Legislature(1999 - 2000)
04/15/1999 01:24 PM House JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 176 - PUBLIC INTEREST LITIGANTS
CHAIRMAN KOTT announced that the next item of business would be
House Bill No. 176, "An Act relating to attorney fees and costs and
the granting of public interest litigant status in proceedings
related to administrative actions and inactions; and amending Rules
79 and 82, Alaska Rules of Civil Procedure, and Rule 508, Alaska
Rules of Appellate Procedure." Present to explain the bill and
answer questions were Jeff Logan and Kevin Jardell, staff to
Representative Green.
Number 1786
JEFFREY LOGAN, Legislative Assistant to Representative Joe Green,
Alaska State Legislature, spoke on behalf of the sponsor, saying HB
176 is designed to "take the 'kick me' sign off of our backs."
Noting Alaska's resource development economy, he said the state
leases, sells, rents or somehow disposes of its resources, and then
collects a royalty, rent, tax, fee or other form of payment to fund
government services. To protect the public interest, the
legislature has spelled out a process that is carried out by the
Administration. There are three stages of notice; integrated
throughout are opportunities for extensive public involvement. The
people who carry out this process are almost always people with
impressive academic credentials, experience in their fields, and
dedication to public service, he said. There is a clear process,
carried out by competent people. But if a member of the public
opposes an agency action or inaction, there is yet another
opportunity to express that opposition: the administrative appeals
process. Failing that, a person can appeal to the courts. Mr.
Logan stated:
Mr. Chairman, some people who oppose the development of our
resources, and whose arguments don't win the day in this
extensive public process, choose this final category,
litigation in the courts, in an attempt to circumvent your
policy and the executive branch's application of it. And
that's okay, Mr. Chairman. House Bill 176 doesn't address the
process, or those people's right to access the court system.
What House Bill 176 does address is that under a doctrine
established by the court, these people are getting paid by the
state to sue the state; and that doctrine is called the Public
Interest Litigant Doctrine. The court has said that some
litigation is so important, [to] not just the parties bringing
the action but to the public at large, that the public at
large should ... foot the bill for the legal expenses, because
the public at large will benefit from the resolution of the
question at hand. And there is probably some merit to that,
if it worked that way.
Unfortunately, the court has seen fit to allow the people of
Alaska to foot the bill for other, smaller, more specific
questions before the court. House Bill 176 is a proposal to
change state policy, to go from getting sued and paying the
plaintiffs to sue us, to getting sued and letting them pay for
their own legal expenses, in essence, taking the "kick me"
sign off of our backs.
MR. LOGAN indicated he had a lot more material, then deferred to
testifiers on teleconference.
Number 2172
WILLIAM GREENE, Deputy Municipal Attorney, Municipality of
Anchorage, testified via teleconference from Anchorage that HB 176
is a step in the right direction. However, political subdivisions
have similar problems, and the municipality would appreciate having
the burden of public interest litigant fees included under the
coverage of HB 176. He referred briefly to SB 123, then indicated
the municipality has found, in its experience in the courts, the
very liberal awarding of public interest litigant fees and the
determination of who is a public interest litigant.
MR. GREENE said in cases involving state statute, the constitution,
or municipal law, the administrative or executive official making
the decision is limited by what the law states to a greater extent
than the courts are limited, he said. Accordingly, they run into
cases frequently in which, under the existing statutory or
ordinance law, the decision was correct but the courts overrode
that judgment and made the plaintiff or the appellant a public
interest litigant. The municipality ends up paying 100 percent of
the actual reasonable attorneys fees of the other side; in this
context, there is a great deal of leeway in determining what is
reasonable. Under Civil Rule 82, the court has wide discretion to
deviate from the schedules; at least in theory it could grant full
actual attorneys fees.
TAPE 99-33, SIDE A
Number 0001
MR. GREENE, in response to a question of Representative Rokeberg,
said in one instance the municipality prevailed in supporting the
ruling of its administrative official, and one minor matter ended
up being an advisory matter. The municipality is in the process of
litigating whether or not the plaintiff will obtain full public
interest litigant status on a relatively minor issue, because the
courts generally will not apportion fees between issues.
MR. GREENE told members that in a second case, the administrative
official followed the ordinance, the state statutes and the
constitution, but is limited in the degree to which the official
may amend an initiative ballot proposition, whereas the court has
some additional powers that allowed it to make some changes in
language in the petition statement itself. Those are two instances
in which the municipality faces a real prospect, they believe, of
paying full actual attorneys fees, in cases where the municipality
was, at least in part, correct. And in another instance where the
controlling issue in the case was answered by the court in the
municipality's favor, they are still looking at the potential of
substantial fees. Mr. Greene offered to provide further examples
in writing.
Number 0234
STEVE WILLIAMS, Attorney at Law, testified at length via
teleconference from Anchorage, noting that he has been an attorney
in Fairbanks and Anchorage for 21 years, mostly representing civil
commercial clients, although he does some public interest
litigation. He stated, "I'm here because I believe that this bill
is a bad policy and, frankly, bad politics." He told members:
One thing I think that needs to be made clear is that the
state is not paying people to sue them. What they are doing
is ... if - at the end of the litigation, often several years
out after a lawsuit is filed - the judiciary determines that
the state acted unconstitutionally or unlawfully, then the
party is entitled to reasonable attorneys fees under the
public interest ... litigant standard.
Secondly, with respect to Mr. Greene's testimony, I can fully
understand that the municipality would want in on this being
let off the hook for fees where they've acted unlawfully. No
executive likes to be sued and called to task for acting
unlawfully or unconstitutionally.
But I think that the key point that I want to make here is
that our society - our democratic society - is founded on the
rule of law; and that's a principal distinction between our
democracy and other places such as Stalinist Russia, "banana
republics," or modern-day Kosovos. Now, I'm not saying Alaska
is like that. But the principle is that the executive branch
of government must act lawfully and constitutionally, not
arbitrarily, and is subject to review and restraint by an
independent judiciary. This principle is recognized as
essential for emerging (indisc.) democracies around the world,
to protect the freedom and the rights of all citizens.
The public interest attorneys fees doctrine, which has been
recognized in Alaska for about 25 years, has as its purpose to
encourage private citizens to raise issues of public interest
where officials may be acting in an unlawful or
unconstitutional way, acting as a private attorney general to
vindicate the public interest and the rule of law. By
definition, ... under current law, a person is a public
interest litigant only if the case is designed to effectuate
strong public policies; if the plaintiff succeeds, numerous
people receive benefits from that success - numerous members
of the public; that only a private party could reasonably have
been expected to bring the suit; and that the purported public
interest litigant did not have a substantial, sufficient
economic incentive to file the suit, but was instead primarily
motivated to bring it by desire to raise and have decided
issues of significant public policy and legal importance.
... Currently, the successful public interest litigant is one
who's prevailed, who's obtained a judicial determination that
a public official's conduct was unlawful, is entitled to a
full reasonable fee ... for work devoted to pursuing that
determination. However, the court is required to reduce the
fee if the hourly rate is excessive, the total hours are
unreasonable, or if the party has unreasonably asserted issues
which are frivolous or were asserted in bad faith.
Furthermore, under current law ... a public interest litigant
is not liable to a public defendant for an award of attorneys
fees if the court does not rule in the public interest
litigant's favor. The reason for that rule is to eliminate
the substantial disincentive [that] would be presented to
citizens bringing cases of significant public interest. Few
people can afford to sue the government and face the risk of
having to pay substantial attorneys fees awards, in cases
where they have no significant economic interests but merely
are wanting to vindicate the public interest and the rule of
law.
HB 176 would eliminate these long-established public interest
principles in all cases where a public interest litigant
challenges action by the executive branch of state government.
It would treat public interest litigants as the same as those
who are motivated purely by financial incentive to sue, and,
therefore, add an economic interest in incurring the costs
and risks of litigation. It would thus dramatically reduce
the incentive to bring public interest cases, where state
officials are, in fact, acting in a way which is unlawful or
unconstitutional.
Instead of allowing a successful litigant to recover full
reasonable fees for vindicating the public interest in having
the executive branch - which, as we all know, at this point is
the Knowles Administration - acting ... lawfully and
constitutionally, it would allow the recovery of only 20 to 30
percent of those fees. And since most public interest fees
are matters of law and ... decided by summary judgment, it
would, in most cases, limit recovery to 20 percent of the
actual reasonable fees incurred in the case.
And I would submit that, with respect to private attorneys in
Alaska, many of whom work by themselves or in relatively small
firms, very few Alaskan lawyers could take on a public
interest case if, in the end - ... after perhaps three or four
years of litigation - they would be permitted to recover only
20 percent of their actual fees for work on the case. Those
of you on the committee who are attorneys, or who have worked
... in the law business, know that that percentage of a fee
would not even cover the overhead for most law firms, which
generally ranges somewhere around 30 to 40 percent ... of
revenues.
Moreover, by exposing public interest litigants to the risk of
facing award of fees, should the court not agree with their
legal challenge to the state executive's conduct, HB 176 will
clearly and dramatically ... deter such challenges from being
brought. The average citizen would face bankruptcy, were he
or she not to prevail on a public interest case, and be
subjected to a substantial fee award.
Number 0670
Now, I understand from talking to several folks, and it was
reaffirmed by [Representative] Green's staffer, that this bill
is apparently a reaction to certain public interest lawsuits,
with which ... some legislators disagree, or which they view
to be a nuisance, particularly in the natural resources area.
However, it is just a reaction, in the sense that this law
would affect all public interest litigants.
Alaska's public interest fee doctrine is not partisan. It
protects the rights of all Alaskans, of all political and
philosophical persuasions, to litigate issues of substantial
public interest. In fact, to the extent this ... bill
purports to be a, quote, "conservative political reaction" is
insulting to conservative principles. ...
MR. WILLIAMS offered as proof the following discussion of reported
cases on public interest litigation:
Those cases involving the administration of state laws ... in
which a litigant has been found to be a public interest
litigant included [a] considerable number of cases involving
political candidates or officeholders challenging election
conduct; cases contesting the conduct and result of state
elections; cases challenging state reapportionment schemes;
cases challenging fish and game regulatory statutes, or fish
and game enforcement or interpretation of them, where the
litigant relies on fish or game resources for personal, ...
rather than commercial, use, or where the litigation is
principally designed to implement the public interest; cases
challenging the state's public school ... funding formula
laws, in the way that they discriminate between REAA [Rural
Education Attendance Area] and non-REAA schools; cases
challenging regulations concerning the use of boats on the
Kenai River; challenges to the Local Boundary Commission
decisions concerning incorporation of municipalities;
challenges to the implied powers of government concerning
state rights-of-way.
And I think that these cases - and there are many more which
don't involve ... the state administration, but which involve
local government - these cases, if you review them fairly,
make it clear that the public interest litigation doctrine is
not, one, a doctrine which is merely about, quote, "liberal
groups" or "environmental groups" or even "civil liberties
groups." It's a doctrine which protects the rights of us all,
and protects the rights of people of all philosophical and
political persuasions to seek to vindicate the rule of law.
The only other comment I would make is that, in fact, what
this law will do is deter any private attorneys from taking
public interest cases brought by individual citizens. In
fact, the concern of some members of the legislature, and of
this committee, as expressed by Representative Green's aide,
is to somehow deter environmental organizations and law firms
from bringing lawsuits challenging natural resource decisions
by the state executive.
I would suggest that this bill will not do that, mainly
because that is what those groups exist to do. At most, this
bill will somewhat reduce their income from this particular
source, which they might get, again, if they were right, and
if they won the case - in other words, if their view of the
law was correct, ... at the end of a lawsuit. But, in fact,
those kinds of interest groups are out there and established
specifically to litigate these issues. So, I don't think that
this is going to be a deterrent to those sorts of interests
being asserted in litigation against the state executive.
Instead, it's going to be a deterrent against people who
aren't a part of organized environmental groups or other
organized groups, who may not have an organization ... with a
few staff attorneys who ... are capable of bringing cases. It
will, in fact, deter people who go to lawyers like me and say,
"I think that I was not treated fairly," or "I think that the
state government is acting unlawfully; will you help me?" And
I'd have to look at that people and say, "I really want to.
I care about this. But you have to understand that I can't
afford to take a case on where, even if we're right, and even
if we get paid some fee three years from now, or four years
from now, it will only be 20 percent of what I actually put
into the case, which won't even be enough to cover my
overhead."
So, in conclusion, I just think that ... there's no doubt that
this bill will seriously reduce the power of Alaskans of all
political persuasions to ensure that the executive branch of
their government - the Knowles Administration, for at least
the next three and a half years - conducts itself in a way
which is lawful, consistent with the laws passed by this
legislature, and constitutional. Simply put, the bill will
erode the rule of law in Alaska, and I would urge the
committee not to pass it out.
Number 1002
KEVIN JARDELL, Legislative Assistant to Representative Joe Green,
Alaska State Legislature, responded that he takes some exception to
the loose analogy to Kosovo and "banana republic" countries,
although he realizes it was to make a point. He then reminded
members that neither the federal system nor any other state system,
to his knowledge, has such a broad doctrine. He stated:
I don't think, if the doctrine is eliminated or is defined in
some other way, that we would see an all-out destruction of
the rule of law by any means, or even an erosion of the rule
of law. Throughout this state's history, we've had people
stand up and take it upon themselves to challenge actions by
municipalities, the state; and we're not saying that they
can't do that now. In fact, in the state of Alaska we have a
system, under Rule 82, that pays a portion of their fees if
they do, in fact, win and are considered the prevailing party.
This just eliminates the doctrine, or will redefine the
doctrine, in a way, that some policymakers believe brings it
more in line with what they feel [it] should be.
Some of the problems that we see have been brought out by the
Administration, in its arguments in cases, when it argues that
the courts have reimbursed public interest litigants for
legislative lobbying costs. The courts have allowed public
interest litigant status to be awarded to groups and
individuals that are seeking policy agendas, and not
necessarily in the public interest. ...
The question the Administration posed to the court was: What
amount should the Alaska Center for the Environment be awarded
as an accidental beneficiary of an unfortunately drafted
settlement agreement, the fatal deficiencies (indisc.) which
were established by others? This is a case where ACE won
approximately three out of eleven claims. The court decided
that even those three weren't significant. The superior court
said, "We won't give you any fees." The supreme court
remanded the case and said, "Not only will you pay them fees,
but you'll pay them $456,000." That's the type of abuse of
the policy that we [have] recognized, and that we are trying
to remedy.
Now, whether there are other solutions, other considerations
that can be brought up -- I know the sponsor is always open to
suggestions. The municipality has raised some points that
they would like to bring up, apparently, and ... the sponsor
would be more than happy to listen to those suggestions. But
there is a problem, and it needs to be addressed. And this is
an attempt to address that problem.
CHAIRMAN KOTT asked whether Mr. Williams wished to reply briefly.
Number 1211
MR. WILLIAMS responded that, first, he was obviously not comparing
Governor Knowles to [Yugoslav President] Milosevic. He himself
believes that the conduct of the government is subject to review by
the judiciary, and there is no doubt that the ability of people to
obtain judicial review of executive conduct will be diminished
here. Second, he agrees with Mr. Jardell that most other states
don't provide for attorneys fees, except in certain statutorily
provided situations. In fact, very few other states provide for an
award of attorneys fees against the losing party, period. It is,
therefore, a two-edged sword. He believes that HB 176 will provide
a substantial disincentive to people bringing public interest
cases, although probably not to some organizations that exist for
this very purpose.
Number 1318
LAUREE HUGONIN, Director, Alaska Network on Domestic Violence and
Sexual Assault, came forward. She told members that unfortunately
the network had entered into litigation as a public interest
litigant after passage of the domestic violence prevention and
victim protection Act of 1996. It was a case against the court
system, which had refused to recognize the three separate types of
protective orders that the legislature had made provision for in
the Act; through court forms, only two kinds of protective orders
were available.
MS. HUGONIN explained, "We tried to work with their forms
committee. We tried to work with Mr. Snowden, who was the
administrator at the time. We tried to intervene through talks
with the Administration, talking to the court system. Then
Representative Parnell also tried to work with the court system to
remedy this short of litigation. And we were not successful in any
of our attempts to do so. And so, we believe strongly enough that
victims were being put at risk, by not being able to ... avail
themselves of this remedy that the legislature had provided, that
we did enter into litigation against the court system."
MS. HUGONIN noted that they had been successful in that litigation,
winning on all issues. They tried to reduce costs, she said, and
they sold T-shirts and sweatshirts. They are a small
organization that is lucky if it has $10,000 in the bank. Although
only about two-thirds of their attorneys fees were awarded to them,
the ability to collect those attorneys fees helped them to stay a
viable entity. She understands that the concern is of maybe a
bigger proportion in terms of money that the state has to return to
programs. However, it affects little programs, as well - and on
matters of life and death.
MS. HUGONIN said as she reads them, HB 176 differs from the Senate
bill in that it applies to executive branch actions. Although
their particular case against the judicial branch may not fall
within the scope of this bill, there could be occasions where they
need to litigate against the Administration, if the Administration
chooses to not follow a policy meant for the protection of victims,
for example, and is, in fact, endangering them. Ms. Hugonin
expressed hope that some consideration would be given to narrowing
the scope or, for a prevailing party, allowing the court to
continue to have discretion in the amount of the attorneys fees
awarded. Noting that their case was the first time her
organization had to be a public interest litigant, she said she
hopes it is the last. "But we would like to be able to avail
ourselves of that, if it became necessary again," she concluded.
Number 1515
REPRESENTATIVE GREEN asked whether that two-thirds was awarded
because of being a public interest litigant or because of being the
victorious party.
MS. HUGONIN replied that she believes it was for both reasons.
REPRESENTATIVE GREEN asked whether she believes they would have
been awarded no fees if they hadn't applied as a public interest
litigant.
MS. HUGONIN said she wasn't sure, as she is not an attorney.
Number 1617
MR. JARDELL, who is an attorney, clarified that under Rule 82 the
court can award more than the 30 percent or 20 percent that is
given in section (b), and factors are set out for the courts to
look at. Even under Rule 82, therefore, the court could always
come back, for whatever reason deemed necessary, and award whatever
it believes to be adequate.
Number 1714
REPRESENTATIVE ROKEBERG asked whether it is a fair analysis that
the legislature, rather than the court system, makes the laws, and
that in this case the courts clearly have usurped the lawmaking
ability of the legislature.
MR. JARDELL answered that if one goes far enough back, to common
law, the courts set all law. It has evolved from that to more of
a civil law, to where we now codify almost everything. Reserved in
the common law is the concept that if the legislature hasn't spoken
to it, the courts can create it. Therefore, until the legislature
speaks to it, the courts can create a doctrine.
REPRESENTATIVE ROKEBERG asked whether the legislature couldn't
repeal any public interest doctrine or principles, and restrict the
court from applying them.
MR. JARDELL replied, "Absolutely."
REPRESENTATIVE ROKEBERG thanked Representative Green for
introducing HB 176, saying it is one of the best bills he has seen
this session, including his own. He disagreed with Mr. Williams
that this would erode the rule of law, then stated, "I'd say the
existence of this is making scofflaws of people who intentionally
litigate for the very purpose of filling their own coffers and
pursuing agendas, and of taking advantage of this, to the degree
that it's stifled development and cost literally thousands of jobs
in this state. And it's the most frustrating thing I've witnesses
here for the last 50 years of my life, the development of this type
of thing."
Number 1786
CHAIRMAN KOTT referred to Mr. Greene's suggestion that HB 176 be
extended to apply to municipalities. He asked whether that had
been given any thought.
MR. JARDELL affirmed that, then added, "We didn't have any good
communications with the municipality, and weren't aware of exactly
what type of problem existed there. We were working under a rough
assumption that they may see more of ... causes of action that ...
may be in the realm where the policy makers here believe it should
be a sole individual standing up for zoning problems against the
municipality, and not really running into the same problems that
the state does. We work with the state, so we're more aware of the
state's problems." Mr. Jardell said they would contact Mr. Greene
and work with him; if there is a need to extend this to
municipalities, and a way to do that, then the sponsor's office
will see whether it can be done.
Number 1848
REPRESENTATIVE KERTTULA pointed out that courts create the rule of
law along with the legislature.
REPRESENTATIVE ROKEBERG responded, "I don't disagree with
Representative Kerttula; I just think we're in the constitutionally
superior position." He then asked whether there is a potential
here to distinguish between natural resource or development
activities and other grievances, without running afoul of
constitutional fairness mandates, for example.
Number 1903
MR. JARDELL replied that the federal method and most states'
methods are to determine specific causes of action, such as
election laws, and make a determination that election laws are an
area that they want to encourage people to challenge, for instance,
as a foundation of democracy; therefore, they will allow full
reasonable attorneys fees as an exception to that cause of action.
However, it is very difficult to develop each and every cause of
action that could come up. It is also difficult to try to come up
with a balance for the carrot and the stick, without having a
doctrine like we do now.
REPRESENTATIVE KERTTULA responded that therein lies the problem.
They would foreclose a whole range of public interest litigation,
including civil rights cases, public information matters or those
raised by Ms. Hugonin, for example, not just that involving natural
resources.
REPRESENTATIVE ROKEBERG said he takes exception, asking whether the
issue is now paying Mr. Williams' overhead. He commented that
members of the bar have an obligation to look out for people whose
rights are being stepped on, and who don't have the resources to
come forward. He said he believes the current situation is being
abused.
MR. JARDELL addressed Representative Kerttula's comment, saying
that the exception mentioned earlier in Rule 82 would still provide
the courts a remedy for those situations that aren't being abusive,
and which truly merit a greater award of attorneys fees than the 30
percent or 20 percent.
Number 2054
MR. LOGAN referred to the 1990 Alaska Supreme Court opinion
provided in committee packets regarding Anchorage Daily News v.
Anchorage School District. He clarified that although that is the
case where the court enumerated the four standards that must be met
in order to be considered a public interest litigant, that was a
case where the plaintiff was a subsidiary of a large newspaper
corporation. It isn't always an indigent organizations that is
granted public interest litigation status, he pointed out.
Number 2089
MS. HUGONIN expressed her understanding that one reason why her
organization became a public interest litigant was because it
needed standing in order to appear in court. Part of what HB 176
does is remove the notion of public interest litigant or doctrine.
She asked the committee to consider still allowing these litigants
to have standing in court, to continue to bring these matters
forward, aside from the issue of attorney fees.
Number 2158
MR. JARDELL pointed out that standing is a completely different
issue from attorneys fees, and this would have no affect,
whatsoever, on the ability of one person or another to obtain
standing.
REPRESENTATIVE ROKEBERG said he is aware of a part-time fisherman
in Haines with standing enough to bring down and stop any
development anywhere in the state of Alaska, in terms of the
practical application of the Alaska courts.
MR. JARDELL stated, "Even with public interest litigants, when
there's a group the courts still look to the members of the group
to see if the members having standing, so that the group will have
standing. And so, whether you're claiming to be a public interest
litigant or not, you're still going to have to have an individual
standing classification, some injury, in fact. So, this really
would not have any effect on a person's ability to get so-called
standing."
Number 2231
CHAIRMAN KOTT asked whether there were further questions or
testifiers, then closed public testimony.
Number 2247
REPRESENTATIVE KERTTULA told members she would like to be sure on
the issue of standing, as she doesn't want to change the statute on
that. Second, she would like to show the committee the kinds of
cases that get these awards. These are people who have won their
cases, which is why they are getting the awards, she noted.
REPRESENTATIVE ROKEBERG agreed that would be great information,
stating his understanding that with resource cases, it is "merely
technical, minor provisions that allow 100 percent awards, and it
stops development for five years."
REPRESENTATIVE KERTTULA responded that those aren't the cases she
has seen.
CHAIRMAN KOTT agreed that these are valid concerns. He indicated
he looked forward to hearing from Representative Kerttula regarding
standing and the types of cases, at the next hearing on the bill.
He concluded by announcing that HB 176 would be held over.
| Document Name | Date/Time | Subjects |
|---|