Olson et al v. O'Brien et al

Filing 77

ORDER granting 61 Motion to Dismiss; clerk to enter judgment for defedants. Signed by Judge John W. Sedwick on 8/21/14. (NKD, COURT STAFF)

UNITED STATES DISTRICT COURT
DISTRICT OF ALASKA

DAVID E. OLSON, et al.,
Plaintiffs,
vs.
MARK 0'BRIEN, et al.,
Defendants.

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3:11-cv-00245 JWS

ORDER AND OPINION
[Re:

Motion at docket 61]

I. MOTION PRESENTED
At docket 61 defendants Mark 0'Brien, James Cantor, and Richard Welsh
(collectively “Defendants”) filed a notice responding to the court’s solicitation of
comments on the viability of plaintiff’s claims following completion of proceedings in
North Pacific Erectors, Inc. v. State of Alaska, Dept. Of Admin.1 The court elected to
treat that notice as a motion to dismiss.2 Plaintiffs David E. Olson and Absolute
Environmental Services, Inc. (collectively “Plaintiffs”) opposed the motion at docket 70.
Defendants’ replied at docket 72. Oral argument was not requested, and it would not
assist the court.
II. BACKGROUND
The parties’ papers disclose that the following facts are not in dispute. David
Olson is the owner of Absolute Environmental Services, an Alaska corporation

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2

P.3d

Doc. 62.

, 2013 WL 4768380 (Alaska).

(“Absolute”). North Pacific Erectors, Inc. (“NPE”) contracted with the State of Alaska to
perform work on the State Office Building (“SOB”) in Juneau. Among other things,
NPE’s contract with the State required removal of asbestos from the SOB. NPE
subcontracted with Absolute to accomplish the asbestos removal. Absolute
encountered what it believed to be conditions different from the conditions assumed in
bidding the work. In Absolute’s view, the conditions encountered rendered removing
the asbestos more costly.
Absolute called upon NPE to present a claim for additional compensation for the
asbestos work under a state review procedure calling for a decision by the
Commissioner of the Alaska Department of Transportation and Public Facilities
(DOTPF). A hearing was held before a hearing officer who eventually recommended a
decision in favor of NPE. After his initial review, the Commissioner remanded the
matter to the hearing officer for further consideration. The hearing officer responded
with a modified recommendation in favor of NPE. Chief Assistant Attorney General
Cantor then assigned Assistant Attorney General Welsh to review the second
recommendation. Welsh did so with the aide of DOTPF Contract Manager O’Brien. At
some point responsibility for rendering a final decision was delegated by DOTPF
Commissioner von Scheben to DOTPF Deputy Commissioner Richards. After
consultation with Welsh, Richards ultimately rejected the recommendation from the
hearing officer and adopted Welsh’s alternative recommendation denying relief to NPE.
NPE appealed to Superior Court contending among other things that Welsh and
O’Brien had wrongfully participated in the decision-making process such that NPE was
denied due process of law. After conducting a de novo hearing into the actions of
Cantor, Welsh and O’Brien, the Superior Court rejected the denial of due process claim
and affirmed Richards’ decision. NPE appealed to the Alaska Suprem e Court in
February of 2012. Rather than await resolution in the state court system, Absolute filed
this lawsuit which advances a claim pursuant to 42 U.S.C. § 1983 that Defendants
denied Plaintiffs due process of law in the handling of the claim for additional
compensation, a claim pursuant to 42 U.S.C. § 1981 that Defendants denied Absolute’s
contract rights, a claim of conspiracy to deny constitutional rights pursuant to 42 U.S.C.
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§ 1985, a claim pursuant to 42 U.S.C. § 1986 for failing to prevent the violation of
constitutional rights, a civil RICO claim brought pursuant to 18 U.S.C. § 1964 based on
the allegation that Defendants’ actions violated 18 U.S.C. § 1962, and state law tort
claims based on the actions of Defendants. The exclusive focus for liability purposes in
Plaintiff’s complaint is on the actions of Cantor, Welsh, and O’Brien.
Following commencement of the case at bar, the Alaska Supreme Court affirmed
the decision by the Superior Court. Sometime after that, the United States Supreme
Court declined to review the Alaska high court’s decision.
III. DISCUSSION
At docket 61, Defendants first contend that the state court has determined that
Plaintiffs were not denied any contract right or business expectancy, that Defendants
did not act unlawfully in the administrative proceeding and that Plaintiffs were not
denied due process. Defendants rely on the doctrine of claim preclusion to foreclose
further litigation in the case at bar.
Claim preclusion, also sometimes called res judicata, applies where there has
been (1) a final judgment on the merits, (2) by a court of competent jurisdiction, (3) in a
dispute between the same parties or their privies.3 Claim preclusion also applies to
claims that could have been but were not litigated in the earlier case. The Alaska
Supreme Court has explained that this proposition is “fundamental tenet” of claim
preclusion jurisprudence. 4 What controls the determination of whether a claim could
have been raised in the earlier litigation is not whether the same legal theories are
advanced in both lawsuits, but whether the claims in the two lawsuits “arise out of the
same transaction–the same set of facts.”5
Despite Plaintiffs’ protestations to the contrary, this court has little difficulty
finding that all of the elements of claim preclusion have been satisfied here. While
clothed in the garb of differing legal theories, every claim advanced by Plaintiffs in the
3

Conitz v. ASCHR, 325 P.3d. 501, 507 (Alaska 2014).

4

Patterson v. Infinity Ins. Co., 303 P.3d 493, 497 (Alaska 2013).

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Id. (quoting Angleton v. Cox, 238 P.3d 610, 614 (Alaska 2010)).

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current lawsuit arises out of the same set of facts already addressed in state court. To
the extent that Plaintiffs rely on the argument that the individual defendants are not in
privity with the original defendant, State of Alaska Department of Administration, their
argument founders on the fact that what the individual defendants are accused of doing
wrong was the basis for asserting that the Department wronged Plaintiffs in the original
litigation.
The court finds it unnecessary to address Defendants’ argument that “issue
preclusion,” also known as collateral estoppel, forecloses litigation of the instant lawsuit.
IV. CONCLUSION
For the reasons set forth above the motion to dismiss at docket 61 is GRANTED.
The Clerk will please enter judgment for Defendants.
DATED this 21st day of August 2014.

/s/ JOHN W. SEDWICK
SENIOR UNITED STATES DISTRICT JUDGE

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