Petition for Writ of Certiorari — Roberts v. Alaska (No. 07-631)

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AV & Supreme Court US.

No. 7-63 L NOV 8- 2007

OFFICE OF THE OLERK

In The

Supreme Court of the Anited States

PETER ROBERTS,

Petitioner,

versus

THE STATE OF ALASKA,

Respondent.

On Petition For A Writ Of Certiorari

To The Supreme Court Of Alaska

PETITION FOR WRIT OF CERTIORARI

PETER ROBERTS, Pro Se

c/o DOWNTOWN BICYCLE RENTAL, INC.

333 W. 4th Avenue, Suite 206

Anchorage, AK 99501

(907) 279-3334

——

QUESTIONS PRESENTED FOR REVIEW

In Alaska, gambling is regulated by the state.

Nonprofits can apply to the State for a “gaming”

permit. After paying operating expenses and prize

money, state law requires net profits be spent on

“charitable” activities. In December of 1999, without

consulting any governmental agency or community

group, two gaming regulators in Juneau approved a

free bike loan Program for downtown Anchorage.

“The Program” was implemented without notice by

“Earth.” Earth was organized for educational pur-

poses under § 501(cX(3) of the IRS Code. Undermined

seasonal tax-paying bike rental businesses com-

plained. The State chose not to act and refused to

explain in writing why it approved the Program.

The questions presented are:

I. Whether an agency’s conflicting verbal,

investigatory and judicial rationales and a refusal to

create a written record of reasons self-proves bad

faith justifying application of judicial estoppel against

the State.

II. Whether the assertion by a state agency that

“there is no requirement of compliance with federal

law” in the state statute that it administers permits

the state agency to facilitate activities that violate a

501(c)(3) federal tax exemption.

QUESTIONS PRESENTED

FOR REVIEW ~- Continued

Ill. Whether the right to pursue a lawful occu-

pation as protected by the due process clause and/or

the privileges or immunities clause of the Fourteenth

Amendment of the U.S. Constitution is infringed

when a state agency decides without notice or written

explanation to provide tourists a free recreational

service that they are able and willing to buy from

existing tax-paying businesses.

ili

PARTIES TO THE PROCEEDING

Petitioner Peter Roberts makes his living renting

bicycles. Roberts is the sole shareholder and only

officer of Downtown Bicycle Rental, Inc. (hereafter

“DBR”). Mr. Roberts is a 2002 graduate of New Eng-

land School of Law. Roberts passed the February

2006 Alaska Bar, but postponed swearing in to pre-

serve an issue of first impression in Alaska: Whether

there is a common law exception to the statutory

prohibition against lay representation of corporate

claims.

Respondent is the State of Alaska. The Alaska

Department of Revenue (“the Department”) regulates

charitable gaming in Alaska.

TABLE OF CONTENTS

Page

Pe I iliac seisiivantindubesiiceneinensenniveiahonniiades vil

EEE Le AA TOTTORI ix

Petition for a Writ of Certiorari.................ccssseeeeeee 1

I i csclhatilidbsinthionisbctabal sales daliiaadlts 1

ea eaten lau ulgtbiinentiine 1

Constitutional Provisions ................:ccccccceceeseseeeeeees 1

Statutory and Regulatory Provisions...................+- 2

EE I isi sihicrusssrcstaninicadetphndonmnonaehennannnes 2

Reasons Why Certiorari Should Be Granted......... 15

POINT I.

JUDICIAL ESTOPPEL SHOULD BE

APPLIED AGAINST THE STATE BE-

CAUSE GAMING REGULATORS DENIED

AGGRIEVED CITIZENS A WRITTEN DE-

CISIONAL DOCUMENT AND PROVIDED

THE OMBUDSMAN AND THE COURTS

WITH INCONSISTENT, GROUNDLESS,

AND EQUIVOCAL POST HOC RATION-

ALES AND EXCUSES ...:ccssceccoscossssonsensoesseseose 18

A. The State’s Inconsistent Statements

Compromised the Integrity of the Ju-

dicial Process and Deprived the Public

of the Benefit Charitable Gaming Pro-

ceeds Are Supposed to Provide.............. 19

B. The Refusal to Issue a Written Deci-

sional Document or Provide the Court

with A Clear and Consistent Explana-

tion Self-Proves Bad Faith .................... 22

TABLE OF CONTENTS -— Continued

Page

C. The Lower Courts Failed to Follow

This Court’s Framework for the Or-

derly Process of Review ...........ccccccssseeees

D. The Petition for Quasi-Estoppel Was

Ignored by the Trial Court and Re-

jected With Erroneous Reasoning on

FI is etsicscesrbdiccsscaniciiniis etnies

SN wha ccsssissisctintssaebiassenetasics

FF I iisetiiccccccacenin,

E. The Legal Basis for Bad Faith Is In-

herent to Judicial Estoppel and Recog-

nized by This Court’s “Square Corners”

SPINS icescniciattesenitauenseeteitiinbleaineiatiads

POINT II.

STATE AGENCIES ARE PREVENTED BY

THE PREEMPTION DOCTRINE FROM

FACILITATING ACTIVITIES THAT VIO-

LATE A §501(C)(3) FEDERAL TAX EX-

RPE 5 PAE eiisnnssdssicnnvisudsseatactindivaieloacamadaseiens

A. Federal Law and Public Policy Is De-

signed to Facilitate, Not Undermine

Tax-Paying Small Business...................

B. State Support of the Program Violates

Federal Public Policy ..............cscccsssecesees

TABLE OF CONTENTS -— Continued

Page

C. The State’s Assertion that There Is “No

Requirement of Compliance With Fed-

eral Law” Is a Tacit Admission that

Federal Preemption Applies.................. 32

BI vicvsctecsisnibetactlcneerceneneas er Nn Cae 34

POINT III.

BECAUSE EXECUTIVE BRANCH AC-

TION INFRINGED PETITIONER’ RIGHT

TO EARN A LIVING AS PROTECTED BY

THE FOURTEENTH AMENDMENT, THIS

COURT SHOULD DECIDE WHETHER

THE RIGHT IS PROTECTED BY SUB-

STANTIVE DUE PROCESS, THE PRIVI-

LEGES OR IMMUNITIES CLAUSE, OR

a citssiccesitiwstapreidieitasihccenciaelccldebaindieaaibaite 34

A. What Alaska Did to the Bike Renters

Mirrors What Louisiana Did to the

Butchers in the Slaughter-House Cases... 35

B. In light of Saenz, Certiorari Should

Be Granted to Revisit the Alternative

and Arguably Original Constitutional

es 38

C. Petitioner Has Established His Right

to Earn a Living Was and Remains In-

PD niidcnictsavscssseodecncesidiliaaacedibbihipiomneis 39

ee aE MN OI eee RT 42

i oss a sccm banbamacnaeann 42

vii

APPENDIX INDEX

Page

ROBERTS v. ALASKA, 162 P.3d 1214 (Alaska

SIE ia sisisveniacsssliuidinicaisiddisichiteiniasicuantaiacstigadisteiammacuciiin App. 1-32

ROBERTS v. ALASKA, et al., Summary Judg-

ment Order, 3AN-03-5534CI................008 App. 33-53

Superior Court Final Judgment and Award of

FEE FO ccisnsicisicicnibicntiativigninnaciciainlavian App. 54

Supreme Court Order Denying Petition for

BI iiscissininiteinninsniiabaredinleiiiiapananieniiiigicipenintilga App. 55

15 U.S.C. §631 Declaration of Policy................ App. 56

Roberts’s Identification of Federal “Commerci-

ality Doctrine” Authorities ..................00008 App. 61-62

Roberts’s Identification of Authorities Requir-

ing “Operational Nexus”.............cccceeseeeeees App. 62-64

Roberts’s “Summary of Argument” for Counts

Alleging Executive Branch Violation of Sub-

stantive Due Process/Privileges or Immuni-

SE I va vinscietinc cs siicancesgineedaemeneitapbeiinetonie App. 65-66

Excerpt of Table of Contents from Appellant’s

Supreme Court Opening Brief Itemizing

State’s Inconsistent Positions .................. App. 67-70

V1ll

APF .:DIX INDEX — Continued

Page

Itemization to the Record of 18 Undisputed

Facts Establishing Self-Proving Bad Faith by

the State. (Appellant’s Opening Brief)..... App. 71-74

Appellant Roberts’s Supreme Court Argument

Alleging Executive Branch Violation of Sub-

stantive Due Process and Privileges or Im-

munities Clause Right........sccccccssccsssessseeees App. 75-76

Ombudsman’s Report. Gaming Regulators’

Reasons for Approving Program............... App. 77-78

Roberts’s Notice to Supreme Court Listing

Dropped Defendants on Caption.................+ App. 79

Roberts’s Petition for Rehearing.................. App. 80-86

TABLE OF AUTHORITIES

Page

FEDERAL CASES

Airlie Foundation v. IRS, 283 F.Supp.2d 58

Lie cacccbissdveeneveneneveciocttvsescervees 31

Bob Jones University v. U.S., 461 U.S. 574

cial civancnbicerecceseesasverversecereeves 29

Bull v. United States, 295 U.S. 247 (1935)........00.0.. 30

Camps Newfound/Owatonna, Inc. v. Town of

Harr., Maine, 520 U.S. 564 (1997) oo... ccc cence 30

Citizens to Preserve Overton Park, Inc. v. Volpe,

RE © BE BP viceccccaccoschstvonvonessovesescersesosce 18, 19

Cleveland v. Policy Management Systems

Corp., 526 U.S. 795 (1999) w.cceccscsssssessssessceseessecreees 21

Craigmiles v. Giles, 110 F.Supp.2d 658 (E.D.Tenn.

ied scascnkdecdednsesstvevecereevseeees 35, 39

Crosby v. National Foreign Trade Council, 530

ESE 32

Defenders of Wildlife v. Gutierrez, 484 F.Supp.2d

ES EE 25

Dunlop v. Bachowski, 421 U.S. 560 (1975) ....... 22

Ft. Stewart Schools v. Fed. Labor Rel. Board,

ND srisssctesvcscevsesuvessevceseevoevessesevces 24

Gedrich v. Fairfax Cty. Dept. of Family Ser-

vices, 282 F.Supp.2d 430 (E.D.Va. 2003)................ 37

Heckler v. Chaney, 470 U.S. 821 (1985) .............. 15, 18

TABLE OF AUTHORITIES — Continued

Heckler v. Community Health Services of Craw-

SE, BEF BS a rerceinntiniiitiibiteaneiniionmnion 27

Independent Ins. Agents of Huntsville, Inc. v.

Commissioner of I.R.S., 998 F.2d 898 (11th

CI, ee cksitielcshsincaivascdetiatesaneancealaiel piiaiidadinne dmeiibesiben 18

Motor Vehicle Mfrs. Ass’n of the United States,

Inc. v. State Farm Mut. Auto. Ins. Co., 463

As Se EEE sicccsnvcisenauanessibbiiciapiibadbsiiamedammiaaaanisbaiaaas 25

New Hampshire v. Maine, 532 U.S. 742 (2001)........ 20

Purer v. U.S., 872 F.2d 277 (9th Cir 1989)................ 20

Recinos DeLeon v. Gonzalez, 400 F.3d 1185 (9th

SG Bi cincssicchicsiciadiceectdlctehiensitiesidbidiasaiiacabdadsiiotastiads 22, 24

Regan v. Taxation With Representation of

Washington, 461 U.S. 540 (1983)... eee eeeeeeee 29

Saenz v. Roe, 526 U.S. 489 (1999) ........ ee 35, 38

SEC v. Chenery Corp., 318 U.S. 80 (1943) ....22, 24, 25

Slaughter-House Cases, 83 U.S. (16 Wall.) 36

COTE sidacconcdeeissiisasnindicekovnmindebuamieniaimaidatn 35, 38, 42

Wagner v. Director Fed. Emerg. Mgmt. Agency,

GF Fe BE CR Ce CEE vccisiesnsinensctncencsctsnnvennainns 20

Watkins v. United States Army, 875 F.2d 699

CE Rs OU ciidissevinkcissvcnpnicienidicelcciisimainciemadbnmnia 23

STATE CASES

Botelho v. Griffin, 25 P.3d 689 (Alaska 2001)....... 6, 19

TABLE OF AUTHORITIES - Continued

Page

CONSTITUTIONAL PROVISIONS

PC a asia ci cnisceainienianbinesaanmaniaritallaa 41

ie I MIs WU cetecnisesierisinsiapineciinhanisannirhteniaiiaeepiainiionnsiel 1

U.S. Const. amend. XIV, § 1, cl. 2............ 16, 36, 38, 41

STATUTES, REGULATIONS & RULES

RE IUD sitnnusukbideciubtanindeissrmicvtassusdibesenvcn 2, 15, 18

AE IIE sii ciiitiiasliapinibtinntiacinngnbinbeneiniunieneiuimedaieasen 2, 12

IID diichrtecnnccvsiintunreniinacsuebienniienees 6

AK R. Evid. 803(8\a), Hearsay Exceptions,

Public Records and Reports ................ccccccececeeeeeeees 26

EI A ia sce dra iodine Se aicn ipa banunasonapinanedeuioneets 15

15 U.S.C. § 631, Declaration of Policy, “Small

IIIT ioc usiscie satus icecheacchediniinasubedpiiaiianaicians 2, 28

15 U.S.C. § 4801(a), Findings and Purpose ................ 2

Se ee ee ae I intnhdsctabsnteranincediseiietdasiianasmeste passim

§ 501(c)(3)-1(3)a) Educational defined................0++ 5

BF. F BED vscvcesiniicivesenicccevecvisacssonsenntiens 8

PU a 24, 41

xii

TABLE OF AUTHORITIES - Continued

LAW REVIEWS

Andras Kosaras, Federal Income and State

Property Tax Exemption of Commercialized

Nonprofits: Should Profit-Seeking Art Muse-

ums be Tax-Exempt?, 35 New. Eng. L. Rev.

Ne I iiiaicha a ccamieisicedeiondaianeccsasack shsastashdainciiian

Chester James Antieau, Paul’s Perverted

Privileges or the True Meaning of the Privi-

leges and Immunities Clause of Article Four,

9 Wm. & Mary L. Rev. 1 (1967)..............cccccceeee

Developments in the Law - Nonprofit Corpora-

tions, 105 Harv. L. Rev. 1612, 1633 (1992)......

Douglas G. Smith, The Privileges and Immuni-

ties Clause of Article IV Section 2: Precursor

of Section 1 of the Fourteenth Amendment, 34

Eis NE cicnidecidcenicticsntadinieitaacrinsine

Henry B. Hansman, Article, Unfair Competi-

tion and the Unrelated Business Income Tax,

Fe Us tc: Bes Br Ce ikcccccddcticsascoressvasscesis

Jessica Pena & Alexander L.T. Reid, Note, A

Call for Reform of the Operational Test for

Unrelated Commercial Activity in Charities,

76 N.Y.U. L. Rev. 1956 (200%) ccccccsccccscssceseseses:

John Denvir, Democracy’s Constitution, Claim-

ing the Privileges of American Citizenship

CED intssersahaticivaceisienaontidaianesndataalasnietaiaeaiaiadn

John Harrison, Reconstructing the Privileges or

Immunities Clause, 101 Yale L.J. 1385 (1992)

Page

Xill

TABLE OF AUTHORITIES — Continued

Page

Laurence H. Tribe, Comment, Saenz Sans

Prophecy: Does the Privileges Or Immunities

Revival Portend the Future — Or Reveal the

Structure of the Present?, 128 Harv. L. Rev.

a iccatisitdasnietdamneiceiianiiiedaidtinddaiasinniinastiiatmaminate dain 17

Mary Grace Blasko, Curt S. Crossley, David

Lloyd, Standing to Sue in the Charitable Sec-

tor, 33 U.S.F. Le. Rev. 37 (1GBS)..ccceccsccccesscersossevsenses 23

Michael Conant, AntiMonopoly Tradition

Under the Ninth and Fourteenth Amend-

ments: Slaughter-House Cases -?2-Examined.

BE Beet Lak. FOO (GOED scorvcnscsscerescsnsscevecievcess 17, 38

Michael Kent Curtis, Resurrecting the Privi-

leges Or Immunities Clause and Revising the

Slaughter-House Cases Without Exhuming

Lochner: Individual Rights and the Four-

teenth Amendment, 38 B.C. L. Rev. 1 (1996)......... 17

Nina J. Crimm, Why All is Not Quiet on the

“Home Front” for Charitable Organizations,

Se FE Fe TOO FC wissen ttevecinintianieriabitanites 23, 31

Stancey L Winick, Comment, A New Chapter in

Constitutional Law 28 Hofstra L. Rev. 573

CIEE intiinesetwinitntintcdedainntniasianaaiiandiaaiiaamddcaaas 39

Steve France, Dusty Doctrines, 87 A.B.A.J. 46

SAUTEED <ssieowuveihinnientiitensinpesiaitiieduieiaesiaiinsninbsidipeaiiesenmmiaiaa 17

Virginia Richardson, Roderick Darling and

Marvin Friedlander, Exempt Organizations

Technical Topics, <http://www.irs.treas.gov/

pub/irs-tege/eotopica00.pdf> ...........ccecececceceeeeceeeeees 30

X1V

TABLE OF AUTHORITIES -— Continued

Page

Wayne McCormack, Economic Substantive Due

Process and the Right of Livelihood, 82 Ky.

ls Se ee iaiastdesthssconsiesesenmsonibdaniiiaaineninie 17

MISCELLANEOUS

Elizabeth Manning, Food bank’s critics cry foul,

Health department calls EARTH’S backyard

buffet unsafe, Anchorage Daily News, March

Bae As Hr ee icinesanesebtniesonsinindsesennunidesabitiaitienviewes 12

George Will, This Week With David Brinkley

(ABC), Oct. 16, 1994 NEXIS transcript # 677....... 34

<http://www.trailsofanchorage.com/2nd_avenue.

SII scabslioas Caasishditiinebbsdemnbaclbduiicalaiokebcabuhidiiabaabihiaibieisilite 3

http://www.wsgc.wa.gov/fag/internet_gambling.

i scaniicrsiaseneniedcinsiadiauaiccichanabannsiteiediaeteciapiaibiniadiaanisiiaanbnnann 16

Kavan Peterson, 48 states raking in gambling

proceeds, Stateline.org, May 23, 2006 ................... 15

Letter from William A. Egan, Governor of

Alaska to William E. Beltz, President of the

I. BRIE Fa Bei isisscuanncenctistconscelassetididiorseieiinns 20

Letter from Attorney General John L. Rader to

William A. Egan, Governor of Alaska, March

PETITION FOR A WRIT OF CERTIORARI

Petitioner respectfully petitions for a writ of

certiorari to review the judgment of the Alaska Su-

preme Court.

OPINIONS BELOW

The opinion of the Alaska Supreme Court (App.

1-32) is reported at 162 P.3d 1214 (Alaska 2007). The

order denying petitioner’s petition for rehearing is at

App. 55.

JURISDICTION

The judgment of the Alaska Supreme Court was

entered on June 22, 2007. (App. 1.) On August 14,

2007, the court denied petitioner’s timely petition for

rehearing. This court’s jurisdiction is invoked under

28 U.S.C. § 1257(a).

CONSTITUTIONAL PROVISIONS

The relevant Constitutional Provisions are:

ARTICLE VI: This Constitution, and the Laws

of the United States which shall be made in Pursu-

ance thereof ... shall be the supreme Law of the

Land; and the Judges in every state shall be bound

thereby, any Thing in the Constitution or Laws of Any

State to the Contrary notwithstanding.

AMENDMENT XIV, Section 1, Clause 2: No

State shall make or enforce any law which shall

abridge the privileges or immunities of citizens of the

United States; nor shall any state deprive any person

of life, liberty, or property, without due process of

law....

STATUTORY AND REGULATORY PROVISIONS

The relevant federal statutory provisions are:

26 U.S.C. § 501(c\(3) of the Internal Revenue

Code

15 U.S.C. §631(a) Declaration of Policy;

(App. 56)

15 U.S.C. § 4801(a) Findings and purpose.

(App. 57-58.)

The relevant state statutory provisions are:

AS 05.15.150(a) — Limitation on Use of Gam-

ing Proceeds; (App. 13)

AS 05.15.140(a) — Proof Necessary to Qualify

for a Permit. (App. 9.)

STATEMENT OF FACTS

Set forth below are undisputed material facts and

the lower courts’ review of the them. An undisputed

material fact that was not reviewed by the lower courts

is indicated with the signal: [FNR]. A paragraph of

facts not reviewed is signaled: FACTS NR.

Federal questions raised below use the signal:

[FQ]. Federal questions not reviewed are: [FQNR].

Downtown Anchorage

Downtown Anchorage bike rental businesses are

geographically limited, seasonal, weather-dependent

and reliant fon tourists for revenue. There are thou-

sands of hotel rooms in downtown Anchorage. The 11-

mile-long TonY Knowles Coastal Trail bike path

begins downtown. The trail runs along Cook Inlet

through parks.. FACTS NR

A Public Program Without a Public Process

State gaming regulators approved The Earth

Cycle Program (“the Program”) based only on its

name. This public program was instituted by Earth

without any public process across the street from the

Anchorage Visitors Center. Earth used gaming pro-

ceeds not only to buy bikes, but to pay family mem-

bers of its treasurer, Michael O’Callaghan, to lend

them out. FACTS NR

The first site for the Program was in front of the

Old Federal Building. Downtown Bicycle Rental, Inc.

(“DBR”) owner Peter Roberts and other private bike

rental business owners complained. One week later,

the Federal government told Earth to leave. The

Program moved to a second location. Each time the

' http://www. trailsofanchorage.com/2nd_avenue.htm.

* At (App. 17) the Opinion “noted Earth’s objective ‘to teach

and practice individual lifestyles which enhance clean earth, air

and water.’” See Earth’s Gaming Application.

Program moved, the bike renters complained to the

owner of the property and the Program was forced to

leave. When the Program landed at its fourth loca-

tion, the Anchorage International Hostel, it stayed.

Interagency Emails

Behind the scenes, State gaming regulators

exchanged interagency emails about the Program

they had approved. One regulator called it a “Bicycle

Squabble.” He wrote that “Roberts is peeved” and

gave his colleagues the “Heads Up” to be prepared for

calls from reporters. Another email states: “I think

that Roberts is screwed!” At the end of the summer

gaming regulator Larry Meyers wrote in an email:

“think of what we have said and done in the past.”

FACTS NR (App. 72 Fact 6, 8.)

The Commissioner Repudiates

Control Over Gaming Proceeds

At the end of July 2000, regulators told Roberts

an investigation “is ongoing.” One week later, this

statement was retracted. In his Complaint and in his

briefs, Roberts asserted the regulator lied. Roberts

supported his assertion with a corroborating fax and

a sworn affidavit. (App. 72 Fact 5.) Roberts chal-

lenged the State to refute the charge. The State

ignored the challenge. That regulator is now a “for-

mer employee” of the state. FACTS NR

On August 16, 2000, the bike renters wrote the

State asking it to revoke Earth’s gaming permit

because the Program “is not educational or charitable

and serves no public purpose.” Here is an excerpt:

Use of gaming funds received by Earth for its

bike program is not a permitted use under

any of the criteria of AS 05.15.150(a) limita-

tion on use of proceeds. [(App. 13.)] More spe-

cifically, use of proceeds is not educational or

charitable. ... Earth is obligated by its tax

exemption to implement educational pro-

grams.... As defined by the federal

agency that licenses nonprofits, there is

no educational purpose served by giv-

ing bikes to tourists.’ [FQNR] Exhibit 10

is an affidavit that demonstrates first-hand

that the Earth Bike Program is not in any

way educational.... Even if Earth’s tax ex-

emption allowed it to operate charitable pro-

grams, the Earth Bike Program does not

qualify. Tourists are not impoverished. Giv-

ing bikes to tourists to recreate on the Tony

Knowles Coastal Trail is not charitable.‘

(Emphasis added.)

* Educational defined, § 501(cX3)-1(3Xa): “The instruction

or training of the individual for the purpose of improving or

developing his capabilities; or (b) The instruction of the public

on subjects useful to the individual and beneficial to the com-

munity.”

‘ The Alaska Supreme Court’s Opinion (hereafter “Opin-

ion”) said the reason why Roberts asked the State to halt the

Program was “because it did not lessen neighborhood tensions.”

(App. 3.)

The cited affidavit is at: (App. 59-60.) [FNR]

Revenue Commissioner Condon (Gaming is a division

of Revenue) issued a four-sentence response. He

instructed the bike renters to speak with a deputy on

the telephone who would explain why the Depart-

ment “can’t and shouldn’t [act].”” The attorney gen-

eral remained silent.’ Roberts repeatedly demanded

the Department create a written explanation of

reasons, the demand was repeatedly refused. FACTS

NR (App. 72 Fact 8.)

The State Tells the Courts the

Opposite of What it Tells the Bike

Renters and the Ombudsman

During the summer of 2000, while State gaming

regulators renounced control over gaming proceeds to

the bike renters, State lawyers asserted control over

gaming proceeds at the Alaska Supreme Court. FNR

Here is the first paragraph of the State’s Complaint

in Botelho v. Griffin, 25 P.3d 689 (Alaska 2001).

Charitable gaming provides charitable or-

ganizations a means of raising funds for

charitable purposes. Under a closely regu-

lated regimen, charities may run games

such as raffles, bingo, and pull-tabs, to raise

* Later, the State said the court could “safely ignore” all

unrecorded telephone conversations because they were “inad-

missible hearsay.” [FNR]

* Pursuant to AK R. Evid. 801(d\2)(B), Roberts asked that

Law’s silence be treated as an adoptive admission. [FNR]

funds for a wide variety of approved pur-

poses. The people of Alaska have authorized

the playing of these games of chance — and

the customers play them — with the under-

standing that the money will go to worthy

causes. (Emphasis added and NR.)

The Attorney General Admits Earth “Should

Not Have Received a Gaming Permit.”

When the Program returned for a second sum-

mer, the bike renters repeated their call for either

action or a written record of reasons. Commissioner

Condon reiterated his earlier “can’t [act]” “conclusion”

and then signed his three-sentence letter: “Have a

nice summer.” FACTS NR (App. 72 Fact 4.)

In a recorded telephone conversation, the attor-

ney general acknowledged Earth “should not have

received a gaming permit.” [FNRI] (App. 73 Fact 10.)

The Program Ends

Shortly after the bike renters’ second written

petition for action was rebuffed, the bulk of the

Program’s bikes were stolen. During the winter of

2001-2002, concerned the Program would return for a

third summer, Roberts pressed the IRS to enforce the

" The Opinion changed this fact: “But the State is not

taking an inconsistent position; it has consistently maintained

that Earth qualified for a permit.” (App. 18.)

Hostel’s § 501(cX3) exemption by restricting Program

bikes to Hostel guests. FACTS NR

When summer of 2002 began, bikes were re-

stricted to Hostel guests. The IRS is prevented by

§ 6103(b2)A) of its Code from disclosing if it ever

investigated or acted against either the Hostel or

Earth. [FNR] Earth’s § 501(c)(3) status has been

terminated.’ [FNR]

State Regulators tell the Ombudsman

the Opposite of What State Lawyers

told the Alaska Supreme Court

Before Roberts filed suit, the bike renters com-

plained to the state ombudsman. The ombudsman

recovered the emails mentioned above. [FNR] In her

report the ombudsman wrote: “Mr. Meyers stated

that Alaska gaming statutes were broadly con-

structed because the Alaska Legislature did not wisn

to place intrusive restrictions on charitable gaming in

Alaska.” [FNR] (App. 78.) Mr. Meyers also told the

* At (App. 4) of the Opinion, the period of time the bikes

were offered during the summer of 2001 is characterized as

“brief.” An equivocal affidavit submitted by an employee of the

Hostel who willfully refused to provide copies of its organizing

documents as required by Federal law is cited in support. Mr.

Roberts disputed Ms. Paikert’s affidavit and provided emails

and other evidence that proves the Program was operated by

the Hostel through August of 2001. [FNR] See Table of Exhibits

for Counts 9, 11, 12.

* Also, the Anchorage International Hostel’s affiliation with

American Youth Hostels has been terminated.

Ombudsman that “EARTH does not have to be a

charitable organization to obtain a permit, just a

‘qualified organization.’” After equating Earth to 13

organizations that “clearly don’t qualify as ‘chari-

ties[,]”” the ombudsman ended her investigation.

[FNR] (App. 77-78.)

Litigation

On October 10, 2002, DBR and Roberts sued. The

State moved to dismiss because DBR was not repre-

sented by a licensed attorney. The suit was dismissed

without prejudice. DBR assigned its claims to Roberts

who refiled the suit. The State challenged the

assignment. Even though Roberts was DBR’s only

shareholder as well as a law school graduate and a

sitting applicant to the bar, the trial court dismissed

assigned claims but held that “some claims remain.””

Two of the remaining claims were Counts 11 and

12. Here is how these counts were presented in the

Complaint:

Count 11

Substantive Due Process Claim. The

State and each of the Defendants violated

Plaintiff’s Substantive Due Process rights.

'’ Unlike the trial court, the Alaska Supreme Court did not

acknowledge Roberts’s legal training or his pending status

before the bar. Roberts passed the May 2006 bar but chose not to

swear-in to retain the issue of lay representation of corporate

claims.

The right to gainful employment and to earn

a living is a basic, natural and fundamental

right. [FQ]

Count 12

Inherent Rights/Privileges and Immunity

Claim. The State and each of the Defendants

violated Plaintiff's fundamental right to earn a

living in violation of Article I §1 of the Alaska

Constitution and the Privileges and Immunities

Clause of the Fourteenth Amendment of the

U.S. Constitution. [FQNR]”

Answers to the Complaint

In J 2 of its Answer the State wrote: “Defendants

are without information sufficient to admit or deny the

allegations who used the Earth bikes... .” (App. 83.) In

{ 59 of its Answer, the State acknowledged “as a state-

ment of law” that “[t]he legislature did not intend for

the gaming laws to provide free recreation to out-of-

state tourists at the expense of existing tax-paying

businesses, their owners, and employees.” FACTS NR

(App. 82.)

The State Repudiates the Program

During motion practice, the State distanced itself

from the Program by arguing its approval of it did not

' The Opinion alluded only to Article IV’s Privileges or

Immunities Clause. (App. 28.)

constitute “proximate causation” because “Earth

arguably would have offered the free bicycles with or

without state-sanctioned charitable gaming money.”

(App. 74 Fact 16.)* In the same motion the State said

the Program was “similar” to other free bike pro-

grams in other cities around the world. FACTS NR

Michael O’Callaghan and Judicial Notice

The architect of the Program and one of the two

people who signed Earth’s gaming application was

Earth’s Treasurer Michael O’Callaghan. O’Callaghan

is a well-known Anchorage activist. In its cross-

motion for summary judgment, the State submitted a

newspaper article about Earth and O’Callaghan and

asked the Court to take judicial notice of the “chari-

table nature of Earth’s programs because they were a

matter of common knowledge.” Citing the same

article, Roberts asked for judicial notice of

O’Callaghan’s lawsuits and reputation for “unyielding

tenacity.” FACTS NR

Here are excerpts from the article:

[T]he case needs to be foolproof. O’Callaghan

is popular — and wily. ... Anyone who knows

Michael O’Callaghan understands the city is

* After the State won at the trial court, in its motion for

attorneys fees, the State wrote: “defendants had nothing to do

with the free bicycle program in the first place.” [FNR] (App. 74

Fact 18.)

in for a long fight.... [He is] an amiable but

intense hippie who doesn’t like government.

In the past, O’Callaghan has resorted to

hunger strikes and lawsuits to fight for his

free fish giveaways and against a state policy

that allowed fisherman to strip roe from

salmon and dump the carcasses at sea.”

FACTS NR

The State Repudiates Compliance

with Federal Law [FQNR]

Nine claims survived motion practice. Roberts

was first to move for summary judgment. Count 2 of

the Complaint was violation of AS 05.15.150(a) —

Limitation of use of State gaming proceeds. (App. 13.)

Roberts’s first ground for judgment asked that quasi

estoppel (aka judicial estoppel) be applied against the

State. Roberts’s second ground for judgment re-

sponded to the State’s post hoc procedural position

that the Program is “similar” to other free bike pro-

grams. [FNR] Federal law requires a § 501(c)(3)

activity to have an “operational nexus” to its pur-

ported charitable goal. [FQNR]" Accordingly, Roberts

wrote: “There is no evidence that anyone got out of a

car and onto a bike.” [FNR] [FQNR]

'’ Elizabeth Manning, Food bank’s critics cry foul, Health

department calls EARTH’S backyard buffet unsafe, Anchorage

Daily News, March 15, 1998, at B1-3.

At (App. 19) of the Opinion, the Court acknowledged

Roberts’s assertion that an “operational nexus” is required but

did not identify facts in the record that establish a nexus.

In its cross-motion, the State asserted “there is

no such nexus requirement in the [state] statute.”

[FNR] [FQNR] Roberts responded: “Federal law

does. A long line of authorities substantiates the

conclusion that the State facilitated the destruction of

Earth’s exemption.” [FNR] [FQNR] (App. 62-64.)

The State countered:

There is no “operational nexus” requirement,

there is no requirement of compliance with

federal law, and there is no requirement of

advance approval of expenditure of net pro-

ceeds. Accordingly, the defendants respect-

fully request the court to disregard Mr.

Roberts’ attempt to add requirements for

permit issuance that do not exist. FACTS

NR [FQNR] (App. 74 Fact 17.)

The State asserted that the reason why it ap-

proved the Program was because “it is certainly

conceivable a person using a free bike might decide to

adopt a lifestyle that promotes ecological values.”

(App. 73 Fact 11.)

The State Wins Based on What the

Agency “Could” Have Determined

Without mentioning the petition for quasi-

estoppel, without referencing what regulators told the

ombudsman (App. 77-78), without acknowledging

affidavits describing how the Program was run (App.

59-60), the Superior Court ruled the Program chari-

table because:

Traffic in any urban area is a ‘public concern’

and the Department reasonably could have

determined that a free bicycle program

would help to alleviate the concern. In addi-

tion, riding a bicycle is a healthy activity,

and promotes good health among its citizens.

(Emphasis added.) (App. 41.)

On appeal, as he did below, Roberts repeatedly

cited numerous State and U.S. Supreme Court cases

that require agencies to quantify their conclusions

with clear written grounds. [FNR] (App. 72 Fact 8.)

The opinion ignored the requirement and affirmed

based on what the “Department could reasonably

have determined. ...” (Emphasis added.) (App. 14.)

The Court also dismissed, Roberts’s assertion that the

State was relying on an unbriefed legal theory be-

cause “Roberts addressed the program’s impact on

traffic in his summary judgment memorandum.”

(App. 17.)”

‘* In his summary judgment memorandum Roberts wrote:

“There is no evidence that anyone got out of a car and onto a

bike. If the defense really believed their post hoc conclusion had

merit, they would have explained it on paper. No written record

can be created because there has never been any evidence to

expound.” [FNR]

REASONS WHY CERTIORARI

SHOULD BE GRANTED

Throughout the country states have expanded

gambling to raise revenue.” Citizens and legislatures

have traded the social costs of gambling for less taxes

and the public benefit gambling proceeds can provide.

Implicit in the understanding is the promise of

agency oversight.” In this case, an agency that is

supposed to compel transparency and integrity from

others, has won discretion to deport the opposite of

itself." The only thing worse than this double-

standard is the way in which it was won. Because it

lacked the will to engage Michael O’Callaghan in

litigation yet again, an agency that regulates an

‘* “Twenty-five years ago, gambling was legal in only three

states. Now every state except Utah and Hawaii rely on gam-

bling to generate revenues to help avoid raising taxes.” Kavan

Peterson, 48 states raking in gambling proceeds, Stateline.org,

May 23, 2006.

" For example: RCW 9.46.010: “Legislative declaration. The

public policy of the state of Washington on gambling is to keep

the criminal element out of gambling and to promote the social

welfare of the people by limiting the nature and scope of gam-

bling activities and by strict regulation and control.” See also AS

05.15.140 (App. 20) n. 22 infra.

‘* “(D]iscretion may well be necessary to carry out a variety

of important administrative functions, but discretion can be a

veil for laziness, corruption, incompetence, lack of will, or other

motives, and for that reason ‘the presence of discretion should

not bar a court from considering a claim of illegal or arbitrary

use of discretion.’” Heckler v. Chaney, 470 U.S. 821, 848 (1985)

(Marshall, J., concurring) (quoting L. Jaffe, Judicial Control of

Administrative Action 375 (1965)) (italics in original).

industry with “a history of connection to crime and

corruption” maligned the meaning of charity, repu-

diated compliance with federal law, repeatedly moved

the target, and wrote off seasonal small businesses as

acceptable collateral damage.

By closing its eyes to what gaming regulators

have “said and done in the past” and substituting

what the agency “could” have decided instead, a state

court of last resort has elevated Orwellian logic above

elementary principles of fairness and this Court’s

briefed but ignored administrative law precedents.

(Those and other authorities briefed below are sig-

naled with an asterisk.) Certiorari should be granted

to restore integrity to the judicial process and halt the

injustice and damage the challenged opinion has and

will continue to cause.

Certiorari should also be granted because what

the State “said and did” infringed Petitioner’s right to

earn a living as protected by the Fourteenth Amend-

ment of the U.S. Constitution. See, e.g., 16B Am.

Jur.2d Con. Law § 592 (1998). The substantive ele-

ment of the Due Process clause protects this right.

This right also implicates the Amendment’s Privileges

or Immunities Clause (“the Clause”). Whether the

Clause protects citizens against unconstitutional

actions by their own state has been intensely debated

<http://www.wsge.wa.gov/faq/internet_gambling. pdf>.

by constitutional scholars for decades.” This case

presents facts that brings that debate to a head. In

the name of charity, a state court of last resort has

awarded a state agency the discretion to supplant,

without notice or written explanation, Petitioner’s

constitutionally-protected right to earn a living.

* Laurence H. Tribe, Comment, Saenz Sans Prophecy: Does

the Privileges Or Immunities Revival Portend the Future - Or

Reveal the Structure of the Present?, 128 Harv. L. Rev. 110

(1999);

Michael Conant, AntiMonopoly Tradition Under the Ninth

and Fourteenth Amendments: Slaughter-House Cases Re-

Examined. 31 Emory L.J. 785 (1982);

Chester James Antieau, Paul’s Perverted Privileges or the

True Meaning of the Privileges and Immunities Clause of Article

Four, 9 Wm. & Mary L. Rev. 1 (1967);

Douglas G. Smith, The Privileges and Immunities Clause of

Article IV Section 2: Precursor of Section 1 of the Fourteenth

Amendment, 34 Sand. L.R. 809 (1997);

Michael Kent Curtis, Resurrecting the Privileges Or Immu-

nities Clause and Revising the Slaughter-House Cases Without

Exhuming Lochner: Individual Rights and the Fourteenth

Amendment, 38 B.C. L. Rev. 1 (1996);

John Denvir, Democracy’s Constitution, Claiming the

Privileges of American Citizenship (2001);

Wayne McCormack, Economic Substantive Due Process and

the Right of Livelihood, 82 Ky. L.J. 397 (1993-94); Steve France,

Dusty Doctrines, 87 A.B.A.J. 46 (2001).

POINT I. JUDICIAL ESTOPPEL SHOULD BE

APPLIED AGAINST THE STATE

BECAUSE GAMING REGULATORS

DENIED AGGRIEVED CITIZENS A

WRITTEN DECISIONAL DOCU-

MENT AND PROVIDED THE OM-

BUDSMAN AND THE COURTS

WITH INCONSISTENT, GROUND-

LESS, AND EQUIVOCAL POST HOC

RATIONALES AND EXCUSES.

This case does not involve a refusal to take

enforcement action, it involves an agency’s “affirma-

tive grant of approval under a statute that set clear

guidelines for determining when such approval

should be given.” The vague and barely-legible

description of charitable “activities” in the tiny box at

the bottom of Earth’s two-page gaming application is

a disgrace. The description is “not specific.” It dis-

closes no facts. It comes nowhere close to the “satis-

factory proof” demanded by the legislature” and

required by federal law.” [FQNR] Money that by law

” Heckler v. Chaney, 470 U.S. 821, 831* (195) (citing

Overton Park v. Volpe, 401 U.S. 402 (1971)).*

” AS 05.15.140(a) states: “The department may not issue or

renew a permit except upon satisfactory proof that the ...

activity may be permitted under this chapter, and the issuance

of the permit is not detrimental to the best interest of the

public.” (App. 20.)

* “If an organization is found to be organized for tax-

exempt purposes, it must then demonstrate that it actually

conducts activities that entitle it to exemption.” Independent Ins.

(Continued on following page)

must go to charity, provided free bikes to tourists and

summer jobs for the O’Callaghans instead. When

undermined business owners complained, they were

denied a written record of reasons, mocked in inter-

agency emails and told the opposite of what state

lawyers were simultaneously telling the Alaska

Supreme Court in Botelho v. Griffin. (App. 72 Fact 4.)

Here, just as in Overton Park, “this record contains

not one word to indicate that the Secretary [Commis-

sioner Condon] raised even a finger to comply with

the command of Congress [or the Legislature].””

A. The State’s Inconsistent Statements

Compromised the Integrity of the Ju-

dicial Process and Deprived the Public

of the Benefit Charitable Gaming Pro-

ceeds Are Supposed to Provide.

The State’s shell game of asserted and abandoned

contradictory rationales, conclusions and excuses self-

proves bad faith. (App. 71-74.) Accordingly, to protect

the integrity of the judicial process, certiorari should be

granted and judicial estoppel applied against the State.

“The purpose of the doctrine is to protect the integrity

of the judicial process by prohibiting parties from

Agents of Huntsville, Inc. v. Commissioner of I.R.S., 998 F.2d

898, 900 (11th Cir. 1993).* (App. 62.)

“ Overton Park, 401 U.S. at 423 (Black, J., concurring,

Brennan, J.) (“post hoc rationalizations” are “inadequate”

requiring remand for review based on record before Secretary at

time his decision was made).*

deliberately changing positions according to the

exigencies of the moment.””

Unlike in a zoning dispute, Petitioner does not

invoke the doctrine defensively to carve out an exception

to a law to benefit himself at the expense of the public,

he invokes it offensively to benefit the public whose

interests have never been advanced by any of the many

inconsistent positions taken by the State in this case.

A party seeking to raise estoppel against the

government must establish ‘affirmative mis-

conduct going beyond mere negligence’; even

then, ‘estoppel will only apply where the

government’s wrongful act will cause a seri-

ous injustice, and the public’s interest will

not suffer undue damage by imposition of the

liability.’ Purer v. U.S., 872 F.2d 277, 278 (9th

Cir. 1989)*(quoting Wagner v. Director, Fed.

Emergency Mgmt. Agency, 47 F.2d 515, 519

(9th Cir. 1988)).*

Gaming regulators’ inconsistent statements caused a

serious injustice. By repeatedly moving the target,

regulators broke the promise the legislature made to

the public when it legalized gambling over the veto of

then Governor Egan in 1960.” A bill Egan’s attorney

** New Hampshire v. Maine, 532 U.S. 742, 743 (2001).*

* After “numerous conferences with the Attorney General

. and others” Egan reached the “conclusion that enforcement

problems would pose major and costly difficulties.” See Roberts's

Citation to Supplemental Authority, submitted on Nov. 25,

2006.*

general called a “dangerous experiment” became law

in spite of his warning that it “exhibits the impossi-

bility of defining the terms of entry into this activ-

ity... .”* Id. Charity and the legislature’s promise of

faithful agency oversight supplied the bait for legaliz-

ing gambling; agency indifference and arrogance

under the banner of judicially-granted discretion

supplied the switch. Granting certiorari will ensure

the public gets the benefit of its bargain.

Even though Roberts’s opening brief catalogued

the State’s five conclusions and four rationales in

outline form (App. 68-70), the lower courts made no

effort to resolve the documented disparities. In Cleve-

land v. Policy Management Systems Corp., 526 U.S.

795 (1999), this Court identified a long line of cases

that “held with virtual unanimity that a party cannot

create a genuine issue of fact ... without explaining

the contradiction or attempting to resolve the dispar-

ity.” At oral argument, not one justice asked the

State’s attorney to explain any of the numerous

written and recorded inconsistencies briefed in writ-

ing by Roberts and in-person before the en banc

Court.” While the cases cited by Cleveland dealt with

“purely factual contradictions” Cleveland itself held

that legal conclusions “require an explanation of any

apparent inconsistency” Jd. at 806. (Emphasis added.)

Certiorari should be granted so the State’s agents are

* Forty copies on DVD of the oral argument are available and

can be promptly mailed to this honorable Court if it so requests.

forced to “think of what we have said and done in the

past.” (App 72 Fact 7.)

B. The Refusal to Issue a Written Deci-

sional Document or Provide the Court

with A Clear and Consistent Explana-

tion Self-Proves Bad Faith.

In this case, a state agency with a state court’s

approval has defied this Court’s command to provide

citizens aggrieved by agency action with a written

record of reasons. (App. 72 Fact 8.) “[A] ‘reasons’ re-

quirement promotes thought by the Secretary and

compels him to cover the relevant points and eschew

irrelevancies....” Dunlop v. Bachowski, 421 U.S. 560,

573 (1975)* (Emphasis added.) (App. 81.) It took more

than five years and this lawsuit to compel the State to

put pen to paper and commit to a reason why gaming

regulators in Juneau approved a no-notice public

program for Anchorage: “It is certainly conceivable that

a person using a free bike might decide to adopt a

lifestyle that promotes ecological values.” (App. 17.)

This is an equivocal, groundless and meaningless

phrase. “The basis for an agency determination ‘must

be set forth with such clarity as to be understandable.

It will not do for a court to be compelled to guess at the

theory underlying the agency’s action.’””

* Recinos DeLeon v. Gonzalez, 400 F.3d 1185, 1189 (9th Cir.

2005)*(quoting SEC v. Chenery Corp., 318 U.S. 80, 87 (1943)).*

(App. 83.)

Affirmative misconduct requires “ongoing active

misrepresentations” or a “pervasive pattern of false

promises” as opposed to an isolated act of providing

misinformation. Watkins v. United States Army, 875

F.2d 699, 708 (9th Cir. 1989).* That standard was met

and exceeded in this case. The State’s agents used

gamesmanship to malign the meaning of charity and

keep aggrieved citizens, the ombudsman and the

courts at bay. What the agency “said and did” not only

sets a bad example for the gambling industry,

it sets a bad example for the exploding nonprofit

sector.” Because “much of the responsibility for

providing social services and aid has been fulfilled by

the charitable sector instead of the government|,]””

granting certiorari will help “maintain public confi-

dence in, and financial support of that work by ensur-

ing honest and competent management.” /d. at 39.

C. The Lower Courts Failed to Follow

This Court’s Framework for the Or-

derly Process of Review.

The Alaskan courts have “so far departed from

the accepted and usual course of judicial proceedings

* “In 1975 the nonprofit sector made up 6% of the United

States’ gross domestic product. By 1995 the nonprofit sector made up

10% of G.D.P.” Nina J. Crimm, Why All is Not Quiet on the “Home

Front” for Charitable Organizations, N.M.L. Rev. 1, 8 (1999).*

* Mary Grace Blasko, Curt S. Crossley, David Lloyd,

Standing to Sue in the Charitable Sector, 33 U.S.F. L. Rev. 37

(1993) (internal citation omitted).

... as to call for an exercise of this Court’s supervisory

power.” Sup. Ct. R. 10. The lower courts substituted

what the State “could” have determined instead of

reviewing what the facts show it did determine. “It is

elementary that if an agency’s decision is to be sus-

tained in the courts on any rationale under which the

factual or legal determinations are entitled to defer-

ence, it must be upheld on the rationale set forth by

the agency.” Fort Stewart Schools v. Federal Labor

Relations Board, 495 U.S. 641, 651-652 (1990).* In

light of the State’s admission in { 2 of its Answer that

it was “without information sufficient to admit or

deny the allegations who used the Earth bikes” it was

impossible for gaming regulators to make any factual

or legal determinations at all. “The grounds upon

which an administrative order must be judged are

those upon which the record discloses that its action

was based.”

Rewind and replay of the record proves that at

no point did anyone from the State ever assert that

the Program was charitable because it would “help to

alleviate” the “public concern” of “traffic in an urban

area.” The challenged opinion navigates around the

record by concluding the “the State made a similar

argument before the superior court when it noted

Earth’s objective ‘to teach and practice individual

lifestyles which enhance clean earth, air and water.’”

(App. 17.) This nondescript “similar argument” is not

*” Recinos DeLeon v. Gonzalez, 400 F.3d 1185, 1189 (9th Cir.

2005)*(quoting SEC v. Chenery Corp., 318 U.S. 80, 87 (1943)).*

good enough. “The reviewing court should not at-

tempt itself to make up for such deficiencies: the

Court ‘may not supply a reasoned basis for the

agencys action that the agency itself has not

given.’”” Even if this substituted “similar argument”

were good enough, it still cannot pass muster because

it lacks a “reasoned basis.” “The orderly functioning

of the process of review requires that the grounds

upon which the administrative agency acted be

clearly disclosed and adequately sustained.”

D. The Petition for Quasi-Estoppel Was

Ignored by the Trial Court and Re-

jected With Erroneous Reasoning on

Appeal.

At the trial court, Roberts’s petition for quasi-

estoppel was ignored without comment. On appeal,

the petition was considered and rejected on two

grounds.

1. First ground. “But the State is not taking

an inconsistent position; it has consistently main-

tained that Earth qualified for a permit.” (App. 18.)

This is circular reasoning; fallacious en its face. It is

analogous to dismissing charges at a preliminary

* Defenders of Wildlife v. Gutierrez, 484 FSupp.2d 44, 51

(D.C. 2007) (citing Motor Vehicle Mfrs. Ass’n of the United States,

Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

* SEC v. Chenery Corp. 318 U.S. 80, 94 (1943). (Emphasis

added. )*

hearing because an accused with only “slight varia-

tions” in an uncorroborated albeit that they refused to

write down has consistently maintained that they did

not do it. The only thing more troubling than the

Court’s reasoning, is its edit of the record. The attor-

ney general admitted on tape that Earth “should not

have received a gaming permit.”“ (App. 73 Fact 10.)

2. Second Ground. “Any slight variations in

the State’s explanation — such as... — do not rise to

the level of inconsistency or unconscionability re-

quired for application of quasi-estoppel.” (Emphasis

added.) (App. 18-19.) Here the Court arbitrarily

cherry-picked just two of the State’s five conclu-

sions. (App. 68-70.) Assuming arguendo the two

identified conclusions are slight, it was not slight for

regulators to remain silent knowing the Ombudsman

misunderstood what she was “allegedly” told. (App.

18.) (But see AK R. Evid. 803(8)(a), Hearsay Excep-

tions, Public Records and Reports.)* The Courts sided

with the State after being told the Program was

charitable. (App. 14.) The Ombudsman sided with the

State after being told the Program did not need to be

charitable. (App. 77-78.) It is unconscionable to let

the State have it both ways. Gaming regulators

remained seated when good morals and good law

required them to stand.

* Roberts: “No, they (Earth] should not have received a

charitable gaming permit.”

Alaska Attorney General Botelho: “That’s right.”

E. The Legal Basis for a Bad Faith Claim

Is Inherent to Judicial Estoppel and

Recognized by this Court’s “Square

Corners” Doctrine.

After ignoring documented contradictions that

self-prove bad faith, Alaska’s high court said “Roberts

failed to provide us with any legal basis for his [bad

faith] claim.” (App. 25.) Wrong. Bad faith is an inher-

ent element to judicial estoppel. Bad faith is what the

“Square Corners” doctrine is about. “It is no less good

morals and good law that the Government should

turn square corners in dealing with the people than

that the people should turn square corners in dealing

with their governments.” Denying citizens a written

record of reasons, mocking them in interagency

emails and repeatedly moving the target rounds

corners. So too does refusing to acknowledge this

Court’s briefed basis for a bad faith claim.

F. Conclusion

The driving force behind this appeal are unac-

knowledged, undisputed material facts and this

Courts enunciations on administrative law that

attach to them. Accordingly, it is in the interest of the

judiciary and the public to strip the government of its

ill-begotten benefit by applying judicial estoppel

against the State.

* Heckler v. Community Health Services of Crawford, 467

U.S. 51, 61 (1984).*

POINT II. STATE AGENCIES ARE PREVENTED

BY THE PREEMPTION DOCTRINE

FROM FACILITATING ACTIVITIES

THAT VIOLATE A §501(C)(3) FED-

ERAL TAX EXEMPTION.

At issue on this second point of appeal is whether

the Federal Preemption Doctrine prevents a State

agency from applying a state statute in such a

way that it violates Federal law. [FQNR] More

specifically, whether a state agency can facilitate an

activity run by a § 501(c)(3) when that activity lacks

an “operational nexus,” (App. 62-64), violates the

“Commerciality Doctrine” (App. 61-62) and is counter

to the enunciated public policy of Congress.”

Section 501(c)(3) therefore must be analyzed

and construed within the framework of the

Internal Revenue Code and against the

background of the Congressional purposes.

Such an examination reveals unmistakable

evidence that, underlying all relevant parts

of the Code, is the intent that entitlement to

tax exemption depends on meeting certain

common law standards of charity — namely,

that an institution seeking tax exempt status

must serve a public purpose and not be

* 15 U.S.C. § 631: “It is the declared policy of the Congress

that the Government should aid, counsel, assist, and protect,

insofar as it is possible, the interests of small-business concerns

in order to preserve free competitive enterprise. ...”* (App. 56.)

See Appellant’s Opening Brief, Authorities Principally Relied

Upon, page 42 and {EXC. 188-189.]

contrary to established public policy. Bob

Jones Univ. v. U.S., 461 U.S. 574, 586 (1983)

(racially discriminatory policy of tax-exempt

university violates public policy) (Emphasis

added. )*

A. Federal Law and Public Policy Is De-

signed to Facilitate, Not Undermine,

Tax-Paying Small Business.

Tax paying businesses make it possible for gov-

ernment and exempt entities to exist. “Both tax

exemptions and tax deductibility are a form of sub-

sidy that is administered through the tax system.”

Regan v. Taxation With Representation of Washington,

461 U.S. 540, 544 (1983). In this case, taxes paid by

Petitioner undermined his ability to pay them. “When

the government grants exemptions or allow deduction

all taxpayers are affected; the very fact of the exemp-

tion or deduction for the donor means that other

taxpayers can be said to be indirect and vicarious

‘donors.’” Bob Jones at 591 (1983).* Perhaps it is one

of the many ironies of living in a state with no income

or sales tax (Alaska has the largest oilfield in North

America), but thwarting the ability of small business

to meet payroll and pay federal taxes is now the

affirmed legal position of the Alaska Department of

Revenue. (App. 45.) Common sense and bypassed

authority from this Court demonstrates two branches of

Alaskan government got it wrong. “[T]axes are the life-

blood of government, and their prompt and certain

sane

availability an imperious need.” Bull v. United States,

295 U.S. 247, 259 (1935).*

A number of law review articles have discussed

where the line between nonprofit and for-profit

competition should be drawn. “There has recently

been considerable agitation from the business com-

munity, and particularly from small business against

unfair competition from nonprofit firms. ...”” In this

case, the lower state courts not only declined to

discuss where the line should be drawn, it decided no

line should be drawn at all. (App. 25, 44.)

B. State Support of the Program Violates

Federal Public Policy.

“The tax exemption for nonprofits raises pro-

found questions of public policy.”” The trial court

concluded, and appellate court affirmed that “[t]here

” Henry B. Hansman, Article, Unfair Competition and the

Unrelated Business Income Tax,'75 Va. L. Rev. 605 (1989).

See also, Jessica Pena & Alexander L.T. Reid, Note, A Call

for Reform of the Operational Test for Unrelated Commercial

Activity in Charities, 76 N.Y.U. L. Rev. 1855 (2001);

Andras Kosaras, Federal Income and State Property Tax

Exemption of Commercialized Nonprofits: Should Profit-Seeking

Art Museums be Tax-Exempt?, 35 New. Eng. L. Rev. 115 (2000);

Virginia Richardson, Roderick Darling and Marvin Fried-

lander, Exempt Organizations Technical Topics, <http://www.irs.

treas.gov/pub/irs-tege/eotopica00. pdf>.

* Developments in the Law - Nonprofit Corporations, 105

Harv. L. Rev. 1612, 1633 (1992).

is no public policy that prohibits a non-profit from

competing with for-profits, even in spite of their tax-

exempt status.” (App. 25.) The conclusion comes from

a cursory and inapplicable reading of Camps New-

found/Owatonna, Inc. v. Town of Harrison, Maine,

520 U.S. 564, 585 (1997). (App. 25, 44.) In this case,

what the government did to tax-paying businesses

was not competition, it was predatory pricing taken

to the extreme. Just because a nonprofit can engage

in interstate commerce, it does not follow that there

are no rules for the nonprofit to follow. “The nonprofit

character of an enterprise does not place it beyond

the purview of federal laws regulating commerce.” Jd.

at 584. Roberts briefed the lower courts of the appli-

cable federal rules.” For example, footnote 39 was

* “These policies demand that nonprofits significantly and

sufficiently contribute to societal needs ... and in doing so, they

must refrain from competitive behavior with for-profit entities.”

Nina J. Crimm, Why All is Not Quiet on the “Home Front” for

Charitable Organizations, 29 N.M.L. Rev. 1, 21 (1999).* “The

commerciality doctrine considers an activity conducted in a

commercial manner to be inconsistent with the furtherance of

an exempt purpose and hence the activity is considered nonex-

empt. The courts generally have viewed such activity from the

perspective of the consumer and have suggested that if the

activity cannot be differentiated from that of a for-profit coun-

terpart organization, the activity is considered commercial in

nature. [citing a long line of cases.]” Id. at n. 103.* See also,

Airlie Foundation v. IRS, 283 F.Supp.2d 58, 63 (D.C.D.C. 2002):

“Among the major factors courts have considered in assessing

commerciality are competition with for profit commercial

entities; extent and degree of below cost services provided;

pricing policies; and reasonableness of financial reserves.”

(Internal citations omitted.)*{[FQNR]

copied from pages 38-39 of Appellant’s Opening Brief

and pasted verbatim into this document. Like foot-

note 36 supra, footnote 38 is a [FQNR]. If the af-

firmed legal position of the Alaska Department of

Revenue is permitted to stand, it will sow havoc in

the business community and stand as a known obsta-

cle to the express will of Congress.

We will find preemption where it is impossi-

ble for a private party to comply with both

state and federal law, and where “under

the circumstances of [a] particular case, the

challenged state law stands as an obstacle to

the accomplishment and execution of the full

purposes and objectives of Congress.”””

C. The State’s Assertion that There Is “No

Requirement of Compliance With Fed-

eral Law” Is a Tacit Admission that

Federal Preemption Applies.

The challenged opinion avoided Roberts’s request

for preemption by setting up and knocking down a

shaky straw man with a wide and inapplicable

reach.” Of course the State’s gaming laws can comply

” Crosby v. National Foreign Trade Council, 530 U.S. 363,

373-374, 120 S.Ct. 2288, 2294 (2000)* (brackets in original,

internal citations omitted.) (Emphasis added.)

“ “Because Roberts does not allege that it would be impos-

sible for an entity to comply with both state gaming laws and

federal laws of tax exemption, conflict preemption does not

apply.” (App. 19.)

with. the federal laws of tax exemption. As Roberts

made clear, the issue in this case is whether a state

agency applied state gaming laws to comport or

conflict with the federal laws of tax exemption.

[FQNR] (See, e.g., App. 64-66, 76.) The inquiry begins

and ends with what the State actually “said and did”:

“There is no ‘operational nexus’ requirement,

there is no compliance with federal law, and

there is no requirement of advance approval

of expenditure of net proceeds.” [FQNR]

(App. 82.)

If a state agencies’ repudiation of federal law in a

court pleading does not trigger preemption, what

does?

Instead of condemning the State for repudiating

federal law and its duty to make informed decisions

before gaming proceeds are dispensed, the Opinion

condemns and mischaracterizes what Roberts wrote

instead.” Roberts did not “address the Program’s

impact on traffic.” He established that there is “no

evidence” that the Program had any impact on traffic

at all.“ By analogy, the Court ruled that it rained

yesterday simply because a litigant asserted and

established “there is no evidence” that it did. (App.

85.)

“ “Roberts addressed the program’s impact on traffic in his

summary judgment memorandum.” (App. 17.)

“ See n. 15 supra.

D. Conclusion.

If government is serious about automobile pollu-

tion and global warming, it must recognize there is a

right way and a wrong way to do it.“ Displacing

existing tax-paying bike rental businesses causes the

opposite of the intended effect. Certiorari should be

granted because the Program was approved without

notice, without an operational nexus and without

consideration of its impact on private enterprise.

Therefore, agency application of state law is not only

in violation of § 501(c\3) requirements, it trivializes

what is arguably the most challenging environmental

issue of our time.

POINT il. BECAUSE EXECUTIVE BRANCH

ACTION INFRINGED PETITIONER’S

RIGHT TO EARN A LIVING AS PRO-

TECTED BY THE FOURTEENTH

AMENDMENT, THIS COURT SHOULD

DECIDE WHETHER THE RIGHT IS

PROTECTED BY SUBSTANTIVE DUE

PROCESS, THE PRIVILEGES OR

IMMUNITIES CLAUSE, OR BOTH.

In 1999, this Court breathed new life into the

Privileges or Immunities Clause. “Although the

majority appears to breathe new life into the Clause

“ In other words, “government should first do no harm.”

George Will, This Week With David Brinkley (ABC), Oct. 16,

1994 NEXIS transcript #677.*

today, it fails to address its historical underpinnings

or its place in our constitutional jurisprudence.”

Saenz v. Roe, 526 U.S. 489, 527, (1999)*(Thomas, J.,

dissenting). Plaintiff’s position on this point of appeal

relies on the historical underpinnings identified by

Justice Thomas and on what the dissenters wrote in

the Slaughter-House Cases.” [FQNR]

A. What Alaska Did to the Bike Renters

Mirrors What Louisiana Did to the

Butchers in the Slaughter-House Cases.

After the Civil War, the United States experi-

enced an industrial revolution and economic diversifi-

cation. Along with the benefits of industrialization

came some negative side effects. The Louisiana

legislature claimed the Mississippi River had become

polluted because New Orleans butchers dumped

garbage into it. To help remedy this problem (or, as

some have suggested, to use it as an excuse to create

“ “It is one of the privileges and immunities of every

American citizen to adopt and follow such lawful industrial

pursuit, not injurious to the community, as he may see fit,

without unreasonable regulation or molestation, and without

being restricted by those unjust, oppressive, and odious monopo-

lies or exclusive privileges which have been condemned by all

free governments.” Craigmiles v. Giles, 110 F.Supp.2d 658, 666

(E.D.Tenn. 2000), aff’d, 312 F.3d 220 (6th Cir. 2002) (require-

ment that sellers of caskets be licensed funeral directors not

rationally related to purpose of statute thereby depriving

discount casket retailers of right to earn a living) (quoting

Slaughter-House Cases, 83 U.S. (16 Wall.) 36, 106 (1872) (Field,

J., dissenting).

a monopolistic enterprise), the legislature created a

company to receive and slaughter all city livestock.

The Butchers sued. They alleged their right to earn a

living as protected by the recently-passed Fourteenth

Amendment’s privileges or immunities clause had

been infringed.

Industrialization and its negative side effects

continue to this day. One of the worst side effects is

automobile pollution and global warming. To help

remedy this problem, in cities throughout the world,

free bike loan programs help get people out of cars

and onto bikes. These programs are implemented

with notice and synchronized to the cities they serve.

There is an “operational nexus” between the envi-

ronmental goal and the means chosen to achieve it.

In contrast, in this case, there was neither notice,

nexus nor post-approval written justification. Adding

insult to injury, the “closely regulated regimen” told

seasonal small business owners desperate for prompt

action that it “can’t and shouldn’t [act]” and to: “Have

a nice summer.” These and other unacknowledged

outrageous executive branch actions formed the basis

for Roberts’s yet to be reviewed substantive due

process claim.

When conduct of a member of the executive

branch is at issue, ‘only the most egregious

official conduct can be said to be arbitrary in

the constitutional sense.’ To impose liability,

‘executive action must be so ill-conceived or

malicious that it shocks the conscience;’ mere

negligence is insufficient.... Therefore, in

assessing whether plaintiff’s state a sub-

stantive due process claim ... the determi-

native inquiry is whether these individuals

had some evidence . . . on which to base their

action. Gedrich v. Fairfax County Dept. of

Family Services, 282 F.Supp.2d 439, 460

(E.D.Va. 2003)* (internal citations omitted.)

[FQNR]

Roberts reiterated on appeal what he unequivocally

argued below. Roberts argued “his right to earn a living

was infringed not by ‘legislative enactment’ but by the

‘failure and then the refusal of the executive branch to

enforce’ the gaming statutes.” (App. 75, citing Superior

Memorandum at App. 65-66.) Roberts’s point heading

and the argument beneath it are clear. Yet, the Opinion

noted “the superior court described these claims as

‘dificult to decipher....’” (App. 27 citing App. 50.)

Petitioner begs this Court to read (App. 65-66) and then

consider what Petitioner “believes”: The superior court

feigned incomprehension as an excuse to marginalize a

pro se litigant and avoid executive branch review.

The appellate court piled on: “We uphold the

Superior Court’s ruling.” (App. 27.) Yet, in the next

paragraph, the opinion acknowledges Roberts’s

challenge to the executive branch and rules against

him anyway. Why? Because “he does not explain why

the State is not entitled to summary judgment on a

challenge to executive action.” (App. 27-28.) Roberts’s

challenge to arbitrary executive branch action, indif-

ference and abuse is explained everywhere.

B. In light of Saenz, Certiorari Should Be

Granted to Revisit the Alternative and

Arguably Original Constitutional Ground.

In light of Saenz, consistent with U.S. Supreme

Court precedent, this Court can use either the Clause

or substantive due process to condemn unconstitu-

tional action by a state against one of its own citizens.

One big difference between the butchers and the bike

renters that cuts in the latter’s favor, is that in this

case, the right to earn a living was infringed not by

legislative enactment, but by arbitrary action of the

executive branch. Therefore, Petitioner’s position is

consistent with the antimonopoly tradition that

evolved in England, a tradition that is one of the

“historical underpinnings” in our “constitutional

jurisprudence.”” [FQNR]

Given the historical background of the Four-

teenth Amendment as an effort to constitu-

tionalize freedoms enumerated in the Civil

Rights Act of 1866 ... and its commonly ex-

pressed legislative intent to nullify the ‘black

codes’ which Southern states were adopting

to limit the economic rights of the former

slaves; the argument of the Slaughter-House

[T]he sovereigns of England from the fourteenth to the

sixteenth centuries granted all types of monopolies, some as

royal favors and some to finance the crown treasury. Royal

grants of monopolies to merchants were common. Consequently,

Parliament enacted statutes in the fourteenth century designed

to curtail these grants.” Conant, supra note at 793.

dissenters may reflect historical truth. Har-

rison, 101 Yale L.J. at 1388,* see also

Stancey L. Winick, Comment, A New Chapter

in Constitutional Law, 28 Hofstra L. Rev.

573, 593 (1999)* Craigmiles at 666.*

While there is no way to undo the injustice the 5-4

majority in the Slaughter-House Cases unleashed,

this case presents the opportunity to directly confront

what the doctrines of Substantive Due Process and

Selective Incorporation incrementally apologized for.

Certiorari should be granted to revisit the alternative

and arguably original and preferable constitutional

ground. [FQNR]

C. Petitioner Has Established His Right to

Earn a Living Was and Remains In-

fringed.

Masquerading under the guise of charity,

Alaska’s highest court has awarded a state agency

the discretion to supplant without notice or written

explanation, a recreational service that tourists are

able and willing to pay for.

At the Superior Court, the State asserted that

instead of defending through litigation the business

he had built, Roberts should “adapt to the interfer-

ence, either by moving ... or by offering a product

that the charitable ... [entity] did not offer.” [FNR]

Even if Petitioner accepted the outrageous invitation

to switch instead of fight, he cannot. As petitioner

explained to the lower courts, he is personally liable

for his corporation’s lease.[FNR]

Roberts explained to the lower courts how and

why his right to livelihood had been infringed.

Alaska’s high court chose not to listen.

Not only did Roberts fail to show that his right

to earn a living was infringed upon, but he also

failed to meet the heavy burden of showing

that the Department’s actions in granting the

permit to Earth were not rationally related to

the purpose of the program it administered.

(App. 28.)

Once again, the court got it wrong. It is axiomatic

that people will not pay for a service when they can

get it down the street for free. (App. 66.) This fact was

bluntly acknowledged by the interagency email:

“Roberts is screwed!” [FNR] Had Program bikes not

been stolen, or had the IRS not stepped in and halted

the Program, (there is strong circumstantial evidence

that it did), Roberts’s chosen livelihood would not just

have been infringed, like the three other businesses

that wrote the state seeking corrective action, it

would be gone. FACTS NR

Regarding the “heavy burden” that Roberts failed

to meet, the court put the cart before the horse. The

burden belongs to the State. Not only did the State

fail to meet its burden, it repudiated it. “There is no

operational nexus requirement... .” Supra [FNR]

The grossly over- and under-inclusive arbitrarily-

implemented Program was rationally related to only

two goals: Providing free shore excursions for tourists

and outdoor summer jobs for Michael O’Callaghan

and his family. [FNR] Loaning out free bikes in

downtown Anchorage is about as charitable as loan-

ing out free surf boards in Waikiki. The Program

provided no public benefit, only private burden.

The Alaska Courts “departed from the accepted

and usual course of judicial proceedings” (Sup. Ct. R.

10) in two other significant ways. First it ignored

wholesale Roberts’s argument, outlined above, that

the Fourteenth Amendment’s Privileges or Immuni-

ties Clause protected him. The Court alluded to

protection of Article IVs Clause instead. (App. 28.)

Second, the Court failed to quantify how much bur-

den Petitioner must bear. While the Court acknowl-

edged that “under the most generous reading of the

facts suggests at most that the Earth Program com-

peted with that business.” (App. 28.) And it acknow]-

edged the trial court’s ruling that the “‘[T]he burden

to Mr. Roberts ... [—] competition [—] is not an

unreasonable burden.’” (App. 27 n. 45.) The Court

forgot to take the inquiry to the next step. How much

government-subsidized competition is Mr. Roberts’s

business supposed to absorb? How much livelihood

must Roberts lose before the Courts decide the gov-

ernment has taken away too much? [FQNR]

Now that the Alaska Supreme Court has given

the executive branch the green light to reauthorize

the Program, unless certiorari is granted, there is

nothing to stop a gaming regulator in Juneau from

suddenly deciding that Petitioner’s business in An-

chorage (or another citizen’s business elsewhere in

the State) must “adapt to the interference, either by

moving ... or by offering a product that the charita-

ble... [entity] did not offer.”

D. Conclusion.

Because this case presents facts that mirrors what

happened in the Slaughter-House Cases, and because

Petitioner’s right to earn a living was infringed and

remains at risk, for all of the foregoing reasons, Certio-

rari should be granted on this third point of appeal.

CONCLUSION

People plan their lives and initiate litigation in

reliance on what this Court says. Accordingly, the Court

should grant the petition for a writ of certiorari and

reverse the decision of the Alaska Supreme Court.

Respectfully submitted,

PETER ROBERTS

c/o DOWNTOWN BICYCLE

RENTAL, INC.

333 W. 4th Avenue, Suite 206

Anchorage, AK 99501

(907) 279-3334

App. 1

162 P.3d 1214

Supreme Court of Alaska.

Peter ROBERTS, Appellant,

STATE of Alaska, DEPARTMENT OF

REVENUE, Wilson L. Condon,

Commissioner, and Larry Meyers, Deputy

Director, and State Of Alaska, Department

of Law, Bruce M. Botelho, Attorney

General, Appellees.

No. S-12180.

June 22, 2007.

Rehearing Denied Aug. 14, 2007.

Peter Roberts, pro se, Anchorage, Appellant.

Dan N. Branch, Assistant Attorney General, and

David W. Marquez, Attorney General, Juneau, for

Appellees.

Before: FABE, Chief Justice, MATTHEWS,

EASTAUGH, BRYNER, and CARPENETI, Justices.

FABE, Chief Justice.

I. INTRODUCTION

Peter Roberts, owner of Downtown Bicycle

Rental, Inc., filed a complaint objecting to the Alaska

Department of Revenue’s issuance of a gaming permit

to Earth, a nonprofit organization. The superior court

dismissed several counts of the complaint as an

invalid assignment of claims from Downtown Bicycle

Rental, which had no attorney, to Roberts. The court

App. 2

granted summary judgment for the State on all

remaining counts, declared that Roberts was not a

public interest litigant, and ordered him to pay

attorney's fees. Roberts appeals. Because the assign-

ment of claims was an invalid attempt to circumvent

statutory requirements, and because the Department

of Revenue did not abuse its discretion or violate

public policy or Roberts’s constitutional rights when it

approved Earth’s permit application, we affirm the

superior court’s ruling. Because Roberts had economic

incentive to sue, we also affirm the superior court’s

determination that he was not a public interest

litigant.

II. FACTS AND PROCEEDINGS

A. Facts

Peter Roberts owns Downtown Bicycle Rental, a

bicycle rental business located in downtown Anchor-

age. Roberts objected to a free bicycle loan program

that Earth funded with proceeds of a state gaming

permit.

Earth applied for and was granted a charitable

gaming permit from the Alaska Department of Reve-

nue. Earth conducted gaming activities under the

permit, received over $39,000 in gaming proceeds,

and spent approximately $7,000 on its Earth Cycle

Program.

In June 2000 Earth operated the Earth Cycle

Program, offering bicycles to the public for use free of

App. 3

charge from a location in front of the Old Federal

Building in Anchorage. Peter Roberts and other

bicycle rental business owners sent a letter to the

federal General Services Administration, asking that

Earth’s permit to operate on federal property be

revoked. The General Services Administration re-

voked the permit. Earth then moved its program to

another downtown location. In response, Roberts

complained to the owner of the land, and Earth

moved again. In July 2000 Earth relocated to the

grounds of the Anchorage International Youth Hostel.

Roberts then asked the hostel to discontinue allowing

Earth to operate the program from its property. The

hostel refused to revoke its permission.

In the summer of 2000 Roberts complained to the

Department of Revenue about Earth’s use of gaming

funds to operate the Earth Cycle Program. Dissatis-

fied with the Department’s response, Roberts wrote to

Attorney General Bruce Botelho and Commissioner of

Revenue Wilson Condon, demanding a halt to the

program and claiming that the program was not

educational and not charitable because it did not

“lessen neighborhood tensions.” Commissioner Condon

issued a written response, indicating that the Depart-

ment would not take the action Roberts requested.

In September 2001 Roberts filed a complaint

with the Alaska Ombudsman, asking the Ombuds-

man to investigate the Department of Revenue’s

handling of his complaint. Several months later

Roberts filed another complaint with the Ombuds-

man, expressing concerns about the Department of

App. 4

Law’s handling of the issue. In March 2002 Assistant

Ombudsman Linda Lord-Jenkins wrote to Roberts,

explaining that she was closing the complaints be-

cause she found no “evidence of impropriety, serious

flaws in the decision-making process or evidence that

the decision [was] completely insupportable.” She also

informed Roberts that Earth had surrendered its

gaming permit in September 2000 and had given the

twenty-five bicycles to the hostel to distribute.’ In

May 2002 Acting Ombudsman Maria Moya wrote to

Roberts, sustaining closure of the complaint.

B. Proceedings

Appearing pro se, Roberts filed a complaint in

October 2002 in Anchorage Superior Court on behalf

of himself and Downtown Bicycle Rental. The com-

plaint named the State of Alaska, Revenue Commis-

sioner Condon, Attorney General Botelho, and Deputy

Director Larry Meyers of the Department of Revenue

as defendants. On December 2, 2002, Judge Peter A.

Michalski dismissed the case without prejudice

pursuant to AS 22.20.040(a\(2) because Downtown

Bicycle Rental was not represented by an attorney, as

' According to an affidavit submitted by an employee of the

hostel, Earth donated the bicycles to the hostel in 2001. The

hostel offered the bicycles to the public for a brief period in 2001,

until “a group of bicycle rental businesses ... complained and

threatened the hostel with a lawsuit.” The hostel discontinued

offering the bicycles to the public and began restricting their use

to hostel guests by the end of the 2001 summer.

App. 5

Alaska law requires of corporations.’ Roberts did not

appeal Judge Michalski’s order.

In December 2002 Downtown Bicycle Rental

assigned its claims to Roberts. In March 2003 Roberts

appeared pro se and filed a new complaint in Anchor-

age Superior Court, naming the same defendants as

the first suit.’ The complaint contained fourteen

claims: (1) negligence; (2) violation of AS 05.15.150(a);

(3) violation of AS 05.15.140(a); (4) violation of public

policy; (5) bad faith/abuse of discretion; (6) breach of

fiduciary and statutory duties; (7) violation of the

public purpose clause of the Alaska Constitution; (8) a

taking of property without just compensation; (9)

violation of procedural due process; (10) impairment

of freedom to contract; (11) violation of substantive

due process; (12) violation of inherent rights/

privileges and immunities; (13) tortious interference;

and (14) violation of 42 U.S.C. § 1983.

* AS 22.20.040 provides in relevant part:

(a) An action or proceeding may be prosecuted or de-

fended by a party in person or by attorney. However,

(2) a corporation, either public or private, shall appear

by an attorney in all cases unless an exception to the

corporation’s appearance by an attorney has been ex-

plicitly made by law.

* Roberts did not appeal Judge Michalski’s order, instead

filing a new case, which was assigned to Superior Court Judge

Sen K. Tan. It is Judge Tan’s decision that Roberts appeals in

the instant case.

App. 6

In July 2003 Judge Tan declared Downtown

Bicycle Rental’s assignment of claims to Roberts

invalid as an attempt to circumvent the requirement

that corporations be represented by counsel and

dismissed all claims arising under the assignment. In

March 2004 Roberts filed an amended complaint,

adding claims of violation of state antitrust statutes

and equal protection. In August 2004 the superior

court issued an order dismissing all claims for com-

pensatory and punitive damages arising from the

assignment; the claims for declaratory relief re-

mained. The order noted Roberts’s voluntary dis-

missal of four of his claims.‘ The judge dismissed

Roberts’s negligence claim because the complaint did

not allege harm to Roberts individually and dis-

missed Roberts’s 42 U.S.C. § 1983 claim because such

claims cannot be brought against state officials acting

in their official capacity. The court also dismissed

Roberts’s claim of an antitrust violation because the

alleged injury was “not the type of injury the state

antitrust statute intended to protect,” the claimed

loss was not incurred by Roberts individually, and the

statute was “not intended to prevent the State from

operating the charitable gaming program.”

Nine claims for declaratory relief remained after

the superior court’s August 2004 ruling. After cross-

motions for summary judgment, the superior court

* Roberts voluntarily dismissed his claims alleging a taking

of property without just compensation, impairment of freedom to

contract, tortious interference, and violation of equal protection.

App. 7

granted summary judgment for the State on all

remaining counts. The State moved for a Civil Rule

82 award of attorney’s fees. The court found that

Roberts was not a public interest litigant and ordered

him to pay attorney’s fees of $5,226. Roberts appeals

the superior court’s ruling as to the alleged violation

of gaming statutes and public policy, bad faith and

breach of fiduciary and statutory duty, and violations

of substantive due process and privileges and immu-

nities. He also argues the superior court erred in

declaring the assignment invalid and contends that

the court abused its discretion in determining that he

is not a public interest litigant.’

Ill. DISCUSSION

A. Standard of Review

We affirm a grant of summary judgment if “there

are no genuine issues of material fact and if the

movant is entitled to judgment as a matter of law.

When making this determination, we draw all rea-

sonable inferences in favor of the non-movant.” For

questions of law, we adopt “the rule of law that is

most persuasive in light of precedent, reason, and

* Although the State has not argued before us that this case

is moot, we note that even if the case were moot, we would hear

it to determine the prevailing party for attorney’s fees purposes.

See, e.g., LaMoureaux v. Totem Ocean Trailer Express, Inc., 651

P.2d 839, 840 n. 1 (Alaska 1982).

* Alakayak v. British Columbia Packers, Ltd., 48 P.3d 432,

447 (Alaska 2002) (internal citations omitted).

App. 8

policy.” We review a superior court’s determination of

a party’s public interest litigant status for an abuse of

discretion.’

When the superior court acts as an intermediate

court of appeal, we independently review the merits

of the administrative decision.” We review discretion-

ary actions that do not require formal procedures for

an abuse of discretion.” This is the standard we

applied in another challenge to the administration of

gaming statutes, Malone v. Anchorage Amateur Radio

Club, Inc."' In Malone, we reviewed the Revenue

Commissioner’s denial of a request to operate com-

puterized bingo games and applied the “arbitrary,

unreasonable or an abuse of discretion” standard of

review after concluding that the statute committed

the question of equipment to the Department’s discre-

tion.”

Here, the statutory provisions at issue also grant

considerable discretion to the Department. Alaska

Statute 05.15.100(a) provides that “[t]he department

" Guin v. Ha, 591 P.2d 1281, 1284 n. 6 (Alaska 1979).

* Abbott v. Kodiak Island Borough Assembly, 899 P.2d 922,

923 (Alaska 1995).

° Handley v. State, Dep’t of Revenue, 838 P.2d 1231, 1233

(Alaska 1992).

(Alaska 1990) (noting the standard appropriate for quasi-

executive determinations).

" 781 P-2d 576 (Alaska 1989).

* Td. at 578.

App. 9

may issue a permit to a municipality or qualified

organization.” Alaska Statute 05.15.130 provides that

“(tlhe department may supplement the definitions of

qualified organizations and activities by ... adding

additional requirements that the department

considers necessary for the best interests of the

public.” Although the Department has not supple-

mented those definitions, this provision suggests that

the legislature intended to grant the Department

considerable discretion in administering the statutes.

Alaska Statute 05.15.140(a) allows the Department to

make a determination whether issuance of a permit is

“in the best interests of the public.”” This discretion,

coupled with the lack of formal procedures,* make

the abuse of discretion standard appropriate.

AS 05.15.140(a) provides:

The department may not issue or renew a permit ex-

cept upon satisfactory proof that the applicant is a

municipality or qualified organization, the activity

may be permitted under this chapter, and the issu-

ance of the permit is not detrimental to the best inter-

ests of the public. Upon request of the department,

the applicant shall prove conclusively each of these

requirements before a permit may be issued or re-

newed.

“ The State Administrative Procedure Act does not require

formal procedures for the issuance of gaming permits. AS

44.62.330. Though the gaming statutes provide for basic re-

quirements, such as the satisfactory proof requirement in

subsection AS 95.15.140, these requirements are minimal.

Moreover, the statutes grant the department discretion to

determine whether to impose any additional requirements. AS

05.15.130.

App. 10

B. The Superior Court Properly Declared

the Assignment Invalid and Dismissed

Claims Arising out of the Assignment.

Judge Michalski dismissed the first case because

Downtown Bicycle Rental was not represented by an

attorney as required by AS 22.20.040(a)(2)." Roberts

did not appeal this decision. After the dismissal

Downtown Bicycle Rental assigned its claims to

Roberts, who filed a new complaint before Judge Tan.

Judge Tan declared the assignment invalid as an

attempt to circumvent the statute and dismissed all

claims arising out of the assignment. The court noted

the lack of an applicable statutory exception and

ruled that the assignment was invalid because “it

would circumvent the requirement ... that corpora-

tions be represented by counsel.” Roberts appeals,

claiming the assignment was valid.

Roberts asks us to make a common law exception

to the statute and allow the assignment, given that

he is the alter ego of Downtown Bicycle Rental. He

also urges us to “lift{] the corporate veil” to prevent

an injustice, contending that “a device designed to

protect investors has been hijacked by government

officials.”

" AS 22.20.040(aX2) provides that a corporation “shall

appear by an attorney in all cases unless an exception to the

corporation’s appearance by an attorney has been explicitly

made by law.”

App. 11

We conclude that the superior court correctly

declared the assignment invalid and refused to rec-

ognize an exception to AS 22.20.040(a)(2). Roberts

does not argue to this court that the assignment

changes the applicability of AS 22.20.040(a)(2). As the

State noted in its motion before the superior court,

most courts have rejected such assignments as inva-

lid attempts to circumvent the rule that corporations

be represented by counsel.” As explained by the

Second Circuit in Jones v. Niagara Frontier Transpor-

tation Authority,“[iln light of thel] policy reasons for

preventing a lay person from representing a corpora-

tion in litigation, the federal courts have ... disap-

proved any circumvention of the rule by the

procedural device of an assignment of the corpora-

tion’s claims to the lay individual.””

Although some states have made an exception

where a closely held corporation is the litigant’s “alter

ego,””” such cases are inapposite in Alaska given the

’° The State argues that Roberts’s arguments are precluded

by his failure to appeal Judge Michalski’s order in the first case.

But because no assignment had occurred at that time, the order

did not address the question of assignment and issue preclusion

does not apply. See McElroy v. Kennedy, 74 P.3d 903, 907 (Alaska

2003) (noting that issue preclusion requires that the issue be

identical to the issue decided in the first action).

" See Jay M. Zitter, Annotation, Propriety and Effect of

Corporation’s Appearance Pro Se Through Agent Who Is Not

Attorney, 8 A.L.R. 5th 653 § 12b (1992).

* 722 F.2d 20, 23 (2d Cir.1983).

* See Zitter, supra note 17 § 14a-14b.

App. 12

statute’s clear command that any exception be “ex-

plicitly made by law.”” This language suggests that

the legislature intended to restrict any exceptions to

those specifically set out in statute, precluding the

development of common law exceptions. Because the

statutory scheme unequivocally requires representa-

tion by counsel, the superior court was correct to

reject assignment as a procedural device to circum-

vent the requirement. Piercing the corporate veil in

this case, as Roberts advocates, would effectively

recognize a common law exception to the statute,

which is inappropriate given the statute’s clear

requirement that any exceptions be explicitly made.

Moreover, unlike traditional veil piercing, where

the court pierces the veil to recognize that the corpo-

ration is an alter ego, Roberts essentially argues that

he should be allowed to pierce the veil to serve his

own interests. To allow an individual the protections

of the corporate form, as well as the option to shed

the corporate form when it serves his or her interest,

undermines the purposes of corporate law. We affirm

Judge Tan’s ruling that the assignment was an inva-

lid attempt to circumvent AS 22.20.040(a\(2) and

affirm his dismissal of all counts arising out of the

assignment.

” AS 22.20.040(aX 2).

App. 13

C. The Superior Court Properly Granted

Summary Judgment to the State on

Roberts’s Statutory Claims.

1. Issuance of the permit did not vio-

late the statute’s limitation on the

use of proceeds provision.

Roberts appeals the superior court’s ruling that

the gaming permit did not violate state gaming laws.

He first appeals Judge Tan’s grant of summary judg-

ment to the State on his claim that issuance of the

permit violated the “limitation on use of proceeds”

provision of the Alaska gaming laws. This limitation,

found in AS 05.15.150(a), provides that authority to

conduct gaming activity is contingent upon dedication

of the net proceeds “to the awarding of prizes to

contestants or participants and to political, educa-

tional, civic, public, charitable, patriotic, or religious

uses in the state.””

The superior court found that the Department

acted reasonably when it determined that the program

was charitable and consistent with the limitation on

* AS 05.15.150(a) further provides that

“{plolitical, educational, civic, public, charitable, pa-

triotic, or religious uses” means uses benefiting p :r-

sons either by bringing them under the influence of

education or religion or relieving them from disease,

suffering or constraint, or by assisting them in estab-

lishing themselves in life, or by providing for the pro-

motion of the welfare and well-being of the

membership of the organization within their own

community. ...

App. 14

use of proceeds provision. The court noted the defini-

tion of charitable organization in the statute” and the

broad construction of “charity” we applied in Fair-

banks North Star Borough v. Dena Nenad Henash.”

The superior court reasoned that Earth’s articles of

incorporation state that its purpose was to “teach and

practice individual lifestyles which enhance clean

earth, air and water.” Earth’s stated purpose fits

within the statutory definition of a charitable organi-

zation. Traffic in any urban area is a “public concern”

and the Department reasonably could have deter-

mined that a free bicycle program would help to

alleviate the concern. In addition, riding a bicycle is a

healthy activity, and promotes good health among its

citizens. The Department made a reasonable deter-

mination that Earth and its bicycle program fit

within the statutorily defined restrictions for charita-

ble purposes.

The superior court further noted that “[t]he

statutory language is very broad, and the literal

language of the statute covers matters of public

welfare.”

“ AS 05.15.690(7) defines “charitable organization” as “an

organization, not for pecuniary profit, that is operated for the

relief of poverty, distress, or other condition of public concern in

the state.”

* 88 P3d 124, 132 (Alaska 2004) (applying the “broad

common law definition of ‘charity’” in determining whether

Native nonprofit corporation qualified for charitable purposes

tax exemption).

App. 15

Roberts contends that the superior court erred

because Earth’s use of proceeds for its free bicycle

program does not fall within the statutory limita-

tions. He also maintains that the court relied on a

theory that the State did not argue and that was not

supported by sufficient facts. Roberts also challenges

the superior court’s interpretation of the statute,

arguing that the court gave the term “public concern”

greater importance than other terms of the statute.

We conclude that the superior court properly

granted summary judgment to the State. The statu-

tory language encompasses a vast array of possible

programs and allows proceeds to be used for a broad

range of uses, including “political, educational, civic,

public, charitable, patriotic, or religious uses.”

This broad reading of the statutory language is

supported by our decision in Botelho v. Griffin, where

we held that “[bly requiring a portion of the money

spent on charitable gaming to benefit the public

generally, Alaska’s gaming laws create the effective

equivalent of a charitable trust.”” The Restatement

(Third) of Trusts enunciates a broad definition of

charitable trusts, providing that

[a] trust purpose is charitable if its accom-

plishment is of such social interest or benefit

to the community as to justify permitting

the property to be devoted to the purpose in

* AS 05.15.150(a).

* 95 P.3d 689, 693 (Alaska 2001).

App. 16

perpetuity and to justify the various other

special privileges that are typically allowed

to charitable trusts.”

This broad definition of charitable trust is consis-

tent with the broad common law definition of charity

we have applied in other contexts.” Within this broad

conception of charitable purposes, the Department’s

grant of a permit to Earth to use proceeds for the

Earth Cycle Program is not an abuse of discretion.”

The stated purpose of Earth’s programs, “to awaken

groups to the importance of a clean environment and

to teach lifestyles which support a clean environ-

ment,” falls within the range of uses permitted by the

statute. The Earth Cycle Program, which provided

free bicycles for use by the general public, rationally

falls within the organization’s stated purpose of

teaching lifestyles that support a clean environment.

Moreover, as the superior court found, the Depart-

ment could reasonably have determined that riding

bicycles promotes health and alleviates traffic, both of

* RESTATEMENT (THIRD) OF TRUSTS § 28 cmt. a

(2003). The purposes of charitable trusts identified in the

Restatement largely mirror those of the statute, and include the

relief of poverty, the advancement of religion, the promotion of

health, government and municipal purposes, and other purposes

that are beneficial to the community. Jd. at § 28.

*" See, e.g., Fairbanks N. Star Borough, 88 P.3d at 132.

*’ Because we hold that issuance of the permit was consis-

tent with the statutory scheme establishing a charitable trust,

we reject Roberts’s argument that the program is inconsistent

with the State’s position in Botelho v. Griffin.

App. 17

which are public concerns and provide social interest

or benetit to the community. The Earth Cycle Pro-

gram is rationally related to the objectives of the

organization, and those objectives fall within the

broad range of charitable purposes envisioned by the

statute.” We therefore also reject Roberts’s argument

that the superior court erred by giving the words

“public concern” greater importance than other terms

in the statute. The superior court properly inter-

preted the statute to allow a broad array of charitable

programs, including the Earth Cycle Program.

Roberts argues that the superior court decided

this issue on an unargued theory. But the State made

a similar argument before the superior court when it

noted Earth’s objective “to teach and practice individ-

ual lifestyles which enhance clean earth, air and

water.” The State contended that “[iJt is certainly

conceivable that a person using a free bike might

decide to adopt a lifestyle that promotes ecological

values.” Moreover, Roberts addressed the program’s

impact on traffic in his summary judgment memo-

randum.

We reject Roberts’s argument that quasi-estoppel

precludes the State from arguing that the program is

* Roberts’s argument, unsupported by any authority, that

the program is over and underinclusive does not apply. As the

State correctly notes, the statute does not require that all

proceeds be dedicated to poor citizens.

App. 18

charitable.” Quasi-estoppel, which applies when a

party advances a position so inconsistent with a

previous position that it would be unconscionable to

allow the party to assert the second position,” is

inapposite. The crux of Roberts’s argument appears to

be that the Department should be estopped from

defending its action because of its refusal to explain

its decision in writing and because Deputy Director

Larry Meyers allegedly told the Ombudsman that an

organization need be only a “qualified organization,”

and not a charitable organization, to qualify for a

permit. But the State is not taking an inconsistent

position; it has consistently maintained that Earth

qualified for a permit.” Any slight variations in the

State’s explanation — such as whether Earth was a

“charitable organization” or fell into the more broad

category of “qualified organization” — do not rise to

” The State argues that Roberts waived this argument,

along with several other arguments, because he relied on

incorporated material from his memoranda before the superior

court. But because pro se litigants are held to less demanding

standards and because Roberts’s briefing before this court adds

to his arguments below, we do not consider Roberts’s arguments

waived and address the merits. See, e.g., Gilbert v. Sperbeck, 126

P.3d 1057, 1062 (Alaska 2005) (noting that we hold pro se

litigants to less demanding standards).

* Keener v. State, 889 P.2d 1063, 1067 (Alaska 1995).

” Cf. Brandal v. State, Commercial Fisheries Entry Comm’n,

128 P.3d 732, 741 (Alaska 2006) (holding that quasi-estoppel did

not apply where the Commission had consistently advanced the

position that appellant did not qualify for a permit).

App. 19

the level of inconsistency or unconscionability re-

quired for application of quasi-estoppel.

Roberts also argues that the superior court erred

by rejecting his argument that federal law preempts

state law and does not allow the permit program to

extend to the Earth Cycle Program. Roberts main-

tains that because Earth is a tax exempt organization

under 26 U.S.C. § 501(c)(3), federal law preempts any

state law that would permit Earth to use gaming

proceeds without a demonstration of “operational

nexus” between how the proceeds are used and the

organization’s charitable goals. But as authority cited

by Roberts recognizes, conflict preemption applies

only where “it is impossible for a private party to

comply with both state and federal law,” and where

“‘under the circumstances of [a] particular case, [the

challenged state] law stands as an obstacle to accom-

plishment and execution of the full purposes and

objectives of Congress.’”” Because Roberts does not

allege that it would be impossible for an entity to

comply with both state gaming laws and federal laws

of tax exemption, conflict preemption does not apply.

The superior court properly granted summary judg-

ment for the State with respect to the “limitation on

use of proceeds” provision.

* Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363, 372-

73, 120 S.Ct. 2288, 147 L.Ed.2d 352 (2000) (quoting Hines v.

Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941)).

App. 20

2. Issuance of the permit did not vio-

late the statute’s satisfactory proof

requirement.

Roberts argues that the permit also violated

gaming statutes because the State approved Earth’s

permit without “satisfactory proof” that the permit

would not be detrimental to the bests interests of the

public. The satisfactory proof requirement is found in

AS 05.15.140(a), which provides:

The department may not issue or renew a

permit except upon satisfactory proof that

the applicant is a municipality or qualified

organization, the activity may be permitted

under this chapter, and the issuance of a

permit is not detrimental to the best inter-

ests of the public. Upon request of the

department, the applicant shall prove con-

clusively each of these requirements before a

permit may be issued or renewed.

Roberts argues that the permit was detrimental

to the best interests of the public because “‘no benefit

to society’ accrues when government provides tourists

with recreation that they would otherwise pay for.”

But the superior court found that Roberts was equat-

ing “his business interests and profits with the ‘best

interests of the public.’” The superior court further

determined that the Department of Revenue had a

reasonable basis for its grant of a permit to Earth and

concluded that “[elven if this court substituted its

judgment, and applied the law to the undisputed

facts, approving a permit to provide free bicycles to

App. 21

the public is not detrimental to the best interests of

the public.”

In the space for “Dedication of Net Proceeds,”

Earth’s application indicated that “(t]he net proceeds

will be used to awaken social, political, and fraternal

groups to the importance of clean earth, air, and

water; to teach and practice individual lifestyles

which enhance clean air, earth, and water; to operate

the Earth Cycle Program and to distribute food which ,

is presently being wasted in the State of Alaska.”

This information was provided “under penalty of

unsworn falsification.”

Based on this information provided by Earth,

combined with the brief explanation of intended uses

of the proceeds in the application, Earth’s status as a

nonprofit organization at the time, and the absence of

any information to suggest that the use of proceeds

would be detrimental, the Department reasonably

determined that Earth provided satisfactory proof

that the permit would not be detrimental to the

public’s best interests.

As the superior court noted, Roberts’s argument

that the program harmed the public interest relies on

the assumption that something detrimental to his

business interests would be detrimental to the public

“ This information mirrors that listed on Earth’s Articles of

Incorporation. Earth indicated on its application that it was a

501(cX3) charitable organization, and the superior court found

that Earth was tax exempt for the period in question.

App. 22

interest. But even if the program had interfered with

his business — a fact that was not established — such

interference does not render the program detrimental

to the public interest as a whole.”

Roberts does not allege that anything in Earth’s

application should have suggested to the Department

that issuance of the permit would be detrimental to

the public interest. Rather, he suggests the Depart-

ment should have asked different questions and

obtained more information from Earth before issuing

the permit. But the statutory scheme extends discre-

tion to the Department to determine how to evaluate

permit requests.” In other contexts where an agency

has considerable discretion, we have been reluctant to

intrude on agency decision making. For example, in

Vick v. Board of Electrical Examiners, a private

citizen sought to compel the board to file an accusa-

tion against another party.” We declined to extend

this power to a private citizen, noting that to allow

private citizens to compel the board to file accusa-

tions would likely create an enormous burden on

* Roberts argues that the State’s position in Botelho v.

Griffin entitles him to summary judgment on this basis. But

Griffin held that the gaming statutes create a charitable trust,

and charitable trusts broadly define the public interest. 25 P.3d

at 693. Griffin buttresses the superior court’s holding.

* AS 05.15.14((a) provides that “{u]jpon request of the

department, the applicant shall prove conclusively each of these

requirements before a permit may be issued or renewed.”

” 626 P.2d 90, 92 (Alaska 1981).

App. 23

public officials.” We reasoned that “[jjudicial intru-

sion into areas traditionally committed to executive

discretion would make the processes of government

more cumbersome and less efficient. In the absence of

obvious and compelling reasons, that is a result

which should be avoided.”

Although Roberts does not seek enforcement

action, our reasoning in Vick applies. Roberts’s inter-

pretation of the “substantial proof” requirement

would impose a much higher standard of proof than

the Department’s interpretation. In this case, the

legislature has delegated discretion to the Depart-

ment to determine whether a permit would be detri-

mental to the public interest and to assess the

information necessary to support its determination.

The “public interest” is a vague concept and requires

the Department to weigh complex public policies,

particularly where gaming is involved. Where such

delegation has occurred and where Earth’s applica-

tion on its face does not suggest it would be detrimen-

tal to the public interest, the Department did not

abuse its discretion by determining that the “satisfac-

tory proof requirement” was met. While we do not

suggest that a case could not arise where the sub-

stantial proof requirement was clearly not met, this is

not such a case. The superior court properly granted

summary judgment for the State on Roberts’s claim

* Td. at 95.

39 Id.

App. 24

that issuance of the permit violated the satisfactory

proof requirement of AS 05.15.140(a).

D. The Superior Court Properly Granted

Summary Judgment to the State on

Roberts’s Nonstatutory Claims.

1. Issuance of the permit did not vio-

late public policy, fiduciary or statu-

tory duties.

Roberts argues that the State’s grant of a permit

to Earth violated public policy. He cites a federal

statute (the declaration of policy of the United States

Small Business Administration), a state statute (AS

10.15.565),“ and DeArmond v. Alaska State Develop-

ment Corp.," as bases for public policies allegedly

violated by issuance of the permit.

” Roberts cites AS 10.15.565 of the Alaska Cooperative

Corporation Act, but the page he references from his summary

judgment motion below quotes the text of AS 10.15.570, entitled

“Declaration of public policy that cooperatives are not in re-

straint of trade.” Roberts’s motion quotes the statute’s provision

that provides:

It is the public policy of the state to encourage the ef-

ficient production and distribution of agricultural and

other products derived from its natural resources or

labor resources.

" 376 P.2d 717, 721-22 (Alaska 1962) (holding that appro-

priation of funds for the Alaska State Development Corporation

was consistent with the public purpose clause of the Alaska

Constitution and noting that encouraging new business was a

legitimate public purpose).

App. 25

The superior court relied on Camps Newfound /

Owatonna, Inc. v. Town of Harrison, Maine” for the

proposition that nouprofit organizations may engage

in commerce and compete with for-profit entities. The

court concluded that no public policy prohibits non-

profit entities from competing in the marketplace and

granted summary judgment for the State on the

claim for violation of public policy.

We agree. As explained above, we uphold the

superior court’s ruling that issuance of the permit did

not violate gaming statutes. Those statutes embody

the public policy of gaming as announced by the

legislature. Because we hold that issuance of the

permit was consistent with those statutes, it was

therefore consistent with the legislature’s policy.

Roberts’s claim is without merit.

We also uphold the superior court’s grant of

summary judgment to the State on Roberts’s claims

of bad faith and breach of fiduciary and statutory

duties. On Roberts’s bad faith claim, the superior

court noted that “it is not clear what claim is being

pled” but reasoned that “the tort of bad faith arises in

the context of an insurer and insured” and was inap-

posite. Roberts failed to provide us with any legal

basis for his claim.

Moreover, as the superior court noted, even if

there were an applicable bad faith cause of action,

” 520 U.S. 564, 117 S.Ct. 1590, 137 L.Ed.2d 852 (1997).

App. 26

Roberts’s bad faith claim depends on the notion that

the State made a mistake and refused to correct it.

Because we hold that issuance of the permit complied

with statutory requirements, we agree with the

superior court that the Department made “no mistake

in the issuance of the permit ... [and therefore had]

no duty to correct any mistake.”

Similarly, Roberts’s claims for breach of statutory

and fiduciary duties also fail. We assume without

deciding that such claims have a legal basis. But we

hold that the State acted in accordance with the

gaming statutes in issuing the permit, and compli-

ance with the statute negates any claim for breach of

statutory or fiduciary duty.

2. Issuance of the permit did not vio-

late Roberts’s constitutional rights.

Roberts argues the State was not entitled to

summary judgment on his claim that the State vio-

lated his substantive due process right to gainful

employment and to earn a living or his claim that the

State violated his fundamental right to earn a living

in violation of article I, section 1 of the Alaska Consti-

tution and the Privileges and Immunities Clause of

the United States Constitution. He argues that the

superior court erred by applying rational basis review

to the legislature’s enactment of the gaming laws. He

also contends that his challenge was directed not at

the gaming etatutes, but rather at the executive

branch’s autiwerization of the Earth Cycle Program.

App. 27

The superior court concluded that the statute met

rational basis scrutiny.”

We uphold the superior court’s ruling. Under our

jurisprudence, rational basis is the appropriate test

unless a fundamental right is at issue; the party

seeking to establish a violation under rational basis

review has a heavy burden.“ Not only has Roberts

failed to articulate how the statutes violate his right

to earn a living,” but the State identified a rational

purpose for the gaming laws — to permit qualified

organizations to raise money through authorized

gaming activities.

Roberts argues that the superior court misread

his argument as a challenge to the statutes and failed

to recognize that he challenged executive action, but

he does not explain why the State is not entitled to

summary judgment on a challenge to executive

“ The superior court described these claims as “difficult to

decipher” but concluded that Roberts was alleging that the

“gaming statutes violate {Roberts’s] right [to] earn a living by

allowing non-profit entities to compete with his for-profit

business.”

“ See Concerned Citizens of S. Kenai Peninsula v. Kenai

Peninsula Borough, 527 P.2d 447, 452 (Alaska 1974); see also

Dunn v. Municipality of Anchorage, 100 P.3d 905, 909 (Alaska

App.2004). Roberts’s brief does not assert that the right to earn

a living is a fundamental right.

* Judge Tan’s ruling notes that Roberts “continues to run

his business and that right has not been taken away... . [T]he

burden to Mr. Roberts ... [—] competition [—] is not an unrea-

sonable burden.”

App. 28

action. The Earth Cycle Program did not prevent

Roberts from operating his own business — the most

generous reading of the facts suggests at most that

the Earth program competed with that business. Not

only did Roberts faii to show that his right to earn a

living was infringed upon, but he also failed to meet

the heavy burden of showing that the Department’s

actions in granting the permit to Earth were not

rationally related to the purpose of the program it

administered. Moreover, our holding that issuance of

the permit was consistent with the statute forecloses

any debate over whether the Department acted

rationally in issuing the permit.

We also uphold the superior court’s grant of

summary judgment on Roberts’s privileges and

immunities claim. The Privileges and Immunities

Clause “does not ... protect the citizens of a State

against the legislative power of their own State.”

Roberts does not allege that he is an out-of-state

citizen adversely affected by this state’s statute or

program. The privileges and immunities clause does

not restrict the State’s actions in this case. The supe-

rior court properly granted summary judgment to the

State.

“ Craigmiles v. Giles, 110 F Supp.2d 658, 665 (E.D.Tenn.2000),

aff’d, 312 F.3d 220 (6th Cir.2002) (holding that statute at issue

did not violate the Privileges and Immunities Clause).

App. 29

E. The Superior Court Did Not Abuse Its

Discretion When It Ruled that Roberts

Did Not Qualify as a Public Interest

Litigant.

The superior court awarded $5,225 in attorney’s

fees to the State as the prevailing party. Roberts

argues that he should be considered a public interest

litigant. Because Roberts filed this case in March

2003,” the four-factor test for public interest litigant

status applies. This test asks: (1) is the case designed

to effectuate strong public policies; (2) would numer-

ous people benefit if the litigant succeeded; (3) could

only a private party have been expected to bring the

suit; and (4) would the litigant have lacked sufficient

economic incentive to file suit?”

Roberts argues that he meets all four factors of

the test. He contends that he advances public policy

*’ In May 2008 the legislature passed House Bill 145, which

amended AS 09.60.010 to prohibit discrimination in the award of

attorney’s fees “based on the nature of the policy or interest

advocated by the party, the number of persons affected by the

outcome of the case, whether a governmental entity could be

expected to bring or participate in the case, the extent of the

party’s economic incentive to bring the case, or any combination

of these factors.” Ch. 86, § 2, SLA 2003. The act “applies to all

civil actions and appeals filed on or after” September 11, 2003.

Ch. 86, § 4, SLA 2003. Because Roberts filed the complaint in

this case on March 14, 2003, this case predates the effective date

of the statute, and the previous public interest litigant doctrine

applies.

“ Abbott v. Kodiak Island Borough Assembly, 899 P.2d 922,

923 (Alaska 1995).

App. 30

because the case related to statutory language on

matters of public welfare. He argues that the second

factor is met, contending that numerous people

benefit from the case because “all citizens benefit

when the State’s legal position is consistently applied

and transparently explained in writing.” He argues

that the third and fourth factors are met, maintain-

ing that he had no economic incentive because once

“assigned economic injury was removed from the

case, the only claims that could possibly remain are

public interest claims.”

The superior court found that it was “doubtful”

but “conceivable” that the first factor was met, but

concluded that the second factor was not met because

the case would only benefit businesses that rent

bicycles in downtown Anchorage. The court found

that although the third factor was “perhaps” met,

Roberts could not meet the fourth factor because he

had economic incentive to sue. Because the superior

court’s decision turned on the fourth factor, we focus

our analysis on that factor.“ The superior court’s

finding that Roberts had economic incentive to sue is

consistent with our decisions in Abbott v. Kodiak

“ The superior court also found thai Roberts’s case benefit-

ted only downtown bicycle renters. While this is true of his

requests for compensatory damages, Roberts’s request for

declaratory relief concerning the scope of the gaming statutes

could benefit a larger population. But we need not address this

issue because the superior court’s ruling on the fourth factor was

not an abuse of discretion.

App. 31

Island Borough Assembly” and Stein v. Kelso.” In

Abbott, several homeowners appealed a zoning deci-

sion of the Kodiak Assembly, arguing that it

amounted to an unconstitutional taking of property.”

The superior court upheld the Assembly’s decision

and found that the homeowners did not qualify as

public interest litigants. In affirming the decision, we

reasoned that where homeowners “believed the

economic harm facing them was so substantial that

they felt they had a viable taking without just com-

pensation claim,” the superior court’s finding that

owners had an economic interest in litigation was not

an abuse of discretion.” Similarly, in Stein v. Kelso,

we upheld an award of attorney’s fees against miners

who challenged an administrative permit decision as

an unconstitutional taking.“ Noting that the miners’

pleadings sought a ruling that they had “lost their

property rights and must be justly compensated,” we

rejected the miners’ claim that they had no economic

interest in the suit.”

Like the plaintiffs in Stein and Abbott, Roberts’s

initial complaint requested personal economic relief.

As the State recognizes, this suggests that Roberts

* 899 P.2d 922.

* 846 P.2d 123 (Alaska 1993).

* 899 P.2d at 923.

* Id. at 925.

* 846 P.2d at 127.

Id.

App. 32

did not lack financial incentive to bring suit. Roberts

suggests that he became a public interest litigant

after the superior court’s order dismissing all claims

for relief, except declaratory relief. While it is true

that Roberts did not abandon his suit after the finan-

cial claims were eliminated, he also appeals the

superior court’s ruling that the assignment failed.

This assignment ruling is the basis for the superior

court’s elimination of all but the claim for declaratory

relief; presumably if we had reversed it, Roberts’s

claims for compensatory damages could be viable.

Given his pursuit of compensatory relief in this initial

claim and indirectly in this appeal, the superior

court’s ruling on public interest litigant status was

not an abuse of discretion.

Iv. CONCLUSION

We hold that the superior court properly granted

summary judgment for the State on Roberts’s remain-

ing claims, properly dismissed the assigned claims as

invalid, and properly concluded that Roberts was not

a public interest litigant. We therefore AFFIRM the

decision of the superior court.

App. 33

IN THE SUPERIOR COURT

FOR THE STATE OF ALASKA

THIRD JUDICIAL DISTRICT AT ANCHORAGE

PETER ROBERTS,

an individual,

Plaintiff,

)

THE STATE OF ALASKA, ?

WILSON CONDON, )

an individual, BRUCE )

BOTHELO, an individual, ?

and LARRY MEYERS,

an individual,

) Case No.

Defendants. ) 3AN-03-5534CI

SUMMARY JUDGMENT ORDER

I, Introduction and Background Facts

Peter Roberts, owner of Downtown Bicycle Rent-

als has a bicycle rental business in downtown An-

chorage. In June 2000, a non-profit organization,

Earth, offered one-speed bicycles for rent without

charge also in a downtown location. Mr. Roberts was

not pleased at the development, and wants to stop

Earth from continuing its free bicycle rental activi-

ties.

App. 34

Earth applied for a charitable gaming permit at

the Alaska Department of Revenue.’ Earth was

granted a gaming permit and in early 2000, con-

ducted some gaming activities in Wasilla. From the

money generated, Earth purchased a number of

bicycles. Earth intended to offer the bicycles for free

use during the summer months.

In June of 2000, Earth was given permission to

operate its bicycle program in front of the Old Federal

Building in downtown Anchorage. The program drew

immediate attention from Mr. Roberts and others. Mr.

Roberts and other bicycle rental business owners

were successful in persuading the General Services

Administration (“GSA”) to revoke Earth’s permit to

operate its program in front of the Old Federal Build-

ing.

Undaunted by the GSA’s revocation of its permit,

Earth moved its program to a different location

downtown. Again, Mr. Roberts’ and others’ complaints

were successful in ridding downtown of this un-

wanted new competition to their businesses. Earth

again changed its location. The free bicycle program

eventually found a home at the Anchorage Interna-

tional Youth Hostel: Mr. Roberts and others com-

plained to the hostel about the free bicycle program,

asking the hostel to not allow the program to be run

on their site. The hostel refused to revoke its permis-

sion to Earth.

’ Earth is not a party to this suit.

App. 35

After Mr. Roberts tried to get the state to revoke

Earth’s permit and failed, Mr. Roberts filed suit

against the state. Mr. Roberts claims, inter alia, that

the Department of Revenue erroneously granted

Earth a gaming permit, the Department erroneously

allowed Earth to use the gaming proceeds for a

purpose not within the statute, and that the state’s

activities violated several of his state and federal

constitutional rights. Mr. Roberts moved for summary

judgment on several counts and the state made a

cross-motion for summary judgment including all the

remaining counts.”

Ii. Standards of Review

Mr. Roberts is a pro se litigant in this matter. A

Court will “hold the pleadings of pro se litigants to

less stringent standards than those of lawyers,”

particularly where “lack of familiarity with rules”

rather than “gross neglect or lack of good faith”

underlies litigants’ errors. Wright v. Shorten, 964 P.2d

441, 444 (Alaska 1998). Judges should “inform a pro

se litigant of the proper procedure for the action he or

she is obviously attempting to accomplish.” Breck v.

Ulmer, 745 P.2d 66, 75 (Alaska 1987). The court

should further inform pro se litigants of any specific

defects in their pleadings. Collins v. Arctic Builders,

* Mr. Roberts’ amended complaint contained sixteen counts.

A number of counts were dismissed on August 30, 2004. Cur-

rently nine counts remain.

App. 36

957 P.2d 980, 982 (Alaska 1998). In this case, Mr.

Roberts is a skillful pro se. Although he has yet to

pass the Alaska Bar examination, he is a law school

graduate, and from his pleadings it is apparent that

Mr. Roberts is familiar with the Alaska Rules of Civil

Procedure and the standard for summary judgment.

Summary judgment is appropriate when there is

no genuine issue of material fact and the moving

party is entitled to judgment as a matter of law.

Lincoln v. Interior Reg’l Hous. Auth., 30 P.3d 582, 585

(Alaska 2001). The movant has the burden of showing

that no issues of material fact exist, entitling them to

judgment as a matter of law. Alaska Rent-A-Car v.

Ford Motor Co., 526 P.2d 1136, 1141 (Alaska 1974).

Additionally, when ruling on a Motion for Summary

Judgment, the court must draw all reasonable infer-

ences in favor of the non-moving party. Clabaugh uv.

Bottcher, 545 P.2d 172, 175 (Alaska 1976). Although

the issues arise in the context of a summary judg-

ment, many of the claims question the permitting

provess.

The Supreme Court has stated that, “[hlowever

denominated, a claim is functionally an administra-

tive appeal if it requires the court to consider the

propriety of an [administrative] determination.”

Haines v. State, Commercial Fisheries Entry Commis- ._

sion, 746 P.2d 892, 893 (Alaska 1987). The Court .

has traditionally reviewed a wide variety of non- |

adjudicative administrative and executive actions

under the same narrow and deferential standards- Song

that apply in administrative appeals. Southeast”

App. 37

Alaska Conservation Counsel v. State, 665 P.2d 544,

548 (Alaska 1983).

In Ellis v. Department of Natural Resources, the

Court was faced with a similar situation. 944 P.2d

491 (Alaska 1997). In Ellis, the Department of Natu-

ral Resources issued a Mineral Closing Order closing

certain state land from mining. Jd. at 493. Mr. Ellis

had been mining in the area that was closed but had

failed to file the appropriate claim paperwork with

the state. Jd. Mr. Ellis was precluded from mining at

these sites and filed suit against the state challenging

the validity of the closure order. Jd. On summary

judgment, The Court determined that the case would

be reviewed like an appeal from a final administra-

tive order. Jd. The court reviewed the Department of

Natural Resource’s decision under the “reasonable

basis” standard. Id.

A reviewing court will apply the “reasonable

basis” test when reviewing administrative decisions

involving complex issues that require agency exper-

tise. Kelly v. Zamarello, 486 P.2d 906, 917 (Alaska

1971). Under the “reasonable basis” standard of

review, this court gives the agency determination

deference as long as it is reasonable, supported by

evidence, and there is no abuse of discretion. Kodiak

W. Alaska Airlines, Inc. v. Bob Harris Flying Service,

Inc., 592 P.2d 1200, 1203 (Alaska 1979). On questions

of law where no agency expertise is involved, the

“substitution of judgment” standard will be applied.

Jager v. State, 537 P.2d 1100, 1107 (Alaska 1975).

App. 38

The counts that are ripe for summary judgment

are the following: 2, 3, 4, 5, 6, 7, 9, 11, and 12. On

March 29, 2005 Plaintiff filed a motion for summary

judgment on counts 2, 3, 5, and 6. The State opposed

Mr. Roberts’ motion on April 25, 2005 and filed a

cross-motion for summary judgment on counts 4 and

7. The State later filed a motion for partial summary

judgment and motion to dismiss counts 9 through 12.

Mr. Roberts responded with cross-motions on counts 9

through 12. All of the counts that remained following

dismissal are now ripe for summary judgment.

Count 2:

Violation of AS 05.15.150(a): in this count Mr. Roberts

argues that the Department of Revenue allowed

Earth to use its gaming proceeds for a purpose not

permitted under the statute.

AS 05.15.150(a) states in relevant part that the

proceeds gained through a gaming permit may be

used for:

... the awarding of prizes to contestants or

participants and to the political educational,

civic, public, charitable, patriotic, or religious

uses in the state. “Political, educational,

civic, public, charitable, patriotic, or religious

uses” means uses benefiting persons either

by bringing them under the influence of edu-

cation or religion or relieving them from dis-

ease, suffering, or constraint, or by assisting

them in establishing themselves in life, or by

providing for the promotion of the welfare

App. 39

and well-being of the membership of the or-

ganization within their own community, or

through aiding candidates for public office or

groups that support candidates for public of-

fice, or by erecting or maintaining public

buildings or works, or lessening the burden

on government...

“Charitable organization” is further defined in AS

05.15.690(6) as “an organization not for pecuniary

profit, that is operated for the relief of poverty, dis-

tress, or other condition of public concern in the

state.” The term charity has been interpreted broadly

by the Supreme Court. As recently as 2004, the court

has referred to “the broad common law definition of

‘charity’” and observed that this definition reflects

the “humanitarian rationale” of tax exemptions.

Fairbanks North Star Borough v. Dena Nena Henash,

88 P.3d 124, 132 (Alaska 2004). The common law

definition contemplates that there be some public

benefit arising out of the labeling of an organization

as charitable. The definition states, “It is quite clear

that what is done out of good will and a desire to add

to the improvement of the moral, mental, and physi-

cal welfare of the public generally comes within the

meaning of the word ‘charity.’” Jd.

Earth is a charitable organization and was

recognized as such by the federal government

through its grant of 501(cX3) tax-exempt status.

Earth was listed as a charitable organization for the

pertinent period of time related to this lawsuit. The

purposes, stated in Earth’s articles of incorporation

App. 40

filed with the Department of Commerce, Community

and Economic Development are the following:

1. To awaken social, political, and fraternal

groups to the importance of clean earth, air

and water.

2. To teach and practice individual life-

styles which enhance clean earth, air and

water.

3. To operate the Earth Cycle Program

4. To engage in such other educational ac-

tivities as the board of directors shall deter-

mine.

5. To distribute food which is presently be-

ing wasted.

Earth used the funds earned through its gaming

permit in part to buy bicycles. These bicycles were

available to the public to use without charge. The

issue is whether this use of funds for the free bicycle

program is a permissible use, or whether it violates

the statute.

Mr. Roberts argues that, in the context of down-

town Anchorage, given its proximity to the Tony

Knowles Coastal Trail, bicycles should be rented by

paying customers and not offered for free. He argues

that allowing anyone to use these free bicycles “cre-

ated no public benefit, only private burden.” It appears

that Mr. Roberts would consider this program to be

charitable if it were operated in another city in Alaska

or even in another part of Anchorage. Essentially if

App. 41

the program did not compete with his for-profit

business, he -vould not object to Earth’s free bike

program nor deny that the program was charitable.

The Department of Revenue found that the

program was charitable and awarded a license to

Earth. The Department’s determination was reason-

able. Earth’s articles of incorporation state that its

purpose was to “teach and practice individual life-

styles which enhance clean earth, air and water.”

Earth’s stated purpose fits within the statutory

definition of a charitable organization. Traffic in any

urban area is a “public concern” and the Department

reasonably could have determined that a free bicycle

program would help to alleviate the concern. In

addition, riding a bicycle is a healthy activity, and

promotes good health among its citizens. The De-

partment made a reasonable determination that

Earth and its bicycle program fit within the statuto-

rily defined restrictions for charitable purposes.

Whether the Department of Revenue allowed

Earth to use its gaming proceeds for a permissible

purpose under the statute is a matter that involves

the expertise of the Department, and the reasonable

basis standard should apply. The Department’s

decision in granting a permit has a reasonable basis

and will not be disturbed.

The statutory language is very broad, and the

literal language of the statute covers matters of

public welfare. This court finds that even applying a

substitution of judgment standard, and considering

App. 42

the undisputed facts, and as a matter of law, the

defendants did not violate AS 05.15.150(a) when the

Department granted a permit to Earth and allowed it

to run its free bicycle program.

Count 3:

Mr. Roberts alleges that the defendants violated

AS 05.15.140(a) by issuing the 2000 gaming permit to

Earth. Mr. Roberts contends that Earth was not

entitled to a gaming permit under the governing

statute, and the Department of Revenue erroneously

granted it a permit.

This requires the court to examine AS 05.15.140(a)

which states in relevant part:

The department may not issue or renew a

permit except on satisfactory proof that the

applicant is a municipality or qualified or-

ganization, the activity may be permitted

under this chapter, and the issuance of a

permit is not detrimental to the best inter-

ests of the public. Upon request of the

department, the applicant shall prove con-

clusively each of these requirements before a

permit may be issued or renewed.

In order to qualify for a gaming permit an applicant

must provide satisfactory proof to the Department of

three things; 1) that it is a municipality or qualified

organization, 2) that the law permits the proposed

gaming activity, and 3) the issuance is not detrimen-

tal to the best interests of the public. Mr. Roberts

App. 43

does not contend that the first two prongs of the test

have not been met.

Mr. Roberts bases his argument on the third

prong of the test. Mr. Roberts argues that in operat-

ing its program, Earth competed with other busi-

nesses and he equates an impact on his business with

a detriment to “the public interest.”

Mr. Roberts argues that in issuing the permit his

business was adversely effected. Mr. Roberts then

argues that this adverse effect would lead to the

bankrupting of the government through lost taxes.

Mr. Roberts appears to equate his business interests

and profits with the “best interests of the public.” He

appears to contend that if there is a detriment to him

and other small businesses, it cannot be in the best

interests of the public.

In applying the reasonable basis standard to the

decision of the Department of Revenue in granting a

permit to Earth, this court finds that there was no

error. Again, the language of the statute is very

broad, and by no means is subject to the narrow

construction advocated by Mr. Roberts. Even if this

court substituted its judgment, and applied the law to

the undisputed facts, approving a permit to provide

free bicycles to the public is not detrimental to the

best interests of the public.

App. 44

Count 4:

In this count, Mr. Roberts pleads a Violation of

Public Policy. Mr. Roberts alleges that “[s]tate and

defendants’ ratification and encouragement of the

Earth Cycle Program works at cross-purposes to

established State and National Public Policy. Ratifi-

cation and encouragement of nonprofit activities that

run counter to established public policy is illegal.

State Participation in the Program fails the Bob

Jones test.”

The public policy Mr. Roberts argues is the

“capitalist system” and allowing a tax-exempt/non-

profit to compete with a tax-paying/for-profit entity

violates public policy.”

The Supreme Court of the United States has

stated “[njothing intrinsic to the nature of nonprofit

entities prevents them from engaging in interstate

commerce.” Camps Newfound/Owatonna, Inc. v. Town

of Harrison, Maine, 520 US 564, 585 (1997). In engag-

ing in interstate commerce a non-profit will naturally

compete with for-profit entities. Daily, non-profit

charities and organizations compete with for-profit

entities. When a non-profit raises funds it must enter

the marketplace to raise those funds and to use those

funds, and it must compete with for-profit entities in

* “It is unsettling that it is necessary to explicate the

fundamental principle of our capitalist system. Plaintiff respect-

fully asks this court to reaffirm it.” Plaintiffs opposition and

Cross-Motion at 4.

App. 45

that market. There is no public policy that prohibits a

non-profit from competing with for-profits, even in

spite of their tax-exempt status. The policy is to the

contrary, that non-profits have a very important role

in our society, and are not limited to only providing

goods and services where there is no competition.

There is no violation of public policy in this case.

The court grants summary judgment on count 4

in favor of the defendants.

Count 5:

Bad Faith Claim: The complaint in the case pled

that “Defendants had an affirmative duty to acknowl-

edge and correct known operational errors made by

subordinates. Aggrieved citizens are entitled to a good

faith written explanation of reasons.” In briefing, Mr.

Roberts also alleges actions defendants failed to take

to correct the “operational errors.”

Generally the tort of bad faith arises in the

context of an insurer and insured. Loyal Order of

Moose Lodge 1392 v. International Fidelity Ins. Co.,

797 P.2d 622, 627 (Alaska 1990). Thus, it is not clear

what claim is being pled, and whether relief can be

granted. Even if the claim of Bad Faith can be

pleaded, the “tort of bad faith arises when the insur-

ance company intentionally denies, fails to process, or

pay a claim without a-reasonable basis for said ac-

tion.” Hillman v. National Fire Insurance Co., 855

P.2d 1321, 1324 (Alaska 1993).

App. 46

Mr. Robert’s premise of the bad faith claim rests

on the notion that the Department made a mistake,

and then refused to correct that mistake. Because the

court found above that there was no mistake in the

issuance of the permit to Earth, there was no duty to

correct any mistake. Clearly there was a reasonable

basis for the defendants’ decision. This claim is with-

out merit. Summary Judgment is granted for defen-

dants on this claim.

Count 6:

Mr. Roberts alleges that the defendants violated

their fiduciary and statutory duties. Mr. Roberts does

not establish that there is a fiduciary duty existing

between him and the defendants. The undisputed

facts set out above do not support any theory of a

fiduciary duty.

Thus, the gravamen of this court is the breach of

statutory duties. Because the court has found that

Earth was properly granted a gaming permit and the

proceeds were used for a permitted purpose, defen-

dants breached no statutory duty to Mr. Roberts.

Accordingly, summary judgment is granted for

the defendants as they did not breach any fiduc:ary

or statutory duty owed to Mr. Roberts.

App. 47

Count 7:

Violation of the Public Purpose clause of the

Alaska Constitution, Art [X, sec. 6. Article IX, section

6 of the Alaska Constitution states:

No tax shall be levied, or appropriation of

public money made, or public property trans-

ferred, nor shall the public credit be used,

except for a public purpose.

Mr. Roberts argues in his motion for summary judg-

ment:

Whether general fund money spent of the

salaries and office costs of state gaming regu-

lators violates Article IX Section 6 of the

Constitution when at the end of the day their

oversight is not intended to achieve any dis-

cernable public benefit.

In essence, Mr. Roberts argues that the salaries and

costs of the Department of Revenue and the Attorney

General’s office, which are paid from the state’s

general fund, serve no public purpose and therefore

are in violation of Article IX section 6.

The Supreme Court has stated that the phrase

“public purpose” “represents a concept which is not

capable of precise definition.” R.N. DeArmond uv.

Alaska State Development Corp., 376 P.2d 717, 721

(Alaska 1962). In examining whether a particular

action of the legislature that utilizes monies from the

general fund violates Article IX section 6, the Su-

preme Court:

App. 48

... Adopts for its guidance the general rule,

supported by the great weight of authority,

that where the legislature has found a public

purpose will be served by the expenditure or

transfer of public funds or the use of the pub-

lic credit, this court will not set aside the

finding of the legislature unless it clearly

appears that such finding is arbitrary and

without reasonable basis in fact.

DeArmound, supra at 721.

This court finds that the legislature was not

acting arbitrarily and that it did have a reasonable

basis when it created both the Department of Reve-

nue and the Attorney General’s Office.

Accordingly, summary judgment is granted to

defendants.

Count 9:

Mr. Roberts alleges that the state violated his

procedural due process rights “because it did not

provide advance notice, conduct a hearing or create a

written decisional document” when it granted the

gaming permit to Earth. Mr. Roberts would have the

Department of Revenue conduct a full adjudicative

hearing for every gaming permit that is issued in the

state of Alaska.

In State v. Greenpeace, the court examined a

factually similar situation to the present case,

wherein a third party challenged an administrative

decision. 96 P3d 1056. There, the court addressed a

App. 49

situation where the state had lifted a stay on a per-

mit without adequate notice to Greenpeace. Following

the lifting of the stay, Greenpeace had “an opportu-

nity to present its case...” Jd. at 1067. Greenpeace

had several opportunities to “contest the Department

of Natural Resources’ decision and it continued to do

so. It simply failed to convince the commissioner that

the stay should be reimposed.” Greenpeace asked the

DNR to reconsider its decision and the DNR did so

and stated that Greenpeace had “failed to provide any

countervailing evidence or argument” to lift the stay

and “relied on unsubstantiated allegation...” Jd. at

1067. The court held that lifting the stay with little

notice to Greenpeace did violate its due process

rights, but the “procedures DNR followed after lifting

the stay preserved Greenpeace’s right to due process.”

Id. at 1068.

Similar to Greenpeace, Mr. Roberts alleges that

he wasn’t provided with adequate notice nor was he

provided with an opportunity to be heard. The court

finds that Mr. Roberts had many opportunities to

contest the issuance of a gaming permit to Earth. Mr.

Roberts was in repeated contact with officials in the

Department of Revenue and the Attorney General’s

office and even recorded conversations with then

Attorney General Bothelo. Mr. Roberts likewise filed

a complaint with the Anchorage Ombudsman who

found no due process violations. Mr. Roberts was told

that Earth was qualified to conduct gaming activities

and that the free bike program fit within the statu-

tory restrictions for the use of funds from gaming

App. 50

activities. The procedures granted to Mr. Roberts

after the issuance of Earth’s permit “preserved [his]

right to due process. Jd. at 1068.

For all of the aforementioned reasons, this court

finds that as a matter of law, the actions of the state

and the defendants did not violate the due process

rights of Mr. Roberts. Therefore, this court grants the

defendants’ motion for summary judgment on this

count.

Counts 11 and 12:

Substantive Due Process and Privileges and

Immunities claim: Mr. Roberts alleges that the state

and the defendants violated his substantive due

process rights by infringing on his right to “gainful

employment and to earn a living ... ” Although

difficult to decipher, the court believes that Mr.

Roberts is alleging that the gaming statutes violate

his right [sic] earn a living by allowing non-profit

entities to compete with his for-profit business.

Substantive due process is denied when a legisla-

tive enactment has no reasonable relationship to a

legitimate governmental purpose. Mobile Oil Corp. uv.

Local Boundary Comm’n, 518 P.2d 92, 101 (Alaska

1974). It is not a court’s role to decide whether a

particular statute or ordinance is a wise one; the

choice between competing notions of public policy is

to be made by elected representatives of the people.

The constitutional guarantee of substantive due

process assures only that a legislative body’s decision

App. 51

is not arbitrary but instead based upon some rational

policy. Concerned Citizens of So. Kenai Pen. V. Kenai

Pen. Borough, 527 p.2d 447, 452 (Alaska 1974).

In analyzing the arbitrariness of a. legislative

enactment the court will begin with a presumption

that it is proper. Jd. The party claiming a denial of

substantive due process has a “heavy burden” to show

that no rational basis for the enactment exists. The

Supreme Court states that “if any conceivable legiti-

mate public policy for the enactment is apparent on

its face or is offered by those defending the enact-

ment, the opponents of the measure must disprove

the factual basis for such a justification.”

When ruling on a claim that an enactment has

violated substantive due process norms at the sum-

mary judgment stage, the existence of facts known to

the court which provide such a rational basis is

sufficient by itself to establish that the statute or

ordinance is not arbitrary, as long as the opponents of

the legislation do not assert the contrary of those

facts. Id. at 452.

In this case Mr. Roberts has failed to carry his

“heavy burden” in showing that there is no rational

basis underlying the state’s gaming statutes. Mr.

Roberts gives the court an extensive history of both

the Fourteenth Amendment and the Privileges and

Immunities Clause of the United States Constitution,

but nowhere does he allege that there is no rational

basis for the existence of the charitable gaming laws.

Essentially Mr. Roberts’ argument is that the right to

App. 52

work and earn a living is protected, that right was

burdened by the gaming permit issued to Earth, and

there is no rational basis for this burden. What Mr.

Roberts fails to appreciate is that his right to earn a

living is not absolute. In this case, he continues to

run his business and that right has not been taken

away. In this case, the burden to Mr. Roberts, to be

free from competition, is not an unreasonable burden.

The gaming statutes were enacted near the

time Alaska became a state. The statutes serve the

purpose of allowing municipalities and qualified/

charitable organizations to raise funds that must be

used for approved charitable purposes. This court

finds that this is a rational basis and that the gaming

statutes do not violate and did not violate the sub-

stantive due process rights of Mr. Roberts.

For the aforementioned reasons, this court grants

the defendants’ motion for summary judgment on this

count.

Conclusion:

Because this court finds that the Department of

Revenue’s decision to grant Earth a gaming permit

was reasonable and that no questions of material fact

exist on any claim, this court finds as a matter of law

that defendants are entitled to summary judgment on

all counts.

Judgment shall be entered in the defandants’

favor.

App. 53

DATED Oct 10/05 at Anchorage, Alaska.

/s/ Sen K. Tan

SEN K. TAN

Superior Court Judge

I certify that on 10-10-05 a copy of the

above was mailed/delivered to each of the

following at their addresses of record:

P. Roberts M. Barnhill-AGO

/s/ M. Lucas

Judicial Assistant

App. 54

IN THE SUPERIOR COURT

FOR THE STATE OF ALASKA

THIRD JUDICIAL DISTRICT

AT ANCHORAGE

PETER ROBERTS, an individual,

Plaintiff(s),

vs.

THE STATE OF ALASKA,

WILSON CONDON, an individual,

BRUCE BOTELHO, an individual,

and LARRY MEYERS, an individual,

Defendant(s).

Case No.

3AN-03-5534 CI

i ee ee ae ae a a

JUDGMENT

IT IS ORDERED that judgment is entered as follows:

1. The plaintiff’s complaint is dismissed with

prejudice.

2. Defendants are awarded attorneys’ fees in

the amount of $5226.00

3. TOTAL JUDGMENT: $5226.00

Dated this 28 day of Dec, 2005.

/s/ Sen K. Tan

Sen K. Tan

Superior Court Judge

App. 55

In the Supreme Court of the State of Alaska

Peter Roberts, ) Supreme Court No. S-12180

Appellant, Order

" Petition for Rehearing

State of Alaska, , Date of Order: 8/14/07

Appellee. )

Trial Court Case # 3AN-03-05534ClI

cc:

Before: Fabe, Chief Justice, and Matthews,

Eastaugh, Bryner, and Carpeneti, Jus-

tices.

On consideration of the Petition for Rehearing

filed on 7/2/07,

IT 1s ORDERED: The petition for rehearing is

DENIED.

Entered by the direction of the court.

Clerk of the Appellate Courts

/s/ Marilyn May

Marilyn May

Supreme Court Justices

Judge Tan

Trial Court Appeals Clerk/Anchorage

West Publishing for Opinions (Opinion #6134,

6/22/07)

App. 56

15 U.S.C. Section 631. Declaration of policy

(a) Aid, counsel, assistance, etc., to small busi-

ness concerns The essence of the American economic

system of private enterprise is free competition. Only

through full and free competition can free markets,

free entry into business, and opportunities for the

expression and growth of personal initiative and

individual judgment be assured. The preservation

and expansion of such competition is basic not only to

the economic well-being but to the security of this

Nation. Such security and well-being cannot be

realized unless the actual and potential capacity of

small business is encouraged and developed. It is the

declared policy of the Congress that the Government

should aid, counsel, assist, and protect, insofar as is

possible, the interests of small-business concerns in

order to preserve free competitive enterprise, to

insure that a fair proportion of the total purchases

and contracts or subcontracts for property and ser-

vices for the Government (including but not limited to

contracts or subcontracts for maintenance, repair,

and construction) be placed with small-business

enterprises, to insure that a fair proportion of the

total sales of Government property be made to such

enterprises, and to maintain and strengthen the

overall economy of the Nation.

a # *

App. 57

15 U.S.C. Section 4801. Findings and purpose

(a) Findings

The Congress finds that —

(1) efforts to reverse the decline of United

States industry has been hindered by —

(A) a serious erosion in the institutions and

policies which foster United States competitiveness

including a lack of high quality domestic and interna-

tional economic and scientific data needed to —

(i) reveal sectoral strengths and weaknesses;

(ii) identify potential new markets and future

technological and economic trends; and

(iii) provide necessary information regarding

the competitive strategies of foreign competitors;

(B) the lack of a coherent and consistent gov-

ernment competitiveness policy, including policies

with respect to —

(i) international trade, finance, and investment,

(ii) research, science, and technology,

(iii) education, labor retraining, and adjust-

ment,

(iv) macroeconomic and budgetary issues,

(v) antitrust and regulation, and

(vi) government procurement;

App. 58

(2) the United States economy benefits when

business, labor, government, academia, and public

interest groups work together cooperatively;

(3) the decline of United States economic com-

petitiveness endangers the ability of the United

States to maintain the defense industrial base which

is necessary to the national security of the United

States;

(4) the world is moving rapidly toward the

creation of an integrated and interdependent econ-

omy, a world economy in which the policies of one

nation have a major impact on other nations;

(5) integrated solutions to such issues as trade

and investment research, science, and technology,

education, and labor retraining and adjustments help

the United States compete more effectively in the

world economy; and

* * *

App. 59

AFFIDAVIT

STATE OF ALASKA )

) ss

THIRD JUDICIAL DISTRICT )

CLARA BALL, being first duly sworn upon oath,

deposes and states as follows:

1. Ireside at XXXXX, Raytown, Missouri 64133,

and make this affidavit from my own personal knowl-

edge.

2. On August 8, 2000, I went to Anchorage

International Youth Hostel at 7th and H Street in

Anchorage and obtained an Earth bike in exchange

for a $5 deposit.

3. That the young man in charge did not ask me

to test-ride the bike and he made no inquiry or as-

sessment of my abilities to safely operate the bikes.

The young man did not provide me with any instruc-

tion or training, either verbally or in writing, which

would have improved or developed my capabilities to

ride a bicycle.

4. That the young man in charge made no

inquiry concerning my financial means.

5. That the young man in charge had bicycle

helmets that he could have loaned me but were not

offered to me. No facts or information was provided to

me, either verbally or in writing, which would have

improved my knowledge of how to safely operate the

App. 60

bike. However, the young man in charge did say that

I shouldn’t ride on the sidewalk. He later said that

he, personally, does ride on the sidewalk.

6. That the young man in charge did not ask me

for what purpose I intended to use the bike.

7. That when I asked where was a good place to

ride, the young man said the coastal trail. To get to

the trail, I was instructed to take a left onto 4th

Avenue and go down a hill to a park. We were not

provided a map.

8. That the young man in charge did not pro-

vide me, either verbally or in writing, with any in-

formation or facts to support the assertion of the

placard attached to the back of the bike seat. The

placard said the bike program “promotes alternative

modes of transportation.”

DATED at Anchorage, Alaska, this 15 day of

August, 2000.

/s/ Clara H. Ball

CLARA BALL

SUBSCRIBED AND SWORN to before me this 15 day

of August, 2000.

/s/ Nathene Farmer

Notary Public in and for Alaska

My commission expires: Sept 3, 2003

App. 61

Case No. 03-AN-03-5534CI

IN THE SUPERIOR COURT

FOR THE STATE OF ALASKA

THIRD JUDICIAL DISTRICT

AT ANCHORAGE

Roberts v. State, et al

Plaintiff’s Reply and Opposition to Defendants’

Cross-Motion for Partial Summary Judgment

May 9, 2005

* * *

considered before gaming permits are issued, the

State of Alaska is not being fair, decent, or sincere. By

sticking to its guns on what is without question a

material issue, the State undermines its credibility

and does a disservice to the citizens it serves. By

sticking to its guns the State is signaling to this

Court that it will do the same thing again. This signal

must be taken seriously. Plaintiff provides the Court

with the following authority to quash it.

1) In People’s Educational Camp Society, Inc. V.

Commissioner, 331 F.2d 923 (2nd Cir. 1963), a

nonprofit resort camp was denied IRC 501(c)(4)

status based on the fact that it competed actively

for public business with other resorts in the area.

2) Easter House v. United States, 12 Cl Ct. 476, 487

(1987): “Competition with commercial firms is

strong evidence of the predominance of nonex-

empt commercial purposes.”

App. 62

3) “The commerciality doctrine is essentially this: A

tax-exempt organization is engaged in a nonex-

empt activity when that activity is engaged in a

manner that is considered commercial. An act is

a commercial one if it has a direct counterpart in,

or is conducted in the same manner as is the case

in the realm of for-profit organizations.” Bruce R.

Hopkins, The Law of Tax-Exempt Organizations,

7th Edition, (1998) pp 629- 630. (Italics in origi-

nal.)

* * *

If the State knowingly provides gambling pro-

ceeds to 501(c)(3) that in turn uses that money to pay

for activities that violate the entity’s exemption, the

State enables and participates in the violation of

federal law. That is what the State of Alaska did

when Earth used State-authorized gaming proceeds

provided to capitalize and operate its free bike pro-

gram. Accepting for the sake of argument the de-

fense’s proposition that the Gaming Law’s do not

require an “operational nexus” there is no escaping

the fact that Federal law does. A long line of authori-

ties substantiates the conclusion that the State

facilitated the destruction of Earth’s exemption.

1) “If an organization is found to be organized for

tax-exempt purposes, it must then demonstrate

that it actually conducts activities that entitle it

to exemption.” Independent Ins. Agents of Hunts-

ville, Inc. v. Commissioner of Internal Revenue,

998 F.2d 898, 900 (11th Cir.1993) (business

league’s insurance activities not substantially re-

lated to accomplishment of exempt purpose).

App. 63

“The focus in deciding whether a corporation

qualifies for tax exempt status is on the manner

of operation of its business, not just whether it is

organized under ‘not-for-profit’ corporate status.”

Senior Citizens Stores, Inc. V. United States, 602

F.2d 711, 713 (5th Cir. 1979) (quoting better

Business Bureau, 326 U.S. at 285 n.3, 66 S.Ct.,at

112 (1945))

§1.501(c)(3)-1(a) Organizational and opera-

tional tests. “(1) In order to be exempt as an or-

ganization described in section 501(c)\(3), an

organization must be both organized and oper-

ated exclusively for one or more of the purposes

specified in such section. If an organization fails

to meet either the organizational test or the op-

erational test, it is not exempt.”

1988 IRS LGM Lexis 81, * Litigation Guide-

line Memorandum: “Thus the critical inquiry is

whether the activity is carried on in such a man-

ner that nonexempt purposes are only inciden-

tally furthered. If an organization engages in

many activities, the conduct of any substantial

activity carried on to further a substantial non-

exempt purpose will preclude exemption.” (Ex-

hibit D.) (Note: Not to be relied upon or otherwise

cited as precedent.)

Bob Jones Univ. V. United States, 461 U.S. 574,

590-91 n. 16, (1983) (quoting from G. Bogert &

Bogert, The Law of Trusts and Trustees § 361, at

3 (rev.2d ed. 1977)): “In return for the favorable

treatment accorded charitable gifts which imply

some disadvantage to the community, the courts

must find in the trust which is to be deemed

‘charitable’ some real advantages to the public

10)

App. 64

which more than offset the disadvantages arising

out of spe

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