Anchorage Daily News v. Anchorage School Dist., S-3374

• Decision Date: 07 December 1990
• Docket Number: No. S-3374,S-3374
• Parties: 65 Ed. Law Rep. 193, 18 Media L. Rep. 1520 ANCHORAGE DAILY NEWS, Appellant, v. ANCHORAGE SCHOOL DISTRICT, Appellee.
• Court: Alaska Supreme Court

Page 402

803 P.2d 402

65 Ed. Law Rep. 193, 18 Media L. Rep. 1520

ANCHORAGE DAILY NEWS, Appellant, v. ANCHORAGE SCHOOL DISTRICT, Appellee.

No. S-3374.

Supreme Court of Alaska.

Dec. 7, 1990.

D. John McKay, Middleton, Timme & McKay, Anchorage, for appellant.

Kermit E. Barker, Jr., Stephanie D. Galbraith, Lane, Powell & Barker, Anchorage, for appellee.

Before MATTHEWS, C.J., and RABINOWITZ, BURKE, COMPTON and MOORE, JJ.

OPINION

BURKE, Justice.

In this appeal we hold that a public interest litigant is entitled to the full amount of its attorney's fees. We so hold despite whatever minimal private interest the litigant may have had in the outcome of its suit.

I

Following our decision in Anchorage School District v. Anchorage Daily News, 779 P.2d 1191 (Alaska 1989), the prevailing party, the Anchorage Daily News, moved for its costs and "full reasonable" attorney's fees, contending that "[t]he Daily News ... qualifie[d] as a public interest litigant." The school district opposed the motion, arguing that the Daily News was motivated to bring suit by economic self-interest.

The superior court "accepted" the argument that the Daily News was a public interest litigant, but awarded it only part of its attorney's fees, stating:

The plaintiff is in the business of gathering news. It does so for the entirely proper purpose of publishing that news for profit. This profit takes many forms--from the rates paid by its readership, to its own editorial proclamation as society's crusading voice, to, it might even be supposed, its aspiration to a Pulitizer Prize for meritorious service in the cause of the public's right to know. There is no vice in any of these. Indeed most are praiseworthy. However, they benefit, they profit the Anchorage Daily News.

... The [c]ourt concludes that a significant part of the plaintiff's motivation to bring this action was commercial in nature and personal to itself, but in part accepts plaintiff's characterization of public interest litigation. For want of a more precise method of measure, the [c]ourt considers the motivations equal, and awards plaintiff one half the actual fees of $4,139, or $2069.50, as a prevailing public interest litigant. Applying the partial compensation rule at 40% to the balance of the fees actually incurred produces an additional $827.60, for a total fee award of $2,897.10.

This appeal followed.

II

We reject at the outset any suggestion that a newspaper engaged in litigation to obtain information for public dissemination is automatically a public interest litigant. ¹ The facts of the particular litigation must be evaluated on a case-by-case basis to determine public interest status. Thus, we examine first the factors critical to this determination in the case at bar. ²

In general, a litigant must satisfy the following criteria to be deemed a public interest litigant:

(1) Is the case designed to effectuate strong public policies?

(2) If the plaintiff succeeds will numerous people receive benefits from the lawsuit?

(3) Can only a private party have been expected to bring the suit?

(4) Would the purported public interest litigant have sufficient economic incentive to file suit even if the action involved only narrow issues lacking general importance?

Murphy v. City of Wrangell, 763 P.2d 229, 233 (Alaska 1988). The school district implicitly concedes that the Daily News satisfies the first three criteria, but maintains all four criteria must be met to be a public interest litigant. We held accordingly in Murphy, where the purported public interest litigant satisfied three of the four criteria, but was, nevertheless, denied public interest status for having sufficient personal economic motive to bring suit. Murphy, 763 P.2d at 233; see also Gold Bondholders Protective Council v. Atchison, Topeka & Santa Fe Ry., 658 P.2d 776, 778 (Alaska 1983) (public interest status denied where court concluded bondholders had substantial private economic motivation to bring suit).

In our earlier decision, we recognized the important public policy violated by the school district's refusal to disclose the terms of the settlement agreement:

The people of this state, through their elected representatives, have stated in the clearest of terms that it is more important that they have access to this type of information than that it remain confidential. Thus, we hold that a public agency may not circumvent the statutory disclosure requirements by agreeing to keep the terms of a settlement agreement confidential. Under Alaska law, a confidentiality provision such as the one in the case at bar is unenforceable because it violates the public records disclosure statutes.

Anchorage School District, 779 P.2d at 1193 (emphasis deleted). It is clear, therefore, that the lawsuit filed by the Daily News vindicated an important public right; ³ the main reason for the litigation, and its primary accomplishment, was to compel the school district to disclose information required by law to be available to the public. Moreover, whatever private interest the Daily News might have had, economic or otherwise, was comparatively minor. Indeed, it is highly unlikely that the Daily News would have brought its suit "if the action [had] involved only narrow issues lacking general importance." Murphy, 763 P.2d at 233.

Given these circumstances, we conclude that the Daily News is, in this instance, a public interest litigant, and that the superior court abused its discretion in awarding it only part of its attorney's fees. Having qualified as a public interest litigant, the Daily News is entitled to the full amount of its attorney's fees, to the extent that they are otherwise reasonable. ⁴ REVERSED and REMANDED for entry of an amended judgment.

MOORE, J., dissents.

MOORE, Justice, dissenting.

Because I find that the Daily News fails the fourth criterion set out in Murphy, I do not agree with the majority's holding that the Daily News is a public interest litigant.

The majority summarily concludes that the Daily News' economic interest in this litigation is "comparatively minor." On the record presented in this case, I do not see any justification whatsoever for the majority's conclusion.

The Daily News' submissions to the superior court fail to substantiate its claim that the commercial benefits of this litigation are minimal. The paper simply asserts that its status as public interest litigant is beyond reasonable dispute. It argues that it would never have brought this suit if it was only interested in financial gain because the costs of litigation outweigh any short-term increase in newsstand sales resulting from the school district story. ¹

This argument is unpersuasive. A newspaper's financial well-being depends on its circulation base and the paid advertisements generated by that circulation base, not on the 25 cent cover price. When a newspaper seeks access to information that is being kept from the public, it builds goodwill in the community and gains a competitive advantage. A newspaper with an image as champion of the public's right to know increases its circulation base and attracts more advertisers in the long-run. ² Plain common sense dictates that this suit will have a direct impact on the paper's circulation base and future profits. Absent any evidence to the contrary, ³ it is impossible to conclude that the Daily News pursued this suit only to further the public interest. ⁴

The superior court properly considered these long-term economic benefits in reaching its decision. It weighed the paper's commercial interest in its reputation ⁵ and found...