01/24/1997 01:00 PM House JUD

HB 22 - CIVIL LIABILITY FOR BOOTLEGGERS                                        
                                                                               
CHAIRMAN JOE GREEN advised members they would first consider HB 22,            
"An Act relating to civil liability for illegal sales of alcoholic             
beverages; and providing for an effective date."  It was sponsored             
by Representative Ivan Ivan.  His committee aide, Tom Wright would             
provide comments on behalf of Representative Ivan.                             
                                                                               
Number 101                                                                     
                                                                               
TOM WRIGHT, Legislative Assistant to Representative Ivan Ivan,                 
provided comments on HB 22 on behalf of the prime sponsor,                     
Representative Ivan Ivan, who was ill.                                         
                                                                               
MR. WRIGHT advised members that current law appeared to exempt                 
those who sell liquor without a license from any civil liability               
for damages that might be caused by their actions.  The basis of               
the bill was to remove that exemption and make bootleggers strictly            
liable for his or her actions.                                                 
                                                                               
MR. WRIGHT pointed out that Christopher Cooke, an attorney in                  
Bethel, Alaska was responsible for bringing this matter to the                 
attention of the Attorney General's Office.  He noted that there               
had been an Alaska Supreme Court decision, Chokwak v. Worley, 912              
P.2d 1248 (Alaska 1996), which stated that there might be a problem            
as far as civil liability was concerned, for those who sell liquor             
without a license.                                                             
                                                                               
CHAIRMAN GREEN noted that individuals at two teleconference sites              
in Anchorage and Fairbanks were standing by to provide testimony on            
the proposed legislation.                                                      
                                                                               
MR. WRIGHT advised members that Linda O'Bannon, Assistant Attorney             
General, would be able to respond to any technical questions posed             
by committee members.  Ms. O'Bannon was the Attorney General who               
had corresponded with Christopher Cook and Representative Ivan's               
office, and also does legal work for the Alcohol Beverage Control              
Board (ABC) Board.                                                             
                                                                               
CHAIRMAN GREEN requested testimony from Fairbanks.                             
                                                                               
LISA JAEGER, Tanana Chiefs Conference, Inc. (TCC), advised members             
that TCC fully supported HB 22.  She offered to fax down a position            
paper and also expressed that the TCC had adopted several                      
resolutions during their annual conventions relating to alcohol                
issues.  Ms. Jaeger advised members that alcohol was an excessive              
problem in the Fairbanks area.                                                 
                                                                               
MS. JAEGER stated that not only did the TCC fully support the bill,            
but the Elders in the community had declared war on alcohol.  She              
advised members that they had experienced problems bringing                    
criminal charges because, basically, everyone's related, which was             
a major problem in the smaller villages.                                       
                                                                               
Representatives Jeannette James and Norman Rokeberg arrived.                   
                                                                               
VICE CHAIRMAN CON BUNDE expressed his support of TCC in dealing                
with alcohol related problems.  He asked Ms. Jaeger how the                    
proposed legislation would affect neighbors and relatives if a                 
criminal charge were imposed.                                                  
                                                                               
MS. JAEGER did not know how the legislation would help with respect            
to people not wanting to testify against one another.  However,                
felt it would be a great tool, in terms of waving a flag, that                 
those people would be civilly liable for activities caused by other            
people that they illegally sell alcohol to.                                    
                                                                               
Number 606                                                                     
                                                                               
VICE CHAIRMAN BUNDE questioned the ability of those being charged              
with bootlegging to pay a fine because of the lack of work in the              
smaller villages, as well as many people living a semi-subsistence             
lifestyle.                                                                     
                                                                               
MS. JAEGER felt it was known that the bootleggers were the                     
individuals with money, and other people, in the remote areas, did             
have snow machines and property.                                               
                                                                               
REPRESENTATIVE ERIC CROFT referenced the "sell or barter" language             
of the proposed legislation and asked if a barter arrangement was              
typical.                                                                       
                                                                               
MS. JAEGER was not familiar with how bartering for alcohol worked.             
The transactions she was most familiar with involved money                     
transactions.                                                                  
                                                                               
REPRESENTATIVE CROFT asked if it was generally known who, in the               
villages, the bootleggers were.                                                
                                                                               
MS. JAEGER responded that it was common knowledge who the                      
bootleggers were in the villages.                                              
                                                                               
REPRESENTATIVE ETHAN BERKOWITZ asked what the estimated cost of a              
bottle of alcohol was that goes through a bootlegging operation.               
                                                                               
MS. JAEGER stated that the cost varied depending on the location,              
however a bottle of alcohol could range from double the shelf cost             
to 25 times the shelf cost.                                                    
                                                                               
REPRESENTATIVE CROFT asked what types of efforts the TCC would make            
to publicize and alert the public of the legislation if it passed.             
                                                                               
MS. JAEGER felt they would run front cover stories in the local                
newspapers, as well as utilize the local radio stations to                     
publicize the enactment of the legislation.                                    
                                                                               
LINDA O'BANNON, Assistant Attorney General and representative of               
the Alcohol Beverage Control Board (ABC) and their staff, pointed              
out that the proposed legislation would make clear that bootleggers            
are civilly liable for the harm they cause by the illegal sale of              
alcohol.  She added that under the particular version, a bootlegger            
would be subject to strict liability.                                          
                                                                               
MS. O'BRANNON advised members that after the Alaska Supreme Court              
decision in Chokwak v. Worley concerning civil immunity, the ABC               
Board and staff felt it should be clarified in statute that civil              
immunity was not, and should not be extended to persons who                    
unlawfully traffic alcohol.  She noted that the ABC Board                      
recommended a change to AS 04.21.020 by adding a paragraph to make             
clear that bootleggers were held responsible for damages they cause            
to other persons.  Ms. O'Brannon noted that as the bill was                    
currently written, it might include someone who purchased alcoholic            
beverages from the bootlegger and then was injured, or someone                 
injured by the person who purchased alcoholic beverages from the               
bootlegger, such as an innocent victim of an automobile accident.              
                                                                               
Number 1270                                                                    
                                                                               
REPRESENTATIVE NORMAN ROKEBERG advised members that he had a                   
suggested amendment that he had received from the Alcohol Beverage             
Control Board and asked if the language had been drafted by Ms.                
O'Brannon.                                                                     
                                                                               
MS. O'BRANNON responded that she did draft that language, although             
that had been done some time ago and was slightly different than               
the language of HB 22.                                                         
                                                                               
REPRESENTATIVE CROFT referenced the difference between a negligent             
standard and a strict liability standard and asked Ms. O'Brannon               
what the difference and practical effect would be between a                    
negligent and strict liability standard.  He questioned how someone            
would prove negligence in an act that was already criminal.                    
                                                                               
MS. O'BRANNON agreed, pointing out that what they were talking                 
about would be a criminal violation, and therefore, negligence per             
se.                                                                            
                                                                               
REPRESENTATIVE BRIAN PORTER recommended adding a new subsection to             
HB 22 which would read as follows:  "(b)  Notwithstanding (a) of               
this section, a person who sells or barters an alcoholic beverage              
to another person in violation of AS 04.11.010 is strictly liable              
for civil damages FOR PERSONAL INJURIES, DEATH, AND PROPERTY                   
DAMAGES, resulting from the intoxication of the person receiving               
the alcoholic beverage IF THE INTOXICATION SUBSTANTIALLY                       
CONTRIBUTED TO THE PERSONAL INJURIES, DEATH AND PROPERTY DAMAGES."             
                                                                               
MS. O'BRANNON advised members she did not see a problem with that              
language.  She stated that AS 04.21.020 provides immunity to social            
hosts and people who hold liquor licenses if they do certain                   
things.  Ms. O'Brannon explained that by amending AS 04.21.020 that            
bootleggers would be responsible, no matter what, in a civil                   
liability situation.                                                           
                                                                               
REPRESENTATIVE JEANNETTE JAMES spoke in favor of the proposed                  
language because it made more perfectly clear what an individual               
would be civilly liable for.                                                   
                                                                               
Number 1980                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ preferred the more simple language over               
specifying certain incidences because a broader statement would                
more likely result in a civil liability case.                                  
                                                                               
REPRESENTATIVE ROKEBERG asked if a community or a law enforcement              
agency would be able to bring a cause of action against an                     
individual for the illegal sale of alcoholic beverages.                        
                                                                               
MS. O'BRANNON stated that for a criminal prosecution under the                 
bootlegger statute, AS 04.11.010, the district attorneys office                
would have to prove the allegations beyond a reasonable doubt.                 
However, in a civil context, the people who could bring civil law              
suits would be those who had actually been injured or were in some             
type of relationship with the injured party.  In a civil liability             
case the standard of proof would be a preponderance of the                     
evidence, as opposed to beyond a reasonable doubt, which is a much             
easier standard of proof.  Ms. O'Brannon also pointed out that a               
criminal prosecution of the bootlegger would not be needed in order            
to bring a civil law suit against that person.                                 
                                                                               
VICE CHAIRMAN BUNDE asked if what was being said, was that a                   
bootlegger could be acquitted on a criminal charge, but a civil                
suit could be brought because of certain results of his illegal                
selling of alcoholic beverages.                                                
                                                                               
Number 2245                                                                    
                                                                               
MS. O'BRANNON fully agreed with Vice Chairman Bunde's                          
understanding, noting that there was a very famous case being                  
argued currently where that same type of situation occurred.                   
                                                                               
REPRESENTATIVE BERKOWITZ asked if the state would have the ability             
to recover investigation costs as an economic damage in a                      
bootlegging case.                                                              
                                                                               
MS. O'BRANNON did not feel the proposed legislation would provide              
for that.  She explained that the state or city would not be the               
directly injured party and specific language would be necessary to             
include that ability.  Ms. O'Brannon went on to say that the                   
proposed legislation would cover a situation even where an                     
investigation had not been conducted by a governmental entity.                 
                                                                               
REPRESENTATIVE PORTER felt that the cost of prosecution to a city              
or state should be added to personal injuries, death and property              
damages.                                                                       
                                                                               
Number 2430                                                                    
                                                                               
LISA KIRSCH, Committee Aide to Chairman Green, referenced the                  
language of, "substantially contributed" in the proposed amendment,            
and wondered if that would cause a problem with the causation                  
standard in Title 9.                                                           
                                                                               
TAPE 97-2, SIDE B                                                              
Number 000                                                                     
                                                                               
MS. O'BRANNON stated that the way the tort laws were currently                 
written, she did not know if it was necessary to say "substantially            
contributed", because she felt the courts would automatically                  
provide jury instructions that would apportion fault among the                 
parties based on their percentage of the fault.                                
                                                                               
REPRESENTATIVE PORTER requested that HB 22 be held over to further             
consider the ability of the state or city being able to recover                
monetary damages from acts of bootleggers and the need to                      
investigate those types of cases.                                              
                                                                               
TOM WRIGHT, Committee Aide to Representative Ivan, advised members             
the sponsor would not object to holding the bill over for the                  
purpose of considering additional amendments addressing the                    
concerns voiced at the present hearing.  Mr. Wright offered to work            
with the Chairman's staff, Representative Porter's staff and                   
Representative Berkowitz staff to arrive at language that would                
accommodate their concerns.                                                    
                                                                               
REPRESENTATIVE CROFT declared a possible conflict of interest                  
advising members that he had worked with Christopher Cooke, the                
attorney from Bethel, Alaska, although it involved nothing to do               
with the proposed legislation, HB 22.                                          
                                                                               
REPRESENTATIVE ROKEBERG expressed his support of a community or                
state having the ability to file action.                                       
                                                                               
CHAIRMAN GREEN advised members that HB 22 would be held over for               
the purpose of considering additional language, and brought back               
before the committee at a later date.                                          
                                                                               
Number 660