ALASKA MINERS ASSOCIATION, COUNCIL OF ALASKA PRODUCERS, and RICHARD HUGHES, Appellants,
v.
JOHN H. HOLMAN; MARK NIVER; CHRISTINA SALMON; MEAD TREADWELL, LIEUTENANT GOVERNOR OF THE STATE OF ALASKA; and STATE OF ALASKA, DIVISION OF ELECTIONS, Appellees.
Appeal
from the Superior Court of the State of Alaska Supreme Court
No. 4FA-13-01296 CI, Fourth Judicial District, Fairbanks,
Paul R. Lyle, Judge.
Appearances: Matthew Singer and Robert J. Misulich, Holland
& Knight LLP, Anchorage, for Appellants.
Timothy A. McKeever and Stacey C. Stone, Holmes Weddle &
Barcott, P.C., Anchorage, for Appellees Holman, Niver, and
Salmon. Notice of nonparticipation filed by Elizabeth M.
Bakalar, Assistant Attorney General, and Craig W. Richards,
Attorney General, Juneau, for Appellees Treadwell and State
of Alaska, Division of Elections.
Before: Stowers, Chief Justice, Winfree, Maassen, Bolger, and
Carney, Justices.
OPINION
STOWERS, Chief Justice.
I.
INTRODUCTION
Richard
Hughes, Alaska Miners Association, and Council of Alaska
Producers (Hughes plaintiffs) challenged the certification of
a ballot initiative that would subject large-scale mining
operations in the Bristol Bay region to additional
legislative approval. It is undisputed that this initiative,
if passed, would impact the Pebble Project, a potential
large-scale mining project in the Bristol Bay region. The
initiative's sponsors, John H. Holman, Mark Niver, and
Christina Salmon (Holman intervenors), intervened on the side
of the State, and the State and intervenors moved for summary
judgment to establish the legality of the initiative. The
superior court granted the State's and the Holman
intervenors' motions for summary judgment and we affirmed
on the merits.[1]
The
Holman intervenors then moved for full reasonable
attorney's fees as constitutional claimants under AS
09.60.010.[2] The Hughes plaintiffs opposed, arguing
that they themselves were constitutional claimants and that
the Holman intervenors were not constitutional claimants
because they were intervenor-defendants. The superior court
determined that the Holman intervenors were constitutional
claimants. It also found that because Pebble Limited
Partnership (Pebble) financed at least part of the litigation
for the Hughes plaintiffs, Pebble was the real party in
interest; the court further found that Pebble did not qualify
as a constitutional claimant because it had sufficient
economic incentive to bring the action. The court therefore
awarded the Holman intervenors full reasonable attorney's
fees. The Hughes plaintiffs appeal. We hold that because this
case is fundamentally about constitutional limits on the
ballot-initiative process and not whether the Pebble Project
should go forward, the Hughes plaintiffs did not have
sufficient economic incentive to remove them from
constitutional-claimant status, and we therefore reverse the
award of attorney's fees.
II.
FACTS AND PROCEEDINGS
This
appeal involves an attorney's fees dispute following a
superior court decision upholding Lt. Governor Mead
Treadwell's certification of the "Bristol Bay
Forever" ballot initiative. The initiative was approved
to be placed on the November 2014 ballot. It required
additional legislative approval for "a large-scale
metallic sulfide mining operation located within the
watershed of the Bristol Bay Fisheries Reserve."
In
January 2013 Richard Hughes filed suit against Lt. Governor
Treadwell and the State of Alaska, Division of Elections
seeking declaratory and injunctive relief and asserting that
the initiative was contrary to the subject matter
restrictions in article XI, section 7 of the Alaska
Constitution.[3] Hughes also alleged that the initiative
violated separation of powers. Hughes's Amended Complaint
added as a plaintiff the Alaska Miners Association, and his
Second Amended Complaint added the Council of Alaska
Producers. The initiative's sponsors, JohnH. Holman,
MarkNiver, and Christina Salmon, moved to intervene as
defendants, and the superior court granted that
motion.[4]
In
February 2014 the superior court granted summary judgment in
favor of the State and the Holman intervenors, [5] and on appeal we
affirmed the superior court's decision.[6]
After
the superior court entered final judgment the Holman
intervenors moved for an award of full attorney's fees
and costs, claiming that they were constitutional claimants
or in the alternative that they were entitled to
attorney's fees and costs under Alaska Rules of Civil
Procedure 79[7] and 82.[8] The Holman intervenors supported their
motion with affidavits from Holman, Niver, and Salmon. All
claimed that they did not have an economic incentive for
pursuing litigation; rather, they asserted that they were
primarily concerned with protecting their rights to get the
initiative on the ballot.[9]
The
Hughes plaintiffs opposed the motion and raised two primary
arguments: (1) they were constitutional claimants and thus
immune from attorney's fees under AS 09.60.010(c); and
(2) the statute was intended to protect persons who raised
constitutional claims against the State but not to protect
intervenor-defendants against private parties.[10] In support of
their argument that they were constitutional claimants, they
filed affidavits from Hughes; Deantha Crockett, Executive
Director of the Alaska Miners Association; and Karen
Matthias, Managing Consultant of the Council of Alaska
Producers. Each disclaimed any economic interest in the
litigation. Notably, their opposition did not allege that the
Holman intervenors had an economic incentive to litigate and
were therefore not constitutional claimants. They also
contended that the Holman intervenors' fees were
excessive.
In
their reply brief in superior court, the Holman intervenors
asserted that the Hughes plaintiffs had economic incentive to
bring the action and suggested that Pebble was actually the
entity paying for the litigation. The Holman intervenors
attached an affidavit from Scott Kendall, an attorney working
for them. Kendall attached a number of publications to his
affidavit connecting the Hughes plaintiffs to Pebble.
At oral
argument counsel for the Hughes plaintiffs conceded that
plaintiffs' litigation fees had been paid for by the
Alaska Miners Association, the Council of Alaska Producers,
and Pebble. He also conceded that Pebble had agreed to
indemnify all of the named plaintiffs in the event of an
adverse attorney's fees ruling. But he argued that if the
Hughes plaintiffs' interests in mining could exclude them
from constitutional-claimant status, then the Holman
intervenors' interests in commercial fishing should
likewise disqualify them from constitutional-claimant status.
The
superior court awarded full fees to the Holman intervenors in
the amount of $63, 944. The court first concluded that the
intervenors were claimants under AS 09.06.010(c) because
"[their] summary judgment motions sought declarations
that [the initiative] was constitutional and [they] sought
dismissal of [the Hughes plaintiffs'] complaint. [Their]
claims were, therefore, in substance, counterclaims to [the
plaintiffs'] claims: [they] sought the exact opposite
result [the plaintiffs] sought." The court found that
this was true even though the Holman intervenors failed to
raise counterclaims in their answer.
The
court next sought to determine whether the Hughes plaintiffs
were constitutional claimants and therefore exempt from
paying fees. The court decided that "[t]hey filed
non-frivolous constitutional claims on which they did not
prevail and [were] subject to paying full, reasonable
attorney's fees and costs only if they had an economic
incentive to bring the action." The court then found
that they had an economic incentive to bring the claim
because "[t]he only entity actually paying the
intervenors' fees[, Pebble, ] will be the entity with an
undeniably 'sufficient economic incentive to file suit
even if the action involved only narrow issues lacking
general importance.' "[11] The court did not make
findings whether the Holman intervenors had a sufficient
economic incentive to preclude constitutional-claimant
status.
The
court provided an alternate ruling in the event that on
appeal this court determined the court was not permitted to
consider Pebble's funding of the litigation. The court
found that "[the Alaska Miners Association's] and
[the Council of Alaska Producers'] affidavits fail to
make a prima facie showing of the interests of their typical
members so that the court can assess the organizational
economic incentives." The Council noted only that it was
a trade group "representing Alaska's large metal
mining industry"; the court found that the Council
therefore failed to provide it with sufficient evidence to
determine the Council's constitutional-claimant status
under AS 09.60.010(c)(1). Similarly, the court found that the
Alaska Miners Association identified classes of members, but
it failed to provide information concerning its members'
typical economic interests. The court concluded that the two
organizations therefore waived their claims to
constitutional-claimant status.
The
court next analyzed whether Hughes was a constitutional
claimant. The court noted that his affidavit disclaimed any
economic interest in the litigation and that he therefore had
made a prima facie showing that he had no financial interest
in the litigation. But the court concluded that the Holman
intervenors "submitted evidence tending to rebut [this]
prima facie showing." Because the ongoing relationship
between Hughes and Pebble was unclear, the court stated that
the Holman intervenors would be permitted discovery on that
issue if this court ...