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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State v. Alaska State Employees Association (08/22/2008) sp-6298
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| STATE OF ALASKA, | ) |
| ) Supreme Court No. S- 12686 | |
| Appellant, | ) |
| ) Superior Court No. 3AN-06- 9651 CI | |
| v. | ) |
| ) O P I N I O N | |
| ALASKA STATE EMPLOYEES | ) |
| ASSOCIATION, AFSCME, AFL-CIO, | ) No. 6298 August 22, 2008 |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Craig F. Stowers, Judge.
Appearances: William E. Milks, Assistant
Attorney General, Talis J. Colberg, Attorney
General, Juneau, for Appellant. Bradley D.
Owens, Jermain Dunnagain & Owens, P.C.,
Anchorage, for Appellee.
Before: Matthews, Eastaugh, Carpeneti, and
Winfree, Justices. [Fabe, Chief Justice, not
participating.]
MATTHEWS, Justice.
The question presented is whether the State is
protected by sovereign immunity from payment of prejudgment
interest on an award made by an arbitrator under a collective
bargaining agreement. The superior court decided that the State
was not so protected and awarded prejudgment interest on the
arbitrators award. We largely affirm because the enforcement of
the arbitrators award in this case sounds in contract and is
enforceable in a proceeding encompassed by the general statute
applicable to contract claims against the State, which waives
immunity as to prejudgment interest.
I. FACTS AND PROCEEDINGS
Wesley Thompson was an engineer and facilities manager
for the State of Alaska and a shop steward for the Alaska State
Employees Association, AFSCME Local 52, AFL-CIO (ASEA). On March
9, 2005, Thompson served as a union representative in an
investigatory hearing regarding Lawrence Rodriguez, another union
member. The States representatives were Harold Riley, a
supervisor, Darice Walter, a human resource specialist, and
Lieutenant Colonel Craig Schreiber, a federal construction and
facilities management officer. The meeting began with an
argument over procedures. When Riley attempted to interrogate
Rodriguez using a list of questions that he refused to disclose
to Thompson, Thompson and Riley engaged in a heated argument.
After both sides briefly caucused, Riley ordered Thompson to
leave the premises. Another argument ensued and Thompson and
Riley began shouting at one another. During this argument
Thompson directed a profane statement at Riley. With the
assistance of a third party, the argument subsided.
The State initiated an investigation of Thompsons
conduct at the meeting. It interviewed Thompson. Then it
interviewed him again to determine if he was dishonest during the
first interview. At the conclusion of its investigation, the
State suspended Thompson without pay for thirty days for making
profane and provocative statements to a supervisor. The State
also terminated Thompsons employment for dishonesty during the
first interview. Thompson, represented by ASEA, filed a
grievance and the parties went to arbitration.
The arbitrator upheld the thirty-day suspension without
pay but found that the State failed to show just cause to
terminate Thompson. The arbitrator ordered the State to
reinstate Thompson with back pay. The decision did not award,
nor did it discuss, interest on Thompsons back pay.
ASEA filed suit in superior court after the State
failed to comply with the arbitrators decision.1 ASEA sought a
judgment directing the State to comply with the arbitrators award
and compensating Thompson in accordance with the award. In its
answer and counterclaim, the State argued that the superior court
should vacate part of the arbitrators decision because the
arbitrator considered evidence outside of the record. Both sides
moved for summary judgment.
The superior court rejected the States summary judgment
motion, but granted summary judgment in favor of ASEA. In the
final judgment that followed, the court expressed as a sum
certain the arbitrators award of back pay damages, added
$23,806.52 in prejudgment interest, and provided for post-
judgment interest. The interest began accruing on April 14,
2005, the date on which Thompsons thirty-day suspension without
pay ended.2 The court combined principal with prejudgment
interest for the purpose of calculating ASEAs Alaska Civil Rule
82 attorneys fees.
On appeal, the State argues that it is immune as a
sovereign from the award of prejudgment interest.3 It also asks
that the award of Rule 82 attorneys fees to ASEA be recalculated
to reflect deletion of the interest award.
II. DISCUSSION
A. AS 09.50.250 Applies and Waives Sovereign Immunity for
Prejudgment Interest.
The Alaska Constitution waives absolute sovereign
immunity, but retains a restricted version of immunity.4 Under
the latter, [w]e have consistently stated that prejudgment
interest may not be assessed against the state unless
specifically authorized by legislation.5 The applicability of
sovereign immunity presents a question of law that we review de
novo.6
The fundamental disagreement in this case is whether
prejudgment interest is specifically authorized for claims of the
type presented here. The State argues that this case is a suit
to confirm an arbitrators award and that it arises under the
Public Employment Relations Act (PERA).7 The State contends that
PERA does not waive sovereign immunity for awards of prejudgment
interest.
ASEA argues that the suit was brought to enforce the
arbitrators award and that the State had agreed by contract to be
bound by such awards. ASEA therefore argues that its claim was a
contract claim and as such fell within the general statute
governing contract claims against the State, AS 09.50.250.
For the reasons that follow, we conclude that the
current litigation is a contract claim cognizable under AS
09.50.250.
1. The competing statutes
Alaska Statute 09.50.250 contains a general consent to
suit for a variety of contract, quasi-contract, and tort claims
against the State.8 Alaska Statute 09.50.280 allows awards of
prejudgment interest against the State for claims brought under
AS 09.50.250.9
The Public Employment Relations Act grants public
employees the right to share in the decision-making process
affecting wages and working conditions by authorizing collective
bargaining.10 As part of the collective bargaining process, PERA
mandates that a collective bargaining agreement (CBA) shall
include a grievance procedure which shall have binding
arbitration as its final step.11 PERA provides that either party
to a CBA has a right of action to enforce the agreement by
petition to the labor relations agency.12 A regulation
promulgated by the Alaska Labor Relations Agency provides that
the agency can hear petitions to enforce an arbitrators decision.13
The parties do not cite this regulation, nor did either party
file a petition before the agency seeking to enforce or vacate
the arbitration award.
2. The collective bargaining agreement
The CBA sets forth a four-step process for resolving
grievances between the union and the State. Arbitration is the
final step of the dispute resolution process. If arbitration
occurs, the CBA provides that the decision or award of the
arbitrator shall be final and binding.
In this case, ASEA invoked the CBAs grievance procedure
and took the dispute to arbitration. The arbitrator upheld the
decision to suspend Thompson without pay but reversed the
termination of his employment with back pay. The State did not
abide by the award, contrary to the CBAs clause mandating that
the arbitration be final and binding. The States delayed
compliance led to ASEAs suit in superior court.
3. ASEAs suit was a contract claim.
The State contends that ASEAs suit in superior court
was merely an extension of the arbitration proceeding. It argues
that the action arose under PERA and that PERA says nothing about
State liability for prejudgment interest. The State concludes
therefore that sovereign immunity bars the award of prejudgment
interest.
In particular, the State argues that this case could
not have been brought under AS 09.50.250 and, implicitly, that
it was not brought under that statute. The State contends that
[t]his [c]ourt has recognized that claims that must be litigated
through administrative procedures cannot be brought under AS
09.50.250 and thus cannot include awards of prejudgment
interest. For this proposition, the State cites three cases,
Hawken Northwest, Inc. v. State, Department of Administration,14
Quality Asphalt Paving, Inc. v. State, Department of
Transportation & Public Facilities,15 and Samissa Anchorage, Inc.
v. State, Department of Health & Social Services.16 The State
compares administrative adjudication to arbitration and
concludes, as in the administrative appeals context . . . the
parties must follow a statutorily required alternative procedure
to resolve collective bargaining agreement disputes, and cannot
take claims directly to superior court.
Two of the cases relied on by the State, Hawken and
Quality Asphalt, concerned claims that were explicitly excluded
from coverage under AS 09.50.250. Both Hawken and Quality
Asphalt involved claims filed against the State under the state
procurement code, AS 36.30, and the claims were adjudicated
administratively pursuant to the code. By the express terms of
AS 09.50.250, an entity that may bring an action under the state
procurement code may not bring an action under section .250.17
The Samissa claim, however, unlike the claims in Hawken
and Quality Asphalt, was not per se excluded from coverage under
AS 09.50.250. Samissa involved a medicaid rate appeal brought by
a hospital under regulations promulgated by the Department of
Health and Social Services. The appeal was prosecuted
successfully and the department ruled that the rate should be
recalculated and the hospital should receive retroactive
compensation. But the department denied the hospital prejudgment
interest. On appeal to the superior court, the court, after
initially ruling to the contrary, denied prejudgment interest.
The court ruled that the hospital could not have brought an
action under AS 09.50.250 because the exclusive remedy for a
challenge to medicaid rates was the remedy defined in the
regulations. On appeal this court affirmed. We recognized that
this case turns on whether [the hospital] brought or could have
brought an action under section .250.18 We held that such an
action could not have been brought because the administrative
remedy was exclusive and did not permit a separate action under
section .250.19
For Samissa to be persuasive analogous authority in
this case, the State would have to establish that the regulation
providing for labor agency enforcement of an arbitrators decision
is the exclusive remedy for enforcement of such a decision. But
the State makes no such argument. Further, it did not object to
the superior courts jurisdiction to hear ASEAs case. Instead it
invoked the jurisdiction of the court to hear its counterclaim to
vacate the award. Thus the State has waived any claim that ASEA
was required to seek enforcement of the arbitrators award before
the Labor Relations Agency.20
Samissa, Hawken, and Quality Asphalt differ from this
case in another important respect. In those cases the prescribed
administrative adjudicative procedure was followed. The superior
court in each of these cases acted as an appellate court from a
final decision of an administrative agency. Review was conducted
under part six of the Alaska Rules of Appellate Procedure. Here,
by contrast, there was no administrative adjudication and no
administrative appeal was possible.
The arbitrators decision in this case was not only not
judicially reviewable under the appellate rules, it was likewise
not judicially reviewable under any statute pertaining to
arbitration.21 PERA also is silent on the subject of judicial
review of arbitration awards.22 Since it is not contested in this
case that a judicial remedy was available, and since no specific
statute or rule prescribed or defined the remedy, it seems right
to conclude that the remedy that was available had its source in
decisional law.
There are numerous authorities that hold that in the
absence of statute a suit to confirm an arbitrators award where
arbitration has been contracted for is a suit to enforce a
contract. At common law, an arbitration award is not self-
enforcing. An action at law such as a contract action is an
appropriate vehicle for enforcing the award.23 ASEAs action to
enforce the arbitrators award in this case fits comfortably
within these authorities. 24
Since we conclude that ASEAs suit can properly be
characterized as a contract claim recognized at common law, we
conclude that it is encompassed by AS 09.50.250 which, as we have
seen, generally applies to contract claims against the State.
Since prejudgment interest is authorized for suits brought under
AS 09.50.250, the States sovereign immunity argument must be
rejected.25
B. The Proper Award of Interest and Attorneys Fees
Under the superior courts order, interest began
accruing the day after Thompsons thirty-day suspension ended. At
oral argument, ASEA conceded that the superior court lacked the
power to award interest accruing before the arbitrators award.26
In its brief, the State conceded that interest could accrue after
the superior courts judgment. Thus the interest award for the
time after the arbitrators award but before the superior courts
judgment is all that is in contention at this point.
III. CONCLUSION
Because we conclude that ASEA stated a contract claim
encompassed within AS 09.50.250, the waiver of sovereign immunity
for interest contained in AS 09.50.280 applies and the award of
interest should accrue from the date of the arbitrators decision.
The award of attorneys fees to ASEA should be modified to reflect
the reduced judgment in favor of ASEA.
We REMAND this case for further proceedings consistent
with this opinion.
_______________________________
1 The award was made May 11, 2006; suit was filed two
months later on July 13.
2 Thus the interest award covered three time periods: (1)
pre-arbitrator award interest, (2) post-arbitrator award, but pre-
superior court judgment interest, and (3) post-superior court
judgment interest. As discussed in Part II.B, the parties only
dispute the award of interest for the second time period.
3 The State does not contest the superior courts award of
post-judgment interest.
4 Alaska Const. art. II, 21; see generally Glover v.
State, Dept of Transp., Alaska Marine Highway Sys., 175 P.3d
1240, 1245-52 (Alaska 2008).
5 Hawken Nw., Inc. v. State, Dept of Admin., 76 P.3d 371,
382 (Alaska 2003) (citation omitted).
6 See Runyon ex rel. B.R. v. Assn of Vill. Council
Presidents, 84 P.3d 437, 439 (Alaska 2004).
7 AS 23.40.070-.260.
8 AS 09.50.250 provides in relevant part:
A person or corporation having a
contract, quasi-contract, or tort claim
against the state may bring an action against
the state in a state court that has
jurisdiction over the claim. A person who
may present the claim under AS 44.77 may not
bring an action under this section except as
set out in AS 44.77.040(c). A person who may
bring an action under AS 36.30.560.695 may
not bring an action under this section except
as set out in AS 36.30.685.
9 AS 09.50.280 provides as follows: If judgment is
rendered for the plaintiff, it shall be for the legal amount
found due from the state with interest as provided under AS
09.30.070 and without punitive damages. See also Stewart &
Grindle, Inc. v. State, 524 P.2d 1242, 1245 (Alaska 1974)
(section .280 provides for the payment of prejudgment interest
but only in cases authorized under section .250).
10 AS 23.40.070.
11 AS 23.40.210(a).
12 Id.
13 See 8 Alaska Administrative Code (AAC) 97.510(a)
(2004). The regulation provides:
(a) A party to a collective bargaining
agreement may file a petition with the labor
relations agency to enforce the agreement.
The petition must include
. . . .
(5) a copy of the grievance arbitrators
decision, if the petition is to enforce an
arbitrator's decision . . . .
14 76 P.3d 371 (Alaska 2003).
15 71 P.3d 865 (Alaska 2003).
16 57 P.3d 676 (Alaska 2002).
17 See supra note 8. There is one exception, but it did
not apply in either Hawken or Quality Asphalt.
18 Samissa, 57 P.3d at 679.
19 Id. at 680. In Danco Exploration, Inc. v. State,
Department of Natural Resources, 924 P.2d 432 (Alaska 1996), we
reached a similar conclusion, holding that an administrative
remedy for aggrieved oil and gas lease bidders was an exclusive
remedy. Id. at 434. We distinguish Danco for the same reasons
that we distinguish Samissa.
20 See, e.g., Gates v. City of Tenakee Springs, 822 P.2d
455, 460-61 (Alaska 1991) (claims that are not raised before the
superior court or that are inadequately raised before this court
are deemed waived). Given our conclusion concerning waiver we
have no occasion to decide whether the exclusive method of
enforcing arbitration awards made under collective bargaining
agreements pursuant to PERA is by a petition to the Labor
Relations Agency. We note that our jurisprudence contains
numerous cases where the validity of such awards was litigated
directly in court. E.g., Baseden v. State, 174 P.3d 233, 237
(Alaska 2008) (considering a suit challenging an arbitration
award); Univ. of Alaska Classified Employees Assn v. Univ. of
Alaska, 988 P.2d 105, 106-07 (Alaska 1999) (considering a suit to
enforce an arbitration award); Fairbanks Police Dept Chapter,
Alaska Pub. Employees Assn v. City of Fairbanks, 920 P.2d 273,
274 (Alaska 1996) (arbitration enforcement). In none of these
cases, however, was an objection raised that exclusive, or
primary, jurisdiction lay in the Labor Relations Agency. In
Carter v. Alaska Public Employees Assn, 663 P.2d 916, 922 (Alaska
1983), we recognized that PERA does not vest exclusive
jurisdiction in the Labor Relations Agency for questions of
whether a public employer must release information pertaining to
employees whom a union sought to organize; but we do not suggest
that Carter would necessarily control the question of agency
jurisdiction to enforce arbitration awards.
21 Alaskas two arbitration statutes, the Uniform
Arbitration Act and the Revised Uniform Arbitration Act, both
provide that they do not apply to labor management contracts.
See AS 09.43.010(a) and AS 09.43.300(c).
22 A section of PERA, AS 23.40.200(f), states that the
parties to a CBA may provide that arbitration is to be conducted
under the provisions of the Uniform Arbitration Act or the
Revised Uniform Arbitration Act. In order to so provide the CBA
must incorporate one of the acts into the agreement by reference.
The CBA in this case does not incorporate either act by reference
and the parties do not argue that either act applies.
23 4 Am. Jur. 2d Alternative Dispute Resolution 195
(2007) (footnotes omitted); accord 6 C.J.S. Arbitration 192
(2004); Frank Elkouri & Edna Asper Elkouri, How Arbitration Works
97 (Alan Miles Rubin et al. eds., 6th ed. 2003) (At common law,
the issuance of an award generally bars any subsequent action on
the original claim, but suit may be filed for enforcement of the
award itself to the same extent as any contract.); Fairweathers
Practice and Procedure in Labor Arbitration 455 (Ray J.
Schoonhover, et al. eds., 3d ed. 1991) (explaining that prior to
the advent of arbitration statutes, [c]onfirmations of
arbitration actions were previously made in state courts under
the common law writ of assumpsit). Other jurisdictions have
applied this rule. See, e.g., Kentucky River Mills v. Jackson,
206 F.2d 111, 120 (6th Cir. 1953) (Prior to the enactment of the
United States Arbitration Act, an action at law on the
[arbitrators] award was the proper method of enforcing it.);
State Cent. Collection Unit v. Gettes, 584 A.2d 689, 696 (Md.
1991) (Before statutes or court rules provided for confirmation
. . . . [s]uit could be brought on the award against the party
who lost the arbitration . . . . Basically the action was in
assumpsit.); Policemans Benevolent Assn, Local 292 v. Borough of
N. Haledon, 730 A.2d 320, 326 (N.J. 1999) (noting that the
statute of limitations for a common law confirmation action was
the statute of limitations for a common law contract action).
24 See Dorothy Dowell, Judicial Enforcement of Arbitration
Awards in Labor Disputes, 3 Rutgers L. Rev. 65, 70-71 (1949) (The
award having been rendered, the parties are bound by their
contract to abide by it; hence, the award partakes of the nature
of a contract. . . . The enforcement of awards at common law,
then . . . is governed by common law rules of contract and
procedure.).
25 The State argues that any action for breach of the CBA
was itself subject to compulsory arbitration per the CBA. But
the State did not make this argument before the superior court.
Rather, as already noted, the State accepted that the superior
court could hear the case, defended its actions, and argued that
the superior court should invoke its powers to vacate the
arbitrators award due to perceived improprieties in the
arbitrators consideration of evidence not presented during the
arbitration hearing. The State cannot now argue that the proper
procedure for treating ASEAs breach of contract claim was a new
round of arbitration. See, e.g., Hartman v. State, Dept of
Admin., Div. of Motor Vehicles, 152 P.3d 1118, 1122 n.8 (Alaska
2007) (holding an argument waived for failure to raise it before
the superior court).
26 See Ebasco Constructors, Inc. v. Ahtna, Inc., 932 P.2d
1312, 1317-18 (Alaska 1997) (holding that awards of pre-
arbitration interest must be made by arbitrators). At oral
argument, ASEA asked that we remand this case to the superior
court with instructions to remand to the arbitrator for
consideration of an award of pre-arbitration interest. We do not
follow ASEAs proposed course of action because ASEA had an
adequate opportunity to raise this issue before the arbitrator
during the arbitration hearing.
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