507 P.3d 49
Alaska2022Background
- The Eyak Corporation bylaws (in place since 2012) require any elected director to execute a confidentiality agreement and a code of conduct before being seated.
- Lucas Borer won an Eyak board election in May 2019 but declined to sign the Agreements immediately, requesting counsel review; Eyak revised the documents in response to his concerns and gave him a deadline to sign.
- Borer did not sign the revised Agreements and Eyak seated another eligible candidate; Borer sued for declaratory and injunctive relief seeking to be seated and to invalidate the Agreements as inconsistent with directors’ fiduciary duties.
- The superior court denied a preliminary injunction, granted Eyak summary judgment, and awarded Eyak 20% of attorney’s fees under Alaska R. Civ. P. 82.
- The Alaska Supreme Court affirmed: it held Borer’s pre-enforcement challenge to the Agreements is not ripe and upheld the Rule 82 fee award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ripeness of pre-enforcement challenge to code/confidentiality | Borer: the Agreements are unlawful and therefore the bylaw conditioning seating on signing is unenforceable; declaratory relief appropriate now | Eyak: plaintiff raises speculative, hypothetical harms; no concrete application of the Agreements to adjudicate | Court: Not ripe — plaintiff must present concrete factual applications; affirmed summary judgment for Eyak |
| Overbreadth of confidentiality agreement | Borer: definition is so broad it could bar sharing information with shareholders and impede fiduciary duties | Eyak: confidentiality will be applied in light of fiduciary duties; overly broad claims are hypothetical | Court: Not ripe to decide in the abstract; distinguishable from Pederson because no concrete documents/applications were at issue |
| Code provision barring actions that "undermine public or shareholder confidence" | Borer: could be used to muzzle dissent and conflict with directors’ right/duty to dissent and to inform shareholders | Eyak: provision can be validly enforced to prevent disloyal acts (e.g., soliciting investors to abandon the company) | Court: Not ripe; provision ambiguous and may be lawful or unlawful depending on concrete facts |
| Sanction of withholding travel reimbursement (and remote participation effect) | Borer: withholding travel could force directors to miss meetings or participate remotely in ways that impair fiduciary duties | Eyak: remote participation is possible and not necessarily disabling; sanctions aimed at compliance with duties | Court: Not ripe; speculative that travel sanction would cause breach of duty without specific factual showing |
| Sanction barring access to corporate information vs. statutory inspection right | Borer: sanction would violate directors’ "absolute" statutory right to inspect corporate records | Eyak: inspection right may have limits; board may restrict access when director intends misuse | Court: Not ripe to decide statutory scope; California authority suggests inspection rights have exceptions; factual development required |
| Attorney's fees under Rule 82 | Borer: award was improper/too onerous and would deter disadvantaged plaintiffs; various equitable arguments | Eyak: prevailing party entitled to presumptive 20% award where no money judgment recovered | Held: Trial court did not abuse discretion; 20% award ($17,780) affirmed |
Key Cases Cited
- Pederson v. Arctic Slope Reg’l Corp., 331 P.3d 384 (Alaska 2014) (confidentiality agreements must be reasonable as applied to specific documents and purposes)
- State v. ACLU of Alaska, 204 P.3d 364 (Alaska 2009) (ripeness and declaratory-judgment standards; pre-enforcement challenges may be unripe absent concrete facts)
- Boilermakers Loc. 154 Ret. Fund v. Chevron Corp., 73 A.3d 934 (Del. Ch. 2013) (Delaware courts typically decline to resolve hypothetical corporate governance claims)
- Parker v. Tomera, 89 P.3d 761 (Alaska 2004) (standard of review for summary judgment)
- Holmes v. Wolf, 243 P.3d 584 (Alaska 2010) (discussion of directors’ statutory fiduciary duties)
- Stroud v. Grace, 606 A.2d 75 (Del. 1992) (Delaware precedent on refusing to strike bylaws based on speculative harms)