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Studley v. Alaska Public Offices Commission (1/27/2017) sp-7148

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  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                                       



JAMES  M.  STUDLEY,                                                  )  

                                                                     )     Supreme  Court  No.  S-15757  

                                Appellant,                           )  

                                                                                                                                    

                                                                     )     Superior Court No.  1JU-13-00669 CI  

           v.                                                        )  

                                                                                               

                                                                     )     O P I N I O N  

                                  

ALASKA PUBLIC OFFICES                                                )  

COMMISSION,                                                          )  

                                                                                                                  

                                                                     )     No. 7148 - January 27, 2017  

                                Appellee.                            )  

                                                                     )  



                                                                                                               

                     Ap            

                          peal from the Superior Court of the State of Alaska, First  

                                                                                                  

                     Judicial District, Juneau, Philip M. Pallenberg, Judge.  



                                                                                                                       

                     Appearances:             Fred  W.  Triem,  Petersburg,  for Appellant.  

                                                                                                   

                     Joanne M. Grace, Assistant Attorney General, Anchorage,  

                                                                                                                  

                     Janell M. Hafner, Assistant Attorney General, and Craig W.  

                                                                                        

                     Richards, Attorney General, Juneau, for Appellee.  



                                                                                                                 

                     Before: Stowers, Chief Justice, Fabe, Winfree, Maassen, and  

                                   

                     Bolger, Justices.  



                                          

                     WINFREE, Justice.  



I.         INTRODUCTION  



                                                                                                                               

                     A self-employed real estate broker ran as a candidate for local elective  



                                                                                                                           

office.       The  broker  sought  a  blanket  exemption  from Alaska's  financial  disclosure  



                                                                                                                                             

requirements to avoid reporting his clients' identities and the income earned from them.  



                                                                                                                                   

The Alaska Public Offices Commission denied the broker's request and assessed a $175  


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

civil penalty for his failure to comply with the candidate reporting requirements.                                                                                                                                                                                           On  



appeal the superior court upheld the Commission's ruling.                                                                                                                                      The broker now appeals the                                                       



superior court's decision, contending the disclosure requirements violate his duty to                                                                                                                                                                                              



maintain client confidentiality, infringe his clients' privacy rights under the Alaska                                                                                                                                                                            



Constitution, and impair several personal constitutional rights.                                                                                                                                             We affirm the superior                            



court's decision upholding the Commission's ruling.                                                                                                    



II.                   FACTS AND PROCEEDINGS                           



                                            In 2012 James Studley, a real estate broker operating through a self-owned                                                                                                                             



corporation, ran for a borough assembly seat.                                                                                                         As a candidate for public office Studley                                                                   



was subject to Alaska's financial disclosure laws, administered and enforced by the                                                                                                                                                                                            



Alaska Public Offices Commission.                                                                                      He was required to file a Public Official Financial                                                                                  



Disclosure Statement reporting                                                                            the source of any                                              income exceeding $1,000                                                                   earned  



                                                                                                                                                                                                                               1  

during the prior calendar year and the nature of the services rendered.                                                                                                                                                                                          

                                                                                                                                                                                                                                    Because Studley  



                                                                                                                                                                                                                                                 

owned the corporation through which he operated, he was self-employed for purposes  



                                                                                                                                                                                                                                                                   

of the disclosure laws and so was required to report his actual client names as the income  



                               2  

"source."   



                                            Studley submitted his calendar year 2011 disclosure statement in July 2012  

                                                                                                                                                                                                                                                                          



and amended it three times.   On the line for identifying clients Studley provided no  

                                                                                                                                                                                                                                                 



details,  but  he  made  notes  essentially  stating  that  he  was  prohibited  by  law  from  

                                                                                                                                                                                                                                                                         



disclosing the information.  Under a general entry he titled "Real Estate Sales" Studley  

                                                                                                                                                                                                                                                                 



reported "$20,000 - $50,000" in income.   During this process Studley contacted the  

                                                                                                                                                                                                                                                                               



Commission and directed it to four real estate statutes that he said should provide "an  

                                                                                                                                                                                                                                                                               



                      1                    See  AS  39.50.030(b)(1)(A)-(F).   



                      2                    See  AS  39.50.200(a)(10).  



                                                                                                                                         -2-                                                                                                                                            7148  


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

                                                                                                                                                                          3  

exemption from disclosing confidential financial information."                                                                                                                Studley stated: "These                     



statutes specifically prohibit release of any financial information regarding my clients or                                                                                                                                            



customers without prior written approval or at the direction of the judicial system by                                                                                                                                               



court order."                         



                                     Campaign disclosure regulations permit a candidate to request a reporting                                                                                                    

                                                                   4       The  Commission  asked  Studley  to  provide  the  required  

exemption   or   a   waiver.                                                                                                                                                                                        



information for making an exemption request, including the name, mailing address, and  

                                                                                                                                                                                                                                   



email address of the person making the request; the provision under which the exemption  

                                                                                                                                                                                                                



was sought; the reasons for requesting the exemption; and a certification that all facts  

                                                                                                                                                                                                                               

given were true.5  Studley responded by providing some of the requested information,  



including  his  name,  mailing  address,  email  address,  and  a  certification  that  the  

                                                                                                                                                                                                                                  



information was true and accurate.  Citing "AS 08-4145," he gave as the reason for his  

                                                                                                                                                                                                                                    



request that the statute does "not allow any financial disclosure or information that would  

                                                                                                                                                                                                                            



                                                                                                                             6  

be considered financially harmful to a client."    

                                                                                                        



                  3                  The four statutes he cited were:                                                       AS 08.88.071, outlining the Alaska Real                                                             



Estate   Commission's   duties   and   powers   and   grounds   for   disciplinary   sanctions;  

AS 08.88.081, providing, in its entirety, that "[t]he commission shall adopt regulations                                                                                                                      

necessary to carry out the purposes of this chapter"; AS 08.88.171, listing real estate                                                                                                                                     

licensee eligibility standards; and AS 08.88.685, requiring real estate brokers to adopt                                               

various written policies and procedures.                                      



                  4                  2 Alaska Administrative Code (AAC) 50.821 (2012).  

                                                                                                                                                                   



                  5                 See 2 AAC 50.821(a)(1)-(9).  

                                                                     



                  6                  It was subsequently clarified that "08-4145" is not a statute number, but  

                                                                                                                                                                                                                                   

rather the designation on an Alaska Real Estate Commission pamphlet that real estate  

                                                                                                                                                                                                                            

licensees are required to present to customers and clients outlining a licensee's duties to  

                                                                                                                                                                                                                                       

those consumers.  The pamphlet explains that a licensee will "[n]ot disclose confidential  

                                                                                                                                                                                                            

information,  even  after  the  relationship  ends,  from  or  about  you  without  written  

                                                                                                                                                                                                                       

                                                                                                                                                                                                        (continued...)  



                                                                                                                  -3-                                                                                                          7148
  


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                                                                      In a subsequent exchange Studley provided the Commission a copy of the                                                                                                                                                                                                                                                                                                       



Alaska Real Estate Commission pamphlet he had referred to as "AS 08-4145" and stated                                                                                                                                                                                                                                                                                                                                                 



that   no  information   about   a   client   may   be   disclosed   without   court   order.     Studley  



provided two hypothetical examples to illustrate how disclosing the existence or details                                                                                                                                                                                                                                                                                                                                         



 of a broker-client relationship might harm a client.                                                                                                                                                                                                                         Studley's first example discussed                                                                                                 



how a buyer might be able to infer that a couple is divorcing from client disclosures and                                                                                                                                                                                                                                                                                                                                                       



use that as negotiating leverage in a purchase; his second outlined privacy concerns for                                                                                                                                                                                                                                                                                                                                                            



 a person selling real property while filing for bankruptcy.                                                                                                                                                                                                                                                      He did not assert that these   



were actual client situations he faced.                                                                                                                                                               



                                                                      Later that day Studley sent the Commission another response asserting that                                                                                                                                                                                                                                                                                                



he was "not required" to file the disclosures because "I receive my money from my                                                                                                                                                                                                                                                                                                                                                                



various owned companies and I have listed both of my companies that pay me my                                                                                                                                                                                                                                                                                                                                                                    



income."   He explained that:                                                                                                                          "all of my clients are with contracts to my companies and                                                                                                                                                                                                                                



not to me personally"; "Alaska real estate law requires a court order or subpoena before                                                                                                                                                                                                                                                                                                                                          



I (a Broker) can release confidential information"; and "the legal system seems to weigh                                                                                                                                                                                                                                                                                                                                           



towards protecting the personal rights of all Alaskans['] financial data."                                                                                                                                                                                                                                                                                                                 



                                                                      Thefollowing                                                              week Commissionstaffdenied                                                                                                                                    Studley'sexemption                                                                                          request.   



The Commission explained that the four statutes Studley cited "do not provide any                                                                                                                                                                                                                                                                                                                                                             



 statutory reason that would exempt you as a candidate[] from disclosing real estate                                                                                                                                                                                                                                                                                                                                                



transactions that provided you income." Noting that "the value of real estate transactions                                                                                                                                                                                                                                                                                                           



is a public process and your involvement and [c]ommissions from this public process                                                                                                                                                                                                                                                                                                                                        



                                   6                                  (...continued)  



                                                                                                                                                                                                                                                                                                                                                                                                                   

permission, except under a subpoena or court order."  The language from this pamphlet  

                                                                                                                                                                                                                                                                                                                                                                                                               

mirrors that of AS 08.88.620(4), stating that real estate licensees may "not disclos[e]  

                                                                                                                                                                                                                                                                                                                                                                                                                        

 confidential information from or about the represented person without written consent,  

                                                                                                                                                                                                                                                                                                                                                                                                               

 except under a subpoena or another court order, even after termination of the licensee's  

                                                                                                                                                                                                                             

relationship with the represented person."  



                                                                                                                                                                                                                           -4-                                                                                                                                                                                                             7148
  


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

 [are] ascertainable already from other sources," the Commission concluded that the                                                                                                                                                                                                                        



transactions did not "fall under a constitutionally protected zone of privacy."                                                                                                                                                                                                                       The  



Commission observed that "the public's right to                                                                                                                                          know the sources of your income                                                                    



outweigh[s] any reason you may have to keep these matters private."                                                                                                                                                                                          The denial also                             



informed Studley that he could appeal the staff's decision directly to the Commission's                                                                                                                                                                             



appointed members within 30 days.                                                                                                    



                                                 Studley took no action to appeal. The Commission then sent him a "Notice                                                                                                                                                                



of   Penalty"   informing   him   that  civil   penalties   are   assessed   for   filing   incomplete  



disclosure statements, and that he was subject to fines accrued daily from the decision                                                                                                              



date until the election date.  The penalty was $10 per day, for a total of $350.  Studley   



was given 30 days to pay the penalty or appeal to the Commission.                                                                                                                                                                                   



                                                 Studley appealed the penalty, requesting a hearing and stating that he was                                                                                                                                                                               



"not allowed" to comply with the disclosure laws "on reporting contractual agreements."                                                                                                                                                                                                                                    



At the hearing the commissioners located a real estate statute defining "confidential                                                                                                                                                                                  

                                               7 and tooknoteofStudley's arguments thattherequired disclosures violated  

information"                                                                                                                                                                                                                                                                               



his clients' constitutional privacy rights.  

                                                                                                                                                   



                                                The Commission later issued a "Final Order" ruling that none of the real  

                                                                                                                                                                                                                                                                                                          



estate statutes Studley cited prohibited the required disclosures. The Commission found  

                                                                                                                                                                                                                                                                                                   



that Studley "violated the reporting statute by not filing a complete [disclosure] report,"  

                                                                                                                                                                                                                                                                                            



but reduced his civil penalty to $175 because he was an "inexperienced filer." The order  

                                                                                                                                                                                                                                                                                                     



informed Studley that he could request reconsideration within 15 days and that he could  

                                                                                                                                                                                                                                                                                                    



appeal to the superior court within 30 days.  

                                                                                                                                                               



                        7  

                                                                                                                                                                                                                                                                                                               

                                                AS 08.88.695(2);  see infra  Section IV.B.3 (discussing applicability of  

              

AS 08.88.695(2)).  



                                                                                                                                                       -5-                                                                                                                                                           7148  


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                                                                                                                       8  

                                  Studley requested reconsideration.                                                      The Commission addressed Studley's                                     



request at a subsequent meeting, ultimately denying it for failure to provide a basis for                                                                                                                       



reconsideration.  



                                  Studley had not been represented by an attorney during his Commission                                                                                 



interactions; he retained counsel and filed an appeal with the superior court after the                                                                                                                         



Commission denied his request for reconsideration.                                                                               Studley cited the real estate statute                                  



establishing a licensee's duty to maintain a client's confidential information learned                                                                                                               

                                                      9 and the statutory "confidential information" definition examined  

during representation,                                                                                                                                                                          

at his Commission hearing.10                                               Studley also asserted that the required disclosures would  

                                                                                                                                                                                                        



violate his clients' constitutional privacy rights and would infringe on several of his own  

                                                                                                                                                                                                             



constitutional rights.  

                                                      



                                 The superior court concluded that Studley "has not shown that he was  

                                                                                                                                                                                                             



called upon to disclose any confidential information" and that he "never made any  

                                                                                                                                                                                                              



specific assertion that any particular client's information should be kept confidential."  

                                                                                                                                                                                                                          



The court rejected Studley's constitutional claims, explaining that "Studley did not  

                                                                                                                                                                                                               



demonstrate . . . that release of information about his clients would violate any of his  

                                                                                                                                                                                                                



clients' privacy rights [or that] his rights under any of the[ ] [asserted] constitutional  

                                                                                                                                                                                     



provisions were violated."  Observing that Studley "provided no basis upon which [the  

                                                                                                                                                                                                              



Commission]   could   have  granted   him  an   exemption,"  the  court   affirmed   the  

                                                                                                                                                                                                             



Commission's decision.  

                                      



                 8               See   2  AAC   50.891(g)   ("The   commission   may   reconsider   an   order   as  



provided in AS 44.62.540. . . . A request for reconsideration must state specific grounds                                                                                                           

for reconsideration.").   



                 9               AS 08.88.620(4).  

                                           



                 10              AS 08.88.695(2).  

                                           



                                                                                                        -6-                                                                                                7148
  


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

                                       Studley now appeals the superior court's decision with two "principal                                                                                                                



questions" for our review.                                                   First, do "real estate regulations that require a broker                                                                                                   not  to  



release confidential client information conflict with the [Commission's] regulations that                                                                                                                                                      



demand this disclosure by a broker who runs for public office?" (Emphasis in original.)                                                                                                                                                                      



Second, was Studley's "constitutional right of candidacy improperly conditioned upon                                                                                                                                                       



relinquishment of his constitutional right of privacy and the rights of privacy of his                                                                                                                                                           



clients[, or u]pon possible loss of his license and of his profession?"                                                                                          



III.                STANDARD OF REVIEW                                   



                                       "When the superior court has acted as an intermediate court of appeal, we                                                                                                                                  



review the merits of the administrative agency's decision                                                                                                                      without deference                                       to   the  

superior court's decision."11  "[W]e give deference to [an] agency's interpretation of a  



                                                                                                                                                                                                                                     

statute] so long as it is reasonable, when the interpretation at issue implicates agency  



                                                                                                                                                                                                                                

expertise or the determination of fundamental policies within the scope of the agency's  

                                                            12      But we will substitute our own judgment for questions of law  

                                                                                                                                                                                                                                               

statutory functions." 



"when the statutory interpretation does not involve agency expertise, or the agency's  

                                                                                                                                                                                                                                

specialized knowledge and experience would not be particularly probative."13   "In such  

                                                                                                                                                                                                                                             



cases we 'adopt the rule of law that is most persuasive in light of precedent, reason, and  

                                                                                                                                                                                                                                                



                   11                  Tolbert v.                     Alascom,   Inc.,   973   P.2d   603,  606-07  (Alaska 1999)                                                                                                     (citing  



Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co.                                                                                                   , 746 P.2d 896, 903 (Alaska 1987)).                                             



                   12                 Marathon Oil co. v. State, Dep't of Nat. Res., 254 P.3d 1078, 1082 (Alaska  

                                                                                                                                                                                                                                    

2011) (citing Matanuska-Susitna Borough v. Hammond, 726 P.2d 166, 175 (Alaska  

                                                                                                                                                                                                                     

 1986)).  



                   13                 Lakloey, Inc. v. Univ. of Alaska, 141 P.3d 317, 320 (Alaska 2006) (quoting  

                                                                                                                                                                                                                                  

Gunderson v. Univ. of Alaska, Fairbanks, 922 P.2d 229, 233 (Alaska 1996)).  

                                                                                                                                                                                                          



                                                                                                                         -7-                                                                                                                7148
  


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                  14  

policy.' "            Questions of constitutional interpretation are also reviewed de novo under                                                     

the substitution of judgment standard.                                15  



IV.	        DISCUSSION  



                                                                                                                                                       

            A.	          Candidates Must Report Sources And Amounts Of Income But May  

                                                                                                                   

                         Seek An Exemption When Privacy Concerns Arise.  



                                                           

                         1.	         Disclosure requirements  



                                                                                                                                             

                         Under  Alaska law a candidate for  elective office, including municipal  



                                                                                                                                                      16  

                                                                                                                                                           A  

office, must file a statement disclosing "income sources and business interests." 



                                                                                                                                                           

municipal  candidate  must  disclose  this  information  when  declaring  candidacy  or  



                                                            17  

                                                                                                                                                        

submitting other required filings.                              The statement must provide "sources of income over  



                                                                                                                                                           

$1,000" for the preceding calendar year, including "each source of the income" and the  



                                                                                                                             

corresponding "amount of income" earned from the source, which "may be stated in a  



                                                                      18  

                                                                                                                                                      

range rather than as an exact amount."                                    A candidate is considered self-employed when  



                                                                                                                                                             

the  candidate  owns  a  controlling  interest  in  an  income-deriving  entity,  such  as  a  



                                                      19  

                                                                                                                                                          

partnership or a corporation.                               A self-employed candidate's source of income is the  



            14          Alyeska Pipeline Serv. Co. v. DeShong                                  , 77 P.3d 1227, 1231 (Alaska 2003)                    



(quoting  Guin v. Ha                 , 591 P.2d 1281, 1284 n.6 (Alaska 1979)).                        



            15          Brandal v. State, Commercial Fisheries Entry Comm'n, 128 P.3d 732, 735  

                                                                                                                                                         

(Alaska 2006); see also Beeson v. City of Palmer, 370 P.3d 1084, 1088 (Alaska 2016)  

                                                                                                                                                     

("We review questions of constitutional law de novo." (citing Anchorage v. Sandberg ,  

                                                                                                                                             

861 P.2d 554, 557 (Alaska 1993))).  

                                                   



            16           AS 39.50.020(a).  

                                                          



            17          Id.  



            18           AS 39.50.030(b)(1); 2 AAC 50.685(c).  

                                                                               



            19           AS 39.50.200(10).  

                                



                                                                             -8-	                                                                     7148
  


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

                                                                             20  

entity's individual "client or customer."                                        Disclosure statements are available to the                             

public.21  



                                                             

                         2.           Disclosure exemptions  



                                                                                                                                               

                         A candidate required to file a disclosure statement may request exemptions  



                             22  

                                                                                                                                                                

from reporting.                   Among other items, a candidate may request to keep "the name of an  



                                                                                                                                                                23  

                                                                                                                                                                      

individual whowas asourceofincome"or "theamount of income" earned confidential. 



                                                                                                                                                                

"The person requesting any exemption has the burden of proving each fact necessary to  



                                                                               24  

                                                                                                                                                         

show that an exemption . . . is applicable."                                        A candidate may seek an exemption under  



                                                                                                                                                                

2 AAC 50.775(c)(1) when "prohibited by law . . . from reporting" the information, or  



                                                                                                                                                         

under 2 AAC 50.775(c)(2) when disclosure "would violate rights of the source under  



                                                                           25  

                                                                                                                                                     

                                                                               Although the superior courtbased its decision  

stateor federal statutes or constitutions." 

                                             26 both parties relied on these two provisions and we accept them  

                                                                                                                                                           

                           

on a different provision, 



as the relevant authorities for this appeal.  

                                                                 



             20          Id.  



             21          AS 39.50.050(c);                  see also        2 AAC 50.801(a) (providing for inspection and                                     



copies of reports, records, and other information in Commission's possession).                                                 



             22          2  AAC  50.775(a).  



             23          Id.  



             24          Id.  



             25          2  AAC  50.775(c)(1),  (2).  



             26          See  2  AAC   50.775(e)   (providing   for  exemption  requests  when  "state   or  



federal  law  or  court  order  requires  the  .  .  .  information  to  be  kept  confidential").  



                                                                               -9-                                                                        7148
  


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

                       B.                      Studley Did Not Demonstrate He Was Entitled To An Exemption.                                                                                                                                             



                                               1.	                    We regard Studley's assertions as arguments for an exemption.                                                                                                                                  



                                               Studley argues that candidate disclosure requirements "compete" with his                                                                                                                                                                             



statutory duty as a real estate agent to keep client information confidential, and that                                                                                                                                                                                        



reporting the information would violate his clients' privacy rights under the Alaska                                                                                                                                                                                                



Constitution.  Studley claims that his right to stand for elective office was conditioned  



upon the surrender of his right to practice as a real estate broker and that his equal                                                                                                                                                                                                   



protection rights were violated.                                                                                  He also contends he does not need to show that his                                                                                                                               



clients'   information   is   confidential   on   a   "case-by-case"   basis.     We   consider   these  



contentions together as an argument that Studley was entitled to a financial disclosure   



reporting exemption.   



                                               2.	                    Exemption requests must be supported by facts; hypothetical                                                                                                                              

                                                                      scenarios are insufficient.                       



                                               As a candidate requesting an                                                                      exemption it was                                           Studley'sburden to "prov[e]                                          



                                                                                                                                                                                                                                  27  

each fact necessary" to show that a reporting exemption applied.                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                           Contending that he  



                                                                                                                                                                                                                                                                         

"cannot  know  the  circumstances  of  each  client,  [but]  can  envision  or  anticipate  



                                                                                                                                                                                                                                                                             

circumstances in which disclosure would be detrimental," Studley offers four "possible  



                                                                                                                                                                                                                28  

                                                                                                                                                                                                                                                                                              

examples" where disclosure could be detrimental to a client.                                                                                                                                                              Studley argues that such  



                                                                                                                                                                                                                                                                                       

hypothetical examples should suffice for an exemption, quoting Falcon v. Alaska Public  



                       27                      2 AAC 50.775(a).           



                       28                      The four hypothetical clients Studley offers as examples are:  (1) "a seller  

                                                                                                                                                                                                                                                                                           

who anticipates a divorce or dissolution"; (2) "a buyer [with] a creditor who is looking                                                                                                                                                                                           

for property on which to place a lien"; (3) "[t]he victim of a crime"; and (4) a buyer with  

                                                                                                                                                                                                                                                                                              

an "interest in keeping the selling price . . . confidential."                                                                                                                                            



                                                                                                                                                -10-	                                                                                                                                        7148
  


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

                                                 29  

 Offices Commission                                   for the proposition that "a case-by-case determination would be                                                                                       



 excessively burdensome."                                         Studley offered the Commission no facts pertaining to his                                                                               



 own situation supporting a reporting exemption.                                                                       



                                 We conclude that Studley's hypothetical scenarios are an insufficient basis                                                                                          

                                                                                                                                                30     Under 2 AAC 50.775(a)  

 for an exemption from the financial disclosure requirement.                                                                                                                              



 "the burden of proving each fact necessary to show that an exemption . . . is applicable"  

                                                                                                                                                                                       



 is on the candidate seeking elective office.  Hypothetical scenarios do not qualify as  

                                                                                                                                                                                                            

 "fact[s] necessary to show that an exemption . . . is applicable."31  

                                                                                                                             



                                 Studleywas in thebestpositiontoinvestigatehis clients' circumstances and  

                                                                                                                                                                                                          



present facts showing an applicable exemption.  But there is no evidence that Studley  

                                                                                                                                                                                               



 tried to determine whether any client's name or commission amount could be legally  

                                                                                                                                                                                                 



protected from disclosure.  Studley's case is distinguishable from Falcon; that case was  

                                                                                                                                                                                                         



 decided before an exemption process existed, and real estate transactions have fewer  

                                                                                                                                                                                                    

                                                                                               32    Because Studley offered no facts showing an  

privacy considerations than healthcare.                                                                                                                                                                     

                                                                     



 applicable exemption with respect to any of his claims, he failed to meet his burden.  

                                                                                                                                                                                          



                 29              570 P.2d 469, 480 (Alaska1977)(holding                                                             that absent regulationsproviding                       



 an exemption scheme, physicians are categorically exempt from                                                                                           "reporting the names of                             

 individual patients" in financial disclosure reports).                                                  



                 30              Because the Commission has no agency expertise, specialized knowledge,  

                                                                                                                                                                                      

 or experience interpreting real estate confidentiality rules, we apply the substitution of  

                                                                                                                                                                      

judgment standard in making this determination.  See Lakloey, Inc. v. Univ. of Alaska,  

                                                                                                                                                                                          

 141 P.3d 317, 320 (Alaska 2006).  

                                                                   



                 31              See 2 AAC 50.775(a).  

                                                              



                 32              See Falcon, 570 P.2d at 479-80.  

                                                                                            



                                                                                                    -11-                                                                                              7148
  


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

                         3.	         Studley did not demonstrate that the required information was                                                       

                                     uniformly   confidential   and   that   disclosure   was  uniformly  

                                     prohibited by law.           



                         Studley   contends   that   he   is   under   a   statutory   duty   not  to   disclose  



confidential information, including client names and derived earnings. We consider this                                                                   



to   be   an   argument   that   disclosure   of   a   self-employed   real   estate   agent's   clients'  



information is always prohibited by law for purposes of Alaska's election disclosure                                                         

regime.33  



                                                                                                                                         

                         Alaska   Statute   08.88.620(4)   prohibits   a   broker   from   "disclosing  



                                                                                                                                                 

confidential information from or about [a] represented person without written consent,  



                                                                                                                                                              

except under  a subpoena or  another court order, even  after  termination of the .  .  .  



                         34  

                                                                                                                                                           

relationship."                    "[C]onfidential  information"  is  defined  in  AS  08.88.695(2)  as  



                                                                                 

"information from or concerning a person" that:  



                                                                                                                                 

                                     (A)  the  licensee  acquired  during  the  course  of  the  

                                                                                                            

                         licensee's relationship as a licensee with the person;  



                                                                                                                             

                                     (B)   the   person   reasonably   expects   to   be   kept  

                         confidential;  



                                                                                                                                   

                                     (C) the person has not disclosed or authorized to be  

                                                             

                         disclosed to a third party;  



                                                                                                                                  

                                     (D) would, if disclosed, operate to the detriment of the  

                                        

                        person; and  



                                                                                                                              

                                     (E) the person is not obligated to disclose to the other  

                                                                                            [35]  

                                                                                           

                        party in a real estate transaction . . . . 



            33           See  2  AAC  50.775(a),  (c)(1).  



            34           AS  0.88.620(4).  



            35           AS  08.88.695(2)  (emphasis  added).   A  real  estate  broker  is  considered  a  



licensee  in  this  context.   See  AS  08.88.695(7).  



                                                                            -12-	                                                                     7148
  


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

The legislature's conjunctiveuse of the word"and"indicates                                                                         that allfiveconditions must                      

be satisfied to meet the "confidential information" definition.                                                                        36                 

                                                                                                                                            Here Studley failed to  



                                                             37  

                                          

make the required showing. 



                                                                                                                                                                                    

                              Studley argues that a real estate broker's clients reasonably expect their  



                                                                                                                                                                                           

names and the broker-client relationship to be kept confidential because Alaska is a  



                                                                                                                                                                                

"non-disclosure state" and the information "is not part of the public record." He further  



                                                                                                                                                                            

contends that a candidate for elected office cannot be expected to determine whether  



                                                                                                                                                                     

clients disclosed his representation to third parties, which would render the information  



                                                                                                   

non-confidential under AS 08.88.695(2)(C).  



                                                                                                                                                                      

                             But  client  names  and  real  estate  broker  commissions  are  frequently  



                                                                                                                                                                              

disclosed to third parties. The Commission observes that disclosure of a client's identity  



                                                                                                                                                                                   

"is generally necessary to enter into a purchase contract of sale, execute a deed, and close  



                                                                                                                                                                           

the transaction."  And during the January 2013 Commission meeting Studley admitted  



                                                                                                                                                                                

that  he  reveals  his  commission  amount  directly  to  counter  parties  in  real  estate  



                                                                                                                                                                          

transactions. Such disclosures are commonplace in land sale contracts, which generally  



                                                                                                                                                                                          

include "the identity of the buyer and seller, the price to be paid, the time and manner of  



               36            SeeEmp't               Sec. Comm'n v. Wilson, 461P.2d 425, 428 (Alaska1969) ("[W]e                                                                



may assume that the legislature knew and understood the rules of grammar," and are                                                                                                     

"justified   in   relying   on   such   rules   in   the   interpretation   of   [Alaska]   laws."   (citing  

AS 01.10.040)).   



               37            We do not address all five elements of the definition because once we  

                                                                                                                                                                                       

determine that one element is lacking, Studley's claim fails.  See AS 08.88.695(2).  

                                                                                                                                                        



                                                                                           -13-                                                                                    7148
  


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

                                                                                    38  

payment,   and   the   property   to   be   transferred."                                  Much   of   this   information   is  also  

disclosed to third parties when real estate transactions are recorded.                                                39  



                       We do not suggest there can never be a transaction where a client's identity  

                                                                                                                                           



or the amount of the broker's commission is intended to be confidential. But we will not  

                                                                                                                                                   



assume that all real estate broker's commissions and clients' identities must be and are  

                                                                                                                                                   



always confidential.  And because Studley has not shown that any of his clients' names  

                                                                                                                                             



or his derived income were previously undisclosed to third parties, weaffirmthesuperior  

                                                                                                                                          



court's decision that he was not "prohibited by law . . . from reporting" this information  

                                                                                                                                    

to the Commission.40  

            



                        Studley also argues that the "crux of the problem is that a broker cannot  

                                                                                                                                            



know for certain what information is detrimental to a client, or whether the release of  

                                                                                                                                                    



information  will  not  work  a  detriment  to  a  client  in  the  future."                                                   He  lists  four  

                                                                                                                                                



"circumstances"  in  which  he  "can  envision  or  anticipate"  disclosures  could  be  

                                                                                                                                                   

                     41   But as noted earlier hypothetical scenarios do not show that disclosure  

detrimental.                                                                                                                          



would be detrimental to a real estate broker's actual clients. Alaska Statute 08.88.695(2)  

                                                                                                                                  



            38         Hall v. Add-Ventures,Ltd.                    ,695P.2d1081,               1086 n.6 (Alaska1985) (quoting                            



Custis v. Valley Nat'l Bank of Phx.                          , 375 P.2d 558, 561 (Ariz. 1962)).              



            39         See AS 40.17.040 (establishing that a district recorder shall maintain an  

                                                                                                                                                    

index system for instruments "so the public may find documents by location and by  

                                                                                                                                                   

names of grantors and grantees"). Studley contends that "no Alaska statute or regulation  

                                                                                                                                       

requires a property owner to record a transaction."  But he does not suggest that his  

                                                                                                                                                   

clients do not in fact do so.  

                                                 



            40         2 AAC 50.775(c)(1); see AS 08.88.695(2)(C).  

                                                                            



            41         See supra note 27 (outlining Studley's four hypothetical scenarios).  

                                                                                                                            



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

plainly   requires   that   a   disclosure   actually   be   detrimental   for   the   information   to   be  



                           42  

confidential.                                                                                                                                                            

                                 The mere possibility of theoretical harm does not mean a harm exists.  



                                                                                                                                                                      

                             Studley  relies  on Falcon  to  argue  that  his  clients'  "sensitive  personal  

                                                                                                                                 43    In Falcon we held that  

                                                                                                                                                                                 

                                                                                                        

information" should be protected "from public disclosure." 



physicians did not need to "report[] the names of individual patients" because of the  

                                                                                                                                                                                   

"significant privacyinterest"atstakein many physician-clientrelationships.44  But unlike  

                                                                                                                                                                             



Falcon where"[e]ven visits toageneralpractitioner may causeparticular embarrassment  

                                                                                                                                                          



or opprobrium," we do not conclude that the disclosure of buyers and sellers of real  

                                                                                                                                                                                 

estate will be similarly detrimental.45                                          In this case there is no indication of broad classes  

                                                                                                                                                                           



of  clients  who  must  uniformly  be  protected  from  election  disclosure  laws,  and  

                                                                                                                                                                                



AS 08.88.695(2) already provides a mechanism for protecting confidential information  

                                                                                                                                                                



in individual circumstances.  Because Studley has failed to show that disclosure would  

                                                                                                                                                                            



actually be detrimental to any of his clients, we affirm the superior court's decision that  

                                                                                                                                                                                 



                                                                                                                                             46  

Studley was not asked "to disclose any confidential information."                                                                                 

                                                                                                                



              42             See   AS   08.88.695(2)(D)   (requiring   that   the   confidential  information  



"would, if disclosed, operate to the detriment of the person" (emphasis added));                                                                                        see also   

Heller v. State, Dep't of Revenue                                         , 314 P.3d 69, 74 (Alaska 2013) ("The plainer the                                                       

meaning of the statute, the more persuasive any legislative history to the contrary must                                                                                       

be." (quoting                City of Dillingham v. CH2M Hill Nw., Inc.                                                  , 873 P.2d 1271, 1276 (Alaska                    

 1994)));  cf. id.                ("We give unambiguous statutory language its ordinary and common                                                                    

meaning . . . ." (citing                        City of Dillingham                       , 873 P.2d at 1276)).         



              43            Falcon v. Alaska Pub. Offices Comm'n, 570 P.2d 469, 480 (Alaska 1977).  

                                                                                                                                                                            



              44            Id.  



              45            Id. at 479-80.  

                                          



              46             See AS 08.88.695(2)(D).  

                                              



                                                                                        -15-                                                                                  7148
  


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

                                     4.	                Studley has not demonstrated that the disclosures would violate                                                                                                     

                                                       his clients' constitutional privacy rights.                                                         



                                     In addition to his statutory argument Studley contends that disclosing his                                                                                                                        



clients' names and derived income would violate his clients' constitutional privacy                                                                                                                                      

rights.47                                                                                  

                        Studley again relies on Falcon to argue that his clients' personal information  



                                                                             48  

                                                                                   

should be kept confidential. 



                                                                                                                                                                                                                          

                                     But just as with Studley's statutory argument, his constitutional privacy  



                                                                                                                                                                                                                                     

argument fails because he relies solely on generalized hypotheticals. If Studley had any  



                                                                                                                                                                                                                                   

specific client relationships where a constitutional right of privacy was a concern, it was  



                                                                                                                                                                                                                                     

his obligation to bring the facts of those relationships to the Commission's attention and  



                                                                                                                                                          

request an exemption.  But Studley brought no specific requests.  



                                                                                                                                                                                                                         

                                     We held in Falcon  that disclosing the identities of physicians' patients  



                                                                                                                                                                                                                                           

could not be required until the Commission promulgated regulations "provid[ing] a  



                                                                                                                                                                                                                            

method for exempting certain classes of patients . . . or for determining whether certain  

                                                                                                                                    49  But the broker-client relationship is  

patients fall within special or sensitive classes." 



not like the physician-client relationship we addressed in Falcon, where because of  

                                                                                                                                                                                                                                        



"specialized practice[s], the disclosure of the patient's identity also reveals the nature of  

                                                                                                                                                                                                                                          



the treatment, and the particular type of treatment is one which patients would normally  

                                                                                                                                                                                                                      



                   47                See   Alaska Const.                                    art.  I,      22   ("The right of the people to                                                                      privacy   is  



recognized and shall not be infringed."); 2 AAC 50.775(c)(2) (permitting candidates to                                                                                                                                                    

seek an exemption when a disclosure "would violate rights of the source under [the] state                                                                                                                                          

 . . . constitution[]").       



                   48                See Falcon, 570 P.2d at 479-80.  

                                                                                                         



                   49                Id. at 480.  

                                                     



                                                                                                                  -16-	                                                                                                          7148
  


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

                                                 50  

seek to keep private."                                Studley does not present "classes of clients" who might have a                                                                              



common interest in privacy; he instead presents four unique circumstances that do not     



lend themselves to ready classification and are best dealt with on a case-by-case basis.                                                                                                              



And the Commission's regulations provide Studley with a method of preserving his                                                                                                             

                                                     51    Because no blanket exemption exists, we affirm the superior  

clients' confidentiality.                                                                                                                                                        



court's rejection of Studley's clients' constitutional claims.  

                                                                                                                                        



               C.             Studley's Remaining Personal Constitutional Claims Fail.  

                                                                                                                                                                



                               Studley also argues that his own constitutional right to privacy would be  

                                                                                                                                                                                              



infringed by the required candidacy financial disclosures.  But the required disclosures  

                                                                                                                                                                           



are neither "personal" nor "intimate," and Studley, at least with respect to potential  

                                                                                                                                                                                



conflicts of interest, has "waived his right to privacy by 'voluntarily entering the public  

                                                                                                                                                                                      

arena.' "52  

                  



                                                                                                                                                                            

                               Studley  also  asserts  that  he  has  been  "whipsawed"  by  "dueling"  



                                                                                                                                                                               

requirements, arguing that his statutory duty of confidentiality irreconcilably competes  



                                                                                                                                                                                   

with the candidate disclosure laws, setting an "unconstitutional condition" that impairs  



                                                                                                                                                                                                

his constitutional right of candidacy.  He contends that his right to stand for election is  



                                                                                                                                                                             

infringed because abiding by the disclosure requirements could subjecthimto discipline,  



                                                                                                                                                                                        

suspension, or loss of his broker's license.  Studley argues that this violates his equal  



                                                                                                                                                                                              

protection and substantive due process rights and acts as a barrier to his candidacy.  



                                                                                                                                                                                          

                              But  the  constitutional  rights  of  self-employed  real  estate  brokers  like  



                                                                                                                                                                                       

Studley who run for public office are protected.  A broker may stand for elective office  



               50             Id.  



               51             See  2 AAC 50.775.          



               52  

                                                                                                                                                 

                              Falcon, 570 P.2d at 474 (citing N.Y. Times Co. v. Sullivan, 376 U.S. 254  

(1964)).  



                                                                                             -17-                                                                                        7148
  


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

                                                                                                                                                                                                          53  

by either making the required disclosures or proving an exemption applies.                                                                                                                                        And  



Studley's right of candidacy was not impaired; he stood for election to the borough                                                                                                                     



assembly   and   could   have   avoided   any   penalty   by   following   the   Commission's  



procedures. Studley's                                    remaining personal constitutional argumentsareall                                                                                without merit.   



We affirm the superior court's decision on those issues.                                                                                         



V.               CONCLUSION  



                                  We AFFIRM the superior court's decision affirming the Commission's  

                                                                                                                                                                                         



final order and civil penalty.  

                                                     



                 53               2 AAC 50.775(a).  

                                                       



                                                                                                          -18-                                                                                                             7148  

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