WINFREE, Justice.
Alaska Statute 09.60.010 was enacted to abrogate our previous common law public interest litigation attorney's fees framework and replace it with a narrower constitutional litigation framework. The statute both encourages and protects those challenging governmental action as a violation of federal or state constitutional rights. First, the statute provides that a successful claimant generally is entitled to an award of full reasonable attorney's fees and costs incurred in connection with a constitutional claim, unless the claimant had "sufficient economic incentive" to bring the claim regardless of its constitutional nature. Second, the statute protects an unsuccessful claimant from an adverse attorney's fees award if the constitutional claim was not frivolous and the claimant did not have "sufficient economic incentive" to bring the claim regardless of its constitutional nature. The primary question raised in this case by the original applications for relief and petition for review, which seek to quash an order for wide-ranging discovery about the petitioners' financial information and the third-party funding of this litigation, is what "sufficient economic incentive" means in this context.
As presented to us here, the question arose from unsuccessful constitutional claimants' invocation of the statutory protection against adverse awards of attorney's fees and the responsive assertion that they had sufficient economic incentive to bring their claim regardless of its constitutional nature. But in a related decision issued today,
We first conclude that our earlier public interest litigation case law, outlined below, provides the guiding parameters for the meaning of "sufficient economic incentive." We also conclude that in this case the claimants did not have "sufficient economic incentive" to bring the claim regardless of its constitutional nature. We therefore vacate the superior court's discovery order and remand for further proceedings consistent with today's decisions.
Four individual Alaskans and Nunamta Aulukestai, a non-profit organization whose members are village corporations in the Bristol Bay region, sued the State of Alaska, Department of Natural Resources, for alleged constitutional violations related to land and water use permits issued to Pebble Limited Partnership (Pebble) for what we will refer to as the Pebble Project.
The State sought awards of costs and attorney's fees under Alaska Civil Rules 79 and 82, requesting about $82,000 in costs and 30% of its attorney's fees, about $484,000. Pebble requested about $105,000 in costs and 30% of its attorney's fees, about $284,000. Altogether the State and Pebble sought costs and attorney's fees awards in excess of $950,000 against Nunamta Aulukestai and the individuals.
Nunamta Aulukestai and the individuals responded by invoking AS 09.60.010(c)(2)'s constitutional claimant protection, which provides:
Nunamta Aulukestai and the individuals argued that the court could not award attorney's fees against them because the case concerned a non-frivolous constitutional claim. Nunamta Aulukestai's executive director and the individuals disclaimed any economic interest in the litigation's outcome.
The superior court issued a preliminary order regarding the requests for costs and attorney's fees. The court determined that Nunamta Aulukestai and the individuals brought a non-frivolous constitutional claim that "trigger[ed] the possible protection within AS 09.60.010(c)(2)." But the court also determined that the State and Pebble "made a prima facie showing that some plaintiffs had an economic incentive to make the claims litigated at trial." Because the court believed that "some source" had funded the litigation, it concluded that the State and Pebble were entitled to discovery and an evidentiary hearing on the economic incentive issue.
The State and Pebble made discovery requests seeking an array of financial information from Nunamta Aulukestai and the individuals. The State requested that Nunamta Aulukestai disclose its members, contributors, and financial information and identify shareholders of member village corporations who were commercial fishers, sports fishing guides, tourism promoters, or otherwise worked in the fishing or tourism industries. Pebble requested that Nunamta Aulukestai provide financial information, including federal tax filings and identities of all members, and disclose its members' funding sources. Pebble also requested that the individuals disclose their property and assets, individual financial information, and details of any promises or assurances from third parties about paying litigation expenses.
Nunamta Aulukestai and the individuals objected to the discovery requests, asserting they were overly broad, unduly burdensome, and not reasonably calculated to lead to admissible evidence. Nunamta Aulukestai also asserted that some requested information was protected by attorney-client privilege, work product immunity, and constitutional rights to free speech and association. The individuals disclosed some financial information, such as annual income, and declared that their attorney-client agreement made them personally responsible for any litigation fees or costs owed to an opposing party.
The State and Pebble filed motions to compel discovery of the information withheld under objection. The State argued that members of the villages connected to Nunamta Aulukestai included commercial fishers, guides, and tourism promoters—giving Nunamta Aulukestai an economic incentive to bring litigation that would stop mineral exploration near Bristol Bay. Pebble claimed its production requests sought information directly relevant to discovering information about Nunamta Aulukestai's and the individuals' economic incentives and abilities to pay attorney's fees and costs.
In addition to seeking discovery from Nunamta Aulukestai and the individuals, Pebble also subpoenaed information from two third parties, Trustees for Alaska and Alaska Conservation Foundation.
Trustees for Alaska is a non-profit organization that represents Nunamta Aulukestai and the individuals in this litigation. Pebble's subpoena for Trustees for Alaska requested a representative's deposition regarding funding sources for the litigation, the terms of any grants or other arrangements used for litigation funding, and the amount actually spent on the litigation. Pebble's subpoena also requested production of documents related to funding sources, litigation costs paid to third parties, grants and related correspondence, fundraising appeals and requests,
Alaska Conservation Foundation is a non-profit organization established to promote natural resource conservation in Alaska, including preservation of the Bristol Bay watershed. Pebble's subpoena requested a representative's deposition regarding grants or funding arrangements for the litigation, the identity of donors providing funding through Alaska Conservation Foundation to Trustees for Alaska, and the identities of any commercial or sport fishers or businesses involved in Alaska Conservation Foundation's Bristol Bay Fisheries and Watershed Protection Campaign, a "coalition of commercial and sport [fishers], Alaska Native groups, local businesses, and environmental groups" opposed to the Pebble Project. The subpoena also requested documents relating to money given to Trustees for Alaska for the litigation, all litigation-related communications between Alaska Conservation Foundation and Trustees for Alaska, federal tax filings, and documents relating to fundraising for the Bristol Bay Fisheries and Watershed Protection Campaign.
Trustees for Alaska and Alaska Conservation Foundation sought protective orders from the superior court. Trustees for Alaska asserted that the constitutional right to free association justified keeping financial and donor information confidential: "Disclosure of the information identified in the deposition notice will infringe on the associational activities of Trustees [for Alaska] and those who fund or contribute to Trustees [for Alaska]." Trustees for Alaska argued that Pebble was not entitled to the disclosures because no showing had been made that the information was crucial to the issue of Nunamta Aulukestai's or the individuals' economic incentives, or that the requested information would lead to relevant admissible evidence. Alaska Conservation Foundation similarly argued that Pebble's discovery requests implicated information protected by the constitutional guarantee of freedom of association, and that Pebble had not shown a compelling need for the information. Alaska Conservation Foundation's executive director submitted an affidavit stating that disclosure of Alaska Conservation Foundation's donors and communications would have a chilling effect on its future public interest litigation funding.
Pebble responded that the "lawsuit was part and parcel" of Alaska Conservation Foundation's campaign against the Pebble Project. Pebble contended its discovery requests sought information "to substantiate its well-founded belief that . . . Trident Seafoods, the Bristol Bay Regional Seafoods Development Association, sportfishing lodges, and others, funded this lawsuit in order to further their economic interests in the Bristol Bay region." Pebble's legal argument centered on the premise that discovery into the economic motives of those funding the litigation, not merely the named plaintiffs, was necessary to effectuate AS 09.60.010's purpose. Pebble submitted a proposed confidentiality order limiting use of the information to the attorney's fees dispute, arguing that keeping the information confidential eliminated concerns about Alaska Conservation Foundation's and Trustees for Alaska's constitutional rights.
The superior court issued a comprehensive order on the discovery motions and the requested protective orders. The court concluded the case was not "merely about the permitting," there was sufficient evidence to suggest that significant commercial interests were behind the litigation, and therefore further discovery was warranted into the economic incentives of Nunamta Aulukestai, the individuals, and the third parties. But the court included a protective order for all subsequent discovery. Financial information from any party could be marked "confidential" and then could be seen only by attorneys and not disclosed to third parties or clients.
The discovery order required Nunamta Aulukestai, the individuals, Trustees for Alaska, and Alaska Conservation Foundation to supplement disclosures and respond to the State's and Pebble's discovery requests. The order required Nunamta Aulukestai to provide the names of each member village corporation shareholder who worked in the seafood
The superior court also approved Pebble's requests for depositions and disclosures from Alaska Conservation Foundation and Trustees for Alaska. The order required Alaska Conservation Foundation and Trustees for Alaska to produce full and complete responses during depositions regarding sources and terms of any grants for the litigation, identification of donors and all other funding sources for the litigation, and communications between Trustees for Alaska and Alaska Conservation Foundation regarding the litigation. Alaska Conservation Foundation and Trustees for Alaska also were ordered to produce or disclose information relating to fundraising, funding for the litigation, donors, grants, and written correspondence with donors for the lawsuit. Alaska Conservation Foundation was ordered to identify fishers or local businesses involved in its Bristol Bay Fisheries and Watershed Protection Campaign.
Alaska Conservation Foundation filed an original application for relief in this court, seeking to reverse the superior court's third-party discovery order. First, it argued that AS 09.60.010 does not authorize discovery into the economic motivations or finances of third-party funders of constitutional litigation. Second, it argued that even if the statute generally allows a court to compel discovery from third parties, the discovery order in this case violated constitutional associational rights.
Trustees for Alaska also filed an original application for relief in this court, seeking the same relief and arguing that AS 09.60.010 does not authorize discovery from non-parties to litigation. Trustees for Alaska further argued that the discovery order violated constitutional rights to free association and privacy and improperly compelled disclosure of attorney work product.
Nunamta Aulukestai and the individuals filed a petition for review, asking us to vacate the discovery order. They contested the superior court's decision to allow discovery on the economic incentive issue "despite the absence of any plausible direct economic benefit to [the] claimants." They argued that the injunctive and declaratory relief sought in the litigation could not confer an economic benefit to the named plaintiffs or any third parties. They also claimed that the superior court lacked authority to allow discovery from third parties unless there was a showing that those third parties controlled the claimant or were the "[r]eal part[ies] in [i]nterest."
We granted the original applications for relief and the petition for review and consolidated the cases for oral argument and decision. We held oral argument in this matter and in the related appeal regarding the underlying litigation's merits on the same day. In a separate decision issued today, we reversed the superior court's decision in favor of the State and Pebble and remanded for entry of declaratory relief in favor of Nunamta Aulukestai and the individuals on their constitutional claim.
Interpretation of AS 09.60.010 is a question of law to which we apply our independent judgment.
Civil Rule 82 generally entitles a prevailing party to an attorney's fees award from the opposing party.
In Kenai Lumber Co. v. LeResche we adopted the core concept of Justice Boochever's McCabe dissent by requiring that litigants demonstrate a lack of economic incentive to bring the litigation before attaining public interest litigant status.
In 2003 the Alaska Legislature abrogated and replaced our public interest litigation exception to Rule 82 with a new statutory provision that encourages and protects parties bringing constitutional claims.
The new law also provides that a party bringing a non-frivolous constitutional claim will not face an adverse attorney's fees award if the claim is unsuccessful and the party lacked sufficient economic incentive to bring the claim:
Although the Legislature abrogated our decisions creating and applying the public interest litigation exception to Rule 82,
Since Kenai Lumber our focus has been on primary purpose: A litigant has
The nature of the claim and the type of relief requested are strong indicators of primary purpose. We look to statements made in the pleadings and proceedings about the rationale for the lawsuit,
In Gwich'in Steering Committee v. State, Office of the Governor we examined the type of relief requested and determined that the claimant did not have sufficient economic incentive to bring its claim.
In McCormick v. Smith we similarly relied on the type of relief requested to conclude that a claimant lacked sufficient economic incentive to bring a claim.
We also look to the direct economic interest at stake when determining primary purpose. When direct economic benefits will flow to the claimant as a result of successful litigation, that is strong evidence the litigant had economic incentive to bring the claim. But direct economic benefits do not flow only from lawsuits seeking damages. In Shepherd v. State, Department of Fish & Game we determined that a big game hunting guide had sufficient economic incentive to bring a claim challenging Alaska Board of Game regulations giving preferences to subsistence hunting in certain areas.
On the other hand, we have concluded that litigation was not primarily motivated by economic interests when it would confer only indirect or attenuated economic benefits. In Kodiak Seafood Processors Ass'n v. State a fishing trade association sued the state alleging that an improper decision had been made to allow scallop dredge fishing in areas previously closed to protect juvenile crabs.
In Ninilchik Traditional Council v. Noah fishing associations and environmental groups sued the State over procedural and substantive violations in an oil and gas lease sale, asking for injunctive relief against one particular lease.
Under any standard of review,
The complaint and arguments advanced by Nunamta Aulukestai and the individuals make clear that their primary objective was making the State's permitting process compliant with the Alaska Constitution. The declaratory and injunctive relief requested accord with Nunamta Aulukestai and the individuals'
We reiterate and emphasize the necessity of direct economic benefit from constitutional litigation for "sufficient economic incentive," and from that perspective also address the State's and Pebble's "stalking horse" argument. We do not suggest that there never could be a third party seeking some direct economic benefit by funding a nominal plaintiff's constitutional litigation, and we agree that in such an instance the third party's direct economic incentive might be relevant to an attorney's fees award under AS 09.60.010.
Focusing on the funding of constitutional litigation rather than on the litigation itself to determine primary purpose, as was done here, can lead easily to the wrong result. And as Trustees for Alaska and Alaska Conservation Foundation make clear in their arguments, discovery and collateral litigation about funding sources may implicate separate constitutional concerns, which, in light of our decision, we do not need to address at this time. We also suggest that there rarely, if ever, should be a situation where the economic interests of lawyers representing a constitutional claimant are relevant to AS 09.60.010. For example, the possibility of an attorney's fees award under the statute should not be "sufficient economic incentive" to bring constitutional litigation; nor should indirect economic benefits, such as lawsuit-generated publicity and fundraising, be "sufficient economic incentive" to bring constitutional litigation.
Finally, we address the State's argument that Nunamta Aulukestai had economic incentive to bring the litigation to protect the Bristol Bay area for subsistence uses, including hunting and fishing. Throughout the litigation Nunamta Aulukestai stressed that its members rely on the Bristol Bay area for
We interpret AS 09.60.010's "sufficient economic incentive" language in the same manner we interpreted that language in our public interest litigation cases. We conclude that there was not sufficient economic incentive for Nunamta Aulukestai and the individuals to bring their constitutional claim regardless of its constitutional basis. The nature of the claim and the equitable relief requested indicate that their primary purpose was securing changes to and increasing notice and public involvement in the State's mineral exploration permitting process. And neither they nor any opponents of the Pebble Project, even if they helped fund this litigation, had a direct economic interest in the outcome—the indirect economic interests possibly at stake and Nunamta Aulukestai's interests in protecting subsistence uses are not enough to demonstrate "sufficient economic incentive" under AS 09.60.010. We agree with Nunamta Aulukestai and the individuals that it was error to allow discovery into economic incentive in light of the nature of the relief sought and "despite the absence of any plausible direct economic benefit to [the] claimants."
We VACATE the discovery order and REMAND for further attorney's fees proceedings consistent with today's opinions.
FABE, Chief Justice, and STOWERS, Justice, not participating.