  the
exclusive  remedy for an employee injured during  the  course  of
employment.  51   But  we have held that the socially  beneficial
purpose  of the work[ers] compensation law would not be furthered
by  allowing a person who commits an intentional tort to use  the
compensation  law as a shield against liability.52  Likewise,  it
would  be  nonsensical  to  allow an  employer  to  rely  on  the
exclusive  remedy  section,  AS 23.30.055,  to  preclude  damages
stemming from a public policy violation.53  APC has directed us to
no  statutory  text  or legislative history suggesting  that  the
Alaska  Workers Compensation Act was intended to provide a remedy
for a discharge motivated by a violation of public policy.
     F.   Punitive Damages
          1.   The  superior  court did not err in  denying  APCs
               motion  for  directed  verdict  on  the  issue  of
               punitive damages.
          APC contends that punitive damages should not have been
awarded  because   APCs  conduct  was  not  shown  by  clear  and
convincing evidence to have been outrageous or reckless . . . .54
It  argues  that  Reusts claim that he has  been  the  victim  of
witness  retaliation is very thinly supported  at  best  and  any
proof  by  him  of this does not rise to the level of  clear  and
convincing evidence.  And  even if Reust proved that APC  reacted
to his deposition testimony, APC asserts that its conduct was not
malicious or reckless because [a] companys conduct in not wanting
in  its  management an individual who falsely accused another  of
its  managers  of  lying cannot be said to be outside  limits  of
reasonable business conduct.
          We  have  stated  that although a  plaintiff  may  have
enough  evidence to support the underlying cause of action  by  a
preponderance  of  the  evidence, the plaintiff  is  required  to
further establish outrageous conduct on the part of the defendant
by  clear  and  convincing evidence before punitive  damages  are
justified.55   Thus,  it does not matter that  Reust  might  have
failed  to  prove  witness retaliation by  clear  and  convincing
evidence,  because that standard of proof applies to proving  the
outrageousness  of  APCs conduct, not to proving  the  underlying
tort.   APCs second contention  that any witness retaliation  was
reasonable because Reust allegedly provided untruthful  testimony
in  his Jantz deposition  has no theoretical relevance here:  APC
produced  no  evidence  at  trial to  support  a  claim  that  it
terminated Reust because he had testified falsely.  APC  has  not
convinced  us that we must intervene to prevent a miscarriage  of
          justice,56 and we therefore affirm the superior courts denial of
APCs  motion  for  a  directed verdict on the issue  of  punitive
          2.   The  punitive damages cap and allocation  statutes
               are constitutional.
          Reust  challenges AS 09.17.020(f) and  (j)  on  various
constitutional  grounds.57  Subsection  .020(f)  is  one  of  the
punitive  damages caps and subsection .020(j) is  the  allocation
provision of the 1997 Alaska tort reform legislation.58
               a.   Due process
          Reust   contends   that  applying   the   tort   reform
legislation to his case violated the due process clauses  of  the
state and federal constitutions.  He asserts that the tort reform
legislation  applies  only to tort causes  of  action  and  that,
because  his  claim  is  for  breach of  contract,  applying  the
punitive  damages cap to his award was arbitrary and  irrational.
APC  responds,  correctly, that a plain reading of  AS  09.17.020
indicates  that  it  applies  to all actions  in  which  punitive
damages  are awarded.59  And, as APC notes, Alaska law  does  not
permit  punitive damages for breach of contract, except when  the
conduct constituting the breach is also a tort for which punitive
damages  are  recoverable.60   This means  that  Reusts  punitive
damages award lies in tort, which would place it within the ambit
of  the  tort reform legislation even if the legislation did  not
apply  to  punitive  damages stemming  from  breach  of  contract
claims.61   We  are therefore unconvinced by Reusts arbitrariness
and irrationality argument.
          Reust  also  claims that the statutes capping  punitive
damages  awards  and requiring payment of fifty percent  of  such
awards to the state violate due process because they infringe  on
fundamental  rights  without a compelling or legitimate  purpose.
He  points  out that the United States Supreme Court has  treated
punitive  damages  as  quasi-criminal.62   According  to   Reust,
retribution  is a legitimate justification for awarding  punitive
damages  between  private parties, but it  is  not  a  legitimate
purpose for Alaskas penal administration.  The award here,  Reust
claims,  contains  inseparable  components  for  retribution  and
deterrence.   Because the state has no interest  in  retribution,
Reust  concludes that it cannot have an interest in his  punitive
damages award.
          In  Evans  ex  rel.  Kutch v. State we  concluded  that
because  interests  in unlimited [punitive]  damages  are  merely
economic,  the  States objectives need only  be  legitimate   not
compelling   to  justify the States action.63  We then  concluded
that  the states objectives in establishing the punitive  damages
caps were legitimate.64  Those objectives are independent of  any
quasi-criminal nature of punitive damages,65 and Reust  does  not
challenge  the objectives  as illegitimate.  Accordingly,  Reusts
claim  that  the  punitive  damages caps  lack  a  compelling  or
legitimate purpose fails.
          This  court was evenly divided in Anderson v. State  ex
rel. Central Bering Sea Fishermens Assn (Anderson II)66 regarding
the  constitutionality  of  AS  09.17.020(j),  the  statute  that
          allocates fifty percent of punitive damages awards to the state.
The courts dispositional opinion discusses the reasons why we now
hold  that  AS  09.17.020(j)  does not  violate  substantive  due
          [A]llocating  half  of  all  punitive  damage
          awards to the state will reduce the incentive
          for  plaintiffs  to pursue  punitive  damages
          claims.   The  statute  will  also  encourage
          plaintiffs  to settle their cases  since  the
          state only shares in punitive damages when an
          award is made.  These incentives could reduce
          both  the  overall number of punitive  damage
          claims  as  well  as the number  of  punitive
          damage  claims  that actually  go  to  trial.
          This  effect could reasonably be expected  to
          have  a  moderating  influence  on  liability
          insurance  premiums.  Further, the  incentive
          to settle punitive damage claims could reduce
          the  length  and  complexity  of  litigation,
          thereby   reducing  the   overall   cost   of
          litigation.  The states expectation  that  AS
          09.17.020(j)  will  help  to  fulfill   these
          purposes is at least minimally rational.[67]
          The dispositional opinion in Anderson II also concluded
that  [i]ncreasing  state  revenues by allocating  a  portion  of
punitive damages awards to the state based on the analogy between
such  awards and civil and criminal fines is a legitimate  public
policy  choice.68  Dissenting in part, Justice Bryner, joined  by
Justice  Carpeneti, argued that the allocation  statute  was  not
minimally  rational  because the only  way  that  subsection  (j)
discourages punitive damages claims is by punishing any  claimant
who  files  a  meritorious  claim,  successfully  pursues  it  to
completion,  and  receives  a  factually  accurate  and  lawfully
authorized judgment.69  We do not share this view.  It is rational
to  expect  that fewer punitive damages claims will be filed  and
that  more  will be settled if the potential payoff is capped  or
reduced by allocating half of any punitive damages awards to  the
state.   Justice Bryners partial dissent also argued that  [j]ust
as  cost  savings alone do not sustain otherwise arbitrary  state
action,  so  revenue  earning is not,  in  itself,  a  legitimate
legislative purpose.70  But in our view, the state action is  not
arbitrary  here  because the objectives of punitive  damages  are
analogous  to  the objectives of civil and criminal  fines.   The
decision  to increase state revenues by allocating a  portion  of
punitive damages awards to the state is therefore legitimate.  We
hold  that  AS  09.17.020(j)  does not  violate  substantive  due
process for the reasons expressed in the dispositional opinion in
Anderson II.
               b.   Equal protection
          Reust argues that the punitive damages caps violate the
equal   protection  clauses  of  the  Alaska  and  United  States
Constitutions.   He  claims  that  the  tort  reform  legislation
discriminates between two classes of litigants  those who receive
full  recovery  and those whose recovery is capped.   This  exact
argument was presented and rejected in Evans.71
               c.   Right to jury trial
          Reust argues that the punitive damages cap violates the
right to a jury trial provided by the Alaska Constitution.72  This
argument  was rejected in Evans, where a majority of  this  court
agreed  that [t]he decision to place a cap on [punitive]  damages
awarded  is  a  policy  choice and not a  re-examination  of  the
factual question of damages determined by the jury.73  Reust urges
a   reconsideration  of  this  conclusion,   arguing   that   [a]
constitutional  protection cannot be bypassed by allowing  it  to
exist in form but not letting it have an effect in function.   We
see no compelling reason to revisit Evanss holding on this issue.
               d.   Takings
          Reust  claims  that  the allocation requirement  in  AS
09.17.020(j)  is a taking because it deprives him of  a  property
right  in his punitive damages claim.74  We addressed this  issue
most  recently  in  Anderson  II.75   The  dispositional  opinion
concluded  that  AS  09.17.020(j) does not  violate  the  takings
clauses of the Alaska Constitution or the Federal Constitution.76
The   opinion  gave  two  reasons.   First,  it  determined  that
Andersons claim for punitive damages was only protected  property
insofar as permitted by AS 09.17.020(j).77  Andersons unlitigated
claim  only  became property when it accrued, and a claim  cannot
accrue  before the events that give rise to it occur.78   Because
Andersons  claim accrued after the August 7, 1997 effective  date
of  AS  09.17.020(j),  the  scope of her  claim  was  defined  by
existing  state law.79  Thus, AS 09.10.020(j) limited  her  claim
and  therefore  her property right  to one-half of  any  punitive
damages award.80
          Second,  the dispositional opinion pointed to Andersons
reasonable expectations when her claim accrued.81  It stated that
because Andersons reasonable expectations were controlled by  the
law  in effect when her claim accrued and subsection .020(j)  was
then  in effect, she could not reasonably expect to recover  more
than  half of her punitive damages award.82  We are persuaded  by
these  arguments and apply them to Reust, whose claim accrued  in
April 1998, after AS 09.17.020(j) became effective.
          Reusts brief cites the Colorado Supreme Courts decision
in  Kirk v. Denver Publishing Co. in support of his argument that
AS  09.17.020(j) effects an unconstitutional taking.83  The court
held  in Kirk that a Colorado punitive damages allocation statute
was  a  taking  because  it applied after a  final  judgment  was
entered  in  the  plaintiffs  case and  after  the  judgment  was
collected  from  the defendant.84  The property interest  in  the
punitive  damages  award therefore vested before  a  portion  was
taken  by  the  state.85   The  dispositional  opinion  in  Evans
distinguished  Kirk  on  the ground that  the  Colorado  statute,
unlike  AS  09.17.020(j),  applied after  a  final  judgment  was
          entered in the plaintiffs case.86  In Anderson II,  the
dispositional   opinion  also  disagreed   with    the   implicit
conclusion  in  Kirk  that a plaintiff  has  a  greater  property
interest  in  a  judgment  upon a tort claim  than  the  interest
recognized  by law when the claim accrued. 87  Most  other  state
supreme  courts  have upheld against takings challenges  statutes
that   allocate   some  part  of  punitive  damages   awards   to
governmental entities.88
          In  his partial dissent in Anderson II, Justice Bryner,
joined  by Justice Carpeneti, argued that AS 09.17.020(j) neither
redefines  nor  regulates the permissible  scope  of  unlitigated
punitive damages claims; instead, subsection .020(j) attempts  to
alter  the  plaintiffs property rights only after the  plaintiffs
claim  accrues  and is fully litigated, after  the  claim  proves
successful, and after the plaintiff receives an award. 89  Justice
Bryner pointed to statutory language that specifies the source of
forfeiture  as  the award  that  a person receives  and  that  is
available for deposit into the general fund of the state.90   But
the  intent of the legislature was clearly to allocate a  portion
of  punitive  damages  awards to the  state.91   Insofar  as  the
Anderson  II dispositional opinions construction of the statutory
language  avoids  a  constitutional violation by  redefining  the
permissible scope of unlitigated punitive damages claims, we  now
adopt that construction.92  We therefore hold that AS 09.17.020(j)
does not result in an unconstitutional taking.
          3.   The superior court applied the incorrect statutory
          Reust  argues  that if a punitive damages cap  applies,
the  superior  court should have applied AS 09.17.020(f),  rather
than AS 09.17.020(h).  He is correct.
          The  superior court reduced the punitive damages  award
to  $500,000  per  AS  09.17.020(h), which lists  increasing  cap
levels that depend on the employers number of employees.93   That
subsection  applies to an action against an employer  to  recover
damages  for  an  unlawful employment practice prohibited  by  AS
18.80.220,   which   proscribes  various  forms   of   employment
discrimination.  Reust argues that his action does not fall under
AS  18.80.220;  rather,  it is a claim for  retaliatory  wrongful
discharge.   Therefore,  if  any  punitive   damages   cap   were
applicable, Reust claims it should have been the cap  imposed  by
AS  09.17.020(f).   That  subsection  states  that,  [e]xcept  as
provided  in  (g) and (h) of this section, an award  of  punitive
damages may not exceed the greater of (1) three times the  amount
of  compensatory damages awarded to the plaintiff in the  action;
or (2) the sum of $500,000.
          APC  argues  that  because Alaska did not  recognize  a
wrongful  discharge  tort when the tort  reform  legislation  was
enacted,  the  trial  court  correctly applied  AS  09.17.020(h).
According to APC, AS 18.80.220 provided the only known  cause  of
action for awarding punitive damages in the context of employment
termination, so the legislature could well have concluded that it
had  adequately described the cap for termination  torts  by  the
manner in which the subsection (h) cap was drafted.
          Alaska  Statute  09.17.020(h) limits  punitive  damages
          recoveries in AS 18.80.220 discrimination cases, but does not
purport  to limit awards for all types of torts arising  from  an
improper  termination.   For  example,  APC  concedes   that   AS
09.17.020(h)   does  not  address  torts  such   as   intentional
infliction  of  emotional distress or defamation that  may  arise
from  a non-discriminatory termination.  APC cites no legislative
history  suggesting that the legislature intended AS 09.17.020(h)
to  have  a  broader application beyond awards in  discrimination
cases  arising under AS 18.80.220.  Because we conclude  that  AS
09.17.020(h) does not apply here, we remand for application of AS
          Once  the  correct  punitive  damages  award  has  been
determined under the statutory cap, it will also be necessary for
the  superior court to ensure that the award is not excessive per
the  statutory factors listed in AS 09.17.020(c)94 and the  three
guideposts outlined by the United States Supreme Court.95
     G.   The  Superior  Court Did Not Abuse  Its  Discretion  in
          Allowing the State of Alaska To Intervene.
          Reust  argues that the superior court should  not  have
allowed  the State of Alaska to intervene either as a  matter  of
right or permissively.96  The state responds that intervention was
appropriate  for both reasons and, even if it were  not,  it  was
entitled to intervene under Alaska Rule of Civil Procedure  24(c)
because  Reust  challenged  the  constitutionality  of  a   state
statute.97   We  agree  that  Rule  24(c)  justifies  the  states
          In addition, it appears that the state should always be
permitted  to  intervene when there is any dispute  about  how  a
punitive  damages award is to be allocated.  Other  recent  cases
have  presented  equivalent disputes, such as  whether  pro  rata
attorneys  fees  and  costs should be deducted  from  the  states
allocation.99  Indeed, we have a difficult time imagining how the
state could be denied intervention in such cases.
     H.   The Timing of the Entry of Judgment Was Appropriate.
          Reust  argues that the superior court unfairly  delayed
entry of judgment, causing a lower interest rate to apply to  his
award.   The jury returned its first verdict on January 11,  2001
and  then  awarded  punitive damages by supplemental  verdict  of
April  24, 2001.  But the superior court did not sign the interim
final judgment until June 11, 2002.
          APC  correctly  points  out that disputed  post-verdict
motions  were pending before the superior court until the interim
final  judgment  was entered on June 11, 2002.  For  example,  on
March  1,  2002  Reust  submitted a motion asking  the  court  to
declare  unconstitutional the tort reform statute.  In  addition,
some  of  the delay was due to Reusts own request to hold matters
in  abeyance pending mediation between the parties.  The superior
court was therefore justified in delaying entry of judgment.
          For  these reasons, we REMAND for reduction of the lost
wages awards in accordance with this opinion, for application  of
the  punitive  damages  cap set out in AS 09.17.020(f),  and  for
review   of   the   recalculated  punitive  damages   award   for
          excessiveness.  We AFFIRM the remainder of the superior courts
rulings variously challenged by APC or Reust.
BRYNER,  Chief  Justice,  with whom  CARPENETI,  Justice,  joins,
dissenting, in part.
          I  disagree with the courts decision to uphold  Alaskas
punitive damages forfeiture statute.  For the most part,  I  rely
on  the reasons set out in my dissenting opinions in Anderson II1
and  Evans  v. State;2 but I add one comment below to  address  a
point  regarding punitive damages forfeiture that is newly raised
in todays opinion.
          The   opinion   suggests  that  the  punitive   damages
forfeiture law can be sustained as minimally rational because  it
is  similar  to a fine: the objectives of punitive  damages,  the
court  declares,  are analogous to the objectives  of  civil  and
criminal   fines.3    Of  course,  fines  and  punitive   damages
undoubtedly  do  have the same general purpose.  But  beyond  its
reliance  on  this  truism, the courts proposed  analogy  between
fines  and forfeiture breaks down and becomes unconvincing: After
all,  unlike  the  punitive  damages  forfeiture  provision,  our
justice  system  does  not require the victim  to  prosecute  the
offender; nor does it force the prosecutor to pay the  fine.   So
while  the  punitive damages forfeiture statute nominally  serves
the same purpose as a fine, it hardly advances this purpose in  a
rational manner.
     1     See,  e.g., Riddell v. Edwards, 32 P.3d 4,  8  (Alaska

     2    Ch. 26, SLA 1997.

     3    See, e.g., Childs v. Kalgin Island Lodge, 779 P.2d 310,
314  (Alaska 1989) (The formation of an express contract requires
an   offer  encompassing  its  essential  terms,  an  unequivocal
acceptance  of  the  terms by the offeree, consideration  and  an
intent  to be bound.); see also Magill v. Nelbro Packing Co.,  43
P.3d 140, 142 (Alaska 2001).

          Whether  a jury instruction is erroneous is a  question
of law to which we apply our independent judgment.  Era Aviation,
Inc. v. Lindfors, 17 P.3d 40, 43 n.2 (Alaska 2000).

     4     See  Restatement (Second) of Contracts  71 (1981)  (To
constitute consideration, a performance or a return promise  must
be  bargained  for  . . . .  A performance or return  promise  is
bargained for if it is sought by the promisor in exchange for his
promise  and  is  given  by the promisee  in  exchange  for  that

     5     In  Hackett v. Foodmaker, Inc., 245 N.W.2d 140, 140-41
(Mich.  App. 1976), the plaintiff agreed to move from  California
to  Michigan to become a restaurant manager.  The restaurant  was
not yet open when the plaintiff arrived in Michigan, so he filled
in  for  absent managers in other locations until his  restaurant
was  ready.   Id.  at  141.   In  the meantime  plaintiff  became
involved  in  an anti-trust suit against defendant and  was  then
informed  that  anyone involved in such a lawsuit  would  not  be
considered  for  a  restaurant manager  position.   Id.   Another
person  was  later  selected  to  fill  the  plaintiffs  expected
position.  Id.

          The   Hackett  court  ruled  that  these  circumstances
amounted  to  a  distinguishing feature and an exception  to  the
proposition  that contracts for personal services  for  permanent
employment  or  for  life  are  considered  indefinite   hirings,
terminable  at the will of either party.  Id.  The court  allowed
the claim to proceed because the plaintiff was never afforded  an
opportunity to perform under the contract due to defendants total
repudiation thereof in that defendant never allowed plaintiff  an
opportunity to manage [the restaurant].  Id.

          Later   Michigan  decisions  addressing  Hackett   have
advanced  conflicting views over what factors the  Hackett  court
found dispositive, but none has criticized its conclusion that  a
public  policy  violation can permit a  cause  of  action  before
performance has commenced.  See Cunningham v. 4-D Tool  Co.,  451
N.W.2d  514,  515-516 (Mich. App. 1989); Filcek v. Norris-Schmid,
Inc., 401 N.W.2d 318, 319-20 (Mich. App. 1986); Milligan v. Union
Corp., 274 N.W.2d 10, 12 n.3 (Mich. App. 1978).

     6     See,  e.g., Indus. Uranium Co. v. United  States,  376
F.2d  868,  872  (Ct.  Cl. 1967) (The defendant  [who]  prevented
performance of the alleged condition[] cannot now stand on it  as
a  bar to recovery.); Motel Serv., Inc. v. Cent. Maine Power Co.,
394  A.2d  786, 788 (Me. 1978) (Where the offeree of a unilateral
contract is prevented from completing performance by the  actions
of  the  offeror, such failure will not be a defense to an action
by the offeree on the contract.); Cahoon v. Cahoon, 641 P.2d 140,
144 (Utah 1982) (One party cannot by willful act or omission make
it  impossible  or  difficult for the other to perform  and  then
invoke  the  others  nonperformance as a defense.);   Richard  A.
Lord, Williston on Contracts  39:3, at 519 (4th ed. 2000).

     7     Kinzel  v. Discovery Drilling, Inc., 93 P.3d 427,  432
(Alaska 2004).

     8    Id. at 438.

     9    AS 11.56.510 provides, in part:

          (a)   A   person   commits   the   crime   of
          interference with official proceedings if the
          person (1) uses force on anyone, damages  the
          property of anyone, or threatens anyone  with
          intent  to (A) improperly influence a witness
          or  otherwise  influence the testimony  of  a
          witness;   (B)   influence  a  jurors   vote,
          opinion,  decision,  or  other  action  as  a
          juror;  (C)  retaliate against a  witness  or
          juror because of participation by the witness
          or  juror in an official proceeding;  or  (D)
          otherwise  affect the outcome of an  official
          proceeding . . . .  (Emphasis added.)
     10    AS 18.60.089(a) provides: A person may not discharge or
discriminate against an employee because the employee has .  .  .
testified  or is expected to testify in a proceeding relating  to
occupational safety and health . . . .

     11     AS 18.80.220(a) provides: [I]t is unlawful for . .  .
(4)  an  employer  .  .  .  to  discharge,  expel,  or  otherwise
discriminate against a person because the person has . . .  filed
a  complaint, testified, or assisted in a proceeding  under  this
chapter . . . .

     12     AS 47.33.350(a) provides: An assisted living home may
not  take retaliatory action against a resident of that  home  if
the resident or the residents representative . . . (2) appears as
a  witness, or refuses to appear as a witness, in an adjudicatory
proceeding regarding the home . . . .

     13     If, for instance, Reust had been fired for testifying
in  a  proceeding under the Alaska Human Rights  Act  (AHRA),  we
would  be reluctant to recognize a cause of action in this  case.
The  AHRA provides its own cause of action, AS 22.10.020(i),  and
we  have typically declined to recognize independent torts  based
on  contravention of public policy where there are adequate legal
alternatives.  See, e.g., Walt v. State, 751 P.2d 1345, 1353 n.16
(Alaska  1988)  (refusing  to  recognize  independent  tort   for
violation   of  public  policy  where  statutes  and   collective
bargaining  agreement provided comprehensive scheme for  employee
rights and remedies).

     14     See, e.g., Bishop v. Fed. Intermediate Credit Bank of
Wichita, 908 F.2d 658, 662 (10th Cir. 1990) (Recognition  of  the
[witness  retaliation] exception supports our tradition of  free,
direct  and truthful testimony at legislative hearings, a  policy
Oklahoma has implicitly recognized.); Freeman v. McKellar, 795 F.
Supp.  733,  742  (E.D. Pa. 1992) (holding that Pennsylvania  law
reflect[s]  a  sufficiently clear and significant  public  policy
against witness retaliation); Fitzgerald v. Salsbury Chem., Inc.,
613  N.W.2d  275,  286  (Iowa 2000) ([W]e  find  ample  statutory
support  for  a  public policy in Iowa in favor  of  refusing  to
commit  perjury  .  .  .  . [T]his public policy  is  not  simply
confined to the refusal to commit perjury but clearly embraces  a
broader  public  policy to provide truthful  testimony  in  legal
proceedings.) (internal citation omitted); Ressler v. Humane Socy
of  Grand  Forks, 480 N.W.2d 429, 432 (N.D. 1992)  ([T]he  public
policy of North Dakota prohibits an employer from discharging  an
employee for honoring a subpoena and for testifying truthfully.);
Sabo v. Schott, 639 N.E.2d 783 (Ohio 1994) (Plaintiffs allegation
that  he  was  fired as a result of having testified  truthfully,
albeit unfavorably to the defendants, if proven to be true, would
constitute  conduct on the part of the defendants which  violates
the public policy of this state.).

     15     Page v. Columbia Natural Res., Inc., 480 S.E.2d  817,
826 (W. Va. 1996).

     16    Id. at 825.

     17     See AS 11.56.200 (crime of perjury); AS 09.20.120  (A
witness who disobeys a subpoena served on the witness shall  also
forfeit to the party requiring the attendance of the witness  the
sum  of  $50 and all damages which that party may sustain by  the
failure  of  the  witness to attend.); Alaska R.  Civ.  P.  45(f)
(Failure by any person without adequate excuse to obey a subpoena
served  upon  that person may be deemed a contempt of  the  court
from which the subpoena issued.).

     18    Jury Instruction No. 26 stated in part: It is unlawful
to fire an employee for giving testimony, including a deposition,
in  a  legal proceeding, or for the possibility that he may  have
been a witness in the future in the same lawsuit, because this is
a violation of a substantial public policy.

     19    Page, 480 S.E.2d at 826 n.8.

     20    Alaska Rule of Civil Procedure 51(a) provides in part:
No party may assign as error the giving or the failure to give an
instruction  unless  the party objects thereto  before  the  jury
retires to consider its verdict, stating distinctly the matter to
which the party objects and the grounds of the objection.

     21     See Alaska R. App. P. 212(c)(8)(B) (Appellants  brief
shall indicate the pages of the record where each point on appeal
was raised in the trial court.); Pope v. State, 480 P.2d 697, 698
(Alaska  1971)  ([B]asic fairness to all  parties  to  an  appeal
requires  that  we limit our review to matters appearing  in  the

     22     See  City  of Nome v. Ailak, 570 P.2d  162,  166  n.4
(Alaska   1977)  (We  disapprove  of  off-the-record  discussions
between court and counsel concerning jury instructions.   Such  a
practice  makes  our  job needlessly more difficult.);  State  v.
Abraham,  566 P.2d 267, 269 (Alaska 1977) (noting that  extensive
unrecorded  in-chambers  conferences   .  .  .   could  have  had
potentially serious repercussions); State v. Buckalew,  561  P.2d
289,  292  (Alaska 1977) (The absence of a record presents  grave
problems  when  it  becomes necessary . . .  to  reconstruct  the
events  that occurred in the court below.); Ervin v.  State,  761
P.2d 124, 126 n.2 (Alaska App. 1988) (quoting Ailak, 570 P.2d  at
166  n.4).   We  also  note  that Alaska Administrative  Rule  21
provides:  So far as practicable, all judicial business involving
the  trial of causes and conferences with members of the  Bar  or
litigants shall be on the record and transacted in open court.

          State  v.  Laraby,  842 P.2d 1275 (Alaska  App.  1992),
provides a poignant example of the unnecessary confusion that can
result   from  unrecorded  jury  instruction  sessions.    Laraby
concerned   ineffective  assistance  of  counsel;   specifically,
whether the defense attorney had withdrawn a proposed instruction
for  tactical  reasons.   Id.  at  1279.   In  a  post-conviction
evidentiary  hearing,  the trial judge  testified  as  a  witness
regarding  an off-the-record jury instruction session  but  could
not  recall  whether defense counsel had withdrawn  any  proposed
instructions  and  could  not explain  why  the  [instruction  in
question] had not been given.  Id. at 1277.

     23     VECO, Inc. v. Rosebrock, 970 P.2d 906, 918-19 (Alaska
1999).   Direct evidence is evidence of conduct or statements  by
persons involved in the decisionmaking process that may be viewed
as directly reflecting the alleged discriminatory attitude . .  .
sufficient to permit a factfinder to infer that that attitude was
more  likely  than  not  a  motivating factor  in  the  employers
decision  .  . . .  Kinzel v. Discovery Drilling, Inc.,  93  P.3d
427,  435 (Alaska 2004) (quoting Ostrowski v. Atlantic Mut.  Ins.
Cos., 968 F.2d 171, 182-83 (2d Cir. 1992)).

     24     To  establish  a  prima  facie  case  of  retaliatory
discharge,  a  plaintiff must show: (1) that [the  employee]  was
engaged  in  a protected activity; (2) that an adverse employment
decision  was  made; and (3) that there was a  causal  connection
between the two.  Kinzel, 93 P.3d at 433 (quoting VECO, 970  P.2d
at 921).

     25    Kinzel, 93 P.3d at 433.

     26    Id.

     27    Era Aviation, Inc. v. Lindfors, 17 P.3d 40, 44 (Alaska
2000) (emphasis added).

     28    Kinzel, 93 P.3d at 434.

     29    Lindfors, 17 P.3d at 44 (citing VECO, 970 P.2d at 920).

     30    Kinzel, 93 P.3d at 435 (quoting Ostrowski, 968 F.2d at
182-83) (emphasis added).

     31    Ostrowski, 968 F.2d at 181.

     32    See, e.g., VECO, 970 P.2d at 920 (rejecting defendants
argument that the plaintiff must choose between pursuing a mixed-
motive theory and a pretext theory).

     33    See Alaska R. Civ. P. 51(a), quoted in supra note 20.

     34     Manes  v. Coats, 941 P.2d 120, 125 n.4 (Alaska  1997)
(quoting Conam Alaska v. Bell Lavalin, 842 P.2d 148, 153  (Alaska

     35     Id.  at 125 (quoting Conam Alaska, 842 P.2d  at  153)
(internal quotation marks omitted).

     36    The adequacy of evidence supporting a jurys award is a
mixed question of law and fact.  Cent. Bering Sea Fishermens Assn
v.  Anderson  (Anderson I), 54 P.3d 271, 277 (Alaska  2002).   As
such,  we  review  the  evidence  presented  in  the  light  most
favorable  to  [the prevailing party] and evaluate  de  novo  the
legal  question  of whether that evidence is specific  enough  to
support the jurys economic damages award.  Id.

     37    Pizzuto testified as follows:

          Q.   Now, isnt it true, Mr. Pizzuto, that the
          person  who  was  going to get  to  fill  Mr.
          Peikerts position  whoever that person  would
          have been  would have had that job as long as
          you  did  a good job for the company, subject
          to   reduction  in  force,  a  transfer,   in
          quitting,  or whatever that person wanted  to
          A.   Yeah, when  provided we have the work to
          justify all the positions.
          Q.   Right.  Subject to reduction in force.
          A.   Yeah.
          Q.    But otherwise, they would have that job
          as  long  as  they  do a  good  job  for  the
          company, right?
          A.   As far as I know.
          Q.    And  that  particularly  work  for  the
          project    manager   isnt   a    job     isnt
          project-specific, is it?
          A.   No.
          Q.     Okay.    In  other  words,  for   that
          particular   job,  there  was  no  particular
          project that needed to be completed, and then
          after  its  completed,  the  person  who  had
          gotten  the  project managers job,  that  job
          would be over and done with, right?
          A.   No.
     38     Anderson I, 54 P.3d at 278 (quoting Skagway City Sch.
Bd. v. Davis, 543 P.2d 218, 225 (Alaska 1975)).

     39    Anderson I, 54 P.3d at 278.

     40     Kinzel v. Discovery Drilling, Inc., 93 P.3d 427,  438
(Alaska 2004).

     41    See, e.g., Tadsen v. Praegitzer Indus., Inc., 902 P.2d
586,  590  (Or.  App. 1995) (the period that the plaintiff  would
likely   have  been  employed  by  the  defendant  but  for   the
discrimination  .  .  . . is [] the proper ultimate  question  in
claims  by  at  will employees . . . .) (affirmed  by  Tadsen  v.
Praegitzer Indus., Inc., 928 P.2d 980 (Or. 1996)).

     42    We review evidentiary rulings for abuse of discretion.
Zaverl v. Hanley, 64 P.3d 809, 817 n. 16 (Alaska 2003).

     43     Hearsay  is a statement, other than one made  by  the
declarant  while testifying at the trial or hearing,  offered  in
evidence  to prove the truth of the matter asserted.   Alaska  R.
Evid.  801(c).   The testimony in question appears  to  fit  this
definition, and none of the exclusions or exceptions addressed in
Alaska Evidence Rules 801(d), 803, or 804 seems to apply.

     44     The  superior  court  did  exclude,  as  an  apparent
sanction,  other parts of Baileys testimony.  But  the  position-
elimination  testimony is the only passage  that  APC  argues  on
appeal  was erroneously excluded; even if the court intended  the
sanction   of   exclusion  to  include  the  position-elimination
testimony, the superior courts hearsay ruling was an alternative,
independent,  and  unchallenged basis  for  exclusion.   We   may
affirm  a  trial  courts exclusion of evidence  even  though  the
affirmance  is  based on a ground not relied upon  by  the  trial
court.   Korean Air Lines Co., Ltd. v. State, 779 P.2d 333,  339-
40  (Alaska 1989) (quoting Sloan v. Atlantic Richfield  Co.,  541
P.2d 717, 722 n.6 (Alaska 1975)).

     45    APC cites Brogdon v. City of Klawock, 930 P.2d 989, 992
(Alaska 1997), which states that

          [i]f  an  employer discovers grave misconduct

          on  the  part of a terminated employee  which

          the  employee might have been able to conceal

          had  the  employee not been  terminated,  the

          employer  should nonetheless not be  required

          to   reinstate  the  employee   or   to   pay

          prospective   damages   for   the   employees

          termination . . . .


     46     See  Crittell v. Bingo, 83 P.3d 532, 536 n.19 (Alaska
2004)  (stating  that reply brief  may raise no  contentions  not
previously raised in either the appellants or appellees briefs  )
(quoting Alaska R. App. P. 212(c)(3)).

     47     APCs briefs fail to specify where in the record  this
point was raised below.  See Alaska R. App. P. 212(c)(8)(B).  Our
review of the record reveals that at trial APC objected to Reusts
emotional  distress damages claim on the ground it  violated  the
Civil  Rule  26  disclosure rule.  During a  discussion  on  jury
instructions, APC stated, we still believe that . .  .  emotional
distress is improper, but specified no grounds for its objection.
APC  did  not raise the issue of severity in its directed verdict
motion.   There is no indication APC brought to the trial  courts
attention any asserted deficiency in Reusts proof of the severity
of his distress.

     48    See Koller v. Reft, 71 P.3d 800, 804 n.6 (Alaska 2003)
(quoting  Mapco  Express, Inc. v. Faulk, 24 P.3d  531,  540  n.29
(Alaska 2001)) (quotation marks omitted).

     49     We  review  questions of law  using  our  independent
judgment.  Indus. Commercial Elec., Inc. v. McLees, 101 P.3d 593,
597 (Alaska 2004).  An Alaska statute is interpreted according to
reason,  practicality, and common sense, taking into account  the
plain meaning and purpose of the law as well as the intent of the
drafters.   Native Vill. of Elim v. State, 990 P.2d 1, 5  (Alaska
1999);  see  also Fyffe v. Wright, 93 P.3d 444, 457 n.39  (Alaska

     50    AS 23.30.055 provides in part:

          The liability of an employer prescribed in AS
          23.30.045  is exclusive and in place  of  all
          other  liability  of  the  employer  and  any
          fellow   employee   to  the   employee,   the
          employees  legal representative,  husband  or
          wife,  parents, dependents, next of kin,  and
          anyone  otherwise entitled to recover damages
          from  the employer or fellow employee at  law
          or  in admiralty on account of the injury  or
          death . . . .
     51    Gunter v. Kathy-O-Estates, 87 P.3d 65, 70 (Alaska 2004)
(quoting  Fenner v. Municipality of Anchorage, 53 P.3d  573,  575
(Alaska 2002)).

     52     Fenner, 53 P.3d at 575 (quoting Elliott v. Brown, 569
P.2d   1323,  1327  (Alaska  1977))  (internal  quotation   marks

     53    See, e.g., Accardi v. Superior Court, 21 Cal. Rptr. 2d
292, 298 (Cal. App. 1993) (stating that a claim for emotional and
psychological  damage, arising out of employment, is  not  barred
[by  an  exclusive  remedy  provision]  where  the  distress   is
engendered by an employers illegal discriminatory practices).

     54     AS 09.17.020(b) provides: The fact finder may make an
award  of punitive damages only if the plaintiff proves by  clear
and  convincing  evidence  that the defendants  conduct  (1)  was
outrageous,  including acts done with malice or bad  motives;  or
(2)  evidenced reckless indifference to the interest  of  another
person.   See also Robles v. Shoreside Petroleum, Inc.,  29  P.3d
838,  846 (Alaska 2001) (quoting Chizmar v. Mackie, 896 P.29 196,
210 (Alaska 1995)).

     55     Nelson  v.  Progressive Corp., 976 P.2d  859,  864-65
(Alaska 1999).

     56     Great  Divide Ins. Co. v. Carpenter ex rel. Reed,  79
P.3d  599, 615 (Alaska 2003) (Matthews, J., concurring)  (stating
that [w]e will reverse a punitive damages award only if we have a
firm  conviction based on the record as a whole  that  the  trial
court  erred  and we must intervene to prevent a  miscarriage  of
justice)  (internal quotation marks omitted) (quoting State  Farm
Mut.  Auto.  Ins.  Co. v. Weiford, 831 P.2d  1264,  1266  (Alaska
1992));  see also Alaskan Vill., Inc. v. Smalley, 720  P.2d  945,
948 (Alaska 1986).

     57    Constitutional issues are issues of law and subject to
de  novo review.  State v. Alaska Civil Liberties Union, 978 P.2d
597, 603 (Alaska 1999).

     58    Ch. 26, SLA 1997.  AS 09.17.020(f)-(h) imposes various
caps  on  punitive damages awards.  We discuss the cap applicable
to  this  case  in Part III.F.3.  AS 09.17.020(j)  requires  that
fifty  percent  of a punitive damages award be deposited  in  the
states  general  fund.   Reust describes  this  as  a  forfeiture

     59     The  tort reform legislation applies to an action  in
which a claim of punitive damages is presented to the fact finder
. . . .  AS 09.17.020(a) (emphasis added).

     60     McKibben v. Mohawk Oil Co., Ltd., 667 P.2d 1223, 1232
(Alaska  1983)  (citing Restatement (Second)  of  Contracts   355

     61     See  ARCO Alaska, Inc. v. Akers, 753 P.2d 1150,  1154
(Alaska 1988) (stating that [w]here a partys conduct in breaching
a contract rises to the level of a traditionally recognized tort,
such  as intentional infliction of emotional distress, an  action
in tort would lie).

     62     See Cooper Indus., Inc. v. Leatherman Tool, Inc., 532
U.S. 424, 432 (2001).

     63     Evans  ex  rel. Kutch v. State, 56  P.3d  1046,  1053
(Alaska 2002) (citing Reid v. Williams, 964 P.2d 453, 458 (Alaska
1998)).   Chief  Justice Fabe, joined by Justice Eastaugh,  wrote
the  courts dispositional opinion.  Justices Bryner and Carpeneti
dissented in part.  The four justices participating in Evans were
evenly  divided on two issues: the constitutionality of the  Tort
Reform  acts cap on noneconomic damages and its requirement  that
half of punitive damages awards be paid to the State . . . .  Id.
at  1070  n.140.   On  these two issues, the Evans  dispositional
opinion  affirmed the superior courts ruling but did  not  create
precedent.   See  Hammond  v.  State,  Dept  of  Transp.  &  Pub.
Facilities, 107 P.3d 871, 883 n.7 (Alaska 2005) (A decision by an
evenly  divided  court  results in an  affirmance.   The  opinion
agreeing  with  the  result  reached by  the  superior  court  is
referred  to as the dispositional opinion, but it does  not  have
the  precedential effect of an opinion of the  court.).   On  all
other  issues present in Evans at least three justices  agree[d];
therefore,  the  courts  decision  on  these  issues  does   have
precedential  value and is binding on future  cases.   Evans,  56
P.3d at 1070 n.140.

     64    Evans, 56 P.3d at 1053.

     65     The  objectives include (1) discourag[ing]  frivolous
litigation   and  decreas[ing]  the  costs  of  litigation;   (2)
stop[ping] excessive punitive damages awards in order to foster a
positive business environment; (3) control[ling] the increase  of
liability  insurance rates; (4) encourag[ing]  self-reliance  and
independence    by   underscoring   the   need    for    personal
responsibility;  and  (5)  reduc[ing]  the  cost  of  malpractice
insurance for professionals.  Evans, 56 P.3d at 1053 (citing  ch.
26,   1(1-5),  SLA 1997) (citations and internal quotation  marks

     66     Anderson v. State ex rel. Cent. Bering Sea Fishermens
Assn (Anderson II), 78 P.3d 710 (Alaska 2003).  Justice Matthews,
joined  by  Justice Eastaugh, authored the dispositional  opinion
regarding  the  constitutionality of  AS  09.17.020(j);  Justices
Bryner and Carpeneti dissented in part.

     67    Id. at 717 (internal footnote omitted).

     68    Id. at 718.

     69    Id. at 724 (Bryner, J., dissenting in part).

     70    Anderson II, 78 P.3d at 724 (Bryner, J., dissenting in

     71     The dispositional opinion rejected the argument  that
the  punitive damages caps violate equal protection.   Evans,  56
P.3d at 1051-55.

     72    Alaska Const. art. I,  16.

     73    Evans, 56 P.3d at 1051.

     74     Reust also asserts that subsection .020(j) is void on
its  face  because  it  requires attorneys  to  perform  services
without  just  compensation.  There is no need  to  address  this
argument  because  we  have previously  held  that  AS  09.60.080
requires  that the superior court deduct pro rata the  contingent
fee  from  the  states  portion of the  punitive  damages  award.
Anderson II, 78 P.3d at 720-22.

     75     Anderson  II,  78  P.3d  at  714-16.   We  previously
addressed the issue in Evans, 56 P.3d at 1058.  The dispositional
opinion  in  Evans concluded that the statute does not  effect  a
taking  because the statute limits a plaintiffs property interest
in  punitive  damages  before it vests.  Id.   The  dispositional
opinion  noted  that  [t]his construction of AS  09.17.020(j)  is
consistent  with  the  legislatures power  to  limit  or  abolish
punitive damages . . . .  Id.

     76    Anderson II, 78 P.3d at 714-15.

     77    Id.

     78    Id. at 714.

     79    Id. at 714-15.

     80    Id. at 715.

     81    Id. (citing State, Dept of Natural Res. v. Arctic Slope
Regl Corp., 834 P.2d 134 (Alaska 1991) (recognizing importance of
reasonable expectations in constitutional takings claims); Beluga
Mining  Co.  v.  State, Dept of Natural Res., 973 P.2d  570,  576
(Alaska 1999) (same)).

     82    Anderson II, 78 P.3d at 715.

     83    Kirk v. Denver Publg Co., 818 P.2d 262 (Colo. 1991).

     84    Id. at 272-73.

     85    Id. at 268.

     86    Evans, 56 P.3d at 1058 n.74.

     87    Anderson II, 78 P.3d at 716 n.30 (quoting DeMendoza v.
Huffman,  51 P.3d 1232, 1234 (Or. 2002) (quoting Fust v. Attorney
Gen., 947 S.W.2d 424, 431 (Mo. 1997))).

     88     See,  e.g., Gordon v. State, 608 So. 2d  800,  801-02
(Fla.  1992);  Mack Trucks, Inc. v. Conkle, 436 S.E.2d  635,  639
(Ga. 1993); Cheatam v. Pohle, 789 N.E.2d 467, 472-75 (Ind. 2003);
Shepherd  Components, Inc. v. Brice Petrides-Donohue  &  Assocs.,
Inc., 473 N.W.2d 612, 619 (Iowa 1991); Fust v. Attorney Gen., 947
S.W.2d 424, 431 (Mo. 1997); Rhyne v. K-Mart Corp., 594 S.E.2d  1,
14-15 (N.C. 2004); DeMendoza, 51 P.3d at 1245-47.

     89    Anderson II, 78 P.3d at 723 (Bryner, J., dissenting in
part) (original emphasis) (quoting AS 09.17.020(j)).

     90     Id.  at  723  n.4  (Bryner, J., dissenting  in  part)
(quoting Evans, 56 P.3d at 1077).

     91    Id. at 717-18.

     92     See  Chenega Corp. v. Exxon Corp., 991 P.2d 769,  785
(Alaska  1999)  (construing statute so as to avoid constitutional
problems  where  reasonable  to do  so);   see  also  Bonjour  v.
Bonjour, 592 P.2d 1233, 1237 (Alaska 1979); Larson v. State,  564
P.2d 365, 372 (Alaska 1977); Hoffman v. State, 404 P.2d 644,  646
(Alaska 1965).

     93    AS 09.17.020(h) states:

          Notwithstanding any other provision  of  law,
          in  an  action against an employer to recover
          damages  for an unlawful employment  practice
          prohibited  by  AS 18.80.220, the  amount  of
          punitive damages awarded by the court or jury
          may  not  exceed (1) $200,000 if the employer
          has  less  than 100 employees in this  state;
          (2)  $300,000 if the employer has 100 or more
          but  less  than 200 employees in this  state;
          (3)  $400,000 if the employer has 200 or more
          but  less  than 500 employees in this  state;
          and  (4) $500,000 if the employer has 500  or
          more employees in this state.
     94     See  Cent.  Bering Sea Fishermens  Assn  v.  Anderson
(Anderson I), 54 P.3d 271, 282 (Alaska 2002).

     95     BMW  of  N. Am., Inc. v. Gore, 517 U.S.  559,  574-75
(1996); see also State Farm Mut. Auto. Ins. Co. v. Campbell,  538
U.S.  408, 418-21 (2003) (applying Gore factors); Anderson I,  54
P.3d at 284 (same).

     96     A  lower courts decision on a motion to intervene  is
reviewed   for  an  abuse  of  discretion.   Mundt  v.  Northwest
Explorations, Inc., 947 P.2d 827, 829 (Alaska 1997).

          Intervention  as  a  matter   of   right   is
          when   the   applicant  claims  an   interest
          relating to the property or transaction which
          is   the  subject  of  the  action  and   the
          applicant is so situated that the disposition
          of  the  action  may  as a  practical  matter
          impair  or  impede the applicants ability  to
          protect  that interest, unless the applicants
          interest   is   adequately   represented   by
          existing parties.
Alaska R. Civ. P. 24(a).

          Permissive   intervention  is   appropriate   when   an
applicants  claim or defense and the main action have a  question
of law or fact in common and

          [w]hen a party to an action relies for ground
          of  claim  or  defense upon  any  statute  or
          executive order administered by a federal  or
          state governmental officer or agency or  upon
          any   regulation,   order,  requirement,   or
          agreement  issued  or made  pursuant  to  the
          statute  or  executive order, the officer  or
          agency   upon  timely  application   may   be
          permitted to intervene in the action.
Alaska R. Civ. P. 24(b).

     97    Alaska Civil Rule 24(c) states, in part:

          When the constitutionality of a state statute
          affecting  the public interest  is  drawn  in
          question in any action to which the state  or
          an  officer, agency, or employee  thereof  is
          not  a  party,  the  court shall  notify  the
          Attorney General of Alaska of such fact,  and
          the state shall be permitted to intervene  in
          the action.
     98     Although  Reust  filed  his  motion  challenging  the
constitutionality  of  AS  09.17.020  after  the  superior  court
granted the states motion to intervene, Reusts challenge had  the
effect  of  rendering any possible error by  the  superior  court
harmless.   The  constitutional challenge  would  have  permitted
intervention even if the superior court had denied it previously.

     99     See, e.g., Anderson v. State ex rel. Cent. Bering Sea
Fishermens Assn (Anderson II), 78 P.3d 710, 720-22 (Alaska 2003).

     1    Anderson v. State ex rel. Central Bering Sea Fishermens
Assn, 78 P.3d 710, 723-24 (Alaska 2003) (Anderson II).

     2     Evans  ex  rel. Kutch v. State, 56 P.3d 1046,  1075-76
(Alaska 2002).

     3    Slip Op. at 30.