Illegal firing lawsuit against Dunleavy will extend into 2023

A legal dispute that began when Gov. Mike Dunleavy took office in 2018 will not be resolved before this year’s gubernatorial election.

Last week, a federal judge set a 2023 timeline for a trial to determine financial damages in a case involving Libby Bakalar, one of four state employees who sued Dunleavy, his former chief of staff Tuckerman Babcock and the state after being illegally fired when Dunleavy took office.

Babcock is now a candidate for state Senate and Dunleavy is running for reelection.

The state has settled with three of the people who filed lawsuits, but Bakalar has declined settlement offers and her case is continuing. In January, a federal judge ruled that Dunleavy unconstitutionally fired Bakalar after he took office in 2018.

Attorneys familiar with the case say they expect that ruling against Dunleavy will be appealed to the 9th U.S. Circuit Court of Appeals, but because that has not yet happened, the case is proceeding toward a trial that would determine how much the state would pay in damages to Bakalar.

“We are identifying the remaining issues to fight about,” said Mark Choate, a Juneau attorney who is representing Bakalar.

An attorney representing Dunleavy and Babcock declined comment. Bakalar also declined.

Choate said the upcoming gubernatorial election will not affect the case and that it will continue whether or not Dunleavy is elected.

New governors regularly ask top-level, politically appointed officials for their resignations as part of the transition between administrations. The resignations are not always accepted — officials can stay over from one administration to the next.

Dunleavy asked for more resignations than historically typical but was advised by the attorney general, that the expanded list at the Department of Law was legal.

Bakalar, an assistant attorney general at the department, was an outspoken critic of former President Donald Trump, posting frequently on social media. After her resignation was accepted, she filed suit, saying that she was fired because of her statements beyond the job, not because of actions at her state position.

Babcock, in charge of the process, said he accepted Bakalar’s resignation because the tone of her resignation letter was unprofessional, but in a January ruling, Judge John Sedwick concluded otherwise, noting in part that an identical letter from another attorney was not accepted.

Sedgwick wrote, “it is clear that Babcock’s decision to terminate plaintiff was motivated by reasons connected to her First Amendment rights” and concluded that Bakalar’s firing amounted to “unfair dealing” under Alaska law.

The judge said Bakalar could have been fired legally, but the state did not prove that Bakalar’s political commentary was detrimental to her work with the state’s elections division.

In a separate but related case, two Alaska Psychiatric Institute doctors refused to submit resignation letters, saying they amounted to a statement of “political allegiance.” The doctors won their subsequent lawsuit, and Sedwick ruled that Dunleavy and Babcock could be held personally liable for violating the state and U.S. constitutions.

Despite some reluctance by legislators in the Alaska House, the state ultimately paid a $495,000 settlement on behalf of the governor and his former chief of staff.