Rule would require attorney general's OK for Alaska agencies to sue or settle

The Alaska Department of Law has extended public comment to Oct. 21 on a proposed rule that would bar executive-branch agencies from suing, settling, appealing or hiring lawyers without the attorney general's written approval.

The rule would cover every department, board, commission, authority and public corporation in the executive branch except the Alaska Railroad Corporation, the University of Alaska and the Alaska Bar Association. Asked whether it would apply to the Alaska Industrial Development and Export Authority or the Alaska Permanent Fund Corporation, the department did not say. Any particular board or commission "would be evaluated in light of the regulation, if passed, and other governing statutes," it wrote in answers to questions about the rule. It did not provide a list of the entities it considers covered.

Under the rule, agencies would also need written approval to waive sovereign immunity, agree to indemnify a third party, or agree in a contract to another state's laws or courts. They could not hire outside lawyers without approval "regardless of the source of funds," and could not hire their own staff attorneys unless a statute expressly allows it or the agency signs an agreement with the attorney general. Agency and contract lawyers would have to defer to the attorney general on the state constitution, the Open Meetings Act, the Public Records Act and "the governance of state boards and commissions," among other laws. The Public Defender Agency, the Office of Public Advocacy and the Office of Administrative Hearings are exempt from those requirements.

The department said the rule came at the direction of Gov. Mike Dunleavy's Administrative Order 362, signed in January after a WilmerHale review of former Revenue Commissioner Adam Crum's commitment of up to $75 million from a Constitutional Budget Reserve Fund subaccount to a DigitalBridge private equity investment. One of the review's recommendations was a regulation making procurement rules apply to outside lawyers even when the state might not pay their fees.

The order covers state agencies "with respect to engaging outside legal counsel." It does not mention lawsuits, settlements, appeals or staff attorneys. The department said the rule follows from state law making the attorney general the legal adviser to the governor and other state officers and the state's representative in civil cases. "The regulations are merely clarifying this statute," it wrote, and the rule "concerns the advice provided by attorneys, and does not purport to govern the decisions made by agencies."

Acting Attorney General Cori Mills extended the comment period in a supplemental notice posted Monday. The proposed text has not changed. Comments are due by 5 pm Oct. 21.