Legislature(2005 - 2006)CAPITOL 124
02/17/2005 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Overview: Aidea/aea | |
| HB117 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 117 | TELECONFERENCED | |
HB 117-STATE/MUNI LIABILITY FOR ATTORNEY FEES 8:52:30 AM CO-CHAIR THOMAS announced that the final order of business would be HOUSE BILL NO. 117, "An Act relating to the liability of the state and municipalities for attorney fees in certain civil actions and appeals; and providing for an effective date." 8:52:52 AM CHRISTOPHER KENNEDY, Assistant Attorney General, Environmental Section, Civil Division (Anchorage), Department of Law, explained that Alaska is unique in that winning litigants in civil lawsuits in Alaska receive a partial recovery of the attorney fees at the end of the case. Usually, the attorney fees are 20 percent of a money judgment or less or 20-30 percent of the actual attorney fees that were reasonably incurred by the other side. This legislation addresses a special circumstance by which Alaska courts have been awarding enhanced fees, that is full fee recovery, to public interest litigants. Public interest litigants are those people who, as the court determines subjectively, are in pursuit of strong public policies. Over the last 10 years, the amount paid under these enhanced attorney fees has averaged approximately $600,000 annually. He clarified that the aforementioned amount of enhanced attorney fees is beyond the 20-30 percent that would normally be paid. The Supreme Court created this public interest litigant doctrine over time, beginning in the 1970s, and it was expanded in the late 1990s. The public interest litigant doctrine allows parties to recover full attorney fees from the state or municipality, even when they don't prevail in many of the claims brought. He cited the 1999 case of the American Civil Liberties Union v. State, relating to the 1996 campaign finance reform law, as an example. The Department of Law feels that it successfully defended the campaign finance reform law in most respects and was able to preserve most of its provisions. However, the American Civil Liberties Union (ACLU) was successful in two provisions of the campaign finance reform law and was able to recover all of its fees for the entire challenge. The fees recovered amounted to $131,000. MR. KENNEDY pointed out that HB 117 creates a new provision capping attorney fees against governments in the state, and thus no enhanced awards would be available. This provision further provides that for civil actions or appeals in which a money judgment is recovered, the state municipalities wouldn't be liable to pay more than 20 percent of the amount of the money judgment as an attorney fee [award to the adverse party]. He opined that the aforementioned cap would rarely occur because it's unusual to receive enhanced attorney fees in a money case. The legislation also places a cap in civil actions with no money judgment. For example, the attorney fees awarded in a case about a regulatory decision that goes to trial would be capped at 30 percent of the party's reasonable and actual attorney fees. However, if the aforementioned case didn't go to trial, the award would be capped at 20 percent of the party's reasonable attorney fees. The same limit would be in place for appeals, he related. Mr. Kennedy noted that these limitations wouldn't apply when statutes specify otherwise or when the court determines there should be enhanced attorney fees as a sanction. For example, if there had been misconduct by the state, municipality, or the attorneys. The limitation also wouldn't apply in cases relating to eminent domain. MR. KENNEDY related that the rationale behind the immunity is to protect the state and municipal treasuries. He characterized it as a money-saving measure. Furthermore, it returns to the legislature the authority to make the policy choices regarding what types of litigation to subsidize. He noted that the immunity can be waived by specific statute. 9:01:44 AM CO-CHAIR THOMAS turned attention to the fiscal note, and related his understanding that a fiscal note specifying savings would show the savings in brackets. However, this fiscal note is a zero fiscal note. MR. KENNEDY suggested that the $600,000 could possibly not be a savings to the Department of Law because these cases are against various state agencies. CO-CHAIR THOMAS, upon counsel from staff, related that usually these [awards] would be funded in supplemental appropriations. 9:03:07 AM REPRESENTATIVE CISSNA pointed out that the legislature talks about accountability a lot. She opined that the legislature needs to be accountable. She said she would be reviewing the balance of powers and recourse to the public. 9:04:16 AM MICHAEL MACLEOD-BALL, Executive Director, Alaska Civil Liberties Union (AkCLU), paraphrased from the following written testimony [original punctuation provided]: We oppose HB 117 (SB 86) on the grounds that it will have a chilling effect on the ability of parties acting in the public interest to challenge the inappropriate exercise of governmental authority. Further, the bill will tend to widen the legal advantage currently held by governmental litigants over private individuals. The typical plaintiff in a public interest lawsuit is an individual, a non-profit advocacy organization, or a charitable organization. The typical defendant in such a suit is a governmental entity - usually the federal or state government due to the nature of the issues commonly litigated. There can be no dispute that the typical suit pits a party with limited financial resources who needs to hire outside counsel against a governmental entity with access to substantially greater financial and legal resources. As often as not, the dispute is over principle and not over money. Compare this to any other type of litigation. First, private suits almost always involve a fight over money or property interests. Typically, general civil litigation pits business against business or individual against individual. Certainly there are disparities in each party's ability to cope with the costs of litigation - but it's a matter of happenstance. The public interest litigant, therefore, is financially disadvantaged and typically does not have the prospective benefit of a money damages award. As a result, attorneys are not readily available to take on such cases without sizable retainers - it is not profitable for them to do so. Therefore, the public interest litigant is legally disadvantaged as well - because the governmental adversary will always have counsel on board from the start. In his letter of transmittal, the Governor complains that the public interest litigant is being subsidized by the current system of attorney fee reimbursement. But, bear in mind that the public interest litigant only receives reimbursement if a) he or she is acting in the public interest and b) he or she is successful in showing that the government acted wrongly. On the other hand, the government gets its subsidy from the taxpayers whether it wins or not. It's not as if the individual within the government who caused the government to violate the victim's rights is made to reimburse the taxpayers for the internal costs of running the government in a manner violative of the public interest. The key is to set up a system that doesn't reward improper behavior - and there will be no incentive for the government to stop inappropriate action if there is no one willing to speak out against such action through public interest legal action. Who will this bill affect? It will affect those in our society least able to afford it - the poor, the uneducated, the minorities, the disabled, the elderly - all of whom have benefited from public interest litigation at one time or another - and many of whom would not have been able to bring such actions in their own right. It won't make a difference to the wealthy individual who funds a public interest lawsuit - for such individuals, attorney fee reimbursement is not a consideration. Rather, this law will discourage normal, everyday people from trying to make a difference when they see the government failing to do its job. If this bill becomes law, the state government will be able to rest easier that it can act against the public interest because it will be less likely to be held to account for its wrongful actions. In short, this bill is presented as if the government is unfairly required to pay for a vengeful individual's lawsuit against the state. Nothing could be further from the truth. This bill will make it harder for someone acting in the public interest to force the government to comply with its legal obligations. We strongly urge you to reject this bill. 9:08:33 AM CO-CHAIR THOMAS asked if the public interest litigant fully reimburses the state for its costs when the state wins the suit. MR. MACLEOD-BALL deferred to the attorneys that would know better, but related his understanding that public interest litigants don't have to compensate the other side for attorney fees. However, he reminded the committee that there is a provision available for the courts to impose when a frivolous or egregious lawsuit is filed. 9:09:30 AM KAREN BRETZ, Attorney; Secretary/Treasurer, Alaskans for Efficient Government, stated her opposition to HB 117. Ms. Bretz, speaking from her experience as an attorney, opined that many organizations and individuals that claim public interest litigant status lack the resources to pay for their own attorney fees in this type of litigation. By definition, the public interest litigant has no or little financial interest to bring the suit. However, the government bodies against which they bring suit have unlimited resources and the ability to prolong the litigation. "They have, in essence, the power to squeeze the public interest litigant to abandon the litigation or to not even bring it from the state," she stated. Attorneys take on public interest litigation cases with the understanding that if the client wins, then his/her fees will be reimbursed 100 percent. Therefore, without the public interest litigant rule, it's unlikely the attorney would recover his/her full fees because the public interest litigant doesn't have the resources to pay. Ms. Bretz opined that the current public interest litigant law places the public interest litigant on a more even playing field than the proposal in HB 117. She further opined that changing the current law will prevent many worthy lawsuits from being brought. CO-CHAIR THOMAS restated his earlier question regarding whether the public interest litigant would pay the attorney fees when the governmental entity wins the case. MR. BRETZ replied no. The public interest litigant is only responsible for the governmental entity's attorney fees if the court finds that the litigation is frivolous. In further response to Co-Chair Thomas, Ms. Bretz related her belief that it would be rare that the court finds public interest litigation cases to be frivolous because many attorneys won't take frivolous litigation. In response to Co-Chair Olson, Ms. Bretz said that to the best of her knowledge, the public interest litigant hasn't ever paid the governmental entity's attorney fees in public interest litigation. 9:12:46 AM UWE KALENKA, President, Alaskans for Efficient Government, said that the previous witnesses have spoken well on this issue. He commented, "All I have to say is that $600,000 a year spent on attorney fees is a small price to pay for justice. If you really need to save some money, let's start on the jet that cost $1.4 million so we can finance this litigation for three years to help the underprivileged in our society." Mr. Kalenka stated his opposition to HB 117. 9:13:52 AM KEN JACOBUS, Attorney, noted his agreement with other testimony [in opposition to HB 117]. He highlighted that in "our system" there are checks and balances such that the legislature and municipal assemblies enact the laws and the courts review the laws. He explained that the courts can't merely say a law is bad and review it, rather a plaintiff has to bring a case. He estimated that 99 percent of the [public interest litigants] are involved on the basis of principle. He noted that most of the people he represents don't have the money to carry forward the suit. The idea behind public interest litigation is to encourage the checks and balances. Therefore, the public interest litigant isn't placed at risk of losing a lot of money but rather is allowed the financial ability to take the case forward. He noted that most of the people he represents are initiative petitioners. The most recent initiative case was the Matanuska Valley tax cap. Mr. Jacobus opined that HB 117 harms the public interest litigants more than the previous bill that two superior courts held were constitutionally improper. Mr. Jacobus encouraged the committee not to enact HB 117 because it creates further problems in an area that is already before the Alaska Supreme Court. 9:17:38 AM DALE BONDURANT, Alaska Constitutional Legal Defense Fund, stated that the Alaska State Constitution is the best in the Union. He highlighted the following portion of Article 1, Section 1: "all persons have corresponding obligations to the people and to the State." Mr. Bondurant informed the committee that the Alaska Constitutional Legal Defense Fund has been a successful public interest litigant in all if its cases before the Alaska Supreme Court. He reviewed some of the [public interest litigant] decisions [with which he has been involved] such as: Peyton (ph); McDowell(ph); Gulkana River(ph); Totemoff(ph); Oshik(ph). Mr. Bondurant said that the 14th Amendment of the constitution says, "That those who are elected or selected ... support those who are willing to act responsible interest litigants." He went on to say, "We, therefore, request that those who are selected, including the governor ... and legislatures and the general public be supportive of Alaska's constitution and the 14th Amendment. We find that, in fact, proposing changes to both the Alaska Constitution and the US Constitution without proper citizenships' right to vote on such important issues are denied." Mr. Bondurant concluded by noting his opposition to HB 117. 9:21:15 AM KATHIE WASSERMAN, Alaska Municipal League (AML), reminded the committee that municipalities are involved in these [public interest] suits. She recalled that two witnesses specified that municipalities have unlimited means to fight lawsuits. However, she estimated that two-thirds of the municipalities in the state don't even have attorneys or have the money to secure an attorney. Ms. Wasserman stated that any lawsuit would harm the public interest in the community. 9:22:21 AM REPRESENTATIVE CISSNA inquired as to how many local governments have been sued as compared to the suits brought against the state government. MS. WASSERMAN said that she didn't know. 9:23:17 AM REPRESENTATIVE CISSNA requested information regarding the experience local governments have had with public interest litigant cases as compared to the state government. MS. WASSERMAN clarified that she isn't advocating taking away the ability for the public to bring action against wrong doing, but merely wanted to be sure that everyone understands that municipalities could be devastated if they have to hire an attorney. Ms. Wasserman, in response to Co-Chair Olson, agreed to contact Mr. Tom Boedeker, the head of AML's legislative subcommittee. In response to Representative LeDoux, Ms. Wasserman agreed to provide information regarding the amount in enhanced attorney fees paid by municipalities that have lost [in public interest litigant cases] over the last five years. [HB 117 was held over.]
| Document Name | Date/Time | Subjects |
|---|