Legislature(2015 - 2016)CAPITOL 120
03/16/2015 01:00 PM House JUDICIARY
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| Confirmation | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
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ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 16, 2015
1:01 p.m.
MEMBERS PRESENT
Representative Gabrielle LeDoux, Chair
Representative Wes Keller, Vice Chair
Representative Bob Lynn
Representative Charisse Millett
Representative Max Gruenberg
Representative Neal Foster
Representative Matt Claman
MEMBERS ABSENT
Representative Kurt Olson (alternate)
COMMITTEE CALENDAR
CONFIRMATION HEARING(S):
Attorney General
Craig W. Richards - Anchorage
CONFIRMATION(S) ADVANCED
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CRAIG RICHARDS, Attorney General Designee
Anchorage, Alaska
POSITION STATEMENT: As appointee to the position of Alaska
Attorney General, discussed his qualifications and answered
questions.
ACTION NARRATIVE
1:01:38 PM
CHAIR GABRIELLE LEDOUX called the House Judiciary Standing
Committee meeting to order at 1:01 p.m. Representatives Keller,
Lynn, Millett, Gruenberg, LeDoux, were present at the call to
order. Representatives Foster and Claman arrived as the meeting
was in progress.
1:01:53 PM
CHAIR LEDOUX announced that Representative Kurt Olsen is an
alternate member of the House Judiciary Standing Committee.
1:02:07 PM
CHAIR LEDOUX brought before the committee the appointment of
Craig W. Richards to the position of Attorney General. [Packets
contain biographical information.]
CHAIR LEDOUX advised the committee it would be hearing the
qualification of this gentleman today and recommending that his
name be referred to the Joint House and Senate for
consideration. Chair LeDoux reminded the committee that its job
is only to review the history and qualifications Mr. Richards.
She stated there will be no vote for or against his confirmation
in this committee. Committee members should feel free to ask
questions as they arrive, but to bear in mind that the committee
is not voting on his qualifications, merely reviewing it, she
highlighted.
^CONFIRMATION
CONFIRMATION HEARING(S):
ALASKA ATTORNEY GENERAL
1:02:47 PM^#
CRAIG RICHARDS, Attorney General Designee, said he is a lifelong
Alaskan as in 1977 his family moved to Fairbanks, Alaska. He
attended the University of Virginia and Washington and Lee
University School of Law (W&L Law) and clerked for then Superior
Court Judge Ralph Bisline, who is currently on the United States
District Court for the District of Alaska. In 2002, he worked
for Wohlforth, Vassar, Johnson & Brecht and became experienced
as a finance and transactional attorney. During 2003-2014,
worked for Walker & Richards, LLC, and during the course of that
time attended Duke University where he received his Master of
Business Administration (MBA) degree. He advised that during
his employment he spent quite a bit of time on finance and oil &
gas, particularly on quantitative modeling. "I'm not just an
attorney, but I am a fairly competent quant on the oil & gas
side as well." He advised that during the course of his
practice his focus was primarily on four areas: municipal law,
public finance, Alaska oil & gas taxation, and gas pipeline
development. He highlighted he expected that if Mr. Bill Walker
won the election, that he would take over the law firm. In the
event Mr. Walker lost, he would retire and Mr. Richards would
take over the law firm. Subsequently, he pointed out that
Governor Bill Walker asked him to be attorney general of which
he decided was an opportunity to serve the people of Alaska,
that it was a once in a life time opportunity, and he would be
crazy not to take it.
1:08:21 PM
REPRESENTATIVE MILLETT asked under what circumstances the state
should compel oil & gas lessees to produce their gas resources,
and whether he would sue the producers to compel them to sell
their products.
1:08:53 PM
MR. RICHARDS responded that approximately 100-years ago in
America there was an open question about whether an oil company
with an oil & gas lease from a landowner could act in its own
self-interest, or whether it owed a duty of care to the
landowner. In approximately 1920-1930, it was well established
that oil companies do owe the landowner a duty of care, and in
particular to fully develop the leasehold, to market a leasehold
oil and gas off of the leasehold when there is reasonable
expectation of profit. The primary reason that duty exists is
to ensure that the landowner has the ability to fully utilize
and take advantage of royalty income. When discussing the duty
to develop or duty to market, which are slightly different
obligations, there is a right of the landowner to have an
expectation to receive his/her royalty income. Typically, in a
duty to develop suit the ultimate remedy is secondarily the
forcing of production, and primarily the right to payment on
lost royalty. In the event the state was not receiving royalty
due to the refusal to develop, it would be the prerogative of
the Department of Natural Resources (DNR) to seek lost royalty.
He does not have any expectation or intent right now from DNR to
file such a suit, he posited.
1:10:23 PM
REPRESENTATIVE MILLETT surmised that Mr. Richards believes there
is a duty to produce and they should produce the gas at whatever
cost.
MR. RICHARDS responded that he does, as there is not only an
implied covenant in the law in every state, but also where the
deal of the lease form expressly states it.
REPRESENTATIVE MILLETT pointed to the remarks of Governor Walker
wherein he was upset about HB 132, and implied he would sue the
lessees in the North Slope for duty to produce if they did not
produce gas for the gas pipeline.
MR. RICHARDS stated he did not hear Governor Walker's comments,
but it is DNR's choice whether or not they feel the lessees are
not living up to their expectations. He noted that DNR has the
remedy available to file a suit for lost royalty.
1:11:31 PM
REPRESENTATIVE MILLETT asked if that would be a decision for DNR
or would he take an active role in that decision.
MR. RICHARDS advised it would be a decision for DNR, as it would
directly come through the standard plan of development process.
He said he would take a role to the extent that DNR sought legal
advice from the attorney general's office on how that process
should occur, if it should occur.
1:11:50 PM
REPRESENTATIVE MILLETT offered a scenario of DNR indicating it
believes there was an implied duty to produce off the leases,
but they were not producing because they could not agree with
their profit margins. Or, she further offered, the pipeline
ownership wasn't in agreement with Mr. Richards, would he be
compelled to give DNR advice that it should sue the lessees.
MR. RICHARDS answered that he would not be compelled to tell DNR
they should sue the lessees as he would only give them advice as
to what their legal options are.
1:12:19 PM
CHAIR LEDOUX quiered, under this analysis, when does the duty to
produce come into play. She assumed it wouldn't come into play
unless the producers were able to show that it could profitably
produce.
1:12:45 PM
MR. RICHARDS answered that there are two parts to the question.
The first is that it is not just a duty to produce as there are
four implied covenants, duty to explore, duty to develop, duty
to produce, and duty to market and each have its own unique
circumstances under the body of common law and each arise at a
slightly different time. He explained that with a duty to
market and a duty to produce, the rule is that the landowner
would only have a remedy against the oil & gas lessee if it
could demonstrate that its failure to develop was despite a
reasonable expectation of profit. He opined that the burden
would shift to the landowner to demonstrate there was a failure
to develop when there was an expectation of profit. He
reiterated that it would not be up to the oil company to show
there was an expectation of profit, but up to the landowner to
show there was a failure to develop when there was a reasonable
expectation of profit.
CHAIR LEDOUX asked what sort of a profit, as profit can be a
person making a penny, or profit could be a $1 billion, and
whether case law describes what it means by profit.
1:13:58 PM
MR. RICHARDS explained that case law does describe what it means
by profit, as it is pretty well settled when looking at lower-48
jurisdictions. He noted there has never been an Alaska case and
Texas is very defined in the law on this. He offered that the
standard when meeting the internal cost of capital of the
reasonably prudent operator as two parts. One part being a
recognition that it is not that a person makes a penny, it is
that there would be a return on a positive present value basis
where the person would meet its internal hurdle rates. The
second part being that it is never measured from the basis of
the individual oil company as the measurement is always based
upon a reasonably prudent operator. He described it as the
theoretical third party reasonable operator that does an oil &
gas lease. He explained that this body of law is not looking to
the individual circumstances of the oil company, its individual
capitalization, its projects around the world, how it wants to
act, but rather to create a third party standard like the
reasonable standard in torts and negligence which says "how
would a reasonably prudent operator act in that circumstance."
He submitted that is the hypothetical duty of care owed to the
landowner that is measured against.
1:15:13 PM
CHAIR LEDOUX questioned whether these duties to produce are
totally common law and are not written into the leases at all.
MR. RICHARDS opined they are totally common law and his
recollection is that the D01 lease form, in the remedy section,
does reference the implied covenants.
1:15:39 PM
REPRESENTATIVE MILLETT surmised that his administration would
like to build 100 percent, and own a gas pipeline. She asked
whether there was a situation he could see getting into where
the tariff could be so expensive that the profits would be
marginal for a producer.
MR. RICHARDS opined that a pipeline is never going to be sued
into existence, and he does not personally believe the duty to
develop can be used to force a $60 billion development project
to occur. That being said, he further opined that the oil & gas
lessors on the North Slope are sophisticated and know their
leases, obligations, and rights. In the event the Alaska
Liquefied Natural Gas Project (AKLNG) did not go forward and an
independent pipeline became credible, they would understand that
they would have a duty to sell product into that project if
there was a reasonable expectation of profit. He remarked that
if they did not have a reasonable expectation of profit they
wouldn't have the duty to market.
1:17:02 PM
REPRESENTATIVE GRUENBERG quoted from his resume "Regularly built
sophisticated valuation, Monte Carlo, and other decision models
..." and asked the definition of Monte Carlo.
MR. RICHARDS explained that Monte Carlo is a statistical means
to measure outcomes and is called "probable-istic modeling." In
decision modeling there can be "determine-istic or probable-
istic analysis." Probable-istic, Monte Carlo, and Monte Carlo
software, says it recognizes there are a range of possible
outcomes so it will build the chance of all of these outcomes
occurring based upon distribution. The software then runs
25,000 different flips of the coin on each chance to determine
the most likely outcome given a number of different variables
and possible outcomes.
REPRESENTATIVE GRUENBERG noted that it appears Mr. Richards had
mainly a transactional or office practice rather than a
courtroom and litigation practice.
MR. RICHARDS responded that Representative Gruenberg is correct
up until 2009 when all of his transactional work and tax cases
became litigation. At that time, he explained that his state
oil & gas tax practice took on a different character. In
particular, he noted, the Trans-Alaska Pipeline System (TAPS)
evaluation dispute cases where he represented the City of Valdez
in a number of trials and very complex litigation cases. He
related that he found himself litigating extensively for more
than half of his time in the last five year.
1:19:31 PM
REPRESENTATIVE GRUENBERG said he was trying to understand his
experience as a nuts and bolts litigator. He asked whether Mr.
Richards knew what it was like to go in front of a jury or an
administrative agency, whether he has worked with the Rules of
Evidence, and how to strategize a case to either prevent an
appeal or build in an appeal.
MR. RICHARDS opined that he has an incredibly sound background
in complex litigation as he has done some of the most complex
litigation that has been handled in the State of Alaska during
the last 5-6 years, full time, and at extremely high risks with
many people against him and with him.
1:20:51 PM
REPRESENTATIVE MILLETT noted that the state asserted the North
Slope Borough and the City of Valdez exceeded the amount they
were allowed to collect for the tax cap on TAPS. She referred
to a letter from the division to the state assessor on 8/24/2012
that the North Slope Borough may owe approximately $49.7
million, and the City of Valdez may owe approximately $56.7
million for a total of approximately $106 million due to the
state. She asked if his administration had started proceedings
to collect the money from the local governments, whether he is
committed to collecting the money, and what is the status of the
disagreement.
1:21:32 PM
MR. RICHARDS replied that he and Governor Walker represented the
City of Valdez in private practice. He has since delegated his
authority to that case to Martin Schultz, Chief Assistant
Attorney General, Statewide Section Supervisor, Oil, Gas &
Mining Section, in Anchorage. He explained that it was one of a
number of cases he delegated before he took office after
consulting with an outside legal attorney and the ethics
attorney within the Department of Law (DOL). He said he was
advised to delegate until a number of events happened, just as
other attorneys general have delegated their prior cases
involving litigation with the state from their private practice.
He said the answer is that he is not up-to-date with the current
status because he is not involved in the cases, but he surmised
that they are still before the Alaska Superior Court with
municipalities arguing that they do not owe the money and the
state arguing that they do.
1:22:36 PM
CHAIR LEDOUX questioned what kind of Chinese wall he has built
around Mr. Schultz.
MR. RICHARDS responded that the Department of Law is accustomed
to this kind of Chinese wall in terms of different matters, and
he does not know that anything special had to be done other than
the fact that the decisions are delegated.
CHAIR LEDOUX asked if Mr. Schultz was going through a
confirmation process.
MR. RICHARDS replied that he is not.
CHAIR LEDOUX quiered how many cases have been delegated to Mr.
Schultz.
MR. RICHARDS noted that four cases were delegated. One of which
was Governor Walker's Point Thompson litigation, which now has
been dismissed. He offered that many of these cases have
multiple facets to them but three cases are the subject matter,
with 10-12 cases, possibly more. There is a property tax case
for the City of Valdez, TAPS valuation litigation, and the Tax
Cap case which is a derivative of the TAPS valuation litigation.
1:23:58 PM
CHAIR LEDOUX referred to his comment that "nothing special" has
been done because the walls have been put up with other
attorneys general. She asked the process of building a Chinese
wall to ascertain there is absolutely nothing going from Mr.
Schultz to Mr. Richards, and from Mr. Richards to Mr. Schultz
with respect to these cases.
MR. RICHARDS opined that he was not sure there is any more of a
process than putting formal delegations in place. He explained
that delegations in this area of law are any kind of delegation
at the state level and there is a process used which makes the
delegation public. He advised he is not familiar with the
process other than it goes up on a web site in order to be
publically available. Once that occurs, the delegated attorney
is then responsible for building a wall and determining what
communications will flow outside of his group. He highlighted
that it is common within the Department of Law (DOL) that
different attorneys work on matters for two different state
agencies with DOL representing both state agencies, with
slightly different interests.
CHAIR LEDOUX surmised that generally speaking there are not two
agencies suing each other in court.
MR. RICHARDS responded that it does happen and in that situation
a Chinese wall is built within DOL.
1:25:35 PM
REPRESENTATIVE MILLETT asked how involved Mr. Richards is in the
AKLNG negotiations project, and further asked if he signed a
confidentiality agreement.
MR. RICHARDS answered that he has been moderately involved in
the sense of attending one meeting telephonically. He said he
has not signed a confidentiality agreement so his attendance was
totally based on publically available information.
REPRESENTATIVE MILLETT noted that in January Mr. Richards
advised the Alaska Journal of Commerce that he plans to
institute a state policy potentially in conflict with the
legislative direction given to state entities related to
confidentiality. She asked his thoughts whether a policy handed
down by the attorney general is good public business, open, and
transparent. She further asked whether this is bypassing the
public process part of a legislators work in crafting a policy
that will help statute.
MR. RICHARDS replied that he certainly would not do anything
contrary to enacted state law, and at the request of Governor
Walker he has had 4-5 conversations with people at AKLNG, and
the Alaska Gasline Development Corporation (AGDC). The idea is
to create processes whereby information that is public can flow
up to the public in order that Alaskans can get a better sense
of what is going on within the project, he remarked. He stated
he certainly does not believe that he has done anything that is
contrary to law enacted by the legislature.
1:27:07 PM
REPRESENTATIVE MILLETT questioned if he would be signing a
confidentiality agreement for the AKLNG project.
MR. RICHARDS advised it is not his current intention to do so.
1:27:15 PM
REPRESENTATIVE CLAMAN pointed to the four cases Mr. Richards
removed himself as attorney general and quiered if there are any
other cases upon which he declared a conflict.
MR. RICHARDS related that those are the only cases.
1:27:53 PM
REPRESENTATIVE KELLER asked Mr. Richards to reiterate the four
cases.
MR. RICHARDS advised that the four cases are: the TAPS valuation
cases which is the long going dispute of the ad valorem taxable
value of TAPS; a series of ongoing cases for 15-years between
the City of Valdez and DNR as to whether or not some of the
marine property servicing the Valdez Marine Terminal should be
subject to an ad valorem tax; Point Thompson; and the TAPS Cap
case which was derivative of the TAPS valuation litigation, but
it is a separate case and separate docket.
1:28:59 PM
CHAIR LEDOUX asked whether he views the role of attorney general
as working for the people of the State of Alaska or for Governor
Walker, or both. She proffered that she is an advocate of an
elected attorney general and the governor having his own
counsel.
MR. RICHARDS replied that as the attorney general he represents
the governor's office and the various state agencies, but the
attorney general's obligation is clearly to be the people's
attorney. The attorney general manages those [duties] by
providing as good a legal counsel as possible to all of the
various state agencies, including the governor's office.
Ultimately, he explained, it is an independent office and
reiterated that his primary obligation is to the people. To the
extent there is a conflict, it is always the duty of the Alaska
Attorney General to act on behalf of the people before the
governor or any state agency.
CHAIR LEDOUX questioned how that works with, not only the
governor's office, but with the state agencies as far as
confidentiality of the attorney client relationship. She noted
he would be working for the agency, governor, and the people.
MR. RICHARDS related that it does work as Alaska is not unique
in that most, if not all, attorneys general throughout the
country operate under the exact same framework. He acquiesced
that some do not actually represent the governor's office as
there is independent counsel, but many do. Ultimately, he
related, he does not see an issue with confidentiality in that
when a commissioner and attorney general disagree the
confidences would not be disclosed and the attorney general
would do what public interest requires.
1:31:15 PM
REPRESENTATIVE CLAMAN offered a scenario of the Department of
Transportation (DOT) having one view, and Mr. Richards concluded
that DOT was wrong, would he take the position as its attorney
in court to properly educate DOT regarding the law that should
be applied to its department.
MR. RICHARDS said "that's correct," and related there have been
more than one fairly public disputes in Alaska when a
commissioner disagreed with an attorney general. He noted that
the attorney general had to make it clear that it is ultimately
the attorney general's office, in certain circumstances, that
makes determinations as to Alaska law and the public's interest.
REPRESENTATIVE CLAMAN surmised that Mr. Richards had practiced
law with the governor for a number of years and quiered if there
were occasions when he and the governor did not see eye-to-eye.
He asked whether Mr. Richards was comfortable advocating his
perspective in convincing the then practicing attorney Bill
Walker of the correctness of his standpoint.
MR. RICHARDS related "it fair to say that happened a number of
times."
1:32:48 PM
REPRESENTATIVE MILLETT referred to Ketchikan Gateway Borough v.
State of Alaska, Superior Court 1KE-14-16 Civil of which the
governor's campaign supported, and she then referred to Alaska
v. Native Village of Veneti Tribal Government (96-1577) 101 F.3d
1286, reversed, of which had received a stay. She asked his
position on both cases.
MR. RICHARDS offered that with ongoing litigation he will
explain the status, but he cannot discuss procedures regarding
the strategy of litigation. He pointed to the Ketchikan Gateway
Borough case and advised that the superior court judge ruled in
part for the Ketchikan Gateway Borough ruling that the local
required contribution did violate the dedicated funds clause.
Ultimately, he remarked, the ruling read that the state did not
have the obligation to make up the local required contribution
for the local communities. He offered that the judge originally
held that was the law and would not grant the stay. The case
went up to the [Alaska] Supreme Court where ultimately the state
did receive a stay. Currently, from the enforcement
perspective, things are on hold until the Alaska Supreme Court
has an opportunity to address the state's position. He advised
that the state is moving forward with the same position as in
prior litigation, although, the state could always change it
position. With regard to the Native Village of Veneti Tribal
Government case, he related that he requested a stay of six
months to have an opportunity to study the issue and there is no
change in position one way or the other.
1:34:42 PM
REPRESENTATIVE KELLER said there are challenges with the federal
government relating to The Arctic National Wildlife Refuge (ANWR
or Arctic Refuge) and asked Mr. Richards to describe the
people's attorney standing up for Alaskan rights for reliance
and access under the Alaska National Interest Lands Conservation
Act (ANILCA).
MR. RICHARDS responded that he views the particular
circumstances of the Alaska Attorney General as a very important
role as the people's attorney which is standing up for state
sovereignty and the state's rights under a number of different
packages. He referred to the Statehood Compact, ANILCA, Alaska
Native Claims Settlement Act (ANCSA), to ensure that Alaskan
rights are respected by the federal government. As to ANWR, he
noted, his office has continued a number of cases some of which
run back through several attorneys general. His office is
moving forward with ANWR on the challenge that the state has a
right to file an on-drilling exploration plan as well as a
challenge to some of the borders of ANWR, he explained. He
offered that the most timely issue is less a litigation issue
than a policy issue, of which is President Barak Obama's new
position with the United States Secretary of the Interior, Sally
Jewell, that ANWR should be treated as wilderness
notwithstanding an Act of Congress.
1:36:30 PM
MR. RICHARDS responded in the affirmative to Chair LeDoux that
the Ketchikan Gateway Borough did cross-appeal.
CHAIR LEDOUX asked the state's position on the cross-appeal.
MR. RICHARDS replied that the state will be opposing the cross-
appeal. He explained that the Ketchikan Gateway Borough is
cross-appealing the two claims it lost on, that the local
required contribution violates the veto clause and the
appropriation clause. He noted that it believes the state
should be required to make up the funds if the local
contribution is struck down. He noted the appeal points his
office is drafting are consistent with defending the state's
position in the Alaska Superior Court.
CHAIR LEDOUX surmised that the points are consistent with
defending the state's position in the Alaska Superior Court
litigation, but not necessarily consistent with Governor
Walker's position during his campaign.
MR. RICHARDS stated he recalls reading an article where Governor
Walker said that he was sympathetic to the Ketchikan Gateway
Borough's lawsuit, of which is the sum total of knowledge he has
about the governor's position, and he has not discussed it with
him.
1:38:07 PM
REPRESENTATIVE CLAMAN asked where the governor was sympathetic
with the position of the Ketchikan Gateway Borough, and whether
it differed from the state's position in any of the three areas
at issue in the lawsuit. He asserted that the state may be
changing its position as to one or more of the appeal points
when moving forward as the briefing is not complete.
MR. RICHARDS reiterated that he generally does not know the
governor's personal position other than in one of the debates he
said he was sympathetic. As to whether or not the state could
change its position, there is no present attempt to, and that
ultimately how to proceed in litigations is his decision, he
posited.
1:39:23 PM
CHAIR LEDOUX stated that the strategy in how to proceed in
litigation might be the decision of Mr. Richards, but the policy
matter would be the governor's decision.
MR. RICHARDS respectfully disagreed with Chair LeDoux as it is
the attorney general's decision in how to proceed in any
litigation both in terms of filing dispositions and strategy.
1:39:55 PM
REPRESENTATIVE KELLER referred to the federally recognized
tribe, Tlingit & Haida Indian Tribes of Alaska decision, and
opined that the decision is not consistent with the Alaska State
Constitution, and questioned how Mr. Richards would proceed on
that issue.
MR. RICHARDS asked for more clarity as to the decision.
REPRESENTATIVE KELLER advised the decision authorized tribal
marriage of same sex couples and he questioned whether it is the
role of the attorney general to challenge the decision.
MR RICHARDS said they are a separate sovereign and have the
power under recognized case law to adopt, as between their own
members, their own body of law. The question is whether or not
the state would recognize [same sex marriage]. He offered that
the decision will be decided in a dispositive manner under Hanby
v. State of Alaska, 479 P.2d 486, 498 (Alaska 1970), which will
be decided by the Supreme Court this term as to whether there is
a constitutional right to gay marriage at the federal level.
1:41:25 PM
REPRESENTATIVE MILLETT asked Mr. Richards to describe his role
in changing laws specific to the National Guard.
MR. RICHARDS advised that as attorney general he will not take
the lead on reforming the National Guard. He opined that his
role is to assist the National Guard with its requests such as
enacting a military justice code, or any other legal changes, or
legal advice. Second, he noted, there will be a report from
Trisha Collins, Special Investigator, who will make
recommendations, if any, as to prosecutions that should occur.
He explained that the primary role of the attorney general's
office will be to review her recommendations and make a decision
as to how to move forward.
1:42:43 PM
REPRESENTATIVE CLAMAN referred to the distinction between
position and policy, and offered that the attorney makes the
strategy call in court. For example, he opined, although there
is a right to a jury trial in a civil matter, the lawyer can
choose to disagree with his/her client and ask for a court
trial. He pointed to an example of school funding and said the
Ketchikan Gateway Borough suit raised a question of statutory
interpretation as it could come to a policy question which is
uniquely a question for the governor's office or executive
branch to take a position. He opined that when looking at the
details of those relationships there are circumstances under
which the executive branch may advise the attorney general
regarding the position it wants to take on the state's behalf.
He offered that the attorney general's advice may be that there
is a legal basis to take either position "A," or "B." In his
scenario, he pointed out that the attorney general may choose
position B, but if the governor chooses position A, would the
attorney general be expected to officially support position A.
He opined that in this scenario the client makes the choice.
MR. RICHARDS responded that he agrees and disagrees with the
statements of Representative Claman in that as attorney general
who is an attorney within the Alaska Department of Law, it has
agency clients or the governor's office. As an attorney for
that client, the attorney takes direction, enables the client's
decision making, and provides legal advice, as does a private
attorney. Although, he related, there is a slight distinction
in that the attorney general's primary representation is to the
public interest and not to any one individual governmental
client. He related that the attorney general's office follows
direction from this client until there is a situation where the
attorney believes the client is taking a position that is not
consistent with public interest. In which case, he noted, the
duty shifts to the attorney general's office being obligated to
take positions in the public interest. He offered to forward a
1995 Attorney General Opinion, written by Bruce Botelho that
lays out the historical artifice of the office, the laws of the
State of Alaska, and why there is a nuance difference.
1:46:04 PM
REPRESENTATIVE CLAMAN offered a circumstance whereby the
attorney general advises the governor there is a sound basis to
support both arguments in the public's interest, and asked
whether there is a point in which Mr. Richards will say he needs
to follow the governor's direction.
MR. RICHARDS explained that the only reason the governor's
direction would not be followed, or any other agency client, is
if the position is not in the interest of the public. In that
hypothetical circumstance, he reiterated, the attorney will
always follow the direction of the client unless the attorney
general believes the direction of the client is not in the
interest of the public.
1:47:21 PM
CHAIR LEDOUX requested a copy of Mr. Botelho's 1995 Attorney
General Opinion. She surmised that as an appointed official the
attorney general decides what is best for the public even though
two reasonable people could come to a conclusion. She offered
that most of the people in the legislature are trying to follow
public interest. She further offered that it is confusing when
Mr. Richards says that he decides public interest. In most
cases, a client says they want to do "A," and the attorney
advises the client that they have a 30-50 percent of prevailing
on "A," and the client decides to take their chances. She used
the example of the Ketchikan Gateway Borough suit on which some
people thought there was not much chance it would prevail, and
it did prevail on the superior court level. She said she was
confused that Mr. Richards is the final arbitrator of public
interest.
1:49:28 PM
MR. RICHARDS answered that it is the nature of the Alaska
Attorney General's Office and throughout the country as it is an
independent office. Ultimately, he explained, as an independent
office holder the attorney general does make those final
decisions in certain specific areas, primarily in terms of
bringing the disposition and handling of litigation.
1:49:53 PM
CHAIR LEDOUX related that the handling of litigation is a
strategic call and not necessarily a policy call as to whether
the litigation is filed in the first place. She reiterated that
whether the lawsuit is filed is a policy call, and once decided
to do the litigation it is up to the attorney general to decide
how to win.
MR. RICHARDS respectfully characterized it differently in that
it is clear and express under Alaska law that the filing,
disposition, and handling of all litigation is an independent
matter for the attorney general.
1:50:47 PM
MR. RICHARDS responded to Representative Claman that the Hanby
case is an Alaska case before the 9th Circuit Court of Appeals
that is on stay. The United States Supreme Court has taken
Certiorari (Cert} in several other state cases with virtually
identical constitutional provisions.
REPRESENTATIVE CLAMAN surmised that the prior administration in
the Hanby case took the position before the Federal District
Court and the 9th Circuit Court of Appeals of advocating that
the Alaska State Constitutional provision, approved by the
voters, was constitutional and should be enforced, and argued
against the plaintiffs. He asked whether this administration
will make any submission to the United States Supreme Court on
whatever the case is before the United States Supreme Court on
same sex marriage. He further asked whether this administration
has made any decision regarding its position in the Hanby case
coming out of Alaska, on which it has been involved.
MR. RICHARDS reiterated that there has been no decision other
than to seek a stay. He noted that the Alaska State
Constitution is clear, so barring a decision by the United
States Supreme Court that the United States Constitution trumps
the Alaska State Constitution, it is his duty to defend the
Alaska State Constitution. He offered that possibly in June the
decision will be forthcoming.
1:52:52 PM
REPRESENTATIVE MILLETT noted that Mr. Richards has been critical
of the action of the legislature regarding HB 4, and SB 21, even
after the referendum on SB 21. She asked whether that would
influence the way he handles DOL, and whether there is
forthcoming legislation that will change any of those two bills.
MR. RICHARDS expressed that his duty as attorney general is to
fully and faithfully execute the laws of the State of Alaska
that are passed by this body, or voter initiative. He stated
that whether or not he disagrees with policy matters associated
with bills in the past it does not change his obligation. He
offered that he would not sponsor legislation as it would be up
an administrative agency, and he is not working on anything that
would affect HB 4 or SB 21, and no one has asked him to.
1:54:01 PM
REPRESENTATIVE MILLETT asked for verification that his personal
opinions about HB 4, and SB 21, will not influence him in any
manner.
MR. RICHARDS stated "I don't believe so."
1:54:14 PM
CHAIR LEDOUX questioned how his personal opinions could not
influence the way he handles litigation if he is the final
arbiter of public interest.
MR. RICHARDS used the example of tariffs provisions around HB 4,
and offered that his personal view and testimony, at the time,
was that he thought there was a better way to structure some of
the tariff filings. House Bill 4, passed and therefore it is
the law of the land and he will do whatever the law of the land
says.
1:55:04 PM
REPRESENTATIVE CLAMAN asked if he testified regarding HB 4, as
Craig Richards, citizen, or Craig Richards, representative of a
particular client.
MR. RICHARDS related that he was there on behalf of a particular
client.
REPRESENTATIVE CLAMAN questioned whether the position of the
City of Valdez was his personal view, or was he strictly working
in his role as counsel for the City of Valdez.
MR. RICHARDS offered that it was in his capacity as counsel for
the City of Valdez.
1:55:53 PM
REPRESENTATIVE GRUENBERG quiered how he has handled cases where
he disagreed with his client on either substance or procedure.
MR. RICHARDS stated that obviously he cannot speak about
specific circumstances, but any practicing attorney has had that
happen. He noted that his private practice approach has been to
work with the client, explain the disagreement as to policy or
strategy, and offer the client his/her full and best opinion.
He added that when the distinction was made on matters involving
strategy it was ultimately the client's decision.
REPRESENTATIVE GRUENBERG asked if his philosophy was "you are
the client, suffer the consequences of their own decision."
MR. RICHARDS related that in private practice the client has the
right to make their own decisions about their case. He said he
has found that when the client is fully informed and he has
explained the consequences, that they would come to a middle
ground in the approach to take.
1:58:11 PM
REPRESENTATIVE GRUENBERG said it may be more difficult when the
attorney general has 60 legislators, an unknown amount of people
in the executive branch, and 700,000 citizens to figure out what
everyone wants.
1:58:27 PM
CHAIR LEDOUX closed public testimony after ascertaining no one
further wished to testify.
1:58:56 PM
REPRESENTATIVE KELLER moved to forward the name of Craig W.
Richards to the joint session of the House and Senate for
confirmation. However, the vote in the House Judiciary Standing
Committee is no indication how a legislator may vote on the
House floor. There being no objection, the confirmation of
Craig W. Richards is advanced from the House Judiciary Standing
Committee.
1:59:33 PM
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 1:59 p.m.
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