The Constitutional Battle Over the Public Interest Litigant Exception to Rule 82

• Jurisdiction: Alaska,United States
• Publication year: 2004
• Citation: Vol. 21

§ 21 Alaska L. Rev. 329. THE CONSTITUTIONAL BATTLE OVER THE PUBLIC INTEREST LITIGANT EXCEPTION TO RULE 82

Alaska Law Review
Volume 21
Cited: 21 Alaska L. Rev. 329

THE CONSTITUTIONAL BATTLE OVER THE PUBLIC INTEREST LITIGANT EXCEPTION TO RULE 82

Abizer Zanzi

I. INTRODUCTION

II. RELEVANT LAW

A. Common Law History

B. Rule 82 Revisions

III. HOUSE BILL 145

A. Legislative History

B. House Bill 145: Provisions and Implications

IV. NATIVE VILLAGE OF NUNAPITCHUK V. STATE

V. CONSTITUTIONAL ANALYSIS OF HOUSE BILL 145

A. The Alaska Constitution Clearly Delineates the Rule-making Powers of the Legislative and Judicial Branches of the State Government

B. The Distinction between Substantive and Procedural Laws is Well-established in Alaska

VI. CONCLUSIONS AND SUGGESTIONS FOR REFORM

FOOTNOTES

Attorney fee-shifting laws arouse a great deal of contention in American legal debates because they aim to answer the difficult question of who should pay the cost of litigation. Lawmakers are constantly reexamining this issue, recognizing that civil litigation is costly and the high price for legal services often determines whether a party will use the courts to settle his or her grievances. This is no less true in Alaska, the only state in America with a general "loser pays" attorney fee-shifting system for most civil litigation. This Note addresses the current dilemma that Alaska faces regarding attorney's fees awards in public interest litigation. The author begins by examining the development of the common law public interest litigant doctrine and the substantive revisions to Rule 82 of the Alaska Rules of Civil Procedure made by the Alaska Supreme Court in 1993. Next, he discusses recent legislative attempts to repeal the doctrine, which prompted a constitutional challenge in Native Village of Nunapitchuk v. State, a case likely to be appealed to the Supreme Court of Alaska. The author then analyzes the legal issues raised in the Nunapitchuk decision and argues for affirmation if appealed. Finally, the author concludes by suggesting what substantive revisions to the public interest litigant doctrine should be considered and how they should be made within the purview of the Alaska Constitution.

I. INTRODUCTION

Alaska has a unique and complex attorney fee-shifting regime that awards partial fees in a two-way fee-shifting system to both prevailing plaintiffs and defendants. ^[1] Unlike most states, where fee-shifting exists [*pg 330] only in limited statutorily-mandated circumstances, ^[2] Alaska's attorney fee-shifting system is codified in the Alaska Rules of Civil Procedure as Rule 82. Specifically, Rule 82 provides that prevailing parties in a civil case may recover attorney's fees pursuant to an established schedule based either on the monetary judgment award or on a percentage of reasonable attorney's fees incurred when no money award is recovered. ^[3] The Rule provides discretion for the court to deviate from this fee schedule upon consideration of a variety of factors. ^[4]

In general, two-way fee-shifting systems such as Alaska's are lauded for encouraging meritorious claims and discouraging nuisance claims. ^[5] However, two-way fee-shifting regimes have disincentive effects beyond merely discouraging non-meritorious claims. ^[6] Middle- and lower-income individuals may be effectively deterred from pursuing promising claims because of the threat of having to pay their opponent's attorney's fees. ^[7] Given the uncertainty of litigation, the opportunity cost of litigating claims, even ones with strong public interest implications, may be too high to justify the potential loss of limited disposable income. ^[8] To accommodate these competing interests, the Alaska courts developed a common law exception to the attorney fee-shifting rule for public interest litigants and made substantive revisions to Rule 82 to maintain the courts' discretion to consider these public policy concerns.

In 2003, the Alaska state legislature passed House Bill 145, which altered the attorney fee-shifting exception for public interest cases. ^[9] The bill raised important constitutional questions, particularly regarding separation of powers. House Bill 145 limited a court's discretion to modify an attorney's fees award for equitable considerations based on the public interest nature of the case, though it preserved an exception to the Rule for claims based on the state or federal constitution. ^[10] In essence, the state legislature substantively amended a disputably proce-[*pg 331] dural rule. In doing so, it sparked controversy over which branch of government has jurisdiction over the public interest litigant doctrine.

In Native Village of Nunapitchuk v. State, ^[11] a group of organizations representing several public interest sectors challenged the constitutionality of House Bill 145, arguing, among other things, that the bill failed to receive the two-thirds majority required for the legislature to amend rules of civil procedure. ^[12] The Nunapitchuk case raised the question of whether the public interest litigant doctrine was a procedural rule or a substantive law that is subject to legislative revision. ^[13] The Superior Court for the State of Alaska struck down the bill, holding that it impermissibly attempted to amend a rule of civil procedure. ^[14] The court, however, stated that there is no bright line rule regarding the constitutional issues raised, ^[15] an assertion that this Note attempts to disprove. While it is uncertain whether this bill will survive judicial review by the supreme court, the legislature has made clear that the public interest litigant doctrine needs revision and attempts to amend it will likely persist.

II. RELEVANT LAW

Throughout the history of Rule 82, the courts have had broad discretion to alter the general rule governing attorney's fees awards. The original Alaska Civil Rule 82 read, "[u]nless the court, in its discretion, otherwise directs, the following schedule of attorney's fees will be adhered to." ^[16] The courts exercised this discretion by establishing a common law exception to Rule 82 for litigants bringing forth good faith claims on behalf of the public interest. ^[17] In 1993, the supreme court adopted Court Order 1118, adding section b(3) to the Rule, which gave the courts explicit discretion to adjust attorney's fees awards based on several factors. ^[18] The following section will discuss the development of the public interest litigant exception in the common law and the subsequent codification of the exception into the Alaska Rules of Civil Procedure.

A. Common Law History

The public interest litigant exception to Rule 82 has its roots in the common law. In the early years following statehood, the supreme court [*pg 332] recognized the burden that fee-shifting placed on unsuccessful litigants bringing good faith claims in the public's interest. In Malvo v. J.C. Penny Company, Inc., ^[19] the court outlined several public policy considerations in determining whether to award attorney's fees. ^[20] In that case, parents of a black teenage girl sued a department store for slander and false imprisonment related to a mistaken allegation of shoplifting. ^[21] The trial court found for the defendants and awarded the department store the full amount of attorney's fees requested under Rule 82. ^[22] The supreme court reversed the attorney's fees award ^[23] and, in doing so, made several policy determinations about the discretion that trial courts may exercise in awarding attorney's fees. Writing for the majority, Justice Boochever acknowledged the wide discretion that Rule 82 grants to a trial court, but argued that the rule was designed solely for the purpose of providing compensation when justified. ^[24] In criticizing the lower court's granting of full attorney's fees to the department store, Justice Boochever stressed the importance of considering the good faith of an unsuccessful litigant's claims and the policy justification for requiring the payment of attorney's fees. ^[25] He cautioned that failure to consider these policy concerns would lead to serious detriment to the judicial system. ^[26] In coming to this conclusion, he relied on Boddie v. Connecticut, ^[27] where the United States Supreme Court held that "a cost requirement, valid on its face, may offend due process because it operates to foreclose a particular party's opportunity to be heard." ^[28] The Alaska Supreme Court concluded by declaring that the purpose of Rule 82 was to partially compensate successful litigants where attorney's fees awards are justified, not to penalize unsuccessful parties for bringing good faith claims. ^[29]

Justice Boochever's reasoning in Malvo, however, did not initially mark a new wave of deference towards unsuccessful public interest litigants in the determination of attorney's fees. A few months later, in Jefferson v. City of Anchorage, ^[30] the supreme court, in an opinion joined by Justice Boochever, ^[31] upheld an attorney's fees award against two tax-[*pg 333] payers purporting to assert a claim on behalf of a public interest. ^[32] There, two taxpayers challenged a city ordinance that raised the annual salary of the Mayor of Anchorage. ^[33] In upholding the fee award against the plaintiffs, the court argued that the public interest would not be served by a claim that so clearly lacked validity. ^[34] While acknowledging that a more valid claim by the plaintiffs might...