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Jim Gottstein: Why I am willing to settle the Taj MaHawker lawsuit

  • Author:
  • Updated: June 26, 2016
  • Published February 8, 2016

I have agreed to allow the landlord of the new Anchorage Legislative Information Office building, often referred to as the Taj MaHawker, to settle with me because the Legislature has the power to do anything it decides and the lawsuit has already accomplished its main goals. Continuing the lawsuit under these circumstances would subject me to substantial financial risk for little if any public benefit since my lawsuit has already forced the Legislature to deal with the issue and looks poised to terminate the lease as it should. However, I doubt the landlord will proceed with the settlement.

I filed the Taj MaHawker lawsuit knowing that it exposed me to substantial financial risk. The lawsuit illustrates how the Alaska Legislature has deliberately suppressed citizen lawsuits seeking to stop corruption and otherwise hold the government accountable to the law. I am calling on Alaskans to demand the Legislature fix the problem this session. If the Legislature doesn't, Alaskans should elect legislators who will.

One way the Legislature has suppressed citizen lawsuits is by overruling the "Public Interest" exception to Civil Rule 82. Rule 82 makes the losing party to a lawsuit pay the winning party partial attorney's fees. Prior to the enactment of HB 145 in 2003, under the Public Interest exception, people filing such lawsuits would not have to pay the winning side partial attorney's fees and would get full, reasonable attorney's fees if they won. This allowed people to file public interest lawsuits without a large attorney's fee award hanging over their heads, and allowed their lawyers to get paid if they won. Because the state was caught so often violating the law, it was often ordered to pay attorney's fees. In response, rather than attempt to get government officials to follow the law, the Legislature chose instead to blame the people exposing governmental misdeeds and rescinded the Public Interest exception through HB 145.

After the Supreme Court decided in 2007 that the Legislature had the right to financially penalize people bringing public interest lawsuits in this way, public interest litigation has all but dried up. A notable, courageous exception was the lawsuit brought by Bella Hammond, Vic Fisher and others against the Pebble Mine in which almost $1 million in attorney's fees was awarded against them by the trial court. Fortunately, they won on appeal and the attorney's fee award against them disappeared. Even so, the original almost $1 million attorney fee award against them demonstrates the risk that civic-minded people must take into account before filing such a lawsuit. This was the risk I knowingly took. The risk is made worse by the attorney general's policy of defending the illegal actions of state bureaucrats. It is no wonder these suits have gotten so rare.

In my Taj MaHawker lawsuit, to partially address this problem, I said that if I win I should get 10 percent of any savings. Under the Federal False Claims Act for fraud against the federal government, whistleblowers get 25-30 percent of any recovery and most states have their own versions. The Alaska Legislature has refused to enact such legislation. On Jan. 13, the judge ruled against my 10-percent claim, saying it is up to the Legislature to pass such a law. Alaskans should demand that it do so now for future lawsuits.

The Legislature has the power to enact any action on the Taj MaHawker, including legalizing the currently illegal lease or, hopefully, terminating it or renegotiating to market value. This potentially subjects me to substantial attorney's fees. The prospective settlement compensates me for the damage the construction did to my building and most, but not all, of my attorney time. It would be foolish of me to continue the lawsuit if the Legislature makes a deal with the landlord in these circumstances. However, I will be surprised if the landlord makes such a deal and/or goes through with the settlement. If it doesn't the lawsuit will go forward.

Whether the Taj MaHawker lawsuit goes forward or not, Alaskans should demand the Legislature pass two laws to address the rampant corruption and government lawlessness.

The first is to repeal HB 145. The second is to pass a law similar to the federal False Claims Act, just as most other states have already done.

If the citizens of Alaska don't demand the Legislature repeal HB 145, and enact a state version of the False Claims Act, they will have demonstrated that Alaska has the (corrupt) government it deserves.

Jim Gottstein is president of Alaska Building, Inc. He owns the building next door to the Anchorage Legislative Information Office, and he filed a suit over the LIO's renovation and lease agreement.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.

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