# Petition for Writ of Certiorari — Roberts v. Alaska (No. 07-631) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1680%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2007 ## Text 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. il 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. 1V 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 7 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 23 25 25 26 27 27 28 29 vi 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 1X 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 x 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 xi 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 ...........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 . 17 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). 18 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) 19 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).* 20 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.* 21 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. 22 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.) 23 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). 24 ... 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)).* 25 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. )* 26 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.” 27 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).* 28 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.] 29 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 30 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, . * Developments in the Law - Nonprofit Corporations, 105 Harv. L. Rev. 1612, 1633 (1992). 31 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] 32 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.) 33 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. 34 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.* 35 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). 36 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 37 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. 38 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 4 [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. 39 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 40 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] 4] 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 42 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, V. 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). © Olson v. State, Dep’t of Natural Res., 799 P.2d 289, 292-93 (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. a 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, v. ) ) ) ) ) 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 of [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1680%3A1. Public record. Not legal advice.