Opinion ID: 2587359
Heading Depth: 4
Heading Rank: 1

Heading: Can the attorney general litigate a charity's claim against a third party without the charity's consent?

Text: If the attorney general has the authority to assert a charity's damages claims against a third party, that power arises out of the attorney general's historical role in enforcing charitable trusts. Under Alaska law, a gaming operator's authorized expenses must be bona fide [and] reasonably necessary and may not exceed seventy percent of the adjusted gross income of pull-tab games or ninety percent of the adjusted gross income from non-pull-tab games. [15] The games' net proceeds, in turn, must be dedicated to political, educational, civic, public, charitable, patriotic, or religious uses in the state. [16] By 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. [17] The attorney general has the power to sue to enforce charitable trusts on behalf of the trusts' beneficiaries, [18] who lack standing to pursue such a claim themselves. [19] When the trustees of a charitable trust divert a trust's property to purposes other than those for which it was given, the attorney general is thus the proper party to institute such proceedings as may be necessary to stop or redress the wrong. [20] Under certain circumstances, the attorney general's authority to enforce charitable trusts gives him the power to prosecute on behalf of the ultimate charitable beneficiaries a charity's claim against a third party. So long as the charitable trustees fulfill their legal obligation to safeguard the interests of the trust's beneficiaries, there is ordinarily no need for the attorney general to involve himself in a charity's suit against a third party. [21] But if a charity's trustees dismiss or compromise a charity's claim against a third party for less than the charity is due under the state's gaming laws, the trustees are, in essence, disposing of the charity's property i.e., disposing of the charity's cause of actionfor a purpose other than that for which the property was given. [22] To prevent charitable trustees from improperly disposing of a charity's cause of action, the attorney general must be allowed to intervene to ensure adequate advocacy of the charity's claim. [23] Although it would be possible for the attorney general to sue the charitable trustees to compel them to sue the third party, [24] to require the attorney general to do so in this case would introduce unnecessary parties and thus unnecessary procedural complexities. [25] Accordingly, we hold that the attorney general's authority to enforce charitable trusts gives him the power to assert the charities' damages claims against the Griffins. [26] Relying on this court's decision in State v. First National Bank of Anchorage , [27] the Griffins argue that the attorney general cannot pursue the charities' damages claims without the charities' consent. In First National Bank, however, the attorney general sought to litigate the damages claims of private individuals, not of charities. [28] Because the attorney general only had the authority to litigate those individuals' damages claims as their representative, we held that his power to litigate their claims was wholly dependent upon their consent. [29] In litigating a charity's damage claim, however, the attorney general does not act as the representative of the charitable trustees. [30] The attorney general represents, instead, the interests of the charitable beneficiaries. [31] Because the attorney general's authority to litigate a charity's damage claim is not derived from his role as the charitable trustees' representative, his power to litigate such a claim is not dependent upon the charitable trustees' consent. Although the Griffins' alleged wrongdoing may have involved a breach of their duties to specific charitable permittees, those charitable organizations cannot unilaterally waive the Griffins' obligation to obey the state's gaming laws. As a New York court stated, in imposing restrictions on the conduct of a professional organization raising funds for charitable groups, The fact that [the charities] expressly agreed to the terms of the contracts should not preclude the Attorney General from protecting the public's rights in this situation. The contracts with the non-profit organizations are not merely bilateral, but rather establish a triangular relationship with the public as the third party whose interests should be protected. [32] The Griffins' involvement in the charities' gaming operations also creates a relationship with the public, whose interests the attorney general may protect in the event that the affected charities do not.