ASRC Energy Serv. Power & Commc'ns, LLC v. Golden Valley Elec. Ass'n, Inc.

Decision Date10 February 2012
Docket NumberNos. S–12630,S–12989.,s. S–12630
Citation267 P.3d 1151
PartiesASRC ENERGY SERVICES POWER AND COMMUNICATIONS, LLC (f/k/a Global Power & Communications, LLC) and Global Power/City Electric Joint Venture, LLC, Appellants, v. GOLDEN VALLEY ELECTRIC ASSOCIATION, INC., Appellee.Golden Valley Electric Association, Inc., Appellant, v. ASRC Energy Services Power and Communications, LLC (f/k/a Global Power & Communications, LLC) and Global Power/City Electric Joint Venture, LLC, Appellees.
CourtAlaska Supreme Court

OPINION TEXT STARTS HERE

Charles E. Cole, Law Offices of Charles E. Cole, Fairbanks, for Appellants/Appellees ASRC Energy Services Power and Communications, LLC (f/k/a Global Power & Communications, LLC) and Global Power/City Electric Joint Venture, LLC.

Cory R. Borgeson and Nikole V. Schick, Borgeson & Burns, PC, Fairbanks, and Joseph W. Evans, Bremerton, Washington, for Appellant/Appellee Golden Valley Electric Association, Inc.

Before: FABE, Chief Justice, EASTAUGH, CARPENETI, WINFREE, and CHRISTEN, Justices.

OPINION

PER CURIAM.I. INTRODUCTION

When the legislature enacted the Alaska Unfair Trade Practices and Consumer Protection Act (UTPA) 1 in 1970, it declared unlawful “unfair or deceptive acts or practices in the conduct of trade or commerce.” 2 Through a 1974 amendment to the UTPA, the legislature directed Alaska courts to give “due consideration and great weight” to Federal Trade Commission (FTC) and federal court interpretations of 15 U.S.C. § 45(a)(1), a subsection of the Federal Trade Commission Act (FTC Act).3 The 1974 legislature specifically directed Alaska courts to adhere to these interpretations to provide uniformity in unfair trade laws.4 In a seminal 1980 decision, State v. O'Neill Investigations, Inc., we rejected a void-for-vagueness challenge to the prohibition against “unfair or deceptive acts or practices in the conduct of trade or commerce,” reasoning that the language of the Alaska UTPA had a “fixed meaning” derived from “agency and judicial interpretation of the identical words of the federal statute.” 5 We then adopted the contemporaneous agency and federal court standards for “unfair or deceptive acts or practices.” 6

For over 30 years, we have consistently defined “unfair or deceptive acts or practices” in line with O'Neill Investigations.7 During that time, however, the FTC and some federal courts have modified their definitions of unfairness and deception. The FTC adopted a modified definition of unfair practices in 1980,8 which was codified by Congress in a separate subsection of the FTC Act in 1994.9 And an FTC adjudication in 1984, In re Cliffdale Associates, Inc., provided a modified definition of deception.10

The primary issue in this case is whether the Alaska legislature's directive that courts should give “due consideration and great weight” to the FTC and federal court interpretations of 15 U.S.C. § 45(a)(1) requires us to overrule our previous line of cases. We hold that it does not, and that the trial court did not err in evaluating UTPA claims and formulating a jury instruction according to our precedent and previously articulated standards for deception and unfairness. But for other reasons explained below, we vacate in part the judgment in this case and remand for further proceedings.

II. FACTS AND PROCEEDINGSA. Facts

This litigation arises from the award by Golden Valley Electric Association (GVEA) of two competitively bid construction contracts on its Northern Intertie Project. In November 2001 GVEA awarded Global Power & Communications, LLC (Global) 11 an approximately $39.4 million contract (Contract NI–8) for construction of the Northern Intertie's Tanana River flats section. Later GVEA awarded Global an approximately $5.3 million contract (Contract NI–9) for construction of the Northern Intertie's Tanana River crossing and Fairbanks sections.

Subsequently, after Global had been awarded NI–9 and before it had completed work on NI–8, Global presented GVEA with requests for additional compensation (RFIs) totaling approximately $2.4 million in connection with NI–8. GVEA responded that it found “no legitimate basis in the construction documents” to justify Global's RFIs and was “rejecting Global's request for additional payment.”

Several months later, Global requested a meeting with GVEA to discuss the merits of the rejected RFIs. Global also notified GVEA that Global would submit more RFIs, arising out of both NI–8 and NI–9. Global submitted additional RFIs to GVEA that month, including additional claims of approximately $2.3 million in connection with NI–8 and claims of approximately $765,000 12 in connection with NI–9. Through these RFIs, Global sought additional compensation totaling approximately $5.7 million under the two contracts. Global primarily alleged that it had incurred lost profits and expenses due to GVEA's inability to timely provide permits, materials, and instructions as required by the contracts. Global also alleged that GVEA requested extra work for which Global was entitled to compensation.

GVEA responded to Global denying most of the RFIs but indicated that it would approve a few and consider partial payment for a few others.

B. Proceedings

1. Pre-trial proceedings

Global filed two complaints against GVEA in October 2003, asserting in the first that GVEA owed Global “in excess of $50,000” in connection with NI–8 and in the second that GVEA owed Global “in excess of $50,000” in connection with NI–9. GVEA answered each complaint and the two actions were consolidated.

In December 2004 GVEA conveyed what it considered an Alaska Civil Rule 68 offer of judgment to Global, “offer[ing] to allow entry of Judgment in favor of [Global] for Seven Hundred and Fifty Thousand Dollars ($750,000.00) ... contingent on the [consolidated lawsuits] being dismissed with prejudice.” Global did not accept this offer.

Global then filed an amended complaint alleging new causes of action regarding NI–8, including misrepresentation, failure to disclose, and a claim under the UTPA.13 Specifically, Global alleged that GVEA had concealed and misrepresented the existence of technical data about subsurface conditions along the project route.

GVEA moved for judgment on the pleadings on Global's UTPA claim. GVEA argued that the UTPA did not apply to the contractual relationship between GVEA and Global despite its application to a commercial dispute in Western Star Trucks, Inc. v. Big Iron Equipment Service, Inc.14 GVEA argued that the construction contracts “were complex, private, arm's-length business transactions between two sophisticated business entities” and that the “contracts did not implicate consumer protection concerns.” Global countered that Western Star required the denial of GVEA's motion for judgment on the pleadings. The trial court agreed with Global and denied GVEA's motion after oral argument.

In early 2006 Global reformulated its claims using a different calculation methodology, reducing the total amount of its claims from approximately $5.7 million to approximately $3.2 million. It apparently did so after consulting a damages expert who found the original methodology “probably not as accurate as it should be.”

GVEA amended its answer to Global's amended complaint, asserting new counterclaims against Global for misrepresentation and alleging that Global had falsified documents, including reports, employee time sheets, and RFIs.

GVEA later amended its counterclaims, asserting that Global had violated the UTPA by presenting falsified RFIs. GVEA alleged that it suffered damages from relying on false or misleading statements in Global's RFIs.

The parties filed trial briefs in April 2006. Global argued that GVEA could not prove damages for its UTPA claim because it had rejected and not paid Global's RFIs, excepting the few GVEA admitted it owed. GVEA maintained that the UTPA did not apply to the two contracts, but argued alternatively that under the trial court's earlier ruling it was entitled to pursue its UTPA claim against Global because GVEA had incurred expenses investigating and defending against Global's claims in the RFIs.

On the day of the final pretrial conference, Global filed a trial brief supplement regarding standards for UTPA claims. Global argued that the UTPA requires courts to give “due consideration and great weight” to interpretations of similar provisions of the Federal Trade Commission Act, and that both the FTC and federal circuit courts of appeals had modified the standards for an unfair or deceptive trade practice since our seminal holding in State v. O'Neill Investigations.15 Global indicated it would submit revised proposed jury instructions in accordance with current federal standards.

2. Trial proceedings

A few days into trial GVEA responded to Global's trial brief supplement. GVEA argued that Odom v. Fairbanks Memorial Hospital 16 provided the standards for an unfair or deceptive trade practice under the UTPA.

This issue continued to arise during trial. Shortly before the close of Global's case, and after the court and counsel discussed relevant mid-trial jury instructions for the UTPA claims, the court stated that it would hold the issue of the standards for an unfair or deceptive trade practice open for final jury instructions.

At the conclusion of GVEA's case, Global moved for a directed verdict on GVEA's UTPA claim, arguing that it cannot be an unfair trade practice to withdraw a previously submitted claim in the course of litigation. The trial court denied the motion. After its rebuttal case, Global again moved for a directed verdict on GVEA's UTPA claim based on the current definitions of unfairness and deception. The trial court again denied the motion.

The trial court's final instruction on the parties' UTPA claims, Jury Instruction 28, contained the existing Alaska standards for an unfair or deceptive trade practice, as requested by GVEA, and not the standards based on current FTC Act interpretations, as ...

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