Archives for April 2007

From the Post Register

REXBURG — District Court Judge Brent Moss said Monday that attorneys in a disputed civil case involving Melaleuca Inc. and a former employee will get the first crack at deciding what the public should and should not know.

Moss did not directly address Melaleuca’s request that documents in its suit against Jeff Wasden, the company’s former vice president of marketing, be sealed and the courtroom be closed to the public.

The Post Register has challenged that request.

But Moss did say that Melaleuca attorney Curt Thomsen and Wasden’s lawyer, Ron Swafford, need to determine what proprietary business records or trade secrets should not be part of the public domain.

Once agreed upon, those records would be covered under a protection order that prevents Wasden from talking publicly about the case.

“That’s why the protection order is in place,” Moss said.

This debate about closed records took place mainly behind closed doors Monday.

Moss spent roughly 30 minutes in his chambers with Thomsen, Swafford and Post Register attorney Steve Wright, attempting to hammer out a compromise on a case that has become increasingly public.

Melaleuca and its CEO, Frank VanderSloot, sued Wasden for allegedly violating a separation agreement and recruiting key employees.

Wasden denies this and in a counter claim accused Melaleuca of breach of contract and VanderSloot of defamation.

After each side disqualified one judge, District Court Judge Darren Simpson was handed the case. But he stepped down after Wasden filed court documents saying he could not get a fair trial because of VanderSloot’s support of Simpson during last year’s election.

Moss’ ruling Monday essentially slowed what has become a frantic paper war between lawyers on both sides of the dispute and the Post Register.

In asking the court to seal all documents pertaining to the case, Thomsen wrote that, “The Post Register has failed to demonstrate any colorable interest it may have in a private employment dispute between Melaleuca and one of its former employees, that exceeds the general curiosity of anyone else in the community, beyond the unusual but well-known and long-standing acrimony the Post Register has nurtured against Frank L. VanderSloot.”

But in a brief filed Monday morning, Wright wrote that Melaleuca’s legitimate trade secrets are entitled to protection and the Post Register has no interest in publishing them. That information could simply be redacted from the court file, Wright said.

Wright wrote that the possibility of trade secrets being revealed is not a reason to seal all documents in the case or to shut the public out of the courtroom.

“This sledge hammer approach is clearly unacceptable where the Constitution and the law require the use of a scalpel,” Wright wrote.

Wright said the newspaper would wait to see how broadly Swafford and Thomsen define “proprietary business records” and “trade secrets” before deciding upon a next step.

Moss made clear Monday that he plans to treat the dispute as just another case.

The disagreement between Melaleuca and Wasden — and the flap over Simpson and whether the court documents and proceedings should be sealed — has inspired several newspaper and television stories. It’s also caught the attention of political bloggers. And Melaleuca employees recently took out a two-page advertisement in the Post Register lauding the company.

“I don’t want this case tried in the newspaper or on the television screen,” Moss said.

VanderSloot, fresh off a trip to Cuba with a contingent of business leaders and Gov. Butch Otter, spent Monday morning in the plaintiff’s chair while his attorney met behind closed doors with the judge.

“Judge Moss stated today that he is going to handle this like any other case,” VanderSloot said in an e-mail Monday afternoon. “I think that is all that anyone could ask.”

Senior reporter Corey Taule can be reached at 542-6754.

”I don’t want this case tried in the newspaper or on the television screen.”

From the Post Register

Editorial from the Idaho Statesman

Bad ideas surface at the end of any legislative session. Some zip through both houses during the rush to adjournment.

In the worst last-minute act of the 2007 session, lawmakers created a $15 million economic reserve slush fund. The money could well be up for grabs today, during a water summit orchestrated by Gov. Butch Otter. Portions of the daylong summit will be closed to the public.

This is certainly no way to spend tax money. Even Otter dislikes the process for spending the $15 million. However, legislators set this in motion with its hasty passage of House Bill 330.

The timeline: The budget-writing House Appropriations Committee introduced the bill on March 28; the bill passed the House 52-12 on March 29; and the bill passed the Senate 25-7 on March 30, the final day of the session.

These 77 lawmakers were, at the risk of a bad pun, logrolled. The last-minute spending bill also earmarked $3.5 million in state money for cash-strapped rural schools in Idaho timber country. The idea is to have a contingency that could replace a federal program that, in turn, has replaced declining timber receipts in past years.

With this as bait, lawmakers put a separate $15 million into the hands of a legislative Gang of Four: Senate President Pro Tem Robert Geddes, R-Soda Springs; House Speaker Lawerence Denney, R-Midvale; Senate Finance Committee Chairman Dean Cameron, R-Rupert; and House Appropriations Chairwoman Maxine Bell, R-Jerome. HB 330 empowers these lawmakers to decide how the Department of Commerce spends the money, although lawmakers must get Otter’s “concurrence.”

Where might the money go? Perhaps, as the speculation goes, to buy out some water users who might otherwise get left dry this summer. Cameron, usually one of the Legislature’s clear-eyed pragmatists, dismisses the suggestion of an under-the-table handout during the closed portions of today’s summit. “I don’t believe for a moment that the decision on spending that money will be made behind closed doors,” Cameron told The Associated Press.

Trouble is, when you combine closed meetings with a big uncommitted lump of dollars, it’s not too much of a stretch to put the two together.

Things get worse. When lawmakers rushed to create this $15 million slush fund, they didn’t take the time to trouble themselves with the Constitution. They allowed a few of their own to decide whether to release this money to a state agency. Otter cannot act unless the lawmakers act first. This “quite possibly” violates the Constitution’s separation of powers language, Deputy Attorney General Mitchell Toryanski wrote on March 30, the day the Senate approved the bill.

As Otter testily but fairly put in a letter to Denney last week, “I refuse to be an active party to the Legislature’s usurpation of executive authority.” Otter doubted the courts gave him the ability to veto a line item of a spending bill, so he allowed the bill to become law without his signature. To his credit, Otter at least gave this bad idea considerably more thought than legislators had.

Editorial from the Idaho Statesman

Editorial from the Idaho Mountain Express

Smoothies at the Idaho State Tax Commission seem to regard the public as undeserving rubes who just fell off the turnip truck.

Why else the full-fledged commission cover-up to conceal paperwork involved in handing out a major tax break to a Wall Street corporation?

Not everyone has accepted this finger in the eye. The Idaho Statesman has wisely sued to force the commission to open tax-exemption paperwork involving Cabela’s, a giant retail and catalog sports gear corporation, whose online Internet sales were generously exempted from Idaho sales taxes with a blatantly deceitful description that minimized Cabela’s “presence” in Idaho.

It’s a familiar smokescreen the commission is using for handing out favors to big business—claiming that disclosing Cabela’s financial data would reveal proprietary information to competitors.

Hogwash. The Boise newspaper doesn’t even want financial data, just Tax Commission papers justifying the exemption.

Cabela’s is a $2 billion, shareholder-owned corporation listed on the New York Stock Exchange, whose 2006 annual report also is online—all 114 pages with minutia about sources of income and how much, liabilities and how much, and, yes, income taxes and how much, among other things.

What’s the State Tax Commission hiding that it considers privileged? Has Cabela’s told it something that it won’t tell shareholders in its government-required annual report?

If Cabela’s shareholders, the NYSE, the Securities and Exchange Commission and financial media know the company’s financial situation, what else went on in those secret deliberations?

Editorial from the Idaho Mountain Express

From the Times-News

Observe carefully how the Idaho Supreme Court decides a case involving improper e-mail messages between two public employees. Pay even closer attention to how the court rules on a financial settlement related to the same matter.

Those issues of the public’s right to observe government are central to the case involving The Spokesman-Review newspaper of Spokane, Wash., and officials in Kootenai County. The ruling is expected this summer and could have far-reaching implications for government agencies throughout Idaho.

Supreme Court justices heard arguments last week on the dispute involving Kootenai County Prosecutor Bill Douglas, former Juvenile Drug Court Supervisor Marina Kalani, and hundreds of e-mails written between them.

The case is an appeal from a July 2005 ruling by 2nd District Judge John R. Stegner. The Spokesman-Review sued to see the e-mail records in order to investigate the drug court’s demise, and whether it was tied to an inappropriate working relationship between Douglas and Kalani.

When the drug court was dissolved, Kalani filed a claim against the county and got a $70,000 settlement through the Idaho Counties Risk Management Program. ICRMP is an insurance payout system funded by taxpayer money. It has funded similar settlements reached in southern Idaho counties.

Stegner ruled in favor of the newspaper for public access to the e-mails under Idaho’s Public Records Law. Kalani appealed and her lawyer argued that the e-mails were personal in nature, and warranted exemption from the law.

That’s a feeble argument when the officials worked on public time using computers bought on the public’s dime. Stegner’s ruling should send a message to other local and state officials that the electronic age does not exempt them from public record laws. E-mail expedites government transactions, but messages sent are still subject to public disclosure.

Yet the same public record laws are more intricate with the actual settlement. Stegner ruled the Kootenai County settlement with Kalani was a public document because it involves public business and payout of public funds. But state laws only require that “statistical data and actual amounts paid” be released to the public.

The judge called that language the equivalent of a poke in the public’s eye.

“Should public records such as this be exempt from disclosure, the public’s ability to monitor actions of agencies like ICRMP and to be aware of how public funds are expended by this agency would be seriously curtailed.”

Fast-forward to this month’s arguments before the justices, and it’s easy to see the relevance to all local government. The question of whether e-mails are public records should be a soft pitch for the high court. But if the ruling to seal settlement terms is also reaffirmed – all because of terse language in state laws – it points to a larger fight.

When courts can’t force government to reveal information directly related to the use of taxes, legislative remedies should be necessary. Taxpayers finally deserve a right to see how and why their funds are spent on surreptitious legal deals.

From the Times-News

Editorial from the Idaho Statesman

No public resource is more important to Idaho than water.

It’s unacceptable, then, for Gov. Butch Otter to plan nearly half a day of closed meetings at his water summit next week. It’s also troubling to see a guest list heavy on traditional rural water users and skimpy on the urban interests that will reshape Idaho water use in the future.

A public resource should be discussed in an all-inclusive public forum, not in what an Otter news release describes as a series of “closed-door caucuses and private discussions.”

There’s nothing illegal about the closed meetings. Otter and his tightly structured group of invitees — 18 active negotiators and 20 “alternates” — do not comprise a public agency, so the Idaho Open Meeting Law does not apply.

However, there’s a considerable difference between what’s legal and what’s good policy. Closed sessions invite skepticism. The itinerary — closed meetings, sandwiched by public sessions in the morning and late afternoon — suggests the open meetings are window dressing, with the real discussions held behind closed doors.

In a sense, the closed sessions are the guts of the summit, scheduled for Tuesday in Burley. The closed meetings will allow water users to hold “frank discussions” about stretching a scant water supply in 2007, interim state Department of Water Resources Director David Tuthill said Tuesday.

“Those solutions are urgently needed,” he said. “There presently is not enough water for all uses.”

This water is not private property, however — as closed negotiations imply.

Another problem transcends this year’s crisis. Otter’s invitation-only process gives short shrift to urban and industrial users, demands that will grow as Idaho grows.

Otter’s guest list skews heavily to rural water users and ag groups, with some local elected officials and staffers and utility reps in the mix. Tuthill says the summit will involve groups that are new to the water debate. Still, of the 38 negotiators and alternates, only three come from Ada County, and none come from Canyon County.

This is, make no mistake, a rural summit. This may adequately represent the current demand for water in a state where ag accounts for 87.8 percent of use. This also represents the current struggle, pitting Idahoans who hold old rights for canal and spring water against Idahoans who hold newer rights to water from the Eastern Snake Plain Aquifer.

It takes no imagination and little foresight to see that the next round of water wars could center on the tension between rural and urban use. Otter need only look to the south, where a 280-mile pipeline is proposed to meet Las Vegas’ ever-expanding municipal thirst, and Utah is seeking a 120-mile pipeline to water the growing city of St. George.

Closed caucuses between current water users do little to instill public trust — and do little to prevent another round of contentious water battles in the future.

Editorial from the Idaho Statesman

From the Post Register

A former Melaleuca Inc. employee being sued by the company said he won’t get a fair trial if District Judge Darren Simpson remains on the case.

In court documents filed Friday, Jeff Wasden said the judge should be disqualified from the case because Melaleuca CEO Frank VanderSloot publicly and financially supported Simpson’s successful effort to knock off sitting Judge James Herndon last year.

“The financial and public support of Melaleuca was instrumental in obtaining the results of Judge Simpson being elected,” say the documents filed by Wasden’s attorney, Ron Swafford. “It is my firm opinion and belief that unquestionably Judge Simpson feels gratitude toward Frank VanderSloot and Melaleuca.”

VanderSloot and his wife,

Belinda, through donations to an anti-Herndon group called Citizens for Justice and through direct payments for advertising, spent nearly $16,000 to help Simpson win office.

VanderSloot said Friday that he believes Simpson would do a good job on his case but can see where people might have concerns. It might be better for everybody, VanderSloot said, if Simpson walked away.

“I think there could be a perception of unfairness,” VanderSloot said. “I wouldn’t want that for the judge or for us.”

Melaleuca’s attorney, Curt Thomsen, said he doesn’t care who the judge is.

“I’ll be happy to have Judge (John) Shindurling,” Thomsen said. “I don’t care. We weren’t judge shopping in the first place.”

The decision rests completely in Simpson’s hands.

Both sides in a civil suit can disqualify one judge for no reason.

But both sides have already used their free pass in this case. Wasden disqualified District Judge Greg Anderson last month, and Melaleuca disqualified District Judge Richard St. Clair earlier this month.

Friday’s motion adds to what is already a complex case.

Wasden was formerly Melaleuca’s vice president of marketing. The company claims in its suit that Wasden violated a separation agreement by recruiting key employees. Wasden denies this and in a counter claim, accused the company of breach of contract and VanderSloot of defamation.

Melaleuca has asked the court to seal all documents in the case because “it is highly likely that (Wasden) will file documents with this Court, give deposition testimony, and in other ways divulge and make (Melaleuca’s) sensitive, confidential and proprietary information a matter of public record,” the company said Tuesday in a motion.

Simpson is scheduled to hear arguments on this issue Tuesday.

Also scheduled for discussion on that day is a temporary restraining order issued March 22 by Shindurling that prevents Wasden from disclosing confidential information “regarding Melaleuca or its products” to any third parties, including current or former Melaleuca employees.

That order is good for 14 days from the day it was issued. Melaleuca wants it made permanent. Swafford said the ruling is so “broad and obscure” that it’s impossible to know what is considered confidential and that it prevents his client from speaking to witnesses about his case.

From the Post Register

From the Post Register

District Court Judge Darren Simpson on Monday removed himself from a case involving his primary benefactor during last year’s election.

Melaleuca Inc. is suing its former vice president for marketing, Jeff Wasden, for allegedly violating a separation agreement by recruiting key employees.

Wasden denies the charge and in a counter claim has accused his former employer of breach of contract and Melaleuca Chief Executive Officer Frank VanderSloot of defamation.

On Friday, Wasden filed court documents asking Simpson to leave the case.

Wasden said that because VanderSloot publicly and financially supported Simpson’s campaign, he wouldn’t get a fair trial.

On Monday, three days after Wasden asked him to step down, Simpson initiated a conference call between Melaleuca’s attorney, Curt Thomsen, and Wasden’s lawyer, Ron Swafford.

At that time, Simpson told the lawyers he would leave the case.

According to Swafford, Simpson said the appearance of impropriety compelled him to step down.

Simpson, through his secretary, confirmed Monday that he had left the case but said he didn’t have time to answer questions, such as whether the move sets a precedent that will keep him from ever presiding over a case involving Melaleuca or VanderSloot.

VanderSloot on Friday said he thought Simpson would do a good job but that he could see where people might have concerns about the judge remaining on the case.

Campaign finance records show that VanderSloot and his wife, Belinda, spent nearly $16,000 in helping Simpson defeat incumbent James Herndon.

Seventh Judicial District Trial Court Administrator Burton Butler said Monday that the case had been transferred to District Judge Brent Moss.

Several key issues in the case were scheduled to be addressed today in a hearing. But Deputy Clark Angie Wood said Monday that the hearing would very likely be postponed.

Melaleuca is asking the court to seal all documents in the case. Also, a temporary restraining order that prevents Wasden from disclosing confidential information about the company or its products is set to expire this week.

Melaleuca wants the order made permanent. Swafford said it prevents his clients from speaking to witnesses about his case.

Government reporter Corey Taule can be reached at 542-6754.

From the Post Register

Editorial from the Post Register

As important as open courts are to the public, the issue is even more vital to eastern Idaho’s judicial system. Credibility is one commodity eastern Idaho courts can ill afford to lose.

At issue is Melaleuca’s attempt to cut off public access to its legal dispute with its former vice president for marketing, Jeff Wasden. Melaleuca is concerned Wasden may disclose trade secrets in the proceedings. The company has every right to protect proprietary information.

But Melaleuca is asking Judge Brent Moss of Rexburg for an order “sealing the court’s entire file and closing all courtroom proceedings to the public.”

That’s taking a meat cleaver approach to a situation requiring surgical precision, a case-by-case review rather than a blanket order. Imagine if Moss grants the motion: How would you ever open the proceedings later on? Would you learn how this case turns out? How much trust would you have in any trial you can’t attend and in which the case files become a state secret?

Past Supreme Court rulings on the topic lead to a pair of themes: People have a right to open courtrooms. Openness is a check on arbitrary courtroom decisions. And the courts need the public’s trust. Secret star chambers erode that confidence. These interests are mutual.

This is a symbiotic relationship. Our system of government depends on it. The courts are a bulkhead against misbehavior — from other branches of government, from private individuals and from organizations. If people lose confidence in the system’s transparency and impartiality, if they come to believe the system plays favorites or makes decisions in private, the courts lose their moral authority.

Sadly, eastern Idahoans have experienced that loss of faith. Without this newspaper’s investigation and legal efforts to pry open a pair of sealed Bonneville County files, the efforts of local Boy Scout officials to conceal sexual abuse of Scouts by camp staff members would have prevailed.

Former Idaho Falls Prosecutor Kimball Mason is going to serve at least four years in prison for stealing guns from the Idaho Falls Police. It’s the rare prosecutor who gets in trouble, let alone ends up convicted of not one but two felonies and is sent to prison for it.

And that happened right here in the 7th Judicial District.

So as he takes up the Melaleuca motion, Judge Moss will be serving his profession’s own interests best by serving yours.

Marty Trillhaase

Case facts

Melaleuca’s motion asking for an order “sealing the court’s entire file and closing all courtroom proceedings to the public” was to be heard Tuesday — but was delayed when Seventh District Judge Brent Moss of Rexburg took over.

Judge Darren Simpson of Blackfoot stepped down after Wasden’s lawyers argued he’d been compromised. Simpson’s successful 2006 race against former Judge James Herndon got a $16,000 assist from Melaleuca CEO Frank VanderSloot and his wife Belinda.

Moss is the fourth judge assigned to the case. Lawyers for former Melaleuca Vice President for Marketing Jeff Wasden exercised their right to disqualify District Judge Greg Anderson. Next assigned to the case was District Judge Richard St. Clair, and Melaleuca’s attorney’s moved to remove him from hearing the case.

Editorial from the Post Register