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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Toni 1 Trust v. Wacker (3/2/2018) sp-7228

Toni 1 Trust v. Wacker (3/2/2018) sp-7228

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

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                       THE SUPREME COURT OF THE STATE OF ALASKA                                         

TONI   1  TRUST,  by  its  Trustee                                 )  

DONALD  TANGWALL,                                                  )    Supreme Court No. S-16153  



                                 Appellant,                        )    Superior Court No. 4FA-15-01603 CI  




                                                                   )    O P I N I O N  




BARBARA WACKER, individually                                       )    No. 7228 - March 2, 2018  


 and jointly  and severally, WILLIAM                               )  


WACKER, individually and jointly  and )


 severally, and LARRY D. COMPTON, )


Bankruptcy Trustee, individually and                               )


jointly  and severally,                                            )


                                 Appellees.                        )



                      Appeal  from  the  Superior  Court  of  the  State  of  Alaska,  


                      Fourth Judicial District, Fairbanks, Michael A. MacDonald,  



                      Appearances:                 S.   Jason   Crawford,   Layton,   Utah,   for  


                      Appellant.   Erik LeRoy, Erik LeRoy P.C., Anchorage, for  


                      Appellees  Wacker.                   Cabot  Christianson,  Law  Offices  of  


                      Cabot Christianson, P.C., Anchorage,for AppelleeCompton.  


                      Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  


                      and Carney, Justices.  


                      BOLGER, Justice.  

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

I.             INTRODUCTION


                             After a Montana state court issued a series of judgments against Donald  


Tangwall and his family, the family members transferred two pieces of property to the  


"Toni 1 Trust," a trust allegedly created under Alaska law.  A Montana state court and  


an Alaska bankruptcy court found that the transfers were made to avoid the judgments  


and were therefore fraudulent.  Tangwall, the trustee of the Trust, then filed this suit,  


arguing that Alaska state courts have exclusive jurisdiction over such fraudulent transfer  


actions under AS 34.40.110(k).  But we conclude that this statute cannot unilaterally  


deprive other state and federal courts of jurisdiction.  We therefore affirm the superior  


court's judgment dismissing Tangwall's complaint.  




                             In 2007 Donald Tangwall sued William and Barbara Wacker in Montana  


state court. The Wackers counterclaimed against Tangwall; his wife, Barbara Tangwall;  


his mother-in-law, Margaret "Toni" Bertran; and several trusts and businesses owned or  


run by the family.  In the ensuing years, several default judgments were entered against  


Tangwall and his family.  


                             In 2010, before the last of these judgments was issued, Bertran and Barbara  


Tangwall transferred parcels of real property to an Alaska trust called the "Toni 1 Trust"  

                          1    The Wackers filed a fraudulent transfer action under Montana law in  


(the Trust). 

Montana state court, alleging that the transfers were made to avoid the judgments.  


               1             The appellees argue that (1) the Trust is not an Alaska trust at all and                                                                                 

(2)  even if it is, the Trust is not subject to the Alaska statute because it was not created                                                                                  

in compliance with applicable statutory requirements. The superior court did not resolve                                                                                       

these factual questions, and we assume, without deciding, that the Trust is an Alaska trust                                                                                          

subject to AS 34.40.110.        

                                                                                            -2-                                                                                     7228

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

Default   judgments   in   the   fraudulent   transfer   action   were   entered   against   Barbara  

Tangwall, the Toni 1 Trust, and Bertran.                                                                                                                                         

                                                         Afterthefraudulenttransferjudgments wereissued, theWackerspurchased                                                                                                                                                                                                           

Barbara Tangwall's interest in one of the parcels at a sheriff's sale, as part satisfaction                                                                                                                                                                                                                                      

of their judgment against Tangwall and family.                                                                                                                                                                     But before they could purchase the                                                                                                               

remaining half interest, Bertran filed for Chapter 7 bankruptcy in Alaska.                                                                                                                                                                                                                                                   Her interest   

in the trust property was therefore subject to the jurisdiction of a federal bankruptcy                                                                                                                                                                                                                                         


                                                         In   December   2012,   Donald  Tangwall,   as   trustee   of   the   Trust,   filed   a  

complaint in the bankruptcy court against the Wackers and bankruptcy trustee Larry                                                                                                                                                                                                                                                                       

Compton.     Among   other   things,   Tangwall   alleged   that   service   on   the   Trust   in   the  

Montana fraudulent transfer action was defective, rendering the judgment against the                                                                                                                                                                                                                                                                                

Trust void.                                         Rather than                                                  litigate whether service in Montana was proper, Compton                                                                                                                                                                

elected   to   bring   a   fraudulent  transfer   claim   against   Tangwall   under   the   federal  

bankruptcy fraudulent transfer statute.                                                                                                                                    A default judgment in Compton's action was                                                                                                                                           

entered against Tangwall.                                                                                        His appeals from this judgment were dismissed.                                                                                                                                                                     

                                                         Tangwall   next   sought   relief   in   Alaska   state   court,   where   he   filed   the  

complaint that led to this appeal. The crux of his argument was that AS 34.40.110 grants                                                                                                                                                                                                                                                                

Alaska courts exclusive jurisdiction over any fraudulent transfer actions against the                                                                                                                                                                                                                                                                              

                          2   Specifically, he argued that the Trust contains a provision restricting the transfer  


                             2                           Tangwall argued that AS 13.36.035(f) had a similar effect.                                                                                                                                                                                                                However,  

AS 13.36.035 concerns the internal affairs of trusts, including "the administration and   

distribution of trusts, the declaration of rights, and the determination of other matters                                                                                                                                                                                                                                                         

involving trustees and beneficiaries of trusts."                                                                                                                                                          AS 13.36.035(a).                                                                 The judgments that                                                    

Tangwall  seeks   to   avoid   concern   fraudulent   transfers,   not   the   internal   affairs   or  

management of the Trust.                                                                                        We conclude that AS 13.36.035 does not apply to this case,                                                                                                                                                                                   


                                                                                                                                                                                    -3-                                                                                                                                                                       7228

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

 of the beneficiary's interest, and that AS 34.40.110(k) grants Alaska courts "exclusive                                                                                                       

jurisdiction over an action brought under a cause of action or claim for relief that is based                                                                                                              

 on a transfer of property to a trust" containing such transfer restrictions.                                                                                                         On this basis,       

 Tangwall sought a declaratory judgment stating that all judgments against the Trust from                                                                                                                    

 other jurisdictions are void and that no future actions can be maintained against the Trust                                                                                                                


because the statute of limitations has run.                                                                 

                                  The superior court dismissed the complaint, and Tangwall appeals.  Most  


 of Tangwall's arguments on appeal are supported by little or no citation to relevant legal  


 authority and are therefore waived.4  However, he has preserved his argument that the  


 state  and  federal  judgments  against  the  Trust  are  void  for  lack  of  subject  matter  


jurisdiction  under  AS  34.40.110(k).                                                               While  reviewing  this  appeal,  we  requested  


 supplemental briefing on the question whether state or federal courts are required to  


 follow  a  statute  that  purports  to  retain  exclusive  jurisdiction  over  a  fraudulent  



 conveyance action.   


                 2                (...continued)  


 and we decline to address it further.  

                 3                Tangwall's complaint also included two "harassment"claims. Theseclaims                                                                                                  

 have not been preserved on appeal.                                    

                 4                Hagen v. Strobel, 353 P.3d 799, 805 (Alaska 2015).  


                 5                See Toni 1 Trust v. Wacker, No. S-16153 (Alaska Supreme Court Order,  


 July 13, 2017).  This case, and the issue referred to the parties, arguably implicates the  


 constitutionality of AS 34.40.110.  Thus, pursuant to Alaska Appellate Rule 514(e), we  


 also  notified  the  Attorney  General  of  Alaska  of  the  case  and  invited  supplemental  


briefing from the State.   Id.                                                Tangwall and Compton filed supplemental briefs; the  


 Wackers and the State did not.  


                                                                                                         -4-                                                                                                 7228

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


                        We review an order granting a motion to dismiss for a failure to state a  


claim de novo.6  


                             We presume all factual allegations in the complaint to be true, and draw  



all reasonable inferences in favor of the non-moving party. 


            A.	         Alaska  Statute  34.40.110(k)  Purports  To  Grant  Alaska Courts  


                        Exclusive Jurisdiction Over Fraudulent Transfer Actions Against The  




                        Alaska  Statute  34.40.110  governs  Alaska  trusts  containing  a  "transfer  


restriction" - a provision stating that trust property may not be transferred before  



payment or delivery of the property to the beneficiary of the trust.                                                  The statute provides  


that these restrictions, which allow for the creation of so-called "self-settled spendthrift  

             9                                               10  


trusts,"  are generally enforceable.                             However, subsection (b)(1) creates a limited cause  


of action for fraudulent transfers:  a creditor of the settlor of the trust can reach trust  


property if the creditor can prove that the settlor's transfer of property to the trust "was  



made with the intent to defraud that creditor." 

            6	          Kollodge v. State              , 757 P.2d 1024, 1026 n.4 (Alaska 1988).                      

            7           Id.  at 1026;        see also Linck v. Barokas &Martin                            , 667 P.2d 171, 173 (Alaska           


            8	          AS 34.40.110(a).  


            9           See Jeremy M. Veit, Self-Settled Spendthrift Trusts and the Alaska Trust  


Act:  Has Alaska Moved Offshore? , 16 ALASKA  L. R                                            EV. 269, 279-81 (1999).       




                        See AS 34.40.110(b) ("If a trust contains a transfer restriction . . . , the  


transfer  restriction  prevents  a  creditor  existing  when  the  trust  is  created  .  .  .  from  

satisfying a claim out of the beneficiary's interest in the trust . . . .").                                                

            11          AS  34.40.110(b)(1).                       Creditors  must  also  satisfy  additional  criteria  


enumerated in AS 34.40.110(d).  


                                                                           -5-	                                                                  7228

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

                              AlaskaStatute34.40.110(k) enumerates two additionallimitsonfraudulent                                                                           

transfer claims.                     First, an action "may not be brought . . . for an attachment or other                                                                              

provisional remedy against property of a trust subject to this section or to avoid a transfer                                                                                     

of property to a trust that is the subject of this section unless the action is brought under                                                                                           

                                                  12   In other words, the (b)(1) fraudulent transfer cause of action is  

(b)(1) of this section."                                                                                                                                                                         

the exclusive means by which a litigant can prevent a transfer of or reach property in an  


Alaska self-settled spendthrift trust. Second, the statute provides that Alaska courts have  


"exclusive jurisdiction over an action brought under a cause of action or claim for relief  


that is based on a transfer of property to a [self-settled spendthrift] trust" - a class that  


obviously includes fraudulent transfer actions.13                                                                 This second limit, Tangwall claims,  


deprived the bankruptcy court and the Montana court of jurisdiction.  


                              Tangwall's argument is not frivolous. He is correct that a judgment is void  


if the court that entered the judgment lacked subject matter jurisdiction over the case.14  


Furthermore, AS34.40.110(k)purportstograntAlaskacourtsexclusivejurisdiction over  


fraudulent transfer claims against Alaska self-settled spendthrift trusts.   And having  


reviewed  the legislative history of AS 34.40.110(k),  we have  no  doubt the Alaska  


legislature's purpose in enacting that statute was to prevent other state and federal courts  


               12             AS 34.40.110(k).   

               13             Id.  



                              Leisnoi, Inc. v. Merdes & Merdes, P.C., 307 P.3d 879, 891 (Alaska 2013).  

                                                                                               -6-                                                                                       7228

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

 from exercising subject matter jurisdiction over fraudulent transfer actions against such                                                                                  



                   The question, however, is whether AS 34.40.110(k) can achieve that intended  


result.  We conclude that it cannot.  


              B.	           Alaska Statute 34.40.110(k) Cannot Limit The Scope Of Other States'  




                            More than 100 years ago, the United States Supreme Court held that  


                             [e]ach state may, subject to the restrictions of the Federal  


                            Constitution, determine the limits of the jurisdiction of its  


                            courts, the character of the controversies which shall be heard  


                            in them, and, specifically, how far it will, having jurisdiction  


                            of the parties, entertain in its courts transitory actions where  



                            the cause of action has arisen outside its borders. 

And just a few years later, the Court held that states are not constitutionally compelled  


to  acquiesce  to  sister  states'  attempts  to  circumscribe  their  jurisdiction  over  such  



                            This latter rule arose from a case much like the one before us now.  An  


 employee sued his employer in a Georgia court, relying on an Alabama statutory cause  


 of  action;  his  employer  countered  that  Alabama  state  courts  retained  exclusive  


jurisdiction over the suit under the Alabama Code, and that the Full Faith and Credit  


 Clause  compelled  Georgia  courts  to  respect  Alabama's   assertion  of  exclusive  


               15           See  Minutes, House Jud. Comm. Hearing on S.B. 344, 23d Leg., 2d Sess.                                                                         

 (Apr.   14,   2004),  

 (comment from David G. Shaftel, Attorney at Law, explaining that the purpose of the                                                                                           

provision is to require a fraudulent transfer action against an Alaska trust to be brought                                                                           

 in Alaska court).     

               16           St. Louis, Iron Mountain &S. Ry. Co. v. Taylor, 210 U.S. 281, 285 (1908).  


               17           See Tenn. Coal, Iron, & R.R. Co. v. George, 233 U.S. 354, 360 (1914).  


                                                                                        -7-	                                                                               7228

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

jurisdiction. 18  The Supreme Court found that "Full Faith and Credit" does not require                                            

 states to go quite so far.                                               Instead, "jurisdiction is to be determined by the law of the                                                                                                     

 court's creation, and cannot be defeated by the extraterritorial operation of a statute of                                                                                                                                                    

 another state, even though it created the right of action."                                                                                                    19  

                                      Alaska Statute 34.40.110(k) crosses the limit recognized by  Tennessee  


 Coal:  it purports to grant Alaska courts exclusive jurisdiction over a type of transitory  


 action  against  Alaska  trusts.20                                                          We  acknowledge  that  the  analogy  is  imperfect;  the  


 Montana court's judgment against Tangwall was based not on a fraudulent transfer cause  


 of action created by an Alaska statute, but rather on a cause of action arising under  


 Montana law relating to an Alaska trust.21   Nevertheless, Tennessee Coal controls.  The  


                    18                Id.  at 358.                   The Full Faith and Credit Clause requires states to give "Full                                                                                                   

 Faith and Credit" to "the public Acts, Records and judicial Proceedings of every other           

 State."   U.S. Const. art. IV,  1.                                              

                    19                 Tenn. Coal, 233 U.S. at 360.  


                   20                 "If the transaction on which [an] action is founded could have taken place  


 anywhere, the action is generally regarded as transitory; but if the transaction could only  


 have happened in a particular place . . . the action is local."  Action , BLACK 'S   LAW  


 DICTIONARY (10th ed. 2014) (omission in original) (quoting 92 C.J.S.                                                                                                                            Venue   8 (1955)).                                   


 Fraudulent transfer actions are founded on a fraudulent transfer of property, which can                                                                                                                                                   

 take place anywhere even if the property being transferred is immovable.                                                                                                                                               See, e.g.                  ,  

 Tcherepnin v. Franz                                     , 439 F. Supp. 1340, 1345-46 (N.D. Ill. 1977) ("In Illinois, an action                                                                                                     

 to set aside a fraudulent conveyance . . . [is] a transitory action properly cognizable                                                                                                                             

 wherever jurisdiction can be obtained over the defendant.").                                                                         

                   21                 Mont. Code Ann.  31-2-326 to -342, (outlining provisions of Montana's  


 Uniform Fraudulent Transfer Act).  Tangwall could have argued that the first sentence  


 of  AS  34.40.110(k)  makes  the  cause  of  action  created  in  AS  34.40.110(b)(1)  the  


 exclusive means of attaching Trust property; he may have attempted to do so in his  


 supplemental brief.  In any case, an Alaska statute cannot prevent Montana courts from  


 applying Montana fraudulent transfer law.  See Pac. Emp'rs Ins. Co. v. Indus. Accident  



                                                                                                                       -8-                                                                                                             7228

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

 Tennessee Coal               court held that the Full Faith and Credit Clause does not compel states                                                 

to follow another state's statute claiming exclusive jurisdiction over suits based on a                                                                       

                                                                                                                                         22   The clear  

 cause of action "             even though              [the other state] created the right of action."                                                

implication is that the constitutional argument rejected in Tennessee Coal would be even  


 less compelling were a state to assert exclusive jurisdiction over suits based on a cause  


 of action it did not create.  


                         In seeking to void the Montana court's judgment for lack of jurisdiction,  


 Tangwall  effectively  argues  that  AS  34.40.110(k)  can  deprive  Montana  courts  of  


jurisdiction over cases arising under Montana law.   This is simply a more extreme  


 interpretation of the "full faith and credit" principle than the interpretation considered  



 and rejected in Tennessee Coal.  


                         We acknowledge that the Alaska legislature's attempt to grant Alaska  


 courts exclusive jurisdiction over a class of claims in some circumstances is hardly  


              24    And we acknowledge that several of our sister states have concluded that  


             21          (...continued)  


 Comm'n of Cal., 306 U.S. 493, 502 (1939) ("[T]he full faith and credit clause does not  


require one state to substitute for its own statute, applicable to persons and events within  


it, the conflicting statute of another state, even though that statute is of controlling force  


in the courts of the state of its enactment with respect to the same persons and events.").  

             22          Tenn. Coal, 233 U.S. at 360 (emphasis added).  


             23          Other courts that have considered attempts to assert exclusive jurisdiction  


 over a broad class  of claims have reached the same conclusion.   See, e.g., Marine  


Midland Bank v. United Mo. Bank, 643 N.Y.S.2d 528, 531 (N.Y. App. Div. 1996) ("Nor  


 can we accept defendant's argument that the courts of this State are divested of subject  


matter jurisdiction by [a Kansas statute that] grants the Kansas probate court exclusive  


jurisdiction over all controversies involving Kansas estates.").  


             24          See  generally  Verity  Winship,  Bargaining  for  Exclusive  State  Court  



                                                                              -9-                                                                      7228

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


 similar statutes do, in fact, restrict their jurisdiction.                                                                                          However, those courts have relied                                               

 on reasoning that is not applicable to AS 34.40.110(k).                                                                                                    First, "[s]ome state courts have                                           

 applied state-law distinctions between local and transitory actions to make discretionary                                                                                                                      

                                                                                                                                                                                                               26       Tennessee  

 decisions whether to stay or dismiss an action in favor of another forum."                                                                                                                                            

 Coal established that "a state cannot create a transitory cause of action and at the same  


 time destroy the right to sue on that transitory cause of action in any court having  


jurisdiction"27  - which suggests that states are not barred from asserting exclusive  


jurisdiction  when  the  cause  of  action  is  local  rather  than  transitory.                                                                                                                                         However,  


 AS 34.40.110(k) grants Alaska courts exclusive jurisdiction over fraudulent transfer  


 actions against Alaska trusts, and fraudulent transfer actions are transitory actions.28  


                   24                 (...continued)  

                                               TAN. J. C               OMPLEX  LITIG. 51(2012).                                                 See also, e.g.                        , Del. Code Ann. tit. 6,                                 

Jurisdiction, 1 S 

  18-305(f) (West 2017); Del. Code Ann. tit. 8,  145(k), 220(c) (West 2017); Del.                                                                                                                                                    

 Code Ann. tit. 12,  3572(a) (West 2017); Ga. Code Ann.  33-36-6(g) (West 2017); La.                                                                                                                                                      

 Stat. Ann.  22:2058(C)(1) (2017) (insurance guaranty funds); S.D. Codified Laws                                                                                                                                                   

  55-16-13 (2018); Utah Code Ann.  25-6-502(11)(b) (West 2017) (asset protection                                                                                                                                     


                   25                 See, e.g., Carbone v. Nxegen Holdings, Inc., No. HHDCV136039761S,  


 2013 WL 5781103, at *4-5 (Conn. Super., Oct. 3, 2013); Wilson v. Celestial Greetings,  


Inc., 896 S.W.2d 759, 761-62  (Mo. App. 1995); State ex rel. U. S. Fid. & Guar. Co. v.  


Mehan, 581 S.W.2d 837, 840 (Mo. App. 1979); Foti v. W. Sizzlin Corp., No. CH03-862,  


 2004 WL 2848398, at *1-2 (Va. Cir. Feb. 6, 2004).  


                   26                 Winship, supra note 24, at 75; see also Wilson, 896 S.W.2d at 761; Mehan,  


 581 S.W.2d at 838-39.  


                   27                  Tenn. Coal, 233 U.S. at 360 (emphasis added).  


                   28                 See supra note 20.  


                                                                                                                     -10-                                                                                                              7228

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

                     Other   courts have declined to                 hear   cases on        the basis      of an     exclusive  


jurisdiction provision without addressing the                        Tennessee Coal           rule.                               

                                                                                                         One of these - a  


Virginiacourt -elected torespect anassertion ofexclusivejurisdiction because"comity  


suggests that limitations one state's legislature places on its own laws be universally  

                         30   But comity is not a legal rule; rather it is "a principle under which the  


courts of one state give effect to the laws of another state . . . out of deference or  


respect."31       In other words, while courts may elect to follow a statute like AS 34.40.110  


out of comity, they are not compelled to do so.32                            Furthermore, AS 34.40.110 is more  


than a "limitation[] [Alaska's] legislature place[d] on its own laws"33 - it purports to  


deprive other states of jurisdiction over all fraudulent transfer actions concerning Alaska  


trusts, even those based on causes of action arising under that state's own law.  


                     Tangwall directs our attention to several Delaware statutes that purport to  


grant the Delaware Court of Chancery exclusive jurisdiction over certain suits,34  and he  


correctly asserts that some state courts have concluded that these statutes limit their  


                   35  In 2014, however - following these decisions - the Delaware Court of  


          29        See  e.g.,  Carbone,  2013  WL  5781103,  at  *4.  

          30        Foti,  2004  WL  2848398,  at  *1.  

          31         16A  AM.  JUR.  2D   Constitutional  Law    224  (2017).  

          32        See  Marine  Midland  Bank  v.   United  Mo.  Bank, 643 N.Y.S.2d   528,   531  

(N.Y.  App.  Div.  1996)  ("Comity  does  not  require  or  suggest  that  the  courts  of  this  State  

should  surrender  their  interest  in  adjudicating  disputes  .  .  .  .").  

          33        Foti, 2004 WL 2848398, at *1.  


          34        See supra note 24.  


          35        See Carbonev.Nxegen Holdings, Inc.,No. HHDCV136039761S, 2013 WL  



                                                               -11-                                                         7228

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


Chancery reached the opposite conclusion. In                                      IMO Daniel Kloiber Dynasty Trust                               ,   the  

court noted that "courts outside of Delaware are divided as to whether Delaware can                                                                  

                                                                                                        37   Citing Tennessee Coal, it  

establish an exclusive forum for certain state law claims."                                                                                   

                                            38   that  had  "declined  to  interpret  the  exclusive  jurisdiction  

sided  with  those  courts                                                                                                            


languagein Delaware'sstatutes as precluding themfromhearing acase,"39 reasoning that  


"Delaware . . . cannot unilaterally preclude a sister state from hearing claims under [that  


state's] law."40  


                        We agree with the Court of Chancery and with those courts that have  


reached similar conclusions.41   The basic principle articulated in Tennessee Coal has not  


changed in the last century.42  As applied to this case, it means that AS 34.40.110(k)'s  

            35          (...continued)  


5781103, at *4-5 (Conn. Super., Oct. 3, 2013); Wilson v. Celestial Greetings, Inc., 896  


S.W.2d 759, 761-62  (Mo. App. 1995); Foti, 2004 WL 2848398, at *1.  

            36          98 A.3d 924 (Del. Ch. 2014).  


            37          Id.  at  940  n.6.  

            38          Id.  at  940.  

            39          Id.  

            40          Id .  at  939;  see  also  id.  at  939  n.4.   All  of  the  cases  that  Tangwall  cites  were  

decided  before  Kloiber .  

            41          See, e.g., Anderson v. Children's Corner, Inc., No. CV106011812S, 2011  


WL 925442, at *3 (Conn. Super., Feb. 15, 2011); Rudebeck v. Paulson, 612 N.W.2d 450,  


454-55 (Minn. App. 2000); Sachs v. Adeli , 804 N.Y.S.2d 731,  733 (N.Y. App. Div.  



            42          See Marshall v. Marshall, 547 U.S. 293, 314 (2006) (quoting Tennessee  


Coal in a more recent Supreme Court opinion); see also RESTATEMENT   (SECOND)   OF  


CONFLICTS  OF  LAWS    91  (AM.  LAW  INST .   1971)  ("A  State  may  entertain  an  action  even  


                                                                          -12-                                                                    7228

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

assertion of exclusive jurisdiction does not render a fraudulent transfer judgment against                                                                                                   

an Alaska trust from a Montana court void for lack of subject matter jurisdiction.                                                                                                                 We  

therefore cannot grant Tangwall the relief that he seeks from the Montana judgment.                                                                                              

                C.	             Alaska Statute 34.40.110(k) Cannot Limit The Scope Of A Federal                                                                                           

                                Court's Jurisdiction.                                 

                               Nor  can   we   grant   Tangwall   relief   from   the   federal   judgment.     While  

Tennessee Coal                         addressed only a state's ability to restrict the jurisdiction of its sister                                                                               

states, a more recent United States Supreme Court case confirmed that the                                                                                                            Tennessee  

Coal  rule also applies to claims of exclusive jurisdiction asserted against                                                                                               federal  courts.   

In  Marshall v. Marshall                                  , the United States Supreme Court considered whether Texas                                                                           

probate courts could retain exclusive jurisdiction over a transitory tort arising under                                                                                                        


Texas law.                                                                                                                                                                                         

                                Relying on Tennessee Coal, the Court concluded that they could not: state  


efforts to limit federal jurisdiction were invalid, "even though [the state] created the right  



of action" giving rise to the suit. 

                42              (...continued)  


though the state of the applicable law has provided that action on the particular claim  


shall not be brought outside its territory.").  

                43             Marshall, 547 U.S. at 300-05.  Specifically, the Court analyzed a Texas  


probate court's ruling that Texas probate courts retained exclusive jurisdiction.   The  


basis for the probate court's ruling is not discussed in Marshall, but the Ninth Circuit  


opinion from which appeal was taken suggests that the probate court relied on a statute  


with an exclusive jurisdiction provision.  See In re Marshall, 392 F.3d 1118, 1136 (9th  


Cir. 2004) ("[A]ny cause of action appertaining to estates or incident to an estate shall  


be brought in a statutory probate court . . . ." (alteration in original) (quoting Tex. Prob.  


Code Ann.  5A(b)).  


                44             Marshall, 547 U.S. at 314 (quoting Tenn. Coal, Iron, &R.R. Co. v. George,  


233 U.S. 354, 360 (1914)). The Court's reasoning in Marshall echoed a similar holding  


in Railway Co. v. Whitton's Administrator, 80 U.S. (1 Wall.) 270 (1871).  The Whitton  



                                                                                                  -13-	                                                                                          7228

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

                       Marshall  - like              Tennessee Coal             - is not perfectly analogous to this case;                    

the  Marshall   Court concluded that Texas could not retain exclusive jurisdiction over                                                        

                                                                                                               45  whereas the federal  

 suits based on a tort cause of action arising under Texas law,                                                                           

bankruptcy court's judgment against Tangwall was based on a cause of action arising  


under federal  law.46  But just as Tennessee Coal should control whether AS 34.40.110(k)  


can restrict state court jurisdiction, Marshall  controls whether AS 34.40.110(k) can  


restrict federal court jurisdiction.   The fact that a state cannot restrict federal courts'  


jurisdiction "even though [the state] created the right of action"47  implies that a state also  


cannot restrict federal jurisdiction over suits based on a cause of action it did not create.  


                       Tangwall notes that some federal courts have concluded that state law  


"exclusivejurisdiction"provisions do in fact deprive themof jurisdiction.48  But only one  


of the cases he cites is reported, and none address Marshall  or Tennessee Coal.  And  


 other  federal  courts  have  reached  the  opposite  conclusion.                                            The  Sixth  Circuit,  for  


instance, has held that "a state may not deprive a federal court of jurisdiction merely by  


            44          (...continued)  

court  held  that  when  a  federal  court  has jurisdiction  over a right of  action,  that  right  of  

 action  cannot  "be  withdrawn  from  the  cognizance  of  [a]  Federal  court  by  any  provision  

 of  State  legislation  that  it  shall  only  be  enforced  in  a  State  court."   Id.  at  286.  

            45         Marshall, 547 U.S. at 314.  


            46         See  11 U.S.C.  548(a)(1)(A) (2012).  


            47         Marshall, 547 U.S. at 314 (quoting Tenn. Coal, 233 U.S. at 360).  


            48         See Lynch  v. Basinger, No.  12-637, 2012  WL  6213781,  at  *5 (D.N.J.  


Dec. 12, 2012); Yale S. Corp. v. Eclipse Servs., Inc., No. 10-CV-0337-CVE-FHM, 2010


WL 2854687, at *3-4 (N.D. Okla. July 19, 2010); Reserve Sols. Inc. v.  Vernaglia, 438


F. Supp. 2d 280, 288-89 (S.D.N.Y. 2006).  


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declaring in a statute that it holds exclusive jurisdiction."                                Similarly, the Ninth Circuit       

has   held   that   "states   .   .   .   'have   no   power   to   enlarge   or   contract   the   federal  

                       50   The reasoning in these latter cases is both persuasive and consistent  

jurisdiction.' "                                                                                                         

with the approach set out in Marshall .  


                     Lastly, we note that if AS 34.40.110(k) were "interpreted to deny parties  


access to the [federal courts] without [those courts'] consent," the statute "might well run  


afoul of the Supremacy Clause."51                       The Marshall court did not invoke the preemption  


doctrine or cite the Supremacy Clause from which the doctrine is derived; it relied  


instead  on the general principle that the jurisdiction of a sovereign nation's courts "is  


determined 'by the law of the court's creation.' "52  However, several federal courts have  


concluded that it is the Supremacy Clause that ultimately precludes state courts from  


           49        Superior  Beverage   Co. v.  Schieffelin  &   Co.,  448  F.3d  910,  917  (6th  Cir.  


           50        Begay  v.  Kerr-McGee  Corp.,  682  F.2d  1311,  1315  (9th  Cir.  1982)  (quoting  

Markham  v.  City  of  Newport  News,  292  F.2d  711,  716  (4th  Cir.  1961));  see  also  Duchek  

v.  Jacobi,  646  F.2d  415,  419  (9th  Cir.   1981)  (same).  

           51        Allstate Ins. Co. v. Gammon, 838 F.2d 73, 77 n.7 (3d Cir. 1988) (analyzing  


Pennsylvania insurance statute with similar provision).  


           52        Marshall, 547 U.S.  at 314 (quoting  Tenn. Coal, 233 U.S.  at 360).  For  


 similar approaches, see Ry. Co. v. Whitton's Adm'r. , 80 U.S. (1 Wall.) 270, 286 (1871),  


and Markham, 292 F.2d at 716.  


                                                                 -15-                                                           7228

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


 limiting federal jurisdiction.                                                 And in             Kloiber, the Delaware Chancery Court reached the                                                                             

 same conclusion when contemplating a situation much like the one before us now:                                                                                                                                

                                    Assume                     that           [a]          non-Delawarean                                   sued              [a]         Delaware  

                                    corporation    in    federal    district    court    and    sought    to    be  

                                    indemnified for $1 million [as permitted under Section 145 of                                                                                              

                                    Delaware's General Corporation Law]. Any challenge to the                                                                                               

                                    federal                 court's                 jurisdiction                        based                on          Section                  145(k)  

                                    conferring exclusive jurisdiction on the Court of Chancery                                                                            

                                    would fail, defeated by the federal diversity statute, 28 U.S.C.                                                                               

                                        1331,   and   the   Supremacy   Clause   of   the   United   States  


                                    This  case  implicates  a  different  federal  jurisdictional  statute,  but  our  


 reasoning is much the same.  28 U.S.C.  1334(a) grants federal district courts "original  


 and exclusive jurisdiction of all cases under title 11."55                                                                                             11 U.S.C.  548(a)(1)(A), the  


 federal bankruptcy fraudulent conveyance statute,  permits trustees to avoid fraudulent  


 transfers.                      Because  AS  34.40.110(k)  purports  to  grant  Alaska  courts  exclusive  


jurisdiction  over  all  fraudulent  transfer  claims  against  Alaska  trusts,  and  because  


 28 U.S.C.  1334(a) grants federal courts jurisdiction over some of these claims, the  


 Alaska law "conflicts with . . . federal law to the extent that . . . it is impossible to comply  


                  53                See, e.g.             ,  Allstate , 838 F.2d at 77 n.7;                                            Begay, 682 F.2d at 1315;                                           U.S. ex rel.         

 Galmines v. Novartis Pharms. Corp.                                                                , No. 06-3213, 2013 WL 5924962, at *4 (E.D. Pa.                                                                             

Nov. 5, 2013). Under                                      federal preemption doctrine -which                                                                 derives fromthe                             Supremacy  

 Clause - state law is preempted when it "conflicts with . . . federal law to the extent that                                                                                                                                 

 (a)   it   is   impossible   to   comply   simultaneously   with   both   or   (b)   the   state   regulation  

 obstructs the execution of the purpose of the federal regulation."                                                                                                            Interior Reg'l Hous.                     

Auth. v. James                          , 989 P.2d 145, 149 (Alaska 1999) (quoting                                                                          In re J.R.B.                    , 715 P.2d 1170,             

 1172 (Alaska 1986)).                 

                  54                IMO Daniel Kloiber Dynasty Trust, 98 A.3d 924, 939 (Del. Ch. 2014).  


                  55                28 U.S.C.  157 allows district courts to refer title 11 cases and proceedings  


 to bankruptcy court.  See Stern v. Marshall, 564 U.S. 462, 474 (2011).  


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simultaneously with both."                                                  We therefore cannot grant Tangwall the relief that he seeks                                                                                 

from the federal judgment.                   

IV.               CONCLUSION  

                                   For the reasons we have explained above, we AFFIRM                                                                                              the judgment of the                        

superior court.   

                  56               Interior Reg'l Hous. Auth., 949 P.2d at 149 (quoting J.R.B., 715 P.2d at  




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