The Seward Phoenix Log - News of the Eastern Kenai Peninsula since 1966

By Wolfgang Kurtz
LOG Editor 

Local jury kills fish case


Wolfgang Kurtz | The Seward Phoenix LOG

The commercial fishing vessel Kruzof nestles next to the tug Junior at its reserved moorage on F float in the Seward Small Boat Harbor.

On April 15, a Seward jury voted for the acquittal of James and Rhonda Hubbard on the few charges that remained after Kenai Superior Court judge Anna Moran threw out much of prosecutor Carole Holley's case. After the raft of dismissals, Holley persisted, padding out the remaining case by splitting it up into even more charges. However, defense attorney Eric Derleth continued to make hash of the proceedings, finally completely invalidating the state's case according to jurors.

At the beginning of the 7-day trial, the Hubbards both faced a formidable array of felony and misdemeanor allegations. The jury took 8 hours to come back with the unanimous not-guilty verdict for James Hubbard on, most significantly, a remaining count of felony attempted perjury in regard to falsifying state tax filing. The other charges included in the sweeping not-guilty verdict were misdemeanor charges of filing false fish tickets. The jury also rendered a not-guilty verdict for Rhonda Hubbard on charges of submitting false fish tickets.

The Hubbards are the principals of Kruzof Fisheries LLC, a commercial fishing and direct marketing operation based out of Seward. Their vessel, the Kruzof, is captained by James Hubbard and hosts various permit holders over the course of the year as openings for different species come and go. Rhonda Hubbard commands the marketing arm of the venture, J & R Fisheries, and according to testimony is known as a dynamic representative on behalf of her clients as she pursues the best possible prices for landed fish.

Between the husband and wife, Kruzof and J&R Fisheries have apparently pioneered creative ways to exploit unforeseen advantages within the various sets of regulations governing the industry. Because of the Byzantine nature of regulation between various state and federal agencies, the case exposed the sometimes debatable terms of legal operation. For the Hubbards, resolving those conflicts sometimes meant going above the heads of Juneau bureaucrats, whereupon they have regularly achieved favorable rulings. However, those successes may have made them at least one enemy in the Alaska Department of Revenue.

Within the maze of agencies and regulations, Derleth described the recently concluded trial as a one-of-a-kind case. Because he was inside of the closer degrees of separation, being a Soldotna-based attorney familiar to the Hubbards' circle of business and legal associates, he was tapped by the Hubbards to mount the defense. However, outside of his baseline competence, he says that at the beginning he had no idea what a fish ticket even was. And fish tickets were at the core of the case developed by Alaska Wildlife Trooper Eric Hinton and brought by the Alaska Office of Special Prosecutions and Appeals.

Since the April 2013 arraignment, it's been a real education for Derleth. Ultimately, after sorting through the technicalities of the commercial fishing industry, he says that he discovered that there just weren't any crimes. His focus and defense theory then turned to other motives behind the charges. Over the course of the 7-day trial, Derleth took the jury through the Cliff Notes version of what he learned and they ended up thanking the attorney for, in one juror's words, pushing back against apparent prosecutorial overreach.

Although Derleth faults the prosecutor for presenting a case without merit, he finds the agency behind its development more troublesome. "By its very nature, OSPA is limited in their scope. I don't remember ever dealing with OSPA, especially in a case that stood out like this, where they just heap on charges that they never understood from the get-go. She, being the prosecutor, never second guessed the case and charged it just as (Trooper Hinton) wrote it up in pre-support. Even if you took everything that he said for granted, there were no crimes, so it was doomed to fail."

During the course of the trial Trooper Hinton was positioned by the defense as a man on a mission to win the case by any means necessary. The defense singled out Tim Cottongim, Fish Group Manager of the Juneau Tax Office of the Alaska Department of Revenue, as the figure responsible for manufacturing a theory of illegal conduct by the Hubbards that Hinton made his own. Notably, under questioning by Derleth, Hinton denied recording interviews with key witness Cottongim over the course of dozens of interviews as the case developed, which seemed to support Derleth's theory of collaboration between the two.

Derleth also highlighted Cottongim's contentious past with the Hubbards, noting various episodes of alleged obstruction by the state official. He says that went hand-in-hand with Hinton's rigorous recording of almost every other witness toward suggesting that the case was was "hinky" from the start. Hinton, who sometimes works undercover in sting operations, was unable to recall many specifics of conversations with witnesses where testimony would be favorable to the defense. Other witnesses for the state seemed similarly ill-prepared or curiously forgetful.

In a mid-trial display of confidence Derleth voiced his assessment of the proceedings when, with the jury out of the courtroom, he announced before the judge and prosecution that the defense had already won and all that was left was mopping up.

Prior to jury deliberations, Judge Moran repeatedly dismissed charges as the prosecution foundered.

In the jury's hands, the case unwound quickly into a rapidly delivered not guilty verdict. After almost four years of investigation the prosecution failed to demonstrate to the jurors' satisfaction that any crimes had been committed.


Reader Comments

fisherman writes:

Tim Cottonjim did the same to our company. We had a positive result going before the Administrative Law Judge, the first step in appeals, and the DOR came back with a compromise - penalties and interest were removed - but we had to agree to withdraw our complaint and thus nullify the ALJ's decision so it could not serve as a precedent. The threat was that the State's full prosecutorial force would be in place for any appeal. We settled. Congrats to Kruzof for fighting.


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