Opinion ID: 1441151
Heading Depth: 3
Heading Rank: 1

Heading: The State May Raise the Alaska Small Loans Act as a Defense[6]

Text: Berger contends that the State cannot raise ASLA as a defense. Berger points out that ASLA is a form of usury statute. Traditionally, only borrowers (or their trustees) could raise usury as a defense. Because ASLA is a special usury statute, he argues that only the borrower (or, in this case, original PFD holder) can raise it as a defense. The State addresses Berger's contention as a standing issue. [7] The State first points out that ASLA is not the State usury statute. And, contrary to the usury statute, ASLA had provisions for criminal enforcement by the Attorney General. [8] Additionally, the Attorney General has the power to intervene in cases in the public's interest. Since the Attorney General can affirmatively act to enforce ASLA, the State argues that he can raise ASLA as a defense. The superior court found that the State had standing to raise ASLA as a defense: [ASLA] provides that violation of certain of its requirements ... constitutes a misdemeanor. This court agrees with the State's argument that if the attorney general has the power to bring an action to enforce a state law it must follow that the attorney general has standing to raise [a] violation of that statute in an action for damages against the state. We agree with the superior court and the State. We have held that the State, through the Attorney General, can act to enforce certain statutes. For example, in Public Defender Agency v. Superior Court, 534 P.2d 947, 949-50 (Alaska 1975), we held that the Attorney General may enforce child support orders. The Attorney General's authority to enforce the support orders stems, in part, from the fact that willful non-support [is] a misdemeanor. Id. at 949. Additionally, the Attorney General has the common law power to bring any action which he thinks necessary to protect the public interest. Id. at 950. We reaffirmed Public Defender Agency in State v. First National Bank of Anchorage, 660 P.2d 406 (Alaska 1982). In First National the Attorney General brought suit against several fraudulent real estate developers. Id. at 408-09. The State sought an injunction against further fraudulent sales and restitution for fifty-three defrauded purchasers. Id. at 408. The developers argued that the State was without authority to enforce the common law rights of these purchasers. Id. at 420. We held that the Attorney General could bring a suit even in the absence of express statutory authority. Id. at 421. This case is similar to Public Defender Agency. The legislature has expressed an interest in protecting Alaskans from usurious small loans by making such transactions misdemeanors. Additionally, the State argues that invalidating the transactions is in the public interest. Thus, as in Public Defender Agency, we hold that the State can act to enforce a statute, in this case by raising ASLA as a defense to Berger's suit.