New legal filings: Seven were denied PFDs based on Alaska’s defunct same-sex marriage law

A new lawsuit challenges the initial denial of a $1,606 Permanent Fund dividend payment to the same-sex spouse of a member of the military stationed Outside.

As many as seven people were initially denied their 2019 Permanent Fund dividends because they’re married to same-sex members of the military or students living outside the state, according to an anonymous state worker quoted in newly filed court documents.

The documents are part of a suit filed in federal court Wednesday by Denali Nicole Smith, the spouse of a member of the military, who claims the state denied her this year’s $1,606 PFD because of an Alaska law against same-sex marriages. A federal judge struck down that law in 2014.

After Smith began working with an attorney, the state agreed to pay her PFD. But it would not promise she wouldn’t be denied payments in the future, according to the documents, filed Monday.

The new filings quote an anonymous state worker inside the Alaska Permanent Fund Dividend Division, and they appear to contradict a press release from Alaska Attorney General Kevin Clarkson’s office Friday that said the division knew of no one else “similarly situated” to Smith. Clarkson also accused Smith’s attorney, Caitlin Shortell, of filing a “false lawsuit” that ignored that the state had already reversed itself and agreed to pay Smith’s dividend.

“No one disagrees that the denial letter never should have been sent,” Clarkson was quoted as saying in his press release. “But the division promptly remedied the action once it figured out its mistake.”

Clarkson said questions were raised over the summer about a PFD Division statute booklet that still included the invalidated same-sex marriage law, and that applications that could have been denied on that basis were placed “on hold.” But Smith’s, for a reason that Clarkson did not specify, was “inadvertently” denied instead.

Shortell and Smith, in two separate declarations filed with the court, argue that Clarkson’s statement is false, that as many as six other applications were denied — not just placed on hold — and that the denials were only fixed after the lawsuit was filed.

[Read the declarations from Smith and Shortell]

The documents also describe the series of events leading up to the lawsuit.

After hearing about Smith’s denial in September, Shortell published a Facebook post asking for information or evidence about others denied their dividends on a similar basis, Shortell wrote in her declaration.

The same day, Shortell said she heard from a worker in the PFD division who confirmed that the state still denied the payments to same-sex spouses and children of same-sex spouses accompanying military members and students outside the state. The employee gave Shortell other details about the state’s practices and “told me that they would provide me information to assist me in this lawsuit and would testify truthfully to these facts under subpoena,” Shortell said.

The employee told Shortell on Sunday that after the lawsuit was filed last week, the PFD division’s management asked employees to identify and pay any dividends denied based on the invalidated same-sex marriage statute, and that “approximately seven” cases had been found.

Asked about the discrepancy between that number and the state’s contention in its press release Friday that it knew of no one “similarly situated” to Smith, a spokeswoman for Clarkson, Cori Mills, wrote in an email that “the information in the press release represented the true and accurate information that the State knew as of last Friday when it was sent out.”

Mills also pointed to a quote in the press release from Gov. Mike Dunleavy: “We are examining our regulations and processes to ensure those who are qualified get their PFD.”

Shortell, in her declaration, said that the basis for the lawsuit is both Smith’s experience this year, along with the fact that state workers have not yet been asked to reverse and pay any denials predating 2019, according to the PFD Division employee.

In a footnote, Shortell said she’s keeping the employee’s name confidential because of their fear of being fired “for having confirmed the unconstitutional actions of state officials in this lawsuit.”

“The PFD employee is referred to with the pronoun ‘they’ to preserve their anonymity,” Shortell wrote.

Alaska Attorney General Kevin Clarkson’s since-deleted tweet from Friday

Clarkson criticized Smith’s lawsuit in a tweet Friday that called it “pointless” and a “big non-issue,” saying she was eligible for a 2019 dividend and that it had gone unpaid only because Smith has not provided a correct address. After deleting the tweet, Clarkson issued his prepared statement, which also criticized Shortell for filing a “false lawsuit, knowing full well that the (PFD) Division had already changed course and had in fact informed her that her client’s dividend was scheduled for payment before the lawsuit was filed.”

Smith, in her own declaration, said she filed her lawsuit because the state only reversed itself after she hired an attorney, refused to clearly explain why and wouldn’t guarantee that she wouldn’t be denied in the future.

After her initial denial in September, Smith said she notified state officials that Shortell was representing her and requested relevant documents. A PFD specialist then emailed Smith and Shortell in early November to say that her dividend would be paid, Smith said.

The specialist “did not explain the reason for the reversal in eligibility,” Smith said. In a follow-up phone call, another PFD division employee told Smith that the state’s lawyers “realized it was wrong what they did,” but would not guarantee that her dividend would not be denied again in the future and refused to give Smith a written explanation for the reversal.

Smith said she subsequently filed the lawsuit because “it appeared to me that the PFD representatives were trying to placate me by promising to pay me my 2019 PFD only after I retained an attorney and to deter me from challenging their practices against me and other same sex accompanying spouses.”

Smith’s lawsuit asks a federal judge not just to order the state to allow her to receive her own dividend, but also to permanently block Alaska from denying dividends to same-sex spouses of military members and students who live Outside. It also asks for an order requiring the state to pay all dividends, plus interest, to anyone denied them after the 2014 ruling invalidating Alaska’s same-sex marriage laws.

Both Smith and Shortell said in their declarations that Clarkson’s press release Friday was “false” and “defamatory” and, according to Shortell, “was published with an intent and an effect of prejudicing the public, court, and the legal community and to detract attention from state officials’ ongoing discriminatory practices against Ms. Smith and others who file civil rights lawsuits against state officials and their counsel.”

Correction: A previous version of this story inaccurately said that the state agreed to pay Smith’s PFD after she filed her lawsuit. The state agreed to the payment after Smith began working with an attorney.