Calista Corporation board member Wayne Don won a significant victory in court on Monday. After deliberating for several hours, Superior Court Judge Andrew Guidi threw out part of the Calista Corporation’s lawsuit against Don, denying an injunction that would have kept Don quiet before the upcoming board elections.
It looked like Monday’s hearing was going to be about who was telling the truth in Calista’s ongoing power struggle. Instead, it was about freedom of speech. Former Board Chairman Wayne Don and Calista CEO Andrew Guy were both prepared to testify Monday, but the hearing never got that far. Instead, Judge Guidi questioned whether a key part of Calista’s lawsuit should have been taken to court at all.
"I have great doubts that these are proxy solicitations. I really do," Judge Guidi said towards the end of the hearing. A proxy solicitation is when one shareholder formally asks another to let them vote on their behalf. In its lawsuit, Calista accuses Don and his two co-defendants of trying to influence the upcoming elections by lying about CEO Andrew Guy in a series of proxy solicitations. But as Don and his co-defendants’ attorneys pointed out, there’s no actual evidence that Don or his supporters asked any shareholders for their votes.
Instead, attorney David Gross argued that Calista was using the law around proxy solicitations to get an injunction and silence Don and his co-defendants. "If you look at all of the statements made, there is not one reference to a vote, to a candidate, to an election, or to who they should vote for in the election," said Gross, referring to statements made by Don and one of his co-defendents, Sam Fortier.
"If what these gentlemen did are proxy solicitations, heaven help us," said Gross. "Because every statement that’s made that’s critical of Calista management during the election season? They’re going to get hauled into court because Calista doesn’t like the idea of people being critical of them."
Calista’s attorneys denied this. Attorney Matt Singer repeatedly claimed that Don and his co-defendants’ statements were untrue and argued that yes, they did amount to proxy solicitations. He also denied that the corporation was infringing on anyone’s First Amendment rights. Calista is a corporation, Singer argued, and corporate speech is subject to different standards.
"Speech made for the purpose of soliciting shareholder votes is commercial speech, and it’s subject to regulation," said Singer. "And the Alaska legislature, like Congress, prohibits false and misleading statements that are intended to influence a shareholder’s decision. They're asking you to eviscerate that law."
But Judge Guidi questioned what, exactly, Calista considers to be soliciting shareholder votes, particularly in the case of Don’s co-defendant, Harley Sundown. A former Calista board member, Sundown is a schoolteacher in Scammon Bay who urged shareholders to support Wayne Don on Facebook. At one point, he told his Facebook friends to vote against board member Robert Beans, who tends to vote with CEO Andrew Guy. Calista argued that that post ammounted to an improper proxy solicitation, and the corporation is now suing him too.
"It’s called democracy!" said Sundown's attorney, Jim Valcarce, in response to the lawsuit in court on Monday. "There’s an absolute right for a shareholder to criticize those who’ve run for office. There’s no need for this hearing - this should be denied."
Judge Guidi expressed some concern about what such an injunction could mean for any other Yukon-Kuskokwim Delta residents who’ve criticized Calista publicly. “General criticism of the board’s actions cannot reasonably be construed as directing the shareholders to vote in a particular way,” he wrote in his ruling, dismissing Calista's motion. “The answer to questionable criticism should be information, discussion, and debate, not lawsuits.”
In a statement issued Monday night, Calista accepted Judge Guidi’s decision. “We want our shareholders to have fair and truthful information as required by Alaska law,” wrote Public Relations Manager Thom Leonard. “This was at the heart of our decision to go to court.”
This isn’t the end of Calista’s lawsuit against Wayne Don. The corporation also wants Judge Guidi to forcibly remove Don from its Board of Directors, and the court has yet to schedule a hearing to litigate that aspect of the case.