Court Opinion

ID: 5159785
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:36:36.43014+00
Date Added: 2024-06-11T08:25:34.496872
License: Public Domain

RABINOWITZ, Justice,
dissenting.
Even if one accepts, as black-letter law, that shareholders in a corporation should not be jurors in cases in which the corporation is involved, black-letter law and Native corporations do not always fit easily together. A shareholder’s “financial interest” in an ordinary corporation is indeed affected by that corporation’s financial health and success in litigation. All other things being equal, a corporation which has just won a legal battle is more likely to declare a dividend than is one which has just lost. The price of a winner’s shares may rise. An investor might buy into or maintain a position in a corporation in order to take advantage of its legal situation. Perceiving a significant “financial interest” in these hypotheticals might sometimes be difficult, but the black-letter rule errs on the side of certainty and exclusion.
However, Alaska Natives did not buy into the corporations Congress has established for them. They cannot sell the shares they own. Native corporation directors need not declare dividends in order to attract shareholders; the shareholders are assigned to the corporations, on the basis of residence, by an Act of Congress. Indeed, commentators have expressed some doubt about whether Native corporations should be treated as corporations, civic entities, or fiduciary institutions. See *262Branson, Square Pegs in Round Holes: Alaska Native Claims Settlement Corporations Under Corporate Law, 8 UCLA— Alaska L.Rev. 103, 125-31 (1979). For these reasons, black-letter corporate rules should be applied to Native corporations with some caution.
This is particularly true when applying the black-letter rule will damage “the local interest,” which we recognized almost twenty years ago, “in having localized controversies decided at home.” See Maier v. City of Ketchikan, 403 P.2d 34, 40 (Alaska 1965), overruled on other grounds, Johnson v. City of Fairbanks, 583 P.2d 181 (Alaska 1978). Thirteen years ago we held that a criminal jury should be “drawn from a fair cross section of the community,” and rejected the notion that “the machinery of justice” should become “inflexibly entrenched within the enclaves of our major cities.” Alvarado v. State, 486 P.2d 891, 897, 906 (Alaska 1971). More recently, we ruled that a civil jury trial could not be moved from Kotzebue to Anchorage simply because Kotzebue residents might be inclined to distrust people in authority. To the extent that “general community attitudes” in Kotzebue differed from attitudes in Anchorage, we stated, “such differences can better justify retaining rather than changing venue.” Wilson v. City of Kotzebue, 627 P.2d 623, 635 (Alaska 1981). Today’s decision explicitly deals with challenges for cause, not venue. It would, however, be unrealistic to assume that a jury trial in this case could be held in Barrow if most Barrow residents could be challenged for cause. If the majority’s rule is accepted, most “localized controversies” concerning Native corporations will not be “decided at home”; instead, they inevitably will be decided in one of Alaska’s major cities. This is precisely the result against which Alvarado and Wilson warned.
In my view, the majority’s own reasoning undercuts its conclusion. Civil Rule 47(c)(12) provides that if a person “has a financial interest other than that of a taxpayer in the outcome of the case,” this person can be challenged for cause. To avoid overruling Maier v. City of Ketchi-kan, supra, a case in which a litigant tried to disqualify a municipal utility’s ratepayers, the majority holds that a citizen who does not “effectively” have a financial interest other than that of a taxpayer may not be challenged under Rule 47(c)(12). Meanwhile, the majority suggests that only a “direct” financial interest will trigger challenges for cause. There is, under the majority’s own logic, room for a trial court to exercise a certain amount of discretion when applying Rule 47(c)(12): the court must decide if a financial interest is “direct” and, even if it is, if it is “effectively” that of a taxpayer. Thus this case should be decided under the rule established in Malvo v. J.C. Penney Co., 512 P.2d 575 (Alaska 1973), which holds that “many” of the grounds on which a juror may be challenged for cause “involve value judgments on the part of the trial judge,” and that value judgments of this sort are “within the sound discretion of the trial judge, with which we are most reluctant to interfere.” 512 P.2d at 578. Yet the majority accords the superior court’s carefully reasoned decision no deference.
I would affirm the superior court’s ruling that the interests stockholders have in an ANCSA-created village corporation do not furnish a basis for a challenge for cause under Civil Rule 47(c)(12). This is a “localized controversy” which should be “decided at home.”