February 22, 2008

Weekly Summary of New Alaska Supreme Court Opinions

Well, the Alaska Supreme Court did not issue any new opinions today. At Atkinson Conway & Gagnon, weeks like this are met with equal parts frustration and relief. Frustration that no new case law has been made that we can apply on behalf of our clients, and relief that the Alaska Supreme Court has not reached down with its invisible hand to gleefully scatter our carefully researched and briefed motions into chaos.

In short, it's a good Friday and time to head downstairs for the one of the best benefits of working at 420 L Street.

February 20, 2008

Doing Deals Can Be An Ordeal

February 2008 has been the month for closing commercial real estate deals here at Atkinson, Conway and Gagnon. In the first two weeks of this month alone, I have personally closed a half dozen transactions in which something like $20 million has changed hands. I say “something like $20 million" because they do not actually let me handle the money itself in these deals. I just make it possible for the money to get passed around amongst the other kids on the playground.

The deals this month have ranged from helping a client sell a couple of office buildings to assisting a client in buying a Midtown trailer park. (Earl Hickey, Come On Down!) Its always gratifying to see a deal come together and successfully close.

Some deals are harder to get closed than others. The deals over the office buildings were particularly troublesome. While my client was in Anchorage, the buyers were a couple of Delaware limited partnerships run by a guy in New York with a lender in Seattle and a lawyer and title company in Washington D.C. The money also had to go through a bond broker and bond trustee before any of it could find its way into my client’s pockets. All the e-mails scurrying back and forth amongst this crowd trying to pull these deals together could have crashed and melted the entire computer infrastructure of any number of Central Asian countries. Like the Republic of Uzbekistan for instance, where the President-For-Life has his very own Apple IIe sitting on his desk.

(I made that last part up. The Uzbeks can actually boast that a whole 15% of their universities in the capitol city of Tashkent have access to e-mail and the Internet: Uzbek Internet )

Uzbekistan-20C-1992.jpg And speaking of Uzbekistan -- truthfully, how often does that country come up in the course of a day? -- I just had to mention that the Uzbeks issued a terrific postage stamp a few years back. The 20 kopeck stamp shows just how highly regarded the Unibrow is in the rest of the world and how backwards we Americans are when it comes to the appreciation of female body hair. (Note that this gal -- Princess Nodira, the wife of Omar Khan -- bears a strong resemblance to Princess Jasmine of the Disney movie Aladdin, except that the lame Disney animators gave Jasmine a wax job on the eyebrows in order to be more politically correct for Western audiences. It just goes to show that the PC police can take the fun out of everything, including facial hair and trailer parks.)

Anyway, the deals for the office buildings turned into ordeals. I had my client twice sign the impressive pile of the closing documents just to have the buyers fail to come through with the money to pay for the buildings. Arghh! We sat on our hands for a few days until – REJOICE! -- the money appeared. After a third round of document signing, the deals were completed.

And so my friends the lesson to be learned is that the Art of the Deal takes many forms, one of which may include chewing your fingernails whilst doing nothing else in particular. Other than perhaps working on your stamp collection, or maybe keeping an eye out for a clean, low mileage double-wide to fit in that open trailer park space you just happen to know is available.

February 18, 2008

Atkinson, Conway & Gagnon Selected For 2008 Benchmark:Litigation

Atkinson, Conway & Gagnon has been selected for inclusion in the 2008 edition of America’s Leading Litigation Firms and Attorneys. Those firms selected are identified by Benchmark’s research team, which conducts extensive face-to-face and telephone interviews with the nation's leading private practice lawyers and in-house counsel across the country in the preceding 12-month period. The purpose of the ranking is to identify those firms and attorneys best able to handle complex litigation matters.

The research results for law firm selection are broken down into “highly recommended” and “recommended” categories. All listed firms were consistently mentioned by peers and clients, but the "highly recommended" firms received the most mentions, and were held up as being definitively dominant in their particular jurisdiction. Atkinson, Conway & Gagnon, Inc., was identified as “highly recommended” in this ranking, and was one of only 3 law firms selected from Alaska.

The rankings also include identification of "local litigation stars" for each state, reflecting only those individuals who were recommended consistently as incontrovertible stars by clients and peers. Two of the law firm's partners, Richard E. Vollertsen and Patrick B. Gilmore, were identified in this ranking as “local litigation stars”.

Source: Benchmark: Litigation 2008
, America's Leading Litigation Firms and Attorneys, www.benchmarklitigation.com

February 15, 2008

Weekly Summary of New Alaska Supreme Court Opinions

The Alaska Supreme Court issued two new opinions today. Moore v. Peak Oilfield Service Co. reaffirmed prior Alaska Supreme Court case law that a defendant in a civil personal injury lawsuit who is convicted of driving while intoxicated must be found to have acted negligently and reckless as a matter of law. The Court further clarified that such a ruling did not preclude the defendant driver from arguing that his or her negligence/recklessness was not a legal cause of the plaintiff's injury.

In Amerada Hess Pipeline Corp. v. Regulatory Commission of Alaska, the Alaska Supreme Court affirmed the Superior Court's finding that shipping rates charged by the owners of the Trans-Alaska Pipeline were unreasonable and unjust from 1997 to 2007 and that refunds must be given. The Alaska Supreme Court did not address the issues raised by the pipeline owners, but incorporated by reference the Superior Court's 44 page opinion.

February 8, 2008

A Trap For The Unwary In Alaska's LLC Statute

A popular form of incorporation that Atkinson Conway & Gagnon often deals with, both in creating them and in structuring deals using them, is the Limited Liability Corporation. There is, however, a nasty little penalty lurking in Alaska’s Limited Liability Company statute that both other practitioners in this state and owners and managers of those LLCs should be aware of.

As with most business forms, members of an LLC have a statutory right to review the books and records of the LLC. What is different about LLCs, is that if a manger or member of an LLC refuses a member’s rightful demand to examine the books of the LLC, that manager or member is personally liableto the demanding member for a penalty in the amount of either $5,000 or 10% of the value of the demanding member’s interest in the LLC, whichever is greater. Consequently, by refusing a rightful demand to review the books and records of an LLC, a manager or member of an LLC runs not only the risk of litigation to compel production of the books but personal liability that, for a highly valued LLC, could be hundreds of thousands of dollars.

So think twice about shooting off that snide letter to your business partner, telling him to go stick his head in the sand when he asks to see the books. You just might get a costly bill in return.

Continue reading for the full statute.

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February 8, 2008

Weekly Summary of New Alaska Supreme Court Opinions

Almost every week, the Alaska Supreme Court issues its written opinions on Friday. You can download free PDF versions of these opinions here. You can also subscribe to a free e-mail list that will e-mail you links to each week’s opinions here. Each week, I will try to post a summary of that week’s opinions, focusing primarily on those opinions addressing civil litigation matters. While Supreme Court Opinions dealing with family law (such as disputes over visitation with the family dog) or criminal matters (how to get barred from attending your own criminal trial) offer interesting reading at times, they are not particularly relevant to the issues the lawyers at Atkinson Conway & Gagnon normally face.

This week, there was only one opinion issued that is of interest. In Villaflores v. Alaska State Commission for Human Rights, Clarito Villaflores, who is Asian and over 40 years old, applied for a human resources position with ConocoPhillips. He was not hired. Mr. Villaflores then filed a complaint with Alaska’s Human Rights Commission, alleging that ConocoPhillips did not hire him because of his race and age. The Human Rights Commission rejected this claim and dismissed his case.

The primary issue on appeal was whether the Human Rights Commission’s decision was supported by substantial evidence. The Court noted that to prevail on a his employment discrimination case, Mr. Villaflores had to prove: (1) he belonged to a protected class; (2) he applied for and was qualified for the position he was denied; (3) his application was rejected despite his qualifications; and (4) the employer hired someone not in the same protected class. While Mr. Villaflores was in protected class (Asian and over 40), the Court found that he had failed to establish that he was qualified for the job. Specifically, his job application did not show that he had the requisite five to 10 years of human resources experience required by ConocoPhillips. Moreover, the person hired by ConocoPhillips did. Consequently, Mr. Villaflores claim was properly denied by the Human Rights Commission because Mr. Villaflores failed to make out a prima facie case of employment discrimination.

The Court also rejected Mr. Villaflores argument that a Seventh Circuit case, Milbrook v. IBP, Inc., 280 F.3d 1169 (7th Cir. 2002), required ConocoPhillips to hire the most qualified applicant, which, presumably, Mr. Villaflores argued was him. The Court noted that even if Mr. Villaflores had established that he was qualified for the position (which he had not), Milbrook gave the employer broad discretion to chose between equally qualified candidates.

While Villaflores v. Alaska State Commission for Human Rights does not change Alaska employment discrimination law, it is a good, short summary of some of the elements that an applicant claiming employment discrimination must prove. It also squarely rejects any reading of Milbrook that would tie the hands of an employer choosing between equally well-qualified applicants.

February 5, 2008

Make Sure Your Commerical Lease Is A Real Space Ranger

The business lawyers at Atkinson, Conway & Gagnon know that, when leasing out an office, industrial or warehouse property, there are some simple things you can do to protect against problems down the road. One thing you should be sure to do is resist the temptation to just pick up a commercial lease form you happen to have lying around and use it for your deal. You need to go through that lease form in detail to make sure it’s a suitable document. Better yet, you should have your lawyer go through that lease form to make sure it's put together correctly.

To illustrate my point, I give you the case of Buzz Lightyear, Space Ranger of the Gamma Quadrant, from the Pixar movie Toy Story. (Stay with me here because I promise it all ties together in the end.) As you will recall, the flashy Mr. Lightyear burst upon the scene in Andy’s room operating under the notion that he actually was a real Space Ranger. No matter how hard Woody tried to convince Buzz otherwise, Buzz just did not accept that he was merely a toy, a child’s plaything.

darjeeling.jpg That is, until Buzz fell into the hands of the neighboring family. The evil Sid wanted to blast Buzz to bits, and Sid’s little sister Hannah dressed Buzz up in doll clothes to participate in a pretend tea party. Buzz’s whole world was turned inside out when he found himself as “Mrs. Nesbitt” and seated at a little toy table next to a couple of headless dolls that Sid must have mutilated. As his delusion dissolved around him, Buzz moaned: “One minute you’re defending the whole galaxy, and, suddenly, you find yourself sucking down Darjeeling with Marie Antoinette . . . and her little sister.”

That lease form you happen to have kicking around is like Buzz Lightyear. While it might have the appearance of something of substance with the blinking lights and all, it may not actually be of any real use out there in the galaxy. For example, if the default clause in your lease is not written correctly, you could find yourself unable to collect lost future rentals from a defaulting tenant. Unless you have the right language in the lease, the termination of the tenant’s right to occupy the premises will terminate the tenant’s obligation to pay you rent. The Space Ranger default clause that you thought was protecting your interests may turn out to be nothing more than a meek Mrs. Nesbitt.

So tread carefully in using lease forms or other standard contracts. When crunch time comes and you want to collect what is owed, you don’t want to find yourself dressed in doll clothes and “sucking down Darjeeling” instead. (Hey, I promised it would tie together, but I didn’t say it would tie together real well.)

By the way, Disney has announced it is going to re-release both Toy Story and Toy Story 2 in 3-D within the next couple of years. Information on Disney's announcement can be found here: Variety Article. (I imagine the comely Bo Peep will be quite fetching in 3-D.)

February 1, 2008

Law Professor With Square Head Rounding Into Form?

Because we work with Native corporations all the time, the lawyers at Atkinson, Conway & Gagnon like to keep up with what is going on in the world of ANCSA. I have just read an interesting article by Douglas Branson, a law professor from Pittsburgh who has often pontificated on ANCSA corporations. .

Professor Branson's new article appears in the Alaska Law Journal. The title of the article is ridiculously long, but the first part of it is Still Square Pegs in Round Holes? (The article can be found here: Alaska Law Review Current Issue) This title harkens back to Professor Branson's original ANCSA law review article of 1979, which was called Square Pegs in Round Holes: Alaska Native Claims Settlement Corporations Under Corporate Law. The original article was notable for its position that ANCSA corporations should be viewed as business corporations under the law first, last and always.

The new article is full of detail that means nothing in the real world. And there are even a few inadvertently humorous points where he demostrates the great distance between Pittsburgh and Alaska. For example, he writes about filing corporate amendments with the "Alaska Secretary of State." Real Alaskans know that, while there is an official First Dude of the State, there is no Secretary of State.

The most interesting part of the new article to me was Professor Branson's concession that perhaps he needed to soften his stance a bit. While various parts of the article show that Professor Branson is still willing to grind that old axe, he has backed off enough to concede that "continued adherence to a single form of entity" is no longer crucial.

Yet Professor Branson misses the larger picture by continuing to insist that ANCSA corporations are bound to follow rules of organizational governance that have been developed in other contexts. He seemingly cannot grasp that ANCSA corporations are unique entities governed by their own unique law that was pulled from various places, not exclusively from the law of business corporations. ANCSA corporations were understood as being unique at the time Congress provided for their creation in 1971, and each time Congress has revisited ANCSA it has done so to reaffirm that ANCSA corporations are unique. It is not possible to be a little unique, any more than it is possible to be a little pregnant.

But buried in the article is a truly frightening paragraph and footnote. Professor Branson writes that, in his view, Section 7(r) of ANCSA only applies to Regional Corporations and not to Village Corporations. Section 7(r) authorizes an ANCSA corporation to provide health, education and welfare benefits to Alaska Natives on a basis other than share ownership. The ANCSA corporations have fought through decades of litigation over elders benefit programs. Section 7(r) was meant to put an end to this litigation. In fact, this past fall I argued in the Alaska Supreme Court the most recent case over elders benefit programs, Bodkin v. Cook Inlet Region, Inc. I had hoped that the Bodkin case was going to be last of its kind.

I fear that Professor Branson's comments on Section 7(r) mean there are more lawsuits to come directed at the elders benefit programs of Village Corporations.