Rude v. Cook Inlet Region, Inc.
2012 Alas. LEXIS 176
| Alaska | 2012Background
- CIRI filed suit in 2008 alleging New Alliance proxy materials contained false and misleading statements; Rude and allied New Alliance candidates counterclaimed that CIRI’s election procedures were unfair and information was improperly withheld.
- Five sets of facts centered on CIRI’s board endorsement process, with Rude and three other non-endorsed candidates running under New Alliance’s slate.
- New Alliance circulated proxy solicitations and a special $50-per-share dividend proposal; CIRI responded with multiple proxy mailings endorsing its slate.
- The superior court granted summary judgment for CIRI on both its claims and New Alliance’s counterclaims, voiding the New Alliance proxies and removing Rude from the board.
- After judgment, the court awarded attorney’s fees and costs to CIRI; Rude appealed on substantive and several procedural grounds.
- Rudes’ appeals addressed both the merits (proxy misrepresentations and election conduct) and post-judgment issues (fees, Rule 60(b), evidence, and New Alliance’s party status).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rude’s election-counterclaims are moot and reviewable for prevailing-party status | Rude argues mootness should not bar review due to public interest and potential change in prevailing party status | CIRI contends most claims moot due to rescheduling of elections; public interest exception does not apply here | Most claims are technically moot; public-interest exception not applied; however merits may affect prevailing-party status. |
| Whether CIRI was required to list New Alliance candidates in proxy materials | Rude asserts Alaska law requires listing non-board nominees; omission misleads shareholders | Alaska proxy rules do not require listing non-board candidates; Rude declined inclusion | alaska proxy regulations do not require listing non-board candidates; summary judgment for CIRI affirmed. |
| Whether CIRI’s selection of a board-endorsed slate was improper | Rude contends closed primary/servered shareholders from nominating opposition | Board endorsement is permissible under Alaska proxy regulations allowing board solicitation | Not improper; board-endorsed slate permissible under Alaska law. |
| Whether CIRI improperly refused to disclose information to Rude as a director and/or shareholder | Rude claims right to shareholder and director information under AS 10.06 and related statutes | Requests moot post-election; some claims abandoned; disclosure rights limited by statute | Claims moot for director access; some shareholder-information claims abandoned; no reversal of summary judgment. |
| Whether New Alliance’s misrepresentations in proxy materials were material and warranted voiding proxies | New Alliance statements about liquidation, shareholder rights, and minority control misled voters | Statements aspirational or colorfully framed; total mix standard shows non-misleading | The statements were material and, taken together, justified voiding the proxies; CIRI prevailed on misrepresentation claims. |
Key Cases Cited
- O'Callaghan v. State, 609 P.2d 520 (Alaska 1980) (mootness public-interest exception discussed)
- Mielke v. Matanuska Elec. Ass'n, 2001 WL 34818260 (Alaska 2001) (public-interest discovery and mootness discussion cited)
- Meidinger v. Koniag, Inc., 31 P.3d 77 (Alaska 2001) (proxy-materials and the total mix/materiality standard referenced)
- Schweitzer v. Salamatof Air Park Subdivision Owners, Inc., 278 P.3d 1267 (Alaska 2012) (prevailing party for attorney’s fees framework cited)
- Yost v. State, Div. of Corps., Bus. & Prof'l Licensing, 234 P.3d 1264 (Alaska 2010) (standards for agency interpretation and deference noted)