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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Lee v. State (08/11/2006) sp-6033

Lee v. State (08/11/2006) sp-6033, 141 P3d 342

     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,


COMMUNITY SERVICES ) Supreme Court No. S- 11396
) Superior Court No. 3AN-01-10170 CI
Appellant, )
) O P I N I O N
v. )
) No. 6033 - August 11, 2006
Appellee. )

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Morgan Christen, Judge.

          Appearances:     Dennis    Lee,    pro    se,
          Newfoundland,   New   Jersey.    Cynthia   C.
          Drinkwater,   Assistant   Attorney   General,
          Anchorage,  and  David W.  M rquez,  Attorney
          General, Juneau, for Appellee.

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

          EASTAUGH, Justice.

          The  State  of Alaska filed a superior court  complaint
against  Dennis  Lee  alleging he violated Alaskas  Unfair  Trade
Practices    and   Consumer   Protection   Act   by   advertising
revolutionary technologies and a free electricity  program.   The
state  also obtained a temporary restraining order enjoining  Lee
from soliciting Alaskan consumers to buy his products or join his
discount  buying  club.  Lee refused to participate  meaningfully
in  discovery,  even  after  the  superior  court  issued  orders
compelling  him  to  do  so.  In a thoughtful  and  well-reasoned
decision,   the  superior  court  imposed  liability-establishing
discovery sanctions and civil penalties.  We affirm.
          On August 29, 2001 the State of Alaska filed a superior
court  complaint  against  Dennis Lee doing  business  as  United
Community Services of America (UCSA).  The complaint alleged that
Lee,  UCSA,  and  two associated corporate entities,  Best  World
Technologies  and  the  International Tesla Electric  Corporation
(ITEC),  had  engaged  in and continued to engage  in  unfair  or
deceptive acts or practices.  It also alleged that the defendants
violated  the Unfair Trade Practices and Consumer Protection  Act
(UTPCPA)1  by  falsely and deceptively advertising  revolutionary
technologies  and a free electricity program on the internet  and
in  the  Anchorage Daily News.2  The ITEC website also  announced
related  opportunities to invest in NASDAC,  a  special  discount
buying  club,  which, among other things, offered commissions  to
members who became recruiters.
          Lee  was  scheduled  to  conduct  an  August  30,  2001
Anchorage   presentation  at  which  he  would  demonstrate   his
technologies  and offer consumers an opportunity to  sign  up  to
possibly  get free electricity for life.  Before the presentation
began,  the  state served Lee with its complaint and a  temporary
restraining  order  (TRO) enjoining him from  soliciting  Alaskan
consumers  to pay him for products, memberships, dealerships,  or
other investments related to a free electricity program.  The TRO
stated that Lee could still give the demonstration.  Lee gave the
demonstration and distributed applications for membership  and  a
notice of right to cancel membership in the discount buying club.
          As  the  states  lawsuit  against  him  proceeded,  Lee
repeatedly  thwarted the pretrial discovery process.   The  state
made  numerous  attempts by telephone and letter to  obtain  Lees
initial  disclosures, but he never provided them.  Lee  responded
late  to  the states interrogatories and requests for  production
and  admission.   Not  satisfied with Lees responses,  the  state
moved  to  compel  discovery and moved for  attorneys  fees.   On
August 31, 2002 the superior court ordered Lee to answer some  of
the  states interrogatories and to produce specific documents  in
response to the requests for production.  He was to comply within
ten days.  Lee filed a reconsideration motion, which the superior
court denied.
          Lee  did  not provide the discovery the order required.
On  November  1,  2002 the state filed a motion  invoking  Alaska
Civil  Rule  37.  The states motion asked for an order  requiring
Lee  to  show  cause why he should not be held  in  contempt  for
failing  to  obey  the courts discovery order.   The  state  also
requested that, if Lee failed to respond to the courts  order  to
show  cause,  the  facts  alleged  in  the  complaint  be  deemed
admitted.  The superior court scheduled a show cause hearing  and
warned  Lee that if he did not appear at the hearing,  the  court
would  consider accepting as established the factual  allegations
in  the  states  complaint.  Lee did not attend  the  show  cause
hearing.  Following the hearing, the court issued an order on the
          states motion.  The order gave Lee one more week in which to
provide the ordered discovery responses.  Lee did not provide the
responses.   The court then issued a supplemental order  granting
the  states  request that the facts alleged in the  complaint  be
deemed admitted.
          In  June 2003 the state moved for summary judgment.  It
argued that there were no genuine issues of material fact because
the  court  had  accepted  all facts as  alleged  in  the  states
complaint.  Lee responded.  The superior court granted the states
motion, concluding that Lee had violated the UTPCPA.
          The state then asked the superior court to impose civil
penalties  against Lee. After a hearing on the issue,  the  court
issued  a  final  judgment  and order on  the  motion  for  civil
penalties.   The  court enjoined Lee from making  unsubstantiated
claims  about  products offered for sale and from advertising  or
soliciting  for  programs related to those products.   The  court
ordered  Lee to refund payments for dealerships, memberships,  or
products  upon  request by Alaska residents,  and  imposed  civil
penalties of $30,000.  The court also awarded costs and attorneys
fees to the state.
          Lee appeals pro se.3
     A.   Standard of Review
           We review discovery orders under the deferential abuse
of   discretion  standard.4   Reversal  under  this  standard  is
warranted  only  when, after reviewing the whole record,  we  are
left  with a definite and firm conviction that the superior court
erred.5   But  we apply our independent judgment in deciding  the
legal question whether the superior court weighed the appropriate
factors in issuing a discovery order.6
          A  superior courts imposition of sanctions under Alaska
Rule of Civil Procedure 37(b) for a partys failure to comply with
a discovery order is also reviewed for abuse of discretion.7  But
we use our independent judgment to decide the legal issue whether
Civil  Rule  37(b)(2)  applies to a  given  fact  situation.8   A
superior   courts  discretion  to  impose  liability-establishing
sanctions is limited.9
          Whether Lee violated the temporary restraining order is
a  mixed question of law and fact.  We review the superior courts
factual  findings  under  the clearly erroneous  standard.10   We
review questions of law de novo.11
     B.   The Superior Court Did Not Abuse Its Discretion when It
          Granted the States Motion To Compel Discovery.
          The  superior court ordered Lee to answer some  of  the
states  interrogatories  and to produce  some  of  the  documents
requested.   Lee  argues  that  the  court  erred  in  compelling
discovery   because   (1)  the  state  was  pursuing   irrelevant
information; (2) he tried to comply with the discovery  requests;
(3)  he requested a protective order; and (4) the discovery order
should have included specific findings of fact and conclusions of
          We find no merit in these contentions.
          First,  the  superior court did not  compel  irrelevant
          discovery.  Lee argues that the courts relevancy determination
should  have  been  based on the pleadings as  filed.   (Emphasis
omitted.)  Alaska Rule of Civil Procedure 26(b)(1) provides:
          Parties  may  obtain discovery regarding  any
          matter,  not privileged which is relevant  to
          the  subject  matter involved in the  pending
          action  . . . .  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.
As  we  have  previously explained, discovery  rules  are  to  be
broadly  construed  and relevance for purposes  of  discovery  is
broader than for purposes of trial.12  Lee is therefore incorrect
in   asserting  that  the  superior  court  should  have  limited
discovery to information directly related to the pleadings.   The
state  requested  information  about  Alaskan  members  in   Lees
organizations and Alaskan consumers of Lees  products, as well as
information about Lees companies technologies and employees.  The
state  also  requested  that  Lee identify  and  produce  certain
corporate  documents.  These requests related  to  Lees  personal
jurisdiction  defense  and  to  the  question  whether  Lee   was
deceptively  advertising.  The superior court did not  abuse  its
discretion  when it ordered Lee to respond to some of the  states
discovery requests.
          Second,  Lee  did  not  attempt  to  comply  with   the
discovery  requests.   Lee argues that he repeatedly  offered  to
demonstrate  all products to [the state], in a private  show,  to
prove  to  [the state] that the products worked as claimed.   The
civil   rules  do  not  allow  for  this  kind  of  response   to
interrogatories and requests for production.13  The  state  might
have  chosen  to  withdraw some or all of its  pending  discovery
requests in exchange for accepting Lees demonstration offer,  but
it  was  not obliged to do so.  With regard to Alaska Civil  Rule
26(a) disclosures, those initial disclosures are mandatory and  a
private  showing of Lees technology would not have  supplied  the
information the rule requires.14
          Third,  the superior court did not abuse its discretion
when  it denied Lees request for a protective order after finding
that  the request was improperly raised and untimely.  Lee  first
raised  the  issue  of  a  protective order  in  his  motion  for
reconsideration  after  the court entered  the  order  compelling
discovery.   But a motion for reconsideration is not  the  proper
vehicle for seeking a protective order for the first time.15  And
issues  raised for the first time in a motion for reconsideration
are untimely.16  Lee should have sought relief under Alaska Civil
Rule  26(c),  but  he  did not do so before entry  of  the  order
compelling discovery.17
          Fourth,  the superior court was not obligated to  issue
findings  of fact and conclusions of law in conjunction with  its
orders   compelling  discovery  and  denying   Lees   motion   to
reconsider.   These orders were issued under authority  of  Civil
Rules 26 and 77.  Civil Rule 52(a) states that [f]indings of fact
and  conclusions of law are unnecessary on decisions  of  motions
          under Rules 12 or 56 or any other motion except as provided in
Rule 41(b).18  Lee mistakenly reads our instruction in Coulson v.
Marsh  & McLennan, Inc.  that [t]rial courts should enter express
rulings  on  motions to compel discovery  as a mandate  to  enter
findings  of  fact and conclusions of law.19  The superior  court
here  issued  a  written ruling on the states  motion  to  compel
discovery   and   a   written   ruling   on   Lees   motion   for
reconsideration; it did not err by not issuing findings  of  fact
and conclusions of law in conjunction with those orders.
     C.   The  Superior Court Did Not Err in Granting the  States
          Request for Civil Rule 37(b) Sanctions.
          Eighteen  months after the state filed  its  complaint,
the superior court granted the states motion for an order to show
cause why Lee should not be held in contempt.20  It decided  that
the  sanction  of  establishing  facts  that  in  turn  establish
liability was warranted.  The court found that Lees violations of
the  courts orders were willful, that they prejudiced the  state,
and  that  lesser  sanctions would be  ineffective  at  deterring
future violations.  But in a final effort to give the parties  an
opportunity to try the case on the merits, the court gave Lee one
additional  week  in which to provide discovery  responses.   The
court  promised to enter an order deeming all allegations in  the
states  complaint admitted if no responses were filed.   Lee  did
not  respond.  In a supplemental order issued one week after  its
original  order  on  the states show cause motion,  the  superior
court granted the states request that the facts set forth in  its
complaint be deemed admitted as a Rule 37(b) sanction.
          Alaska  Civil Rule 37(b) gives judges broad  discretion
to enforce discovery orders through sanctions.21  Before imposing
Rule  37(b)  sanctions,  Rule  37(b)(3)  requires  the  court  to
          (A)   the  nature of the violation, including
          the   willfulness  of  the  conduct  and  the
          materiality of the information that the party
          failed to disclose;
          (B)  the prejudice to the opposing party;
          (C)  the relationship between the information
          the party failed to disclose and the proposed
          (D)    whether   a   lesser  sanction   would
          adequately  protect  the opposing  party  and
          deter other discovery violations;
          (E)   other factors deemed appropriate by the
          court or required by law.[22]
Rule 37(b)(3) also prohibits the court from issuing an order that
has  the  effect of establishing or dismissing a claim or defense
or  determining a central issue in the litigation  without  first
finding that the party acted willfully.23
          The  superior  court followed the correct  analysis  in
applying the Rule 37(b)(3) factors.  First, the court permissibly
          found that Lees noncompliance was willful.  We define willfulness
in  the  context of Civil Rule 37(b) as the conscious  intent  to
impede  discovery, and not mere delay, inability  or  good  faith
resistance.24  Lee argues that he was only seeking invocation  of
the  protections provided to him by law.  But Lee repeatedly,  in
papers  filed  in the court, at hearings through counsel  in  the
superior court, and here on appeal, has argued that the state has
no  right to the discovery requested.  As explained above in Part
III.B, Lee never properly moved for a protective order.  Lees own
attorney  admitted  at the hearing on civil penalties  that  Lees
noncompliance was contemptuous and intentional.
            Lee  suggests  that the superior  court  should  have
informed  him  of  his right to seek interlocutory  review  under
Appellate  Rule  402  and that his failure  to  comply  with  the
discovery  orders should be excused because he  assumed  that  he
could  not  appeal the order compelling discovery.  At  the  show
cause  hearing, Lees corporate counsel argued that Lee wanted  to
appeal  the  discovery  order but had to  wait  until  the  court
entered  a final judgment.  Lees corporate counsel may have  been
unfamiliar  with  interlocutory  review  in  Alaska.25   But  the
superior court had no duty to inform Lee  a defendant represented
in  the superior court by both local and corporate counsel   that
he had a right to file a petition seeking interlocutory review.26
The  courts  job  is to be a neutral arbiter, not an  instructor.
Because  Lee was trying to avoid discovery and because the  court
had no obligation to inform him of the Alaska rules, the superior
court  did  not  err  when it found that  Lees  violation  was  a
knowing, willful refusal to comply with the order.27
          Second,  the  superior court did not err in determining
that  Lees violation prejudiced the state.  As the superior court
found, Lees omissions delayed progress in the case and forced the
state  to  either depose Lee without the aid of written discovery
or conduct a trial without benefit of any meaningful discovery.28
          Third,  the  superior court did not err  in  finding  a
nexus  between the withheld discovery and the proposed  sanction.
A  sanction  under Rule 37(b)(2) must be sufficiently related  to
the  discovery  violation.29  The test  for  the  validity  of  a
discovery  sanction  that dismisses claims  or  orders  facts  or
issues  to  be  taken  as established under  [Rule  37(b)(2)]  is
whether  these claims or issues are elements of the dispute  that
cannot  be  determined on the merits without  disclosure  of  the
evidence  the court has ordered the party to produce.30   If  the
issues  established are not sufficiently related to the  withheld
information, the discovery sanction is considered mere punishment
and is impermissible.31
          All of the information withheld related to the question
whether  Lee  was  making  false claims  or  misrepresenting  his
technologies.  The states complaint alleged that Lee  engaged  in
false  or  deceptive advertising in the Anchorage Daily News  and
internet  advertisements.  The state alleged  that  such  conduct
constitutes unfair or deceptive acts or practices in violation of
AS   45.50.471(a)  and  AS  45.50.471(b)(12).    Alaska   Statute
45.50.471(a)  declares that [u]nfair methods of  competition  and
unfair or deceptive acts or practices in the conduct of trade  or
          commerce are unlawful.  Alaska Statute 45.50.471(b)(12) provides
that  the  terms  unfair  methods of competition  and  unfair  or
deceptive acts or practices include
          using  or  employing deception, fraud,  false
          pretense,  false  promise, misrepresentation,
          or   knowingly  concealing,  suppressing,  or
          omitting  a  material fact with  intent  that
          others rely upon the concealment, suppression
          or  omission in connection with the  sale  or
          advertisement of goods or services whether or
          not   a  person  has  in  fact  been  misled,
          deceived or damaged.
          The   information  withheld  related  to  the  question
whether  Lee made false claims about his companies and  products;
it  also  related  to the question of penalties.   As  the  state
explains,  it  had little information about Lee, his  businesses,
his  technologies, and his free electricity program.   The  state
could  not  take  the chance that Lee, having failed  to  provide
adequate  discovery responses, would attempt to  demonstrate  his
technologies and products at trial.  We assume that  the  science
underlying  the  technologies  and  products  Lee  advertised  is
sufficiently complex that, without pretrial discovery, the  state
would  have  had  inadequate time to examine and  understand  the
scientific   principles  pertinent  to  any  demonstration,   and
consequently  might  have  been unable  to  dispute  whether  the
demonstration  was valid or the principles were  invalid.32   For
these  reasons, the sanction imposed  accepting the alleged facts
as   admitted    was  sufficiently  tailored  to  the   discovery
          Fourth,  the  superior court properly  determined  that
there were no viable alternative sanctions.  A superior court may
not   issue   liability-establishing  sanctions   without   first
exploring  possible and meaningful alternatives  to  dismissal.33
Lee argues that no serious search for alternatives occurred.  But
the  superior  court  specifically considered  imposing  fees  or
delaying  trial, and found those sanctions inappropriate  because
they  would  not  deter  future  discovery  violations  or  would
prejudice  the state.  The superior court had already  given  Lee
numerous opportunities to comply.  And the court gave Lee another
week  in which to comply before it issued the sanction.  We think
the  process  the court followed is highly desirable  because  it
makes  it  clear  on appellate review that no alternative  lesser
sanctions were available or appropriate.
          Finally,   Lee   argues   that   the   superior   court
inappropriately faulted Lee for not appearing at the  show  cause
hearing.  But as the state points out, the superior court did not
find  Lee culpable for missing the hearing.  The court noted Lees
absence  in  one paragraph of its seven-page order,  and  in  one
sentence  of  its supplemental order.  It based its  decision  to
enter   the   liability-establishing   sanction   not   on   Lees
nonappearance, but on the evidence before it.  The superior court
did  not  err or abuse its discretion in mentioning Lees  absence
from the show cause hearing.
          We  think  the  superior courts rulings on  the  states
motion  for  sanctions contain a model analysis of the  pertinent
factors  and that its decision was appropriate in light  of  Lees
     D.   The  Superior  Court Did Not Err in  Finding  that  Lee
          Violated the TRO.
          The  superior court imposed civil penalties of  $30,000
against  Lee   $25,000  for violating  the  TRO  and  $5,000  for
deceptive  advertising.35  Lee argues  that  the  superior  court
erroneously  accepted the states allegation  that  the  pamphlets
handed out at the presentation were solicitations.
          The   TRO   prohibited  Lee  from  soliciting   Alaskan
consumers  to  pay him money or anything of value  for  products,
memberships, dealerships or other investments relating to a plan,
scheme, or opportunity to provide free electricity.  (Emphasis in
original.)  The state presented unrebutted evidence that a  state
trooper  served Lee with the TRO before 4:00 p.m. on the  day  of
the  presentation and that a civilian process server also  served
him  with the TRO at 6:52 p.m.  The presentation started at  7:00
p.m.    Lee   admitted  to  distributing  hand-outs  before   the
presentation.   Those  hand-outs  included  an  Application   for
Membership in the N.A.S.D.A.C. Program and a Notice of  Right  to
Cancel  membership in NASDAC.  The NASDAC membership  application
stated  that  membership  costs  $15  and  entitles  members   to
discounts  on  merchandise after the first $60  spent.   It  also
stated that members are automatically registered in a Free Energy
Program  which  entitles them to 26,000 kwh of  free  electricity
each  and every year, possibly for the rest of [their lives],  if
and when the free electricity technology is brought to market!
          The  superior court did not clearly err when  it  found
that  Lee  violated  the  TRO.  The  evidence  presented  to  the
superior  court  shows that Lee distributed  the  handouts  after
being served with the TRO.  The handouts were solicitations.36  By
distributing  the handouts, Lee was soliciting Alaskan  consumers
he  was  seeking to obtain their business through the  membership
E.   Lee Either Waived or Failed To Preserve His Other Arguments.
          In  his  opening  and reply briefs, Lee mentions  other
tangential  issues,  including the use of hearsay  evidence,  the
late  filing  of the TRO violation, the states use of information
from  other states attorneys general, the lack of a due date  for
the  initial disclosures, the use of rubber-stamp signatures, and
the  amount of the penalty imposed.  We decline to consider these
arguments because they either  were not preserved below  or  have
been waived on appeal.38
          For these reasons, we AFFIRM the superior courts orders
and judgment. The superior court issued a model decision that  we
AFFIRM here.


State of Alaska,                        )
                    Plaintiff,          )
v.                                 )
Dennis Lee d/b/a United Community       )
Services of America,                    )
                    Defendant.          )
                                   )    3AN-01-10170 Civil

            Order on Motion for Order to Show Cause
          Why Defendant Should not be Held in Contempt

     This  is  an  action  under the Unfair Trade  Practices  and
Consumer  Protection Act, AS 45.50.471.  It  arises  from  an  ad
placed  in  the  Anchorage  Daily News  for  a  demonstration  of
technology.   The  Complaint alleges that  the  ad  claimed  that
Defendants presentation would include proof that water  can  flow
up hill without using a pump, that one can burn pure water to cut
through  thick steel and transmutate the nucleus of  an  atom  to
neutralize radioactive waste.  Complaint at page 2.
     This   Complaint  was  filed  in  August  2001.   The   file
demonstrates  that  Defendants  delays  have  caused  almost   no
progress to be made since that time.  The reasons for the  delays
range from Defendants persistent filing of improper pleadings and
ignoring  Alaska  court rules to repeated  requests  for  initial
disclosures  and  discovery  responses  being  ignored   by   the
     On  July  24, 2002, the State filed a Motion to  Compel.   I
granted  the Motion by Order dated September 3, 2002.   A  Motion
for  Reconsideration  was filed by Defendant.   I  denied  it  on
September 20, 2002.
     A  Motion for Order to Show Cause was filed by the State  on
November 1, 2002.  The Motion alleges that the Defendant had  not
filed  supplemental discovery in response to my September 3rd  or
September 20th Orders.
     A hearing was held on March 12, 2003 on the motion for Order
to  Show Cause.  Ms. Drinkwater appeared at the hearing on behalf
of  the State of Alaska.  Ms. McMahon participated in the hearing
telephonically  on  behalf  of  the  Defendant,  having  received
permission  to  participate in this matter pro hac  vice.   Local
Counsel, Ms. Sullivan, also appeared.
     The  issue  at the hearing on the Motion for Order  to  Show
Cause  was  why  Defendants should not be held  in  contempt  for
failing  to  abide by the Order entered on the Motion to  Compel.
     Ms. McMahon addressed this issue at length, repeatedly explaining
that  she  and her client disagree with my ruling.  Notably,  she
made no argument that Defendant is unable to comply with my Order
on  the  Motion  to Compel or lacked notice of it.   Ms.  McMahon
argued  that  her client is concerned that discovery provided  in
this  case might be shared with other attorneys general in  other
parts of the country to the prejudice of her client.
     Ms.  McMahons  strenuous argument left  no  doubt  that  her
client  is  willfully  refusing to abide by  court  Orders.   She
expressed the view that her client is not able to file an  appeal
of my decision until a final judgment is offered, though no basis
for  that  opinion was offered.  Defendant has local  counsel  to
provide  advice  regarding  the provisions  for  challenging  the
ruling  without  waiting for the entry of final  judgment.   See:
Appellate Rule 402.
     I  inquired  several times at the hearing whether  Defendant
had filed a Motion for Protective Order.  Both the States counsel
and  Ms. McMahon stated that no such Motion had been filed.2   In
fact, the Motion for Reconsideration raises that issue in passing
in  its  conclusion,  at  page 9 of the  pleading.   It  was  not
discussed  at  any  length and was not  properly  raised  in  the
context  of  a  Motion  for  Reconsideration.   See:  ARCP  77(k)
(setting   forth   grounds  for  motions  for   reconsideration).
Defendant  had  ample opportunity prior to my initial  ruling  to
raise this issue in response to the States Motion to Compel.  The
Alaska  Supreme  Court has expressed quite  clearly  that  issues
raised  for  the  first time in Motions for  Reconsideration  are
untimely.   See  Denardo v. GCI Communications  Corp.,  983  P.2d
1288, 1290 (Alaska 1999).
     I  also  inquired  at  March 12th  oral  argument  regarding
whether  there had been any attempt by the Defendant to file  the
discovery in camera.  Counsel responded that no such attempt  had
been made.
     Ms.  McMahon  argued that her client should be excused  from
violating the Order on the Motion to Compel because she had  been
ill for 3 months.  The Courts file includes a letter from Mr. Lee
dated  November 8, 2002 in which he advised that Ms. McMahon  was
indeed  ill,  that  she was expected to be out  of  work  for  an
additional  four  six weeks from that date and that  her  illness
had   predated  the  filing  of  his  November  8th   letter   by
approximately one month.  The letter states that her illness left
the  Defendant without counsel to prepare responses.  Rather than
giving  notice of an intention to appeal my ruling, or notice  of
an  intent to file a Motion for Protective Order or a Motion  for
Incamera  Inspection, Mr. Lees November 8th letter  requested  an
additional  45 days to comply with my Order.  It is clear  to  me
after the March 12 hearing that no such compliance has been made.
Ms.  McMahons illness does not explain the failure to comply with
the  September  20th Order.  Five months have  lapsed  since  the
entry of the Order and, in spite of Ms. McMahons 3 month illness,
Defendant is represented by local counsel who could have assisted
in  providing  responses  had Defendant made  himself  available.
There  was no suggestion at oral argument that Mr. Lee  had  done
     The States Motion for Order to Show Cause was filed November
1,  2002.  In the Order scheduling oral argument for February 21,
2003,3  I  advised Mr. Lee that he must appear at the  March  12,
2003  hearing  or  I would consider the States request  that  all
facts in the States Complaint be deemed admitted.  The same order
gave  Mr.  Lee permission to appear at the hearing on the  Motion
for  Order to Show Cause telephonically.  Mr. Lee did not  appear
at  the hearing, no explanation was offered for his absence,  and
no  testimony was taken to explain his failure to comply with the
subject Orders.
     After  considering all argument at the Motion for  Order  to
Show Cause, I am convinced by Ms. McMahons unambiguous statements
and  representations that the Defendant remains entrenched in his
view  that  my  original orders are in error and are  not  to  be
     ARCP   37   allows  for  broad  discretion  when  fashioning
sanctions  for  violations  of  discovery  orders.   The   States
requested  sanction would effectively end this litigation.   That
sort  of  sanction  is  to  serve as a  last  resort.   Per  ARCP
37(b)(3), I must consider whether the violation of my Orders  was
willful.  Ms. McMahons argument leaves no doubt that it  was.   I
find  that the violation was a knowing, willful refusal to  abide
by  the  Order.   I  further find that the information  that  the
Defendant  has  failed  to disclose is highly  material  to  this
action.   It consists of the initial discovery requests filed  by
the  State  seeking very basic information concerning  Defendants
business  activities.   Little  progress  can  be  made   without
responses  to  the requests.  Indeed, this case has been  pending
since August of 2001 and almost no substantive progress has  been
made.    The  prejudice  resulting  from  Defendants  delays   is
significant and substantial, since Defendants omissions  put  the
State  in  the  position of either deposing Mr. Lee  without  the
ability  to review the written discovery first, or proceeding  to
trial  without having completed any meaningful discovery in  this
     As  required by the rule, I have considered whether a lesser
sanction would adequately protect the State and whether it  would
deter  other  discovery violations by Defendant.  I do  not  find
that  a  lesser  sanction is likely to protect the  State,  since
without the requested discovery the State will be unfairly placed
in  the  position of proceeding to trial with very little  usable
discovery.  A monetary sanction can compensate the State for  its
attorneys fees, but not for the inability to prepare its case for
trial, and a delay in the trial date to allow another opportunity
to  complete  discovery prejudices the State, not the  Defendant.
As  noted, Ms. McMahons argument on record leaves me to  conclude
that Mr. Lee has no intention of complying with future orders.  I
find  under  the  final  factor in ARCP 37(b)(3)  that  there  is
therefore  little likelihood that other discovery  violations  by
Defendant  will  be  deterred as a result of the  Order  I  enter
     Because  the Alaska Supreme Court has repeatedly ruled  that
litigation-ending sanctions are to be avoided, as a final attempt
to  put the parties in the position where this case can be fairly
     tried on its merits, I order the State to file a Status Report,
directly  in chambers, on March 21, 2003 regarding the status  of
Defendants  discovery  responses.   If  no  responses  have  been
received  in  the States offices by that date, I  will  enter  an
order that all allegations contained in the States Complaint  are
deemed admitted.  I will also consider the States application for
an  award of fees.  The State is ordered to provide a fax  number
to  the  Defendant by the close of business on March 14, 2003  so
that  discovery  responses  may be  served  via  fax.   If  faxed
responses  are received by noon on March 21, 2003, the  originals
may follow by mail.
     The  trial  date currently scheduled for March  1,  2003  is
vacated.   I will consider whether it is necessary to set  a  new
trial  date when I receive the States Status Report on March  21,

DATED     3/14/03                  /s/ Morgan Christen
                                   Superior Court Judge


State of Alaska,                        )
                    Plaintiff,          )
v.                                 )
Dennis Lee d/b/a United Community       )
Services of America,                    )
                    Defendant.          )
                                   )    3AN-01-10170 Civil

      Supplemental Order on Motion for Order to Show Cause

     Per  the  Order  dated March 14, 2003, I have  received  and
considered the correspondence from the Defendant dated March  19,
2003,  the  correspondence from Defendant to the States  attorney
dated  March  18, 2003, the States responsive correspondence  and
the States Status Report dated March 21, 2003.
     For the reasons set forth in the Order dated March 14, 2003,
I  now  grant the States request that the facts set forth in  its
Complaint  be  deemed admitted for purposes of  this  litigation.
Other  sanctions  for the Defendants refusal to comply  with  the
previous orders compelling discovery have been considered.   None
are adequate.  The Defendant did not appear at the hearing on the
Motion  for  Order to Show Cause.  The Defendant has  not  served
even  partial discovery responses in the wake of the most  recent
order  regarding the need to provide discovery responses by March
21,  2003.  The Defendant did not serve objections or attempt  to
identify  the documents being withheld under claim of  privilege.
No  motion has been filed for a protective order.  Merely sending
a letter demanding a protective order affording usual protections
is  insufficient.  Rather than attempting to comply with the most
recent  Order, Defendant has demonstrated its continuing  refusal
to abide by the order of the court.

DATED     3/26/03                  /s/ Morgan Christen
                                   Superior Court Judge
     1    AS 45.50.471 et seq.

     2    The advertisement appearing in the Anchorage Daily News
was  entitled Prepare To Be Shocked By Technology The  Government
And  Big  Business  Do  Not Want You To Know  Exists!   (Emphasis
omitted.)   The  advertisement  stated  that  attendees   at   an
Anchorage  presentation  would  witness  with  [their]  own  eyes
numerous   things   the   experts  say  are   impossible.     The
advertisement included these statements:
          $    We will prove water can flow up hill without using a pump.
               Move a lake to a mountaintop.
$    You can burn pure water to cut through thick steel or even
use it as fuel for an internal combustion engine.
$    You can transmutate the nucleus of an atom to neutralize
radioactive waste.  We will do it for our audience.
$    Use pickle juice, soda pop, water, sugar, crude oil or old
transmission gear oil, gas, soy sauce, even human urine, as fuel
to run an internal combustion engine with no contaminants
released to the environment.
$    Well demonstrate the worlds most efficient electric
generator ever built . . . The Sundance Generator.
$    Car engines can be modified to run on 80% water and 20% gas
right now!  You can sign up to modify your car!
$    Buy a furnace that runs on fumes from your septic tank to
heat and cool your home and make all your hot water.
$    See the Tornado Engine that harnesses the awesome power of a
tornado to provide power for our generator.
The  advertisement also stated that presentation attendees  could
Sign Up To Possibly Get All Your Electricity For The Rest Of Your
Life  Absolutely  Free!  (Emphasis omitted.)  The  internet  page
advertising  the  Alaska  presentation  listed  these  and  other
technologies that would be demonstrated at the presentation.

     3     Lee  was  represented in the superior  court  by  both
corporate and local counsel.

     4     Coulson v. Marsh & McLennan, Inc., 973 P.2d 1142, 1146
(Alaska 1999).

     5     Nelson-Lizardi  v. Lizardi, 49 P.3d 236,  239  (Alaska

     6    Coulson, 973 P.2d at 1146.

     7     DeNardo v. ABC Inc. RVs Motorhomes, 51 P.3d  919,  922
(Alaska 2002).

     8     McGilvary  v.  Hansen, 897 P.2d 605, 606  n.2  (Alaska

     9    Id.

     10    DeNardo, 51 P.3d at 992.

     11      Webb  v.  State,  Dept  of  Revenue,  Child  Support
Enforcement Div. ex rel. Webb, 120 P.3d 197, 198 (Alaska 2005).

     12     Hazen v. Municipality of Anchorage, 718 P.2d 456, 461
(Alaska 1986); see also Carstens v. Carstens, 867 P.2d 805,  808-
09 (Alaska 1994) (holding that mental health and joint counseling
records  of  divorcing  parties are relevant  in  divorce  action
because they presumably contain information about parties conduct
toward each other).

     13     See  Alaska  R. Civ. P. 33(b)(1) (Each  interrogatory
shall  be  answered separately and fully in writing  under  oath,
unless  it  is  objected to, in which event the  objecting  party
shall  state  the reasons for objection and shall answer  to  the
extent  the interrogatory is not objectionable.); Alaska R.  Civ.
P. 34(b) (The party upon whom the request is served shall serve a
written response within 30 days.).

     14    See Alaska R. Civ. P. 26(a)(1).

     15    See Alaska R. Civ. P. 77(k) (motion to reconsider used
to  ask  court  to  reconsider its previous decision  when  court
misapplied  or  failed  to  consider  directly  controlling  law,
overlooked  or misconceived material fact or issue, or  when  law
applied in ruling has since changed).

     16     Stadnicky v. Southpark Terrace Homeowners  Assn,  939
P.2d 403, 405 (Alaska 1997).

     17     Alaska  Rule of Civil Procedure 26(c) provides:  Upon
motion by a party . . . the court . . . may make any order  which
justice  requires  to  protect a party  .  .  .  from  annoyance,
embarrassment, oppression, or undue burden or expense.

     18    Alaska R. Civ. P. 52(a) (emphasis added).

     19     See Coulson v. Marsh & McLennan, Inc., 973 P.2d 1142,
1146 (Alaska 1999).

     20      The  states  motion  relied  on  Alaska  Civil  Rule
37(b)(2)(A) and (D).  Civil Rule 37(b)(2) provides in part:
          If  a  party . . . fails to obey an order  to
          provide or permit discovery . . . , the court
          in  which the action is pending may make such
          orders in regard to the failure as are  just,
          and among others the following:
               (A)  An order that the matters regarding
          which   the  order  was  made  or  any  other
          designated  facts  shall  be  taken   to   be
          established for the purposes of the action in
          accordance  with  the  claim  of  the   party
          obtaining the order;
               . . .
               (D)   In  lieu  of any of the  foregoing
          orders  or  in  addition  thereto,  an  order
          treating  as a contempt of court the  failure
          to  obey any orders except an order to submit
          to physical or mental examination . . . .
     21     DeNardo v. ABC Inc. RVs Motorhomes, 51 P.3d 919,  922
(Alaska  2002); see also Alaska R. Civ. P. 37(b); Hawes  Firearms
Co. v. Edwards, 634 P.2d 377, 378 (Alaska 1981) (quoting Oaks  v.
Rojcewicz, 409 P.2d 839, 844 (Alaska 1966)).

     22    Alaska R. Civ. P. 37(b)(3).

     23    Alaska R. Civ. P. 37(b)(3); see DeNardo, 51 P.3d at 922-
23  (paraphrasing standard for imposing sanctions under Alaska R.
Civ. P. 37(b)(3)).

     24     DeNardo, 51 P.3d at 923 (quoting Hawes Firearms,  634
P.2d  at  378).  The noncomplying party has the burden of proving
that his failure to comply was not willful.  Id.

     25    See Alaska R. App. P. 402.

     26    See id.

     27      See  DeNardo,  51  P.3d  at  923  (finding  DeNardos
noncompliance  willful, in part, because  [r]ather  than  showing
that  his  failure  to  comply was not  willful  .  .  .  DeNardo
repeatedly  claimed  that [the appellee]  had  no  right  to  the
answers or documents).

     28     See  id. at 925 (noting that parties are entitled  to
discovery of information relevant to their claims or defenses  so
they can prepare for litigation).

     29     McGilvary v. Hansen, 897 P.2d 605, 607 (Alaska 1995);
Underwriters at Lloyds London v. The Narrows, 846 P.2d 118,  119-
20  (Alaska 1993); Honda Motor Co. v. Salzman, 751 P.2d 489,  493
(Alaska 1988).

     30    DeNardo, 51 P.3d at 926 (quoting Hazen v. Municipality
of   Anchorage,  718  P.2d  456,  460  (Alaska  1986))  (internal
quotation marks omitted).

     31     Honda  Motor Co., 751 P.2d at 493 (internal quotation
marks omitted); see also DeNardo, 51 P.3d at 926.

     32    For example, it is likely the state would have suffered
prejudicial surprise if, absent pretrial disclosure, Lee at trial
had  demonstrated working examples of the Sundance Generator  and
Tornado Engine that performed as advertised, or demonstrated  the
use of water as fuel for an internal combustion engine.

     33      Alaska R. Civ. P. 37(b)(3)(D); DeNardo, 51  P.3d  at

     34    We attach the superior courts decision and supplemental
order as an appendix.

     35      The  superior  court  imposed  penalties  under   AS
45.50.551(a) and (b).

     36    Blacks Law Dictionary defines solicitation as (1) [t]he
act  or an instance of requesting or seeking to obtain something;
(2)  [a]n  attempt to gain business.  Blacks Law Dictionary  1427
(8th ed. 2004).  Websters Dictionary defines solicit as [t]o  try
to   obtain  by  entreaty,  persuasion,  or  formal  application.
Websters II New Riverside University Dictionary 1106 (1994).

     37     Whether the pamphlets are solicitations is a question
that  was  appropriately  decided by the  superior  court  judge.
Although Lee argues that a jury should have decided the question,
Lee  requested an oral hearing, not a jury trial.   He  therefore
waived his right to a jury trial on the issue, see Alaska R. Civ.
P.  38(b)-(d),  and the superior court did not make  any  obvious
mistake  warranting a holding that it plainly erred.  See  Miller
v. Sears, 636 P.2d 1183, 1189 (Alaska 1981) (We decline to review
claims  not  raised  below except to the  extent  that  they  may
constitute  plain  error.  Plain error exists  where  an  obvious
mistake  has  been  made  which creates a  high  likelihood  that
injustice has resulted.).

     38    See Alaska R. Evid. 103(a) (requiring timely objection
or  motion  to strike to preserve issue of erroneous  evidentiary
ruling);  Bird v. Starkey, 914 P.2d 1246, 1248 n.1 (Alaska  1996)
(holding hearsay objection waived when not raised before superior
court);  see  also Peterson v. Ek, 93 P.3d 458, 464  n.9  (noting
issues  raised  by  pro se litigant in cursory  fashion,  without
citing any legal authority, are considered waived); Zok v. State,
903  P.2d  574,  576 n.2 (Alaska 1995) (holding pro  se  litigant
waived  issue on appeal even though he developed issue  in  reply
brief); Miller, 636 P.2d at 1189 (deciding that issues not raised
below  would  not be considered on appeal unless they  constitute
plain error).

1      On   October   4,  2001,  Defendant  first  requested   an
extension of time to file an Answer because he was on a  national
tour.   Judge  Joannides granted an extension until  February  8,
2002.   On  February 11, 2002, the Court provided Defendants  in-
house  counsel with a copy of ARCP 81 regarding the admission  of
counsel pro hac vice.  Mr. Lee nevertheless filed Answers that he
signed  himself, purporting to answer on behalf  of  a  corporate
entity.   Meanwhile,  a  Pretrial Scheduling  Order  was  entered
requiring  Initial Disclosures to be exchanged by May  14,  2002.
Defendant  did  not  produce these, nor were the  States  initial
discovery  requests answered.  The State moved for the  extension
of  pretrial deadlines and filed its Motion to Compel on July 24,
2002.   Defendants Opposition was late and offered no explanation
for  the  failure  to provide Initial Disclosures,  responses  to
requests  for  admission or more than cursory  responses  to  the
remaining discovery requests.  The Motion to Compel was  granted,
including  the requirement that for withheld documents sufficient
information  had  to  be  provided in  order  for  the  State  to
challenge  any claims of privilege.  A Motion for Reconsideration
was  filed  by Defendant, not signed by local counsel or  counsel
for  the  Defendant,  though this defect was  later  cured.   The
Motion  for  Reconsideration argued the merits of the  Motion  to
Compel  for the first time, but failed to specifically state  the
grounds  for reconsideration specified in ARCP 77(I).  As  noted,
the   Motion  for  Reconsideration  was  denied  by  Order  dated
September 20, 2002.

     2     Within  a  few  minutes after the  hearing,  my  clerk
received  a  telephone call from Ms. Drinkwater and Ms.  McMahon.
Both counsel asked to speak with me.  It is not unusual for me to
discuss  scheduling  logistics with  all  counsel  of  record  in
telephone  calls,  but I do not take up substantive  matters  off
record.  I joined the call by asking who was on the line.  I  was
informed that Ms. Sullivan was not.  I advised that she needed to
be  involved.  Ms. McMahon stated that she wanted me to know that
she  had raised the issue of a protective order in the Motion for
Reconsideration filed in September.  I advised  that  I  was  not
willing to have the call without Ms. Sullivan, as Ms. McMahon  is
not  local counsel and her statements at the earlier hearing  had
caused  me concern that she is not familiar with local rules.   I
then terminated the call.

3    The hearing had to be rescheduled to March 12, 2003.

     4    This case is set for trial the week of March 17, 2003.

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