BP Pipelines (Alaska) Inc. v. State, Department of Revenue
327 P.3d 185
Alaska2014Background
- The case concerns attorney’s fees and costs after a five-week trial de novo over the 2006 Trans‑Alaska Pipeline System (TAPS) tax valuation; the superior court’s valuation (about $9.977 billion) was later affirmed on appeal.
- Parties: Owners of TAPS (BP, ConocoPhillips, ExxonMobil, Koch, Unocal, and agent Alyeska) appealed the Board’s assessment; the State Department of Revenue and three taxing municipalities (North Slope Borough; Fairbanks North Star Borough; City of Valdez) also litigated and sought fees/costs.
- Superior court awarded costs under Civil Rule 79 and attorney’s fees under Civil Rule 82(b)(2) (non‑money judgment) with a 30% presumptive base, then enhanced to 45% under Rule 82(b)(3)(A), (B), and (H).
- Owners challenged: (1) that Appellate Rule 508 (not Civil Rules 79/82) should govern fees in administrative appeals; (2) that the municipalities did not prevail against the Owners; (3) that fees should be allocated among separate appeals; (4) that enhancements and denial of a special master reduction were improper.
- Superior court declined to allocate fees between appeals, rejected reduction recommended by a special master for Fairbanks’ billings, and declined to find bad‑faith nondisclosure sufficient for greater enhancement. Alaska Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Governing rule for fee awards (Appellate Rule 508 v. Civil Rules 79/82) | Owners: administrative‑appeal character required Appellate Rule 508 | Municipalities/State: trial de novo is governed by superior‑court rules, so Civil Rules apply | Court: Civil Rules 79 and 82 properly applied for a full trial de novo; Appellate Rule 609(b) and precedent support using superior‑court procedural rules |
| Prevailing‑party status (did municipalities prevail against Owners?) | Owners: municipalities only prevailed against Dept/Board, not Owners | Municipalities: adversarial positions and consolidated trial made them prevailing parties against Owners | Court: municipalities (and State) were prevailing parties against Owners; alignment and substantive adversity control, not formal captioning |
| Allocation of fees among consolidated appeals | Owners: separate appeals retained distinct character; fees must be allocated | Municipalities/State: issues overlapped and were tried together; Owners should bear fee awards | Court: superior court did not abuse discretion in declining to allocate; consolidation and common issues justified 100% allocation to Owners |
| Rule 82(b)(1) (money judgment) v. 82(b)(2) (non‑money) | Fairbanks/Valdez: judgment caused money to change hands via supplemental assessments, so Rule 82(b)(1) should apply | Owners/State: judgment set valuation procedure and did not specify dollar amounts; analogous to Strong Enterprises ➜ non‑money judgment | Court: adopted Strong Enterprises analysis — judgment established procedure and was self‑executing without specifying amounts; Rule 82(b)(2) applies |
| Enhancement under Rule 82(b)(3) | Municipalities: sought higher enhancement (including for bad faith nondisclosure) | Owners: enhancements for complexity/length double‑count billed hours; lack of bad faith or unreasonableness bars further enhancement | Court: enhancements under (A) complexity, (B) length, and (H) significance were appropriate; no abuse of discretion in refusing to add (F) or (G) enhancements given record |
| Special master reduction of Fairbanks’ fees | Special master: recommended 15% reduction for duplicative staffing | Fairbanks: trial court familiarity showed staffing and multiple attorneys were reasonable | Court: superior court properly reviewed de novo, relied on its deeper familiarity, and permissibly rejected the 15% reduction |
Key Cases Cited
- Bowers Office Prods., Inc. v. Fairbanks N. Star Borough Sch. Dist., 918 P.2d 1012 (Alaska 1996) (trial de novo with augmented record can justify using Civil Rule 82 for fees)
- Strong Enters., Inc. v. Seaward, 980 P.2d 456 (Alaska 1999) (distinguishes money judgment from non‑money self‑executing judgments for Rule 82 analysis)
- Tenala, Ltd. v. Fowler, 993 P.2d 447 (Alaska 1999) (discusses complexity as enhancement factor under Rule 82)
- Cizek v. Concerned Citizens of Eagle River Valley, Inc., 71 P.3d 845 (Alaska 2003) (upholds length and complexity as permissible enhancement factors)
- Ware v. Ware, 161 P.3d 1188 (Alaska 2007) (addresses Rule 82 enhancement jurisprudence)
- First Nat’l Bank of Fairbanks v. Enzler, 537 P.2d 517 (Alaska 1975) (party can be liable for fees where actual adversity and participation justify alignment)
- Moses v. McGarvey, 614 P.2d 1363 (Alaska 1980) (awarding fees where party prevailed over another despite no formal claim)
- Atlantic Richfield Co. v. State, 723 P.2d 1249 (Alaska 1986) (tax refund litigation where no money judgment existed because money already paid under protest)
- State, Commercial Fisheries Entry Comm’n v. Carlson, 270 P.3d 755 (Alaska 2012) (class refund and application of Rule 82(b)(1) where court entered an actual money judgment)