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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaska Conservation Foundation v. Pebble Limited Partnership (5/29/2015) sp-7012

Alaska Conservation Foundation v. Pebble Limited Partnership (5/29/2015) sp-7012

         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, email  

                                                                                 

         corrections@akcourts.us.  



                  THE SUPREME COURT OF THE STATE OF ALASKA  



ALASKA CONSERVATION                                    )  

FOUNDATION,                                            )    Supreme Court Nos. S-15059/15060/  

                                                       )     15089 (Consolidated)  

                          Petitioner,                  )  

                                                       )    Superior Court No. 3AN-09-09173 CI  

         v.                                            )  

                                                       )    O P I N I O N  

PEBBLE LIMITED PARTNERSHIP,                            )  

                                                       )    No. 7012 - May 29, 2015  

                          Respondent.                  )  

NUNAMTA AULUKESTAI, RICKY                              )  

DELKITTIE, SR., VIOLET WILLSON ,                       )  

BELLA HAMMOND, and VICTOR                              )  

FISCHER,                                               )  

                                                       )  

                          Petitioners,                 )  

                                                       )  

         v.                                            )  

                                                       )  

STATE OF ALASKA, DEPARTMENT   )  

                                                        

OF NATURAL RESOURCES, and           )  

PEBBLE LIMITED PARTNERSHIP,                            )  

                                                       )  

                          Respondents.                 )  

TRUSTEES FOR ALASKA,                                   )  

                                                       )  

                          Petitioner,                  )  

                                                       )  

         v.                                            )  

                                                       )  

PEBBLE LIMITED PARTNERSHIP,                            )  

                                                       )  

                          Respondent.                  )  


----------------------- Page 2-----------------------

                   Appeal from the Superior Court of the State of Alaska, Third  

                                                                      

                   Judicial District, Anchorage, Eric A. Aarseth, Judge.  



                   Appearances:           Susan  Orlansky  and  William  J.  Wailand,  

                                           

                   Feldman  Orlansky  &  Sanders,  Anchorage,  for  Petitioner  

                   Alaska  Conservation  Foundation.    Nancy  S.  Wainwright,  

                                                                       

                   Victoria Clark, and Stephen E. Cotton, Trustees for Alaska,  

                   Anchorage,   for   Petitioners   Nunamta   Aulukestai,   et   al.  

                   William        S.    Cummings,           Friedman         Rubin,      Bremerton,  

                                       

                   Washington,  for  Petitioner  Trustees  for  Alaska.    Matthew  

                   Singer, Howard S. Trickey, and Robert J. Misulich, Jermain  

                   Dunnagan  &  Owens,  P.C.,  Anchorage,  for  Respondent  

                                                                                  

                   Pebble  Limited  Partnership.    John  A.  Treptow,  Senior  

                   Assistant  Attorney  General,  Anchorage,  and  Michael  C.  

                   Geraghty, Attorney General, Juneau, for Respondent State of  

                                                              

                   Alaska.    Brettny  Hardy,  Thomas  S.  Waldo,  and  Shawn  

                   Eisele,  Earthjustice,  Juneau,  for  Amici  Curiae  Council  on  

                   Foundations, Sierra Club, Northern Alaska Environmental  

                   Center, and Alaska Community Action on Toxics.  Joshua A.  

                                                                                            

                   Decker  and  David  C.  Embree,  American  Civil  Liberties  

                   Union of Alaska Foundation, Anchorage, for Amici Curiae  

                              

                   Alaska Legal Services Corporation, American Civil Liberties  

                                                                        

                   Union of Alaska Foundation, Native American Rights Fund,  

                                             

                   Northern Justice Project, LLC, and Planned Parenthood of  

                   the Great Northwest.  



                   Before:      Winfree,   Maassen,   and   Bolger,   Justices,   and  

                   Matthews  and  Eastaugh,  Senior  Justices.*  

                                                                                       [Fabe,  Chief  

                   Justice, and Stowers, Justice, not participating.]  



                   WINFREE, Justice.  



          *        Sitting by assignment made pursuant to article IV, section 11 of the Alaska           



Constitution and Alaska Administrative Rule 23(a).  



                                                            -2-                                                       7012  


----------------------- Page 3-----------------------

I.        INTRODUCTION  



                    Alaska Statute 09.60.010 was enacted to abrogate our previous common  



law public interest litigation attorney's fees framework and replace it with a narrower  



constitutional  litigation  framework.    The  statute  both  encourages  and  protects  those  



challenging governmental action as a violation of federal or state constitutional rights.  



                                                                                                 

First, the statute provides that a successful claimant generally is entitled to an award of  



full reasonable attorney's fees and costs incurred in connection with a constitutional  



                                                  

claim,  unless  the  claimant  had  "sufficient  economic  incentive"  to  bring  the  claim  



regardless  of  its  constitutional  nature.    Second,  the  statute  protects  an  unsuccessful  



                                                                                                                     

claimant  from  an  adverse  attorney's  fees  award  if  the  constitutional  claim  was  not  



                                                

frivolous and the claimant did not have "sufficient economic incentive" to bring the  



                                                                                                                       

claim regardless of its constitutional nature.  The primary question raised in this case by  



                                                                                       

the original applications for relief and petition for review, which seek to quash an order  



                                                     

for wide-ranging discovery about the petitioners' financial information and the third- 



party funding of this litigation, is what "sufficient economic incentive" means in this  



context.  



                    As presented to us here, the question arose from unsuccessful constitutional  



claimants' invocation of the statutory protection against adverse awards of attorney's  



fees and the responsive assertion that they had sufficient economic incentive to bring  



                                                                                                                                1  

                                                                                      

their claim regardless of its constitutional nature. But in a related decision issued today, 



we reversed the superior court's decision on the merits of the constitutional claim and  

                                                                                              



remanded for entry of declaratory judgment in the claimants' favor.  The constitutional  

                                                                                                      



claimants have therefore become the prevailing parties, and we assume that on remand  

                                                                                                



          1  

                                    

                    Nunamta Aulukestai, et al. v. State, Dep't of Natural Res. , ___ P.3d ___,  

Op. No. 7011, 2015 WL ______, (Alaska May 29, 2015).  



                                                              -3-                                                            7012  


----------------------- Page 4-----------------------

they will seek an award of attorney's fees and costs under AS 09.60.010.  Because such   



an award is conditioned on the absence of sufficient economic incentive to bring the  



                              

claim regardless of its constitutional nature, we also assume that on remand the superior  



court  would  enter  the  same  discovery  orders  regarding  the  petitioners'  financial  



information and third-party funding of the litigation.  We see no purpose in dismissing  



                                                                                                                  

the original applications for relief and petition for review as moot in light of the change  



                                                                                                                

in prevailing party status, only to have them re-filed as a result of further attorney's fees  



proceedings  in  the  superior  court;  we  therefore  address  the  meaning  of  "sufficient  



economic incentive."  



                       We first conclude that our earlier public interest litigation case law, outlined  



                                                     

below,  provides  the  guiding  parameters  for  the  meaning  of  "sufficient  economic  



                                                                                                                   

incentive."  We also conclude that in this case the claimants did not have "sufficient  



economic  incentive"  to  bring  the  claim  regardless  of  its  constitutional  nature.    We  



                                                                                          

therefore vacate the superior court's discovery order and remand for further proceedings  



consistent with today's decisions.  



II.         FACTS AND PROCEEDINGS  



           A.          Underlying Litigation  



                       Four       individual           Alaskans           and       Nunamta            Aulukestai,            a    non-profit  



organization whose members are village corporations in the Bristol Bay region, sued the  



                             

State of Alaska, Department of Natural Resources, for alleged constitutional violations  



related to land and water use permits issued to Pebble Limited Partnership (Pebble) for  



                                                                            2  

                                                                                                                            

what we will refer to as the Pebble Project.                                    They sought declaratory and injunctive  



                                  

relief - primarily a court order requiring the State to provide public notice and make  



best-interest  findings  before  authorizing  land  and  water  use  permits  for  the  Pebble  



            2          See generally id. at 3-10.  



                                                                        -4-                                                                      7012  


----------------------- Page 5-----------------------

           3  

Project.    Pebble intervened to defend its existing permits and the State's permitting  

            4  After a non-jury trial the superior court issued findings of fact and conclusions  

process.                                                      

of law resolving the case in favor of the State and Pebble.5  



         B.        Motions For Attorney's Fees And Related Discovery  



                   The State sought awards of costs and attorney's fees under Alaska Civil  

                                                                                         



Rules 79 and 82, requesting about $82,000 in costs and 30% of its attorney's fees, about  



                            

$484,000.  Pebble requested about $105,000 in costs and 30% of its attorney's fees,  



                                                                                       

about $284,000.  Altogether the State and Pebble sought costs and attorney's fees awards  



in excess of $950,000 against Nunamta Aulukestai and the individuals.  



                   Nunamta        Aulukestai        and     the    individuals        responded        by    invoking  



AS 09.60.010(c)(2)'s constitutional claimant protection, which provides:  



                                                                     

                   [A court] may not order a claimant to pay the attorney fees of  

                   the     opposing        party      devoted        to    claims       concerning  

                                                           

                   constitutional  rights  if  the  claimant  .  .  .  did  not  prevail  in  

                   asserting the right, the action . . . was not frivolous, and the  

                   claimant did not have sufficient economic incentive to bring  

                                                                                             

                   the action . . . regardless of the constitutional claims involved.  

                                                      



Nunamta Aulukestai and the individuals argued that the court could not award attorney's  



fees  against  them  because  the  case  concerned  a  non-frivolous  constitutional  claim.  



                                  

Nunamta Aulukestai's executive director and the individuals disclaimed any economic  

interest in the litigation's outcome.6  



         3         Id. at 7-10.  



         4         Id. at 10.  



         5         Id. at 15-17.  



          6        Nunamta Aulukestai and the individuals also invoked AS 09.60.010(e)'s  



"substantial  and  undue  hardship"  protection,  which  provides:    "The  court,  in  its  

                                                                                                       (continued...)  



                                                           -5-                                                     7012
  


----------------------- Page 6-----------------------

                    The      State      and     Pebble        disputed        Nunamta         Aulukestai's           protected  



                                                                                                       

constitutional claimant status, arguing that Nunamta Aulukestai had sufficient economic  



                

incentive to bring the claim.  According to Pebble, Nunamta Aulukestai made economic  



                                                                                                         

arguments  throughout  the  litigation,  particularly  during  closing  statements  when  



Nunamta  Aulukestai's  attorney  described  people  who  "have  lost  their  livelihoods"  



                                                                 

because of Pebble's mineral exploration.  Pebble also alleged that Nunamta Aulukestai  



acted as a "mere stalking horse," bringing the litigation on behalf of the commercial  



                                

fishing industry and other entities with economic interests in stopping the Pebble Project.  



                                                                     

The State conceded that it did not know who funded the litigation, but echoed Pebble's  



                                                                                                                         

accusation that third parties with economic incentives used Nunamta Aulukestai and the  



individuals as alter egos to bring the litigation.  



                    The superior court issued a preliminary order regarding the requests for  



                                 

costs  and  attorney's  fees.    The  court  determined  that  Nunamta  Aulukestai  and  the  



individuals brought a non-frivolous constitutional claim that "trigger[ed] the possible  



                                                                                  

protection within AS 09.06.010(c)(2)."  But the court also determined that the State and  



                                                                         

Pebble "made a prima facie showing that some plaintiffs had an economic incentive to  



                                                                                                

make the claims litigated at trial."  Because the court believed that "some source" had  



                                                      

funded the litigation, it concluded that the State and Pebble were entitled to discovery  



and an evidentiary hearing on the economic incentive issue.  



          6         (...continued)  



discretion, may abate, in full or in part, an award of attorney fees and costs . . . if the  

                          

court finds . . . that the full imposition of the award would inflict a substantial and undue  

                       

hardship upon the party . . . ."  According to Nunamta Aulukestai's executive director  

                                                                                    

and each of the individuals, paying attorney's fees or costs would impose an intolerable  

                                                                             

financial burden, resulting in the loss of all assets or bankruptcy.  Because Nunamta  

Aulukestai and the individuals no longer need protection under AS 09.60.010(e), we do  

                                                                                                                           

not consider any aspect of this issue.  



                                                               -6-                                                         7012
  


----------------------- Page 7-----------------------

                   The State and Pebble made discovery requests seeking an array of financial  



information from Nunamta Aulukestai and the individuals.  The State requested that  



                                                                                   

Nunamta Aulukestai disclose its members, contributors, and financial information and  



identify shareholders of member village corporations who were commercial fishers,  



                                             

sports fishing guides, tourism promoters, or otherwise worked in the fishing or tourism  



industries.  Pebble requested that Nunamta Aulukestai provide financial information,  



                

including federal tax filings and identities of all members, and disclose its members'  



                          

funding sources.  Pebble also requested that the individuals disclose their property and  



                                                                                                   

assets, individual financial information, and details of any promises or assurances from  



third parties about paying litigation expenses.  



                   Nunamta Aulukestai and the individuals objected to the discovery requests,  



                              

asserting they were overly broad, unduly burdensome, and not reasonably calculated to  



lead to admissible evidence.  Nunamta Aulukestai also asserted that some requested  



information was protected by attorney-client privilege, work product immunity, and  



                                   

constitutional rights to free speech and association.  The individuals disclosed some  



                                                                            

financial information, such as annual income, and  declared that their attorney-client  



                                                                                            

agreement made them personally responsible for any litigation fees or costs owed to an  



opposing party.  



                   The State and Pebble filed motions to compel discovery of the information  



                                                                                      

withheld under objection.  The State argued that members of the villages connected to  



               

Nunamta Aulukestai included commercial fishers, guides, and tourism promoters -  



giving Nunamta Aulukestai an economic incentive to bring litigation that would stop  



                                                                                                       

mineral exploration near Bristol Bay.  Pebble claimed its production requests sought  



information directly relevant to discovering information about Nunamta Aulukestai's and  



the individuals' economic incentives and abilities to pay attorney's fees and costs.  



                                                             -7-                                                      7012
  


----------------------- Page 8-----------------------

          C.       Third-Party Discovery Requests  



                   In  addition  to  seeking  discovery  from  Nunamta  Aulukestai  and  the  



individuals, Pebble also subpoenaed information from two third parties, Trustees for  

                                     



Alaska and Alaska Conservation Foundation.  



                   Trustees for Alaska is a non-profit organization that represents Nunamta  

                                                  



Aulukestai and the individuals in this litigation.  Pebble's subpoena for Trustees for  



Alaska  requested  a  representative's  deposition  regarding  funding  sources  for  the  



litigation, the terms of any grants or other arrangements used for litigation funding, and  



                                                                                          

the amount actually spent on the litigation.  Pebble's subpoena also requested production  



                                                            

of documents related to funding sources, litigation costs paid to third parties, grants and  



                                                                                    

related correspondence, fundraising appeals and requests, and communications between  



Trustees for Alaska and other organizations.  



                   Alaska Conservation Foundation is a non-profit organization established  



                                         

to promote natural resource conservation in Alaska, including preservation of the Bristol  



Bay watershed.  Pebble's subpoena requested a representative's deposition regarding  



                                                                                                    

grants  or  funding  arrangements  for  the  litigation,  the  identity  of  donors  providing  



funding  through  Alaska  Conservation  Foundation  to  Trustees  for  Alaska,  and  the  



                            

identities  of  any  commercial  or  sport  fishers  or  businesses  involved  in  Alaska  



                                                                        

Conservation Foundation's Bristol Bay Fisheries and Watershed Protection Campaign,  



a "coalition of commercial and sport [fishers], Alaska Native groups, local businesses,  



                             

and environmental groups" opposed to the Pebble Project.  The subpoena also requested  



                                                                         

documents relating to money given to Trustees for Alaska for the litigation, all litigation- 



related  communications  between  Alaska  Conservation  Foundation  and  Trustees  for  



                                                                            

Alaska, federal tax filings, and documents relating to fundraising for the Bristol Bay  



Fisheries and Watershed Protection Campaign.  



                                                             -8-                                                      7012
  


----------------------- Page 9-----------------------

                    Trustees for Alaska and Alaska Conservation Foundation sought protective  



                                                                                                     

orders from the superior court.  Trustees for Alaska asserted that the constitutional right  



                                                                        

to  free  association  justified  keeping  financial  and  donor  information  confidential:  



"Disclosure of the information identified in the deposition notice will infringe on the  



                                                                                                             

associational activities of Trustees [for Alaska] and those who fund  or  contribute to  



                                                                              

Trustees [for Alaska]."  Trustees for Alaska argued that Pebble was not entitled to the  



                                                                                                                        

disclosures because no showing had been made that the information was crucial to the  



                                                                                                                    

issue  of  Nunamta  Aulukestai's  or  the  individuals'  economic  incentives,  or  that  the  



requested information would lead to relevant admissible evidence.  Alaska Conservation  



                                                   

Foundation similarly argued that Pebble's discovery requests implicated information  



                                              

protected by the constitutional guarantee of freedom of association, and that Pebble had  



not shown a compelling need for the information.  Alaska Conservation Foundation's  



                                                                                                  

executive director submitted an affidavit stating that disclosure of Alaska Conservation  



Foundation's  donors and communications would have a chilling effect on its future  



public interest litigation funding.  



                    Pebble  responded  that  the  "lawsuit  was  part  and  parcel"  of  Alaska  



                                                                                                  

Conservation Foundation's campaign against the Pebble Project.  Pebble contended its  



discovery requests sought information "to substantiate its well-founded belief that . . .  



Trident  Seafoods,  the  Bristol  Bay  Regional  Seafoods  Development  Association,  



                                                                                  

sportfishing lodges, and others, funded this lawsuit in order to further their economic  



                                                                                                          

interests in the Bristol Bay region." Pebble's legal argument centered on the premise that  



discovery  into  the  economic  motives  of  those  funding  the  litigation,  not  merely  the  



                                 

named plaintiffs, was necessary to effectuate AS 09.60.010's purpose.  Pebble submitted  



                                                                                                    

a proposed confidentiality order limiting use of the information to the attorney's fees  



dispute, arguing that keeping the information confidential eliminated concerns about  



Alaska Conservation Foundation's and Trustees for Alaska's constitutional rights.  



                                                             -9-                                                        7012
  


----------------------- Page 10-----------------------

          D.        Discovery Order  



                    The superior court issued a comprehensive order on the discovery motions  

                                                  



and the requested protective orders. The court concluded the case was not "merely about  

                                                                      



the permitting," there was sufficient evidence to suggest that significant commercial  



interests were behind the litigation, and therefore further discovery was warranted into  

                       



the economic incentives of Nunamta Aulukestai, the individuals, and the third parties.  

                                                                                                                 



But  the  court  included  a  protective  order  for  all  subsequent  discovery.    Financial  



information from any party could be marked "confidential" and then could be seen only                   



by attorneys and not disclosed to third parties or clients.  



                    The discovery order required Nunamta Aulukestai, the individuals, Trustees  



                                                                                                                  

for Alaska, and Alaska Conservation Foundation to supplement disclosures and respond  



                                                                        

to the State's and Pebble's discovery requests.  The order required Nunamta Aulukestai  



to provide the names of each member village corporation shareholder who worked in the  



                                                   

seafood or tourism industries in Bristol Bay, and to disclose contributions, federal tax  



filings, Nunamta Aulukestai's two most recent bank statements, and any information  



                                                                                                       

related to contributors or donations to the organization or lawsuit.  The order required  



the individuals to disclose the market value of any real property owned, complete tax  



filings  and  earnings  statements  from  2008  to  2011,  their  two  most  recent  bank  



statements, and statements of any other assets.  



                    The superior court also approved Pebble's requests for depositions and  



                                                                              

disclosures from Alaska Conservation Foundation and Trustees for Alaska.  The order  



required Alaska Conservation Foundation and Trustees for Alaska to produce full and  



                                                                                       

complete responses during depositions regarding sources and terms of any grants for the  



                                                                 

litigation, identification of donors and all other funding sources for the litigation, and  



communications  between  Trustees  for  Alaska  and  Alaska  Conservation  Foundation  



                                       

regarding the litigation.  Alaska Conservation Foundation and Trustees for Alaska also  



                                                              -10-                                                         7012
  


----------------------- Page 11-----------------------

were ordered to produce or disclose information relating to fundraising, funding for the  



litigation,  donors,  grants,  and  written  correspondence  with  donors  for  the  lawsuit.  



Alaska  Conservation  Foundation  was  ordered  to  identify  fishers  or  local  businesses  



involved in its Bristol Bay Fisheries and Watershed Protection Campaign.  



           E.         Applications For Relief And Petition for Review  



                      Alaska Conservation Foundation filed an original application for relief in                               



this court, seeking to reverse the superior court's third-party discovery order.  First, it   



argued that AS 09.60.010 does not authorize discovery into the economic motivations  



                                                                                                                       

or finances of third-party funders of constitutional litigation. Second, it argued that even  



if  the  statute  generally  allows  a  court  to  compel  discovery  from  third  parties,  the  



discovery order in this case violated constitutional associational rights.  



                      Trustees for Alaska also filed an original application for relief in this court,  



seeking the same relief and arguing that AS 09.60.010 does not authorize discovery from  



non-parties to litigation.  Trustees for Alaska further argued that the discovery order  



                                                                                 

violated constitutional rights to free association and privacy and improperly compelled  



disclosure of attorney work product.  



                                                                                           

                      Nunamta Aulukestai and the individuals filed a petition for review, asking  



                                                         

us to vacate the discovery order.  They contested the superior court's decision to allow  



                                                                                                                 

discovery on the economic incentive issue "despite the absence of any plausible direct  



economic benefit to [the] claimants."  They argued that the injunctive and declaratory  



                                                

relief sought in the litigation could not confer an economic benefit to the named plaintiffs  



                                    

or any third parties.  They also claimed that the superior court lacked authority to allow  



                                                                                                             

discovery from third parties unless there was a showing that those third parties controlled  



the claimant or were the "[r]eal part[ies] in [i]nterest."  



                                                                                                     

                      We granted the original applications for relief and the petition for review  



                                                                                                                

and consolidated the cases for oral argument and decision. We held oral argument in this  



                                                                     -11-                                                               7012
  


----------------------- Page 12-----------------------

                                                

matter and in the related appeal regarding the underlying litigation's merits on the same  



                                           

                                                     

day.  In a separate decision issued today, we reversed the superior court's decision in  



favor of the State and Pebble and remanded for entry of declaratory relief in favor of  



                                                                                                           7  

                                                                                                                On  remand  

Nunamta  Aulukestai  and  the  individuals  on  their  constitutional  claim. 



Nunamta  Aulukestai  and  the  individuals  will  be  the  prevailing  parties,  and  under  



AS 09.60.010(c)(1) they will be entitled to an award of attorney's fees and costs so long  



as they "did not have sufficient economic incentive to bring the suit, regardless of the  



                                                 8  

                                                                

constitutional  claims  involved."     Thus,  absent  the  illogical  notion  that  "sufficient  



                                           

economic incentive" means something different with respect to the statutory affirmative  



                                                              

award of attorney's fees and costs than it would with respect to the statutory protection  



from an adverse award of attorney's fees, the question presented remains alive.  



       

III.      STANDARD OF REVIEW  



                                                                                          

                    Interpretation of AS 09.60.010 is a question of law to which we apply our  



                                  9  

independent judgment.   When interpreting statutes, "[w]e look to 'the meaning of the  



                                                                                                                       10 

                                                                                                                           and  

language,  the  legislative  history,  and  the  purpose  of  the  statute  in  question'  " 



                                         

"adopt[]  'the  rule  of  law  that  is  most  persuasive  in  light  of  precedent,  reason,  and  



              11  

policy.' "        



          7         Nunamta Aulukestai , Op No. 7011 at 48-49.  



          8         AS 09.60.010(d)(2).  



          9         See Krone v.  State,  Dep't  of  Health & Soc. Servs ., 222 P.3d 250, 252-53,  



257-58 (Alaska 2009).  



          10        Fancyboy  v.  Alaska   Vill.  Elec.   Coop., Inc., 984 P.2d 1128, 1132 (Alaska  



1999) (quoting Muller v. BP Ex                   ploration (Alaska), Inc ., 923 P.2d 783, 787 (Alaska  

1996)).  



          11        Krone ,  222  P.3d  at  252  (quoting  Glamann  v.  Kirk,  29  P.3d  255,  259  



                                                                                                            (continued...)  



                                                             - 12-                                                       7012
  


----------------------- Page 13-----------------------

IV.	      DISCUSSION  



          A.	      Alaska Statute 09.60.010 Adopted Our Common Law Public Interest  

                                                                                                       

                   Litigation Meaning Of "Sufficient Economic Incentive."  



                   1.	       The public interest litigation exception to Alaska Civil Rule 82  

                        



                   Civil Rule 82 generally entitles a prevailing party to an attorney's fees  

award from the opposing party.12  

                                                 But in Gilbert v. State we recognized an exception for  

                                                                                 



public interest litigation, concluding that an adverse attorney's fees award in a case  



                                                                                                 13  

                                                                                                     Three years later  

raising important matters of public interest was against public policy. 



                                                                                    

in Anchorage v. McCabe we expanded the public interest litigation doctrine to include  



                                                                                                    

awards of full reasonable attorney's fees to successful parties raising important matters  



                                                                                                                        

of public interest, adopting a three-part test to determine whether a party qualified as a  

                                14  The test required that the litigation: (1) effectuate strong public  

public interest litigant.                                                                   



policies; (2) provide benefits to numerous people if successful; and (3) be capable of  

                                               15  We noted that the public interest exception to Rule  

                                                                   

initiation only by a private party.  



82 was judicially "designed to encourage plaintiffs to bring issues of public interest to  

                                                                                                 



          11       (...continued)  



(Alaska 2001)).  



          12	      See Alaska R. Civ. P. 82(a).  



          13       526 P.2d 1131, 1136 (Alaska 1974) ("As a matter of sound policy, we hold  



that it is an abuse of discretion to award attorneys' fees against a losing party who has  

       

in good faith raised a question of genuine public interest before the courts."), superseded  

by statute, ch. 86,  1-2, SLA 2003 (codified at AS 09.60.010(b)-(e)).  



          14  

                                               

                   568 P.2d 986, 991, 993-94 (Alaska 1977) (quoting La Raza Unida v. Volpe ,  

57 F.R.D. 94, 101 (N.D. Cal. 1972)), superseded by statute, ch. 86,  1-2, SLA 2003  

(codified at AS 09.60.010(b)-(e)).  



          15       Id .  at  991  (quoting La  Raza  Unida ,  57  F.R.D.  at  101),  superseded  by  



statute, ch. 86,  1-2, SLA 2003 (codified at AS 09.60.010(b)-(e)).  



                                                           -13-	                                                     7012
  


----------------------- Page 14-----------------------

                                                                                                              16  

the courts" without risk of adverse attorney's fees awards if they lost.                                          In a dissenting  



opinion  Justice  Boochever  argued   for  the  inclusion  of  a  fourth  prong  to  the  public  



interest litigant test, to consider the economic interests of the party invoking the public  



                                                  17  

                                                                                                                               

interest  exception  to  Rule  82.                      He  stated  that  "[w]here  the  sums  at  stake  in  the  



controversy are sufficiently large to prompt suit regardless of the public interest, an  



                                                                                                                               18  

                                                                                                                                    He  

award  of  attorney's  fees  against  the  losing  party  has  been  found  reasonable." 



                                                                                                       

argued that in cases involving potential financial gain there was no need to remove the  

potential for an adverse attorney's fees award.19  



                                                                                                              

                     In Kenai Lumber Co. v. LeResche we adopted the core concept of Justice  



                                                                                                                       

Boochever's McCabe dissent by requiring that litigants demonstrate a lack of economic  



                                                                                                                          20  

incentive to bring the litigation before attaining public interest litigant status.                                            In that  



case  a  timber  company  challenged  the  State's  timber  contract  with  a  competing  



                21  

                                                                                                         

company.            The superior court ruled in favor of the State and the competing company,  



upholding  the  challenged  contract  and  awarding  attorney's  fees  to  the  competing  



                22 

                                                                                                           

company.            The timber company appealed, claiming that it satisfied the three-part public  



                                                                                   

interest  test  because  challenging  allegedly  invalid  State  contracts  was  in  the  public  



           16        Id . at 990. 
 



           17        Id . at 996 (Boochever, J., dissenting). 
 



           18        Id . 
 



           19        Id . 
 



           20        646 P.2d 215, 223 (Alaska 1982).  



           21        Id . at 217.  



           22        Id . at 217, 222.  



                                                                 -14-                                                            7012
  


----------------------- Page 15-----------------------

            23  

                                                                                

interest.       We affirmed the superior court's award of attorney's fees against the timber  



                                                   

company, noting that although it satisfied the three-prong test, courts must consider a  



fourth prong to prevent abuses of the public interest litigation doctrine:  whether the  



                                                                                            24  

litigant  had  sufficient  economic  incentive  for  bringing  suit.                               We  reasoned  that  a  



claimant with sufficient economic incentive to bring a lawsuit is "less apt than a party  



                                                                              

lacking this incentive to be deterred from bringing a good faith claim by the prospect of  



                                                      25  

an adverse award of attorney's fees."                     We concluded that because the timber company  



"was seeking a continuing source of timber to process in its mill, the [superior] court  



                                                                                               

could have concluded that it had sufficient economic reasons to challenge the [contract]  



                                                                                    26  

amendment regardless of the grounds for the challenge."                                  



                    2.	       Alaska Statute 09.60.010's constitutional claimant exception to  

                              Rule 82  



                                 

                    In 2003 the Alaska Legislature abrogated and replaced our public interest  



litigation  exception  to  Rule  82  with  a  new  statutory  provision  that  encourages  and  



                                                                     27  

                                                                                              

protects parties bringing constitutional claims.                         The new law requires courts to award  



          23        Id . at 222 & n.19.  



          24        Id . at 223.  



          25        Id .  



          26        Id .  



          27        Ch. 86,  1-2, SLA 2003 (codified at AS 09.60.010(b)-(e)); Krone v. State,  



Dep't of Health & Soc. Servs .,  222 P.3d 25                  0,  253-54 (A      laska 2009); State v. Native Vill.  

of Nunapitchuk, 156 P.3d 389, 391-95 (Alaska 2007) (providing  the history of ch. 86,  

SLA 2003 (referred to as House Bill (H.B.) 145)).  In Nunapitchuk we determined the  

statutory provision abrogating our common law public interest litigant exception to Rule  

                                                                                 

82 was constitutional.  156 P.3d at 395.   We recognized that the Legislature did not  

                                                                

modify  Rule  82,  but  rather  enacted  substantive  law  eliminating  and  replacing  the  

                                                                                                            (continued...)  



                                                             -15-	                                                       7012
  


----------------------- Page 16-----------------------

full reasonable attorney's fees to a successful constitutional claimant, but only if the                                        



claimant lacked sufficient economic incentive to bring the claim:  



                                                                                          

                                (c)       In  a  civil  action  or  appeal  concerning  the  

                                                                                                      

                     establishment, protection, or enforcement of a right under the  

                                                                          

                     United States Constitution or the Constitution of the State of  

                     Alaska, the court  



                                          (1)        shall  award,  subject  to  (d)  .  .  .  of  this  

                                section, full reasonable attorney fees and costs to                              a  

                                claimant,  who,  as  plaintiff,  counterclaimant,  cross  

                                claimant,  or  third-party  plaintiff  in  the  action  or  on  

                                appeal, has prevailed in asserting the right;  



                                . . . .  



                                (d)       In  calculating  an  award  of  attorney  fees  and  

                     costs under (c)(1) of this section, 



                                 . . . .  



                                          (2)       the court shall make an award only if the  

                                                                                      

                                claimant did not have sufficient economic incentive to  

                                                                   

                                bring the suit, regardless of the constitutional claims  

                                               [28] 

                                involved.  



                     The   new   law   also   provides   that   a   party   bringing   a   non-frivolous  



constitutional  claim  will  not  face  an  adverse  attorney's  fees  award  if  the  claim  is  



unsuccessful and the party lacked sufficient economic incentive to bring the claim:  



                                                            

                                (c)       In  a  civil  action  or  appeal  concerning  the  

                                              

                     establishment, protection, or enforcement of a right under the  

                                                                          

                     United States Constitution or the Constitution of the State of  

                     Alaska, the court  



           27        (...continued)  



judicially created common law public interest litigant exception to attorney's fees awards  

under Rule 82.  Id . at 404-05.   



           28        AS 09.60.010(c)-(d).  



                                                                 -16-                                                           7012
  


----------------------- Page 17-----------------------

                              . . . .  



                                       (2) may not order a claimant to pay the attorney  

                             fees     of   the    opposing        party      devoted       to   claims  

                             concerning  constitutional  rights  if  the  claimant  as  

                             plaintiff,  counterclaimant,  cross  claimant,  or  third- 

                             party plaintiff in the action or appeal did not prevail in  

                             asserting the right, the action or appeal asserting the  

                             right was not frivolous, and the claimant did not have  

                             sufficient economic incentive to bring the action or  

                                             

                             appeal       regardless        of    the     constitutional        claims  

                                           [29] 

                             involved.  



                   Although the Legislature abrogated our decisions creating and applying the  

public interest litigation exception to Rule 82,30 it adopted our language from the fourth  



prong  of  the  public  interest  litigant  test:    The  statute  requires  that  a  constitutional  



                                                                               

claimant lack "sufficient economic incentive" to bring the claim regardless of the nature  



of the constitutional claim - the same phrase we used in Kenai Lumber when creating  



                                                                             31  

                                                                                   When  the  legislature  creates  

the  fourth  prong  of  the  public  interest  litigant  test.  



                                      

statutory language using  terms of art with an existing judicial construction, we will  



presume that the legislature intended to give the statutory provisions the same historical  



          29       AS 09.60.010(c)(2).  



          30       Ch. 86,  1(b), SLA 2003 (abrogating                   Dansereau v. Ulmer , 955 P.2d 916  



(Alaska 1998); Se. Alaska Conservation Council, Inc. v. State, 665 P.2d 544 (Alaska  

1983); Thomas v. Bailey, 611 P.2d 536 (Alaska 1980); Anchorage v. McCabe , 568 P.2d  

                                                   

986  (Alaska  1977);   Gilbert  v.  State,  526  P.2d  1131  (Alaska  1974));  see  also  

Nunapitchuk , 156 P.3d at 395.  



          31  

                                                 

                   Kenai Lumber Co. , 646 P.2d at 223.  In Simpson v. Murkowski, 129 P.3d  

                                         

435, 448 (Alaska 2006), we noted that the "[statutory] provision mirrors the fourth prong  

of the [public interest litigant] test."  



                                                            -17-                                                      7012
 


----------------------- Page 18-----------------------

              32  

                                                                                           

meaning.          And legislative history supports the conclusion that the "sufficient economic  



                                      

incentive" requirement in AS 09.60.010 is the same as the fourth prong of our prior  



                                         33  

                                                          

public interest litigant test.               During legislative hearings supporters of the bill testified  



             

that the constitutional claimant exception "recreates something very similar to the public  



                                            34  

interest doctrine by statute."    We therefore conclude that our prior cases interpreting  



          32        Shea v. State, Dep't of Admin., Div. of Ret. & Benefits, 267 P.3d 624, 633  



n.33 (Alaska 2011) ("We assume the legislature is aware of the common law when it  

                                          

passes legislation." (citing Young v. Embley, 143 P.3d 936, 945 (Alaska 2006))); Joseph  

                                                                                   

v. State, 293 P.3d 488, 492 (Alaska App. 2012) ("[T]he legislature is presumed to be  

aware of pertinent court decisions when it amends a statute."); see also Buckhannon Bd.  

                                                                                                             

& Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 615-16  

(2001) (Scalia, J., concurring) ("[W]here Congress borrows terms of art in which are  

                                                                                                                  

accumulated  the  legal  tradition  and  meaning  of  centuries  of  practice,  it  presumably  

knows and adopts the cluster of ideas that were attached to each borrowed word . . . and  

                                                                 

the meaning its use will convey to the judicial mind unless otherwise instructed." (first  

alteration in original) (quoting Morissette v. United States , 342 U.S. 246, 263 (1952))  

                                                                                                   

(internal quotation marks omitted));  Cannon v. Univ.  of Chicago, 441 U.S. 677, 699  

(1979) ("In sum, it is not only appropriate but also realistic to presume that Congress was  

                                                                      

thoroughly familiar with these unusually important precedents from this and other federal  

courts and that it expected its enactment to be interpreted in conformity with them.");  

                                                                                                                 

Commonwealth v. Colturi, 864 N.E.2d 498, 501 (Mass. 2007) ("We also presume that  

                                           

when  the  Legislature  amends  a  statute  it  is  aware  of  the  prior  state  of  the  law  as  

                                    

explicated by the decisions of this court, and where it has reenacted statutory language  

                                                                

without material change, [it is] presumed to have adopted the judicial construction put  

                                                 

upon it." (citations and internal quotation marks omitted)).  



          33  

                                                                                                          

                     One of the bill's supporters argued that "this law does not abolish public  

                                                                                                       

interest litigant status . . . .  What [the bill] really does is [retain] the essence of the public  

interest litigant doctrine for the cases that relate to our most important rights . . . ."  

                                                                                                    

Debate on C.S.H.B. 145 (FIN) Before the Senate, 23d Leg., 1st Sess. (May 20, 2003)  

(statement of Sen. Ralph Seekins).  



          34  

                                                                                                   

                    Hearing on C.S.H.B. 145 (FIN) Before the House Fin. Comm., 23d Leg.,
  

1st Sess. (May 12, 2003) (testimony of Christopher Kennedy, Assistant Attorney Gen.,
  

                                                                                                                (continued...)
  



                                                               -18-                                                          7012
  


----------------------- Page 19-----------------------

                                                    

the economic incentive prong of the  public interest litigant test provide the guiding  



parameters for the meaning of "sufficient economic incentive" under AS 09.60.010.  



          B.	       A Claimant Lacks "Sufficient Economic Incentive" If The Litigation's  

                    Primary Purpose Is Not Economic Gain.  



                    Since Kenai Lumber our focus has been on primary purpose:  A litigant has  



sufficient economic incentive to bring a claim when it is brought primarily to advance  



                                                                                                    

the litigant's direct economic interest, regardless of the nature of the claim.  We generally  



                                                                                                          

examine two factors - the nature of the claim and relief sought and the direct economic  



interest at stake - to determine primary purpose.  



                        

                    1.	       Nature of the claim and relief sought  



                                                                                     

                    The nature of the claim and the type of relief requested are strong indicators  



                                                                         

of primary purpose. We look to statements made in the pleadings and proceedings about  



                                        35	                                                                             36 

                                             

the rationale for the lawsuit,             to whether the relief requested was equitable or legal,                         and  



          34        (...continued)  



Dep't of Law); see also Minutes, House Fin. Comm. Hearing on C.S.H.B. 145 (FIN),  

                                                                                                                 

23d Leg., 1st Sess. (May 9, 2003) (statement of Sen. Therriault, bill's sponsor, quotation  

                                                                                                      

from  minutes)  (explaining  that  constitutional  claimants  were  "a  class  of  litigants  

recognized by the court as receiving special provisions that provide for the possibility  

of having attorney fees covered if the case is successful . . . [and] that the bill proposed  

                                                                                    

to restrict those criteria to constitutional issues").  



          35  

                                    

                    See, e.g.,  Leisnoi, Inc. v. Stratman , Mem. Op. & J. No. 1369, 2010 WL  

3719166,   at   *3   (Alaska   Sept.   22,   2010)   (citing   statements   made   in   previous  

administrative  hearings  and  evidence  of  the  claimant's  prior  behavior  to  conclude  

claimant had an economic incentive); Musser v. Wells Fargo Home Mortg., Inc. , Mem.  

                     

Op. & J. No. 1307, 2008 WL 1914375, at *4 (Alaska Apr. 30, 2008) (examining "main  

                                             

action" in complaint); Puddicombe v. Fitzgerald , Mem. Op. & J. No. 930, 1999 WL  

33958803, at *2 (Alaska Aug. 25, 1999) (examining affirmative defenses to conclude  

                                                     

"motivation in this case was in good measure due to [economic incentives]").  



          36  

                                              

                    Compare City of Kotzebue v. State, Dep't of Corr., 166 P.3d 37, 47 (Alaska  

                                                                                                            (continued...)  



                                                             -19-	                                                       7012
  


----------------------- Page 20-----------------------

                                                           37 

                           

to the amount of money in controversy,                         to determine whether the litigant had sufficient  



economic  incentive  to  bring  the  claim.    But  the  type  of  relief  sought  is  not  always  



                                                                                                           38 

                                                                                                              and requesting  

conclusive:  "Economic interest need not take the form of damages," 



                                                                                                    39 

                                                                                                        We also have stated  

injunctive relief does not guarantee a lack of economic motivation. 



          36         (...continued)  



2007) (determining that party seeking reimbursement for costs had sufficient economic  

                                                                                                 

incentive), with Kodiak Seafood Processors Ass'n v. State , 900 P.2d 1191, 1199 (Alaska  

                                                                                          

 1995) ("The fact that [claimants] sought only equitable relief, rather than damages, also  

                                                                                                                 

indicates that economic motivation was not a significant factor in bringing this case.");  

                                                                                        

see also Patterson v. State, Dep't of Envtl. Conservation , Mem. Op. & J. No. 989, 2000  

                                           

WL 34545820, at *7 (Alaska Aug. 30, 2000) (noting complaint was amended to add a  

                             

request for damages and finding an economic incentive); Ninilchik Traditional Council  

                                                        

v. Noah , 928 P.2d 1206, 1219 (Alaska 1996) ("[T]he parties here have made no claim  

                                                

for monetary damages, indicating that economic motivation was not a significant factor  

                                                                            

in bringing the claim.").  



          37  

                                                                         

                     See Bruner v. Petersen, 944 P.2d 43, 50 (Alaska 1997) ("[T]he economic  

                                                                

incentive of $10,000 in wages, coupled with the request for punitive damages for an  

                                                                                           

additional  $10,000,  demonstrates  a  sufficient  economic  incentive  to  bring  the  suit  

regardless of the possible public interest elements of his claim . . . ." (internal quotation  

                                                                                                                

marks omitted)); Murphy v. City of Wrangell , 763 P.2d 229, 233 (Alaska 1988) (finding  

                                                                                       

sufficient economic incentive after considering possible award of punitive damages and  

                                                                              

the fact the case was filed in superior court seeking more than $25,000 in total damages).  



          38  

                                                                                              

                    Matanuska-Susitna Borough Sch. Dist. v. State , 931 P.2d 391, 403 (Alaska  

 1997).  



          39  

                                                       

                     See,  e.g.,  Kachemak  Bay  Watch,  Inc.  v.  Noah ,  935  P.2d  816,  827-28  

(Alaska 1997).  In Kodiak Seafood Processors Ass'n we suggested that a request only  

                                                                                                                          

for injunctive relief indicated a lack of economic incentive.  900 P.2d at 1199.  But we  

                                                                                                                      

later clarified that the type of relief by itself is not dispositive - in Fairbanks North Star  

                                                                          

Borough v. Interior Cabaret, Hotel, Restaurant & Retailer's Ass'n , we stressed that "the  

                                                                                                                        

lack of potential for a monetary recovery, while relevant, is not conclusive."  137 P.3d  

289, 292 (Alaska 2006) (footnote omitted) (citing Eyak Traditional Elders Council v.  

Sherstone, Inc., 904 P.2d 420, 426 (Alaska 1995); Kodiak Seafood Processors Ass'n ,  

                                                                                                                (continued...)  



                                                               -20-                                                          7012
  


----------------------- Page 21-----------------------

that  courts  must  "  'look  to  the  facts  of  the  case  to  determine  the  litigant's  primary  



                                               40  

                                                   The facts of the case, including the pleadings, relief  

motivation for filing the suit.' " 



                                                                 

requested, standing declarations, and types of arguments made during the proceedings  

inform the determination of primary purpose.41  



                    In  Gwich'in  Steering  Committee  v.  State,  Office  of  the  Governor  we  



                                                                                                            

examined the type of relief requested and determined that the claimant did not have  



                                                                      42  

                                                                                            

sufficient economic incentive to bring its claim.                         In that case a nonprofit organization  



dedicated to protecting caribou filed suit seeking public records about state lobbying  



                                                                                                            43  

activities for drilling operations in the Arctic National Wildlife Refuge.                                      After the  



                                                                                                                            44  

                                                                             

organization lost its suit, the superior court ordered it to pay attorney's fees to the State. 



We  reversed  that  order,  concluding  that  the  organization  did  not  have  sufficient  



                                                                      

economic incentive to litigate because the relief requested - disclosure of records under  



                                                                  

the Public Records Act - "sought access to information, not money or other economic  



advantage,"and because the organization's economic interest in protecting caribou for  



          39        (...continued)  



900 P.2d at 1199).  



          40        O'Callaghan v. State, 920 P.2d 1387, 1390 (Alaska 1996) (quoting Eyak  



Traditional Elders Council, 904 P.2d at 426).  



          41        Standing declarations can be indicative of the claimant's motivations, but   



standing   based  on  economic  harm  is  "not  synonymous  with  economic  incentive."  

Griswold v. City of Homer, 925 P.2d 1015, 1030 (Alaska 1996) (quoting Oceanview  

Homeowners Ass'n v. Quadrant Constr. & Eng'g , 680 P.2d 793, 799 n.3 (Alaska 1984))  

                                                

(internal quotation marks omitted.  



          42        10 P.3d 572, 584-85 (Alaska 2000).  



          43       Id . at 576-77.  



          44       Id . at 584.  



                                                            -21-                                                       7012
  


----------------------- Page 22-----------------------

subsistence uses was not substantial.45  



                   In McCormick v. Smith we similarly relied on the type of relief requested  

to conclude that a claimant lacked sufficient economic incentive to bring a claim.46                                   In  



McCormick an individual prevailed in the superior court on her challenge to a recall  



                                  

petition to remove her from a school board, requesting an injunction against the recall  

            47   We reversed and ordered the individual to pay the prevailing appellant's  

election.                                                                   



                                     48  

attorney's fees on appeal.               We vacated that order on rehearing, concluding that the  



individual  was  entitled  to  public  interest  litigant  status  because  she  did  not  have  a  



sufficient economic incentive to bring her claim:  



                   [The individual] sought only to enjoin the recall election, not  

                        

                   to  recover  money  damages.    Moreover,  according  to  [the  

                   individual],   she   serves   on   the   school   board   "without  

                   compensation."  Thus, prevention of her recall election was  

                   not  intended  to  protect  a  paycheck.    Accordingly,  [the  

                                                        

                   individual] appears to meet the fourth prong of the [public  

                                                [49] 

                   interest litigant] test.  



                   2.       Direct economic interest  



                   We also look to the direct economic interest at stake when determining  



                                                                                             

primary purpose.  When direct economic benefits will flow to the claimant as a result of  



                                                                                                                

successful litigation, that is strong evidence the litigant had economic incentive to bring  



                                                                  

the claim.  But direct economic benefits do not flow only from lawsuits seeking damages.  



          45       Id. at 585.  



          46       799 P.2d 287, 288 (Alaska 1990).  



          47       Id . at 287-88.  



          48       Id . at 287.  



          49       Id. at 288 (citation omitted).  



                                                          -22-                                                     7012
  


----------------------- Page 23-----------------------

In  Shepherd  v.  State,  Department  of  Fish  &  Game  we  determined  that  a  big  game  



hunting guide had sufficient economic incentive to bring a claim challenging Alaska  



                                                                                                                              50  

               

Board of Game regulations giving preferences to subsistence hunting in certain areas. 



We concluded that the guide "was primarily motivated to litigate by concerns for his own  

                                                                                 



economic  livelihood"  because  he  had  a  direct  economic  interest  in  eliminating  the  



                                                            51  

preferences to increase his guiding area.                       



                    On the other hand, we have concluded that litigation was not primarily  

                                                                                                             



motivated  by  economic  interests  when  it  would  confer  only  indirect  or  attenuated  



economic  benefits.    In  Kodiak  Seafood  Processors  Ass'n  v.  State  a  fishing  trade  



                                                                                                                    

association sued the state alleging that an improper decision had been made to allow  

                                                                                                              52  The trade  

                                                                                                                   

scallop dredge fishing in areas previously closed to protect juvenile crabs.  



association, representing seafood processors, claimed that opening those areas would  

                                                                                         



cause  potential  harm  to  the  crabs  and  the  sea  floor,  and,  impliedly,  to  fishers'  

                                        



                  53  

livelihoods.          But we stated that even though the trade association's members had an  

                                            



economic interest in crab and bottom fish fisheries, "[t]he potential economic benefit to  

                                                                                      



[the association] from this litigation is indirect.  [The association] will gain only if the  

                                                                                                          



                                                                        54  

areas  are  eventually  reopened  to  crab  fishing."                         A  favorable  outcome  in  the  trade  



          50        897 P.2d 33, 35, 45 (Alaska 1995).  



          51        Id .   Similarly   see   Kenai   Lumber   Co.   v.  LeResche,  646  P.2d  215,  223  



(Alaska 1982) (concluding that timber company challenging State timber contract with  

another company was seeking continuing timber supply, supporting superior court's  

determination that timber company had sufficient economic incentive to bring suit).  



          52        900 P.2d 1191, 1193 (Alaska 1995).  



          53        See id . at 1193-95.  



          54        Id . at 1198-99.  



                                                             -23-                                                        7012
  


----------------------- Page 24-----------------------

association's litigation would not have led to direct economic benefits because other  

independent administrative decisions stood in the way of any economic gain.55  



                    In  Ninilchik   Traditional   Council   v.   Noah   fishing   associations   and  



                                                                                     

environmental groups sued the State over procedural and substantive violations in an oil  



                                                                                                              56  

                                                                                                                  We noted  

and gas lease sale, asking for injunctive relief against one particular lease. 



that the fishing associations may have had an economic interest to  stop  oil and gas  

                                                                                                                

leasing but that "any economic benefit to the parties from the litigation is indirect."57   In  

                                                                                                         



Keane v. Local Boundary Commission we determined that a lawsuit challenging a state  

               



decision  to  incorporate  a  local  area,  which  then  would  implement  a  sales  tax,  "was  



                                                                                                                   

directed  at  the  formation  of  a  municipality,  rather  than  at  the  imposition  of  a  tax;  



                                                                         58  

economic interests were affected only indirectly."                            And in Spenard Action Committee  



                                                               

v. Lot 3, Block 1, Evergreen Subdivision a nonprofit neighborhood organization sued for  



                                                                                              

injunctive  relief  against  the  development  of  a  subdivision;  we  concluded  that  the  



                                              

organization "will not receive any direct financial benefit from the successful outcome  



                                                                   

of this litigation," despite the possibility that its members "may benefit indirectly based  

on improved property values."59  



          55        See id.  



          56        928 P.2d 1206, 1218-19 (Alaska 1996).  



          57        Id . at 1219.  



          58        893 P.2d 1239, 1251 (Alaska 1995).  



          59        902 P.2d 766, 782 (Alaska 1995).  



                                                             -24-                                                        7012
  


----------------------- Page 25-----------------------

          C.	        There Was Not Sufficient Economic Incentive To Bring This Litigation  

                    Regardless Of The Constitutional Claim Involved. 



                                                                   60  

                                                                                                                  

                     Under any standard of review,                    it was error for the superior court to look  



at future possibilities and contingencies well outside the contours of the litigation to  



                                                                 

conclude  that  this  case  was  not  merely  about  permitting.    Just  as  Kodiak  Seafood  



Processors  Ass'n  was  only  about  stopping  scallop  dredge  fishing  in  a  previously  



                                                                                                                                  61  

                                                                                             

protected area and not about the possible economic effect on crab fishers' livelihoods, 



                                                                      

and just as Ninilchik Traditional Council was only about injunctive relief relating to one  



                           

oil and gas lease and not about the potential impact of oil and gas leasing on commercial  



          60        The  parties  have  not  briefed  the  possible  standards  of  review  for  



determinations relevant to protected constitutional claimant status under AS 09.60.010.  

                                      

We previously used a discretionary standard for encouraging or protecting common law  

                                                                                              

public interest litigants.  See, e.g., Fairbanks N. Star Borough v. Interior Cabaret, Hotel,  

                                                                                

Rest.  &  Retailers  Ass'n ,  137  P.3d  289,  291  (Alaska  2006).  But  the  legislature  has  

                                                                                                       

couched  the  encouragement  and  protection  of  qualifying  constitutional  claimants  in  

seemingly mandatory terms -  AS 09.60.010(c)(1) states that a court "shall award"  

                                                                                                      

attorney's fees and costs to a qualifying successful claimant, and AS 09.60.010(c)(2)  

                               

states that a court "may not order" a qualifying unsuccessful claimant to pay attorney's  

                                                                                                            

fees.  The statute does not suggest new standards for determining the reasonableness of  

                            

requested attorney's fees, but under AS 09.60.010(e) a court seemingly has discretion  

to  abate  attorney's  fees  and  costs  awards  upon  a  finding  of  "substantial  and  undue  

                                                                                            

hardship."    See  supra  note  6.    The  specific  determination  of  "sufficient  economic  

incentive" conceivably could be a discretionary determination by the superior court or  

                                                      

a mixed question of fact and law.  We do not need to decide that question here, but either  

                                                                                                               

way the basis for the determination rarely should require examination beyond the factual  

                                                      

contours of the litigation itself, and even more rarely should require the broad and free- 

                                                 

ranging discovery ordered here.  The legislature intended AS 09.60.010 to encourage and  

protect  constitutional  litigants;  it  is  unlikely  the  legislature  intended  lengthy  and  

                                                       

expensive litigation over the rights it created.  



          61         900 P.2d 1191, 1193-95, 1198-99 (Alaska 1995).  



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----------------------- Page 26-----------------------

           62 

                                             

fishing,      this case is only about constitutional limitations on the State's issuance of land  



                                                                                                     

and water use permits to Pebble and not about whether the Pebble Project should proceed  



or whether the Pebble Project may harm Bristol Bay fisheries.  



                   The complaint and arguments advanced by Nunamta Aulukestai and the  



individuals make clear that their primary objective was making the State's permitting  



process compliant with the Alaska Constitution.  The declaratory and injunctive relief  



requested accord with Nunamta Aulukestai and the individuals' consistent emphasis on  



                                                              63  

public involvement in the permitting process.                     Nunamta Aulukestai and the individuals  



did not claim money damages or attempt to use the lawsuit to secure direct economic  



                                                 

gain; their references to public use of the area and private economic loss supported their  



                              

argument for public notice and involvement in the permitting process, not an argument  



for economic relief.  



                   We reiterate and emphasize the necessity of direct economic benefit from  



constitutional litigation for "sufficient economic incentive," and from that perspective  



also address the State's and Pebble's "stalking horse" argument.  We do not suggest that  



                           

there never could be a third party seeking some direct economic benefit by funding a  



nominal plaintiff's constitutional litigation, and we agree that in such an instance the  



third party's direct economic incentive might be relevant to an attorney's fees award  



         62        928 P.2d at 1219.  



         63        See Oceanview Homeowners Ass'n v. Quadrant Constr. & Eng'g, 680 P.2d  



793, 799 (Alaska 1984) ("Oceanview's consistent emphasis on health and safety to the  

virtual exclusion of economic concerns indicates that it would not have had 'sufficient  

                                                                                              

economic incentive to bring the lawsuit.' " (quoting Kenai Lumber Co. v. LeResche , 646  

                

P.2d 215, 223 (Alaska 1982))).  



                                                         -26-                                                    7012
  


----------------------- Page 27-----------------------

                                   64  

under AS 09.60.010.                    But the third party's economic interest still must be direct, not  



                                                                                                                                 

indirect.  Many people and organizations are opposed to the Pebble Project, and some  



of that opposition is based on concerns that the Pebble Project ultimately may have  



                                                                                                                       65  

                                                                                                                           Commercial  

negative effects on the Bristol Bay watershed and commercial fisheries. 



                                            

fishery interests may fund litigation by others seeking to delay or stop the Pebble Project,  



                                                                                      

but this does not automatically transform otherwise indirect economic benefit into direct  



economic  benefit.    Here  the  underlying  litigation  was  limited  to  constitutional  



requirements for the State's permitting process.  No matter the result, the underlying  



litigation could not directly affect any Pebble Project opponent's economic interests.  



                      Focusing  on  the  funding  of  constitutional  litigation  rather  than  on  the  



litigation itself to determine primary purpose, as was done here, can lead easily to the  



                                  

wrong result.  And as Trustees for Alaska and Alaska Conservation Foundation make  



           64         Direct economic incentive of a third party would be relevant if that third   



party controlled the litigation or the claimant were merely acting on behalf of the third  

party.  See  Carmony v. McKechnie, 217 P.3d 818, 823 (Alaska 2009) ("The superior  

                                                                                       

court made ample findings in support of its conclusion that Carmony acted on behalf of  

                                                                                                   

his  employer  .  .  .  and  that  [the  employer]  had  economic  incentives  to  promote  the  

                              

initiative in question."); Petitioners for Dissolution of Skagway & Incorporation of a  

Skagway Borough v. Local Boundary Comm'n, 186 P.3d 571, 572-74 (Alaska 2008)  

(discussing third-party "control" of litigation where third party " 'bankrolled the action,  

                                                                                                            

directed it, and is the real litigant here' "); Matanuska Elec. Ass'n. v. Rewire the Bd ., 36  

                                    

P.3d 685, 698 (Alaska 2001) ("[E]vidence might have supported, but did not compel, a  

finding that Rewire's suit was aimed at improving [a third party's] bargaining position  

                                                                                          

. . . .").  



           65  

                                                                           

                      See, e.g., Hughes v. Treadwell , 341 P.3d 1121, 1123, 1125 (Alaska 2014)  

(confirming previous order for election ballot placement for the "Bristol Bay Forever"  

                                                                                       

initiative requiring final legislative authorization for any new large-scale metallic sulfide  

mining operations in Bristol Bay Fisheries Reserve watershed); Pebble Ltd. P'ship ex rel.  

Pebble  Mines  Corp.  v.  Parnell ,  215  P.3d  1064,  1078-81  (Alaska  2009)  (rejecting  

Pebble's  argument  that  proposed  clean  water  initiative  would  be  unlawful  special  

legislation despite current application only to Pebble Project and one other mine).  



                                                                     -27-                                                               7012
  


----------------------- Page 28-----------------------

                                                                                            

clear in their arguments, discovery and collateral litigation about funding sources may  



                                                                    

implicate separate constitutional concerns, which, in light of our decision, we do not  



need to address at this time.  We also suggest that there rarely, if ever, should be a  



                                               

situation where the economic interests of lawyers representing a constitutional claimant  



                                               

are relevant to AS 09.60.010.  For example, the possibility of an attorney's fees award  



under the statute should not be "sufficient economic incentive" to bring constitutional  



                                                                           

litigation; nor should indirect economic benefits, such as lawsuit-generated publicity and  



fundraising, be "sufficient economic incentive" to bring constitutional litigation.  



                     Finally,  we  address  the  State's  argument  that  Nunamta  Aulukestai  had  



                                                                                

economic incentive to bring the litigation to protect the Bristol Bay area for subsistence  



uses,  including  hunting  and  fishing.    Throughout  the  litigation  Nunamta  Aulukestai  



stressed that its members rely on the Bristol Bay area for subsistence uses, suggesting  



                                                                                           

that the lawsuit was designed to protect those uses from the Pebble Project.  But, as  



                                                                                                            

noted, Nunamta Aulukestai's arguments were focused on reasons for public notice and  



                                                                            

involvement,  not  for  economic  compensation,  and  we  consistently  have  held  that  



protecting subsistence uses is not sufficient economic incentive to bring a lawsuit.  In  



                                                                                          

Alaska Survival v. State, Department of Natural Resources we rejected the argument that  



protecting subsistence uses conferred an economic incentive to litigants, explaining that  



                                                                                                          

"a more substantial financial interest is required before a litigant will be deemed to have  



                                                                                    66  

an  independent  economic  incentive  to  bring  suit."                                   And  in  Gwich'in  Steering  



Committee  we  rejected  the  idea  that  a  nonprofit  tribal-based  organization  "whose  



                                                                                                                       

[litigation] sought access to information" had an economic incentive based on its interest  



          66         723 P.2d 1281, 1292 (Alaska 1986) (citing                       Kenai Lumber Co. v. LeResche                   ,  



646 P.2d 215, 223 (Alaska 1982); Mobil Oil Corp. v. Local Boundary Comm'n , 518 P.2d   

92, 104 (Alaska 1974)).  



                                                               -28-                                                          7012
  


----------------------- Page 29-----------------------

                                                         67  

in protecting caribou for subsistence uses.    Thus, Nunamta Aulukestai's emphasis on   



protecting  subsistence  uses  of  the  Bristol  Bay  area  does  not  mean  there  was  direct  



economic incentive to bring this litigation.  



         D.       Summary Of Our Decision  



                                                                                        

                  We interpret AS 09.60.010's "sufficient economic incentive" language in  



                                                               

the same manner we interpreted that language in our public interest litigation cases.  We  



conclude that there was not sufficient economic incentive for Nunamta Aulukestai and  



the individuals to bring their constitutional claim regardless of its constitutional basis.  



The nature of the claim and the equitable relief requested indicate that their primary  



purpose was securing changes to and increasing notice and public involvement in the  



State's mineral exploration permitting process.  And neither they nor any opponents of  



                                                                                               

the Pebble Project, even if they helped fund this litigation, had a direct economic interest  



in  the  outcome  -  the  indirect  economic  interests  possibly  at  stake  and  Nunamta  



Aulukestai's  interests  in  protecting  subsistence  uses  are  not  enough  to  demonstrate  



                                               

"sufficient  economic  incentive"  under  AS  09.60.010.    We  agree  with  Nunamta  



Aulukestai  and  the  individuals  that  it  was  error  to  allow  discovery  into  economic  



incentive  in  light  of  the  nature  of  the  relief  sought  and  "despite  the  absence  of  any  



plausible direct economic benefit to [the] claimants."  



V.       CONCLUSION  



                  We VACATE the discovery order and REMAND for further attorney's fees  



proceedings consistent with today's opinions.  



         67       10 P.3d 572, 585 (Alaska 2000).  



                                                        -29-                                                     7012  

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