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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Petitioners for the Dissolution of the City of Skagway and Incorporation of a Skagway Borough v. Local Boundary Commission (07/03/2008) sp-6281

Petitioners for the Dissolution of the City of Skagway and Incorporation of a Skagway Borough v. Local Boundary Commission (07/03/2008) sp-6281, 186 P3d 571

     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,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

PETITIONERS FOR THE )
DISSOLUTION OF THE CITY OF ) Supreme Court No. S- 12376
SKAGWAY AND INCORPORATION)
OF A SKAGWAY BOROUGH, ) Superior Court No. 1JU-02- 1024 CI
)
Appellant, ) O P I N I O N
)
v. ) No. 6281 July 3, 2008
)
LOCAL BOUNDARY COMMISSION,)
)
Appellee.)
)
Appeal    from     the
          Superior Court of the State of Alaska,  First
          Judicial   District,  Juneau,   Patricia   A.
          Collins, Judge.

          Appearances:   Robert P.  Blasco,  Robertson,
          Monagle  &  Eastaugh, Juneau, for  Appellant.
          Michael   G.  Mitchell,  Assistant   Attorney
          General,   Anchorage,   Talis   J.   Colberg,
          Attorney General, Juneau, for Appellee.

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

          MATTHEWS, Justice.


I.   INTRODUCTION
          Petitioners appeal the superior courts ruling that they
do  not  qualify  as  public interest litigants and  thus  cannot
invoke  an exception to the attorneys fee schedule set  forth  in
Alaska  Civil Rule 82.  The exception does not apply if the  suit
was  or  could have been brought by a public entity.   Here,  the
City  of  Skagway  could have brought  and, through  Petitioners,
evidently did bring  the suit at issue.  We thus affirm that  the
public   interest   litigant  exception  is  not   available   to
Petitioners, and Rule 82 applies.
II.  FACTS AND PROCEEDINGS
          In  2001 Petitioners for the Dissolution of the City of
Skagway  and the Incorporation of a Skagway Borough (Petitioners)
filed  a  petition with the Local Boundary Commission to dissolve
the  City  of  Skagway  and  form the Borough  of  Skagway.   The
Commission   denied  the  petition.   Petitioners  appealed   the
Commissions  decision  in the superior court  alleging  that  the
Commission  had  improperly  adopted  and  imposed  a  new  legal
requirement  in  violation of due process and the  Administrative
Procedure Act (APA).  The court ruled in favor of Petitioners and
remanded the matter to the Commission.1
          In  September  2005  Petitioners  filed  a  motion  for
attorneys  fees in which they made a prevailing party  claim  for
all  fees  incurred  in the appeal.  The Commission  opposed  the
motion;  it  conceded that Petitioners were the prevailing  party
but  argued  that they were entitled only to an award of  partial
attorneys  fees  under  Civil Rule 82.  (Emphasis  in  original.)
Petitioners   replied,  asserting  that,   as   public   interest
litigants,  they  were entitled to an award  of  full  reasonable
attorneys  fees.  The Commission moved for and was granted  leave
to  submit additional briefing on the issue of Petitioners status
as  public  interest litigants.  In its supplemental  brief,  the
Commission   disputed  that  Petitioners  were  public   interest
litigants,  because,  it asserted, it was  the  City  of  Skagway
[that]  bankrolled  the action, directed  it,  and  is  the  real
litigant here.
          The  superior  court held oral argument  and  issued  a
written decision on January 11, 2006, in which it applied a well-
established  test  to  determine  whether  the  public   interest
litigant exception applies.2  The test requires that (1) the case
be  designed  to  effectuate strong public policy;  (2)  numerous
people  would  benefit from the suit if successful;  (3)  only  a
private party could have been expected to bring the suit; and (4)
the  litigant lacked sufficient economic incentive to  bring  the
suit.3   The  court found that Petitioners met  the  first  three
criteria.   As to the fourth criterion, the court concluded  that
it  lack[ed]  sufficient detailed information of the  petitioners
identities and economic interests (or lack thereof) to  determine
whether  Petitioners sufficiently lacked financial  incentive  to
bring  the  suit.   The court gave the parties  fifteen  days  to
submit  evidence of the make-up of the Skagway petitioners  group
and their economic interest, if any.
          The  Commission moved for reconsideration of the order.
It disputed the courts finding that Petitioners had met the third
part  of the test requiring that only a private party could  have
brought  the  suit.4  The Commission took issue with  the  courts
determination that [t]he City of Skagway could not  have  brought
this  suit  against the Commission because it is prohibited  from
bringing  due  process and equal protection  claims  against  the
state.  On the contrary, the Commission asserted, the City  could
have  brought the same suit under the APA and, for all  practical
purposes did[] bring it.  The Commission requested that,  in  the
          event that its motion was denied (which it was), the court
evaluate  the evidence that [would] be submitted in  response  to
its  Order to determine whether it shows that the Petitioners for
the  Dissolution  of the City of Skagway . . . is  a  group  that
actually  exists and functions separately from and  independently
of the City.
          In  response  to  the courts request  for  supplemental
evidence,  Petitioners  submitted  thirty-three  affidavits  from
various  members  of  the group, each of which  stated  that  the
individual  affiant  had  nothing to gain  financially  from  the
appeal.  The court noted that Petitioners affidavits amounted  to
satisfactory  evidence illustrating that, individually,  most  of
the  members assert that they lack sufficient economic  incentive
to  bring  suit.   For  its  part, the  Commission  submitted  an
affidavit  from  a  local  government  specialist  and   numerous
additional documents, which, it claimed, showed
          (1)  that  economic incentives did drive  the
          petition  and the appeal; (2) that the  City,
          as  well as the individuals collectively, had
          economic  interests  in suing  in  their  own
          right;  and  (3)  that  they  petitioned  and
          appealed in order to protect their own  local
          economic interests, and not to effectuate any
          strong   public  policies  beyond  protecting
          their own interests.
          
          Based on the evidence submitted by the Commission,  the
court  found that Petitioners were controlled and acting  at  the
behest   of  Skagway.   Based  on  that  finding  it  held   that
Petitioners  [were]  therefore not entitled  to  public  interest
litigant status.
          Petitioners  appeal  the superior courts  determination
that  they  are not public interest litigants.  They assert  that
the  court  misapplied  the four-part test and  erroneously  gave
undue  weight to the role of the City of Skagway, a non-party  to
the  litigation  whose  interests,  Petitioners  argue,  are  not
germane to the appeal.

III. DISCUSSION
     A.   Standard of Review
          The  applicable standard of review of a superior courts
determination of a partys status as public interest litigants  is
abuse  of  discretion.5  Under this standard,  the  lower  courts
decision  should  be  reversed  only  where  it  appears  to   be
manifestly unreasonable or motivated by an inappropriate purpose.6
Where  the decision depends on findings of fact made by the trial
court,  such  findings  must be upheld unless  they  are  clearly
erroneous.7
     B.   The  Public Interest Litigant Exception to Rule 82 Does
          Not Apply to Government-Initiated Litigation.
          
          Alaska  Rule  of  Civil Procedure  82(a)  provides  for
partial recovery of attorneys fees for the prevailing party in  a
civil suit.8  This court has developed an exception to this  rule
          in cases involving issues of genuine public interest to prevent
the  rule from deter[ring] citizens from litigating questions  of
general public concern for fear of incurring the expense  of  the
other  partys attorneys fees.9  The offensive corollary  to  this
protective  exception  is that where a public  interest  litigant
prevails,  the  litigant is not limited to the  partial  recovery
scheme  set forth in Rule 82 but can, rather, recover up  to  one
hundred percent of its attorneys fees.10
          This  policy-driven exception does not apply where,  as
here,  the  litigation was, or could have been,  initiated  by  a
public  entity such as a local government.  As noted  above,  the
third  part of the test requires that only a private party  could
be  expected to bring the suit.11  The superior court found  that
the City of Skagway  a public entity  controlled the petition and
ensuing  appeal.  Given the evidence submitted by the Commission,
this finding is not clearly erroneous12 and we may not disturb it.
Petitioners  are essentially acting as private attorneys  general
on  behalf of the Citys interests and the broader public interest
that  is consistent with the Citys interests.  The City would  be
precluded from claiming public interest litigant status here, and
it  follows  that this bar should apply to parties litigating  in
its stead.13
            Petitioners argue that the City of Skagway could  not
have instituted the appeal, because, as the superior court noted,
the  City  was  prohibited from bringing due  process  and  equal
protection claims against the state.  This argument lacks  merit.
Petitioners ultimately prevailed on statutory, not constitutional
grounds.  The City could have raised this argument with the  same
result.   Even assuming that Petitioners victory could only  have
been  secured by raising the constitutional due process  argument
and  that  the  City  would have been barred  from  raising  this
argument,  this  would not be a sufficient reason  to  permit  an
agent   of   the  City  (here,  Petitioners)  to  be   considered
independent of the City for purposes of circumventing  the  third
part  of the public interest litigant test.  The litigation still
would be brought at the behest of the City.
          Last,  asserting  that the court erred  in  considering
supplemental briefing and a supplemental affidavit from the Local
Boundary   Commission  without  allowing  the   Petitioners   any
opportunity to respond,   Petitioners have requested that, in the
event  that  we affirm the superior courts ruling, we  remand  to
allow  them further briefing on the issue.  We decline to do  so.
Petitioners  were  put  on notice by the Commissions  motion  for
reconsideration of January 24, 2006, that the Commission  claimed
that  the  City  controlled  the litigation.   Petitioners  filed
affidavits  subsequent to this motion but chose not to  focus  on
the  issue of City control.  Further, they do not claim that  the
courts conclusion regarding City control is factually as distinct
from  legally wrong.  As to the latter point they have had a full
opportunity for briefing in this court.
IV.  CONCLUSION
          The decision of the superior court is AFFIRMED.
_______________________________
     1    The petition was eventually approved in 2007.

     2     It should be noted that in 2003 the Alaska Legislature
modified  and redirected the public interest litigant  exception.
See  AS 09.60.010(b); ch. 86,  2, SLA 2003.  The case at hand was
filed prior to September 11, 2003  the effective date of the act.

     3     See, e.g., Matanuska Elec. Assn v. Rewire the Bd.,  36
P.3d 685, 696 (Alaska 2001) (citing Kenai Lumber Co. v. LeResche,
646 P.2d 215, 222-23 (Alaska 1982)).

     4     Rewire the Bd., 36 P.3d at 696.

     5     See  Fairbanks  N. Star Borough v.  Interior  Cabaret,
Hotel, Rest. & Retailers Assn, 137 P.3d 289, 291 (Alaska 2006).

     6    Kenai Lumber Co. v. LeResche, 646 P.2d 215, 222 (Alaska
1982) (citation omitted).

     7     Alaska R. Civ. P. 52(a); see also Alaska N. Dev., Inc.
v. Alyeska Pipeline Serv. Co., 666 P.2d 33, 39 (Alaska 1983).

     8     Where,  as  here, a case goes to trial  but  no  money
judgment  is  awarded, the prevailing party  can  recover  thirty
percent  of  its fees, although the court has broad  latitude  to
vary  the  award at its discretion.  Alaska R. Civ. P.  82(b)(2)-
(3).

     9     Kenai  Lumber  Co.,  646 P.2d at 222  (quotations  and
citation omitted); see also Gilbert v. State, 526 P.2d 1131, 1136
(Alaska  1974)  (holding that [i]t is an abuse of  discretion  to
award attorneys fees against a losing party who has in good faith
raised an issue of genuine public interest before the courts).

     10    See State v. Native Vill. of Nunapitchuk, 156 P.3d 389,
392  n.2 (Alaska 2007) (citing Anchorage v. McCabe, 568 P.2d 986,
989-91 (Alaska 1977) and Gilbert, 526 P.2d at 1136).

     11     E.g.,  Rewire the Bd., 36 P.3d at 696  (citing  Kenai
Lumber Co., 646 P.2d at 222-23).

     12    See Alaska N. Dev., 666 P.2d at 39.

     13     Petitioners  argue  that our decision  in  Hickel  v.
Southeast  Conference,  868 P.2d 919  (Alaska  1994),  compels  a
contrary result.  In Hickel, we upheld an award of attorneys fees
and  costs to the Mat-Su Borough and other litigants, all of whom
claimed  public interest litigant status.  Id. at 922.   In  that
case,  however,  the state did not contest the  litigants  public
interest  status,  id., so the issue of whether  the  borough,  a
public  entity, qualified as a public interest litigant  was  not
properly before us; we did not purport to pass on it.

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