Legislature(2001 - 2002)
03/22/2002 01:22 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 385 - UNFAIR TRADE PRACTICES ATTY FEES/COSTS Number 2124 CHAIR ROKEBERG announced that the last order of business would be HOUSE BILL NO. 385, "An Act relating to the attorney fees and costs awarded in certain court actions relating to unfair trade practices; and amending Rules 54, 79, and 82, Alaska Rules of Civil Procedure." Number 2162 REPRESENTATIVE BERKOWITZ moved to adopt the proposed committee substitute (CS) for HB 385, version 22-LS1224\C, Bannister, 3/21/02, as a work draft. There being no objection, Version C was before the committee. Number 2213 REPRESENTATIVE ERIC CROFT, Alaska State Legislature, sponsor, said that HB 385 does two things. Section 1 attempts to provide a shield for consumers who are pursuing their own claims by precluding them from having to pay attorney fees to a prevailing defendant unless the suit is found to be frivolous. He remarked that the fundamental problem with consumer protection [cases] is the lack of available legal counsel who are willing to pursue what are essentially small claims. He elaborated: When you buy a $100 toaster and it does not work, and the major corporation that sold it to you does not give you any satisfaction under the warranty, you're in a difficult situation trying to get a lawyer to pursue that kind of claim. They will say, "First of all, it will cost you ... $5,000 to pursue this all the way through." And the worst part about it is, the major corporation knows that, and they can tell you ... essentially what they want because very few people are going to have the ability to spend $5,000 to get their $100 toaster fixed. REPRESENTATIVE CROFT said that currently, even if someone is able to pursue such a case, if it gets thrown out on some sort of technicality, that person could be assessed either all or a large portion of the major corporation's attorney fees. He explained that in developing HB 385, he used a model from the Civil Rights Act, which, because of a lack of attorneys willing to pursue such cases, enabled private individuals to pursue their claims without being assessed attorney fees if they lost. REPRESENTATIVE CROFT explained that Section 2 of HB 385 would give the attorney general the power to collect fees and put them in a special fund that would be used for "consumer protection defense actions." He mentioned that although Sections 1 and 2 are severable, he opined that together, Sections 1 and 2 provide a little more help for individual plaintiffs and a slightly more certain funding stream for the Office of the Attorney General so that it can pursue [consumer protection] claims. CHAIR ROKEBERG noted that language similar to that of Section 1 was heard and rejected in a prior legislature. REPRESENTATIVE CROFT remarked that the decisions of one legislature are not binding on future legislatures. Number 2360 REPRESENTATIVE JAMES mentioned that she learned early on that for less serious issues, the best advice she could give people is for them to stay out of court to begin with if at all possible. People who go to court expecting to be compensated for their losses are bound to be disappointed because of the additional emotional costs; going to court is a dart game. She said that it is her belief that if people are willing to go to court over an issue, they should be willing to pay the price if they lose. REPRESENTATIVE CROFT agreed that Representative James's advice is good advice, but noted that this is unfortunate, since the justice system is intended to fix "some of these problems." The reality, however, is that there is very little cost-effective remedy for small indignities, he noted. When an entity has sold a shoddy piece of goods of a relatively low value, "are we really going to say that Alaskans have no recourse to fix that?" he asked. He said the corporations that do so, although they are probably few in number, know that the disadvantages of going to court are so big that very few individual consumers are going to do it; therefore, those corporations are willing to sell 100 defective toasters, for example, since 99 of the buyers aren't going to seek recourse. He remarked that although the justice system works well for resolving large injustices, he is searching for a cost-effective, relatively quick way for ordinary consumers to get risk-free relief for small injustices. REPRESENTATIVE JAMES pointed out, however, that there is an inherent risk to living, that not everything can be fixed, and that time is money. TAPE 02-35, SIDE B Number 2489 REPRESENTATIVE JAMES said whether "it's your own time or someone else's time," the amount of money it's costing to pay attorney fees and court fees is only a small part of the cost of going to court." If it's a big issue, she said, it should be pursued, but if it's a small issue, "you just need to swallow and go on with life." REPRESENTATIVE BERKOWITZ, referring to the "100 toasters" example, pointed out that it is usually not the single consumer who would bring the action against the seller; it would be someone who knew that there were a 100 folks who'd been ripped off by a bad toaster. Therefore, any problem that could possibly be corrected by the language in Section 1 of HB 385 only exists if one aggregates all of those small indignities. REPRESENTATIVE COGHILL asked how many suits have been deemed frivolous. REPRESENTATIVE CROFT said he does not have any statistics regarding the number of frivolous suits. And although there are sanctions for frivolous actions, he surmised that the very burdens that Representative James spoke of tend to keep many [frivolous suits] from being filed. CHAIR ROKEBERG mentioned that prior legislation, which later became law, contained a definition of frivolous. He suggested that there has never been "a finding of [Civil Rule 11 of the Alaska Rules of Civil Procedure]" REPRESENTATIVE BERKOWITZ argued to the contrary that if the committee's staff researched that issue, "she would come up with a long list of Rule 11 cases." REPRESENTATIVE CROFT, to summarize, said that Section 1 and Section 2 reflect two different approaches. Section 1 empowers individual consumers to pursue their own cases, whereas Section 2 helps the government pursue consumer protection cases. Via Section 2, when the government wins consumer protection cases, it would be allowed to keep the fees and use them to further consumer protection activities. He opined that there is a problem that needs solving, and to that end, he observed, the committee can either keep both Sections 1 and 2, so that they can work in tandem, or keep one of the sections and delete the other, depending on which philosophy the committees prefers - individual empowerment or governmental [intervention]. He also opined that Alaskans are increasingly becoming targets of consumer fraud, and the legislature should do something about it. REPRESENTATIVE BERKOWITZ asked Representative Croft whether he would characterize [Section 1] as form of privatization. REPRESENTATIVE CROFT indicated that he would. He mentioned that four years ago, he'd introduced legislation to provide the Office of the Attorney General with more funds with which to pursue consumer protection issues, but other legislators, notwithstanding concerns regarding consumer fraud, were reluctant to support [the increased funding]. Number 2213 REPRESENTATIVE BERKOWITZ surmised, then, that legislators who generally support privatization as a concept should feel comfortable with Section 1. REPRESENTATIVE CROFT said: "You would think so." CHAIR ROKEBERG asked for confirmation that currently, plaintiffs in "these private rights of actions [get] the costs, by court rule, and full reasonable [attorney] fees." [An unidentified speaker indicated that was correct.] CHAIR ROKEBERG continued, pointing out that currently, defendants are subject to [Civil Rule 82 of the Alaska Rules of Civil Procedure]; therefore, there is already an inequity in favor of plaintiffs, since they get full attorney fees. REPRESENTATIVE CROFT countered that although that is a correct analysis, plaintiffs currently face an unbalanced field in terms of the difference in power between an individual with a faulty toaster and a major corporation. He acknowledged that [Section 1] would be providing an individual who sought redress for a small injustice another tool that the defendant would not have. CHAIR ROKEBERG remarked that [current statute] already gives plaintiffs full right of recovery, which, he opined, is a pretty major concession. REPRESENTATIVE CROFT, after restating his opening remarks that there is a problem that needs to be fixed and what the aspects of that problem are, opined that although current statute provides some protection for consumers, it does not go far enough. Number 2053 LES S. GARA, Attorney, testified via teleconference, and said: Five years ago we enacted the first round of amendments to the "consumer protection" Act, and ... they tried to make a fix to what was a pretty broken consumer protection system. ... We took a look over the last five years to see how well what we did five years ago was working. We held a consumer law conference in November; it was attended by about 100- 125 people. [Representative] Dyson was there; [Representative] Croft was there. And what we got out of that conference was that we still had two major problems. Two major problems that keep the consumer protection system from working, and that's what these two provision aim to solve. ... This bill ... is timely; at a time when we're asking the members and citizens of the state to contribute to possibly help fund government, I think we have to find ways to save people money at the same time, and that's what this does. The bill also saves people money and enhances the consumer protection system without impacting the budget, and I think that's also important. We've really tried to work to come up with a better system that doesn't impact the budget. The provisions of [HB 385] are well tried and tested. The provision ... that currently allows plaintiffs full [attorney] fees if they win their consumer fraud case, ... that ... is called privatizing the attorney general's function. What it does is, it says we know that ... the government isn't going to be able to stand up and help people when they've been victimized by consumer fraud, so let's try and make it so that they can represent and help themselves. And so five years ago we enacted a bill that said plaintiffs in consumer fraud cases, if they prove they've been defrauded, can recover full [attorney] fees; that's the only way they're going to find private attorneys to help them. Number 1937 MR. GARA: But there's still an impediment. And the impediment is that when somebody walks into an attorney's office and they say, "Look, I've been defrauded by a used car dealer to the tune of $800," the attorney's advise has to be to that person, "You know, we can pursue the claim, it's a really good claim, but let me tell you this: If we lose the case, you might owe $10,000; $20,000; $30,000; $40,000; $50,000 in [attorney] fees to the other side and there are many ways you can lose the case." That other person just walks out of the office and says, "Well that's an indignity I'm just going to have to keep to myself." And that's what happens in these consumer cases: they're small, and people are scared out of going to court to vindicate themselves and to stand up against an injustice. They're ... scared out by the [attorney] fee provision in Rule 82. So what we've done in this Section 1 of [HB 385] is ... followed 100 years of practice from the federal civil rights arena. It's in the title (indisc.) that's been there since 1964; it's been in the Civil Rights Act ... since the 1800s. And it says this: "If you win your case, if you prove that you've been wronged, you do get full [attorney] fees, so you can go out and find an attorney; we're not going to scare you out of court by saying if you lose, you have to pay [attorney] fees, except ... if your case is frivolous, you will be penalized - you'll have to pay full [attorney] fees to the other side." That's the system that works under the civil rights statutes, the system that works under a number of sort of states' and federal remedial statutes in areas just like this, and so this is a system that's worked for a long time. Number 1880 MR. GARA continued: It's a system that I think we need to enact here: A, in order to stop scaring people out of standing up for their rights; B, because we're never going to give the attorney general's office enough funding so that the attorney general's office will represent consumers in all the cases that are brought over to their office - they just can't do it and we don't have the money to do that. So, if we're going to have a private system that works, this is how we're going to have to do it. We tried enacting half of the bill five years ago, which was to just give full [attorney] fees to plaintiffs if they won their cases. But the part that ... practitioners in the area say is still scaring people out of standing up for themselves is the part that says that, as an attorney, you have to tell your client, "If you take this case and lose, even if it's a good-faith case, you might owe $10,000; $20,000; $30,000; $40,000 in [attorney] fee penalties." ... The system is just not working very well with that threat in place, so I think it's a fair compromise to do what the federal and state laws in many areas do, which is only impose [attorney] fees against a plaintiff, in these kinds of cases, if they file a frivolous lawsuit, and in that case they should be penalized. The second part, Section 2, does this -- we're in a time where we don't have a lot of money for things. I don't think anybody would say that preventing consumer fraud is a bad thing; I don't think anybody would say that having a consumer protection section at the [Office of the Attorney General] is a bad thing. Those are good things that Republicans think are good things, Democrats think are good things, everybody thinks are good things. But how are we going to fund a state consumer protection agency? Well, it's hard in these times and we should do what many laws do in other areas, which is when the state pursues a consumer fraud claim and proves consumer fraud, they should be able to recover their full enforcement costs. And that's what Section 2 does. It makes the state whole for their time. Number 1797 MR. GARA: ... Where's the money come from? The money ends up coming from people who commit consumer fraud. ... What better group of people are there out there to fund a state consumer protection section? So that's what Section 2 says: that the state - if it prevails, if it proves consumer fraud - is entitled to be fully compensated for its time and for its efforts. And then what'll happen is that money will go into a special account, and at the end of the year you'll be able to see how much money has been raised. You don't have to appropriate it back to the [Office of the Attorney General], but we do this in some of the environmental cases [and] we do this in other areas of law: you create this special account just so you can ... see how well the system is working, and you can appropriate the money anywhere you want. But that's what that new Section 3 does. Places where this Section 2 system is in place - the federal environmental laws that have been amended, even under what's been called the Republican revolution in Congress - they still allow the government to recover full [attorney] fees in those cases. In the Clayton Act - that's the federal sort of an antitrust law - that's what we do: we let the government recover full [attorney] fees when they prove their cases. ... It should be no different here, and the extra motivation we have here is that we don't have a lot of money in the state any more. And so if we're going to fund government, we should have government funded in a way that's meaningful and is smart, and I think it's meaningful and smart to have those people who commit consumer fraud pay for this part of our governmental function. ... Representative James made a good point; ... as an attorney, I told my clients ..., "You know, filing a lawsuit in this state is like Russian roulette - it's a crapshoot." But one of the things that makes it a crapshoot is this Rule 82 ... that says if you lose your case you have to pay the other side's [attorney] fees. And so we can stop it from being a crapshoot. And when I say Russian roulette, we have an even worse provision on the books right now than that ...; even today, if you win your lawsuit, you might have to pay [attorney] fees to the other side ... [because of [Civil Rule 68 of the Alaska Rules of Civil Procedure]. ... MR. GARA concluded: The thing is, it is a crapshoot, there is Russian roulette, and we're trying to stop it from being a crapshoot and we're trying to sort of minimize this Russian roulette concept in the law that keeps people from standing up for their rights. If we don't do anything about it, we're going to make sure the people who make $20,000; $30,000; $40,000 a year [get] to absorb the cost of shoddy business practices. That's not right. I don't think we should ask people to keep bearing those costs, especially people who live on the economic margins; ... those are ... really the people that this bill helps. ... As we've watched ... [current law] work, we've seen that there's still some somewhat major shortcomings, and through experience and through what we've learned in the last five years, we've determined that these are the two provisions that would really make ... this system work without costing the state any money. ... Number 1570 STEVE CONN, Executive Director, Alaska Public Interest Research Group (AkPIRG), testified via teleconference, and remarked that in his experience, change does not occur in consumer-justice laws unless it is [done in a] bipartisan [manner]. He mentioned that there are two barriers for the consumer, and that the second one, as experienced by middle-class consumers, is addressed by HB 385. The first barrier, he noted, is that most consumers - 99 percent - are too embarrassed by being cheated to speak out, particularly if they are elderly, because relatives and friends might take it as a sign that they are entering some state of dementia. MR. CONN, returning to the second barrier, said that neither the rich nor the poor need to worry about penalties for filing frivolous lawsuits, because the poor are "judgment-proof" and the rich "have got deep enough pockets." He said that the people who need HB 385 "are people like you and people like me," adding that he defined the middle-class as those who have something to lose but can't afford to lose it. He opined that HB 385 is needed in order to secure some justice for the middle- class, should they have "the guts enough" to go to court. He remarked that the toaster example is an insult to the consumers that he has met: "people really do suffer major hurts that hit them where they live, that stop them from feeding their family, [or] from getting to work; this is serious business if they're going to spend the time to go to court or even be not embarrassed enough to talk about their complaint." MR. CONN said that HB 385 speaks to something that is rooted in bipartisanism; that this legislature has got a great bipartisan movement going on several fronts, in several areas of consumer justice; that he is very positive about this [issue]; and that HB 385 emerged from the consumer roundtable discussions [organized] by Representatives Dyson and Croft. With regard to setting aside the money won from judgments for ongoing consumer protection as is proposed by Section 2 of HB 385, Mr. Conn commented that "in olden days," the state "paid consumer justice as they went." With regard to Section 1 of HB 385, he commented that if people are willing to take the time and trouble to go to court to say that they've been cheated, they mean business, they have something to lose, and they deserve the shield that HB 385 could provide. He noted that such people are also acting on behalf of the many people who won't invest the time and money or who are too embarrassed to speak up. Number 1312 REPRESENTATIVE JAMES, after relaying that her understanding of HB 385 does not comport with Mr. Conn's explanation, asked him whether he is claiming that plaintiffs who win are not awarded attorney fees, or whether he is saying that the problem revolves around the fact that when plaintiffs lose "they have to pay." MR. CONN said: If they had a sensational case and it's handled by themselves or by a good lawyer, they're going to win. But we're talking about cases that are harder to prove. They're small-money damages to start off with - so most attorneys aren't interested in them - and they're probably going to be somewhat back on the statutory/civil penalties provided in the Act. And ... they give it their best shot, but they lose because, as you said earlier, you don't know if you are going to win or lose. But they're not doing it to play games with the opposition or to play games with the courts; they're doing it because they're outraged - they're righteously outraged. REPRESENTATIVE JAMES responded: I have known cases of people who have been aggrieved ... and they've gone to court and they've won and they're still stressed out because the experience was so horrible. And so I think that if we were to do this, what you're doing is encouraging more attorneys to convince them to go to court. And I'm not convinced that that's the thing they ought to do, because of all the other kinds of experiences that they can have and the net results when they're done: they're still not whole when it's over. MR. CONN said a sense of outrage is satisfied in a lot of ways. Sometimes money will never compensate, whether one is the victim of a physical crime or a financial crime; however, he noted, what he has experienced is that for a lot of people, the satisfaction of making a crook stand in the light of day has a cathartic effect. He also remarked that people are often emboldened by the fact that others have gone forward with cases involving crimes against consumers. He opined that many consumer fraud perpetrators are not amateurs, they are real criminals that commit fraud for a living. REPRESENTATIVE JAMES said that her concern is that it is not the plaintiff who receives the real benefit of winning such cases, it is the attorney. Number 1088 MR. CONN remarked that there are areas of the law that attorneys "won't touch with a ten-foot pole," such as workers' compensation cases, in which people just have to do for themselves. He mentioned that consumer protection is not an area of the law that lends itself to "ambulance chasers," and that oftentimes consumers just need a little assistance from lawyers who are honestly trying to help and are not just trying to get rich, in order to put their cases forward. REPRESENTATIVE JAMES remarked that with [HB 385], unlike legislation pertaining to workers' compensation, "the other issues are too broad ... and I'm just not willing to go there." CHAIR ROKEBERG asked Mr. Conn whether he is aware of any instances occurring in the last five years that would justify "this remedial [legislation]." MR. CONN said yes, adding that he has people call him all the time who are angry and in despair and who have tried without success to get help from attorneys regarding contractors, house repairers, and roofing specialists, for example. CHAIR ROKEBERG mentioned that the limit [for] small claims court has been raised to $10,000; thus, he surmised, Mr. Conn must be referring to cases in excess of that amount. MR. CONN indicated that he was not. CHAIR ROKEBERG asked, then, why folks didn't just go through small claims court to get satisfaction, since that was the proper venue. MR. CONN argued that the problem lies with the fact that "the other side can still bring their attorney into small claims court" and, through that attorney, can "remove that case out of that court." He noted that if small claims court were limited only to people representing themselves, "we might have a different story," but such is not the state of the law. CHAIR ROKEBERG mentioned that he would like to hear some specific cases for which current law is not working. Number 0867 MARIE DARLIN, AARP, mentioned that the AARP was very involved in trying to get responsibility for consumer protection placed back into the [Office of the Attorney General], and was very glad to see support for doing so because the AARP had received a lot of complaints from members and other folks asking what they could do in situations of consumer fraud, and so it was nice to be able to finally say, "Call the attorney general's office; there is somebody there who will at least speak to you and give you some advice and perhaps help you out." In conjunction with that, she said, the AARP has written a letter of support for HB 385, with the idea that it will take [consumer protection] one step further. REPRESENTATIVE JAMES stated that she certainly supports the consumer protection agency to a greater extent than [the legislature] has currently done, because that is where the responsibility belongs, since that is where the expertise is; it would be able to settle such cases more quickly and with less trauma for the [plaintiffs]. MS. DARLIN commented: "But again we come back to the fact that the rich and the poor maybe don't have to worry as much as some of the middle-income-class people and particularly some of those who may not go into small claims court." CHAIR ROKEBERG asked Ms. Darlin whether she knew of anybody that wanted to file a lawsuit but didn't because he/she was afraid of losing attorney fees. MS. DARLIN said no, she is not aware of any specific instances at this time, but suggested perhaps that is because "there has been another place for them to go" to receive help. REPRESENTATIVE BERKOWITZ suggested that perhaps that question should also be asked of Mr. Conn and Mr. Gara. CHAIR ROKEBERG indicated that he would be doing so after others had a chance to testify. Number 0666 PAM LaBOLLE, President, Alaska State Chamber of Commerce ("the Chamber"), remarked that the vast majority of businesses in Alaska are small businesses, and, thus, the vast majority of the Chamber's members are small business owners. She opined that the premise upon which HB 385 is based is that all business is big and thus can afford to absorb the costs of "this sort of thing." She remarked that things have already been changed greatly by "allowing Rule 82 to not apply ... if you are ... found guilty: you're going to pay all the attorney fees." With HB 385, not only will [defendants] have to pay if they are guilty, but they will also have to pay all of their own costs even if they are innocent. "This is just taking it way too far," she opined. MS. LaBOLLE remarked that small business is what enables the Alaskan business world to operate, and that these are businesses which might only have 5-10 employees. She said that it might be the corner grocer who's hauled into court because somebody thinks the vegetable scale is rigged. It's not big business, it's not some giant company like the Proctor & Gamble Company or the General Electric Company; it's the small companies in Alaska that are going to be affected by HB 385. However, regardless of whether it is small business or big business, business people deserve equal protection under the law; they should not be treated so differently, as is proposed by HB 385. CHAIR ROKEBERG asked Ms. LaBolle how many small business would go out of business if they were "slapped with a $20,000 or $30,000 legal bill." MS. LaBOLLE surmised that such costs would cause a great many small business to consider going out of business, even if they were found innocent. REPRESENTATIVE BERKOWITZ asked Ms. LaBolle how she feels about section 2 of HB 385. MS. LaBOLLE said that her organization does not like Section 2 either. REPRESENTATIVE BERKOWITZ noted that Section 2 merely provides that if the state wins, the state gets full attorney fees. MS. LaBOLLE asked how that differs from current practice. CHAIR ROKEBERG posited that currently, the state, too, is subject to Rule 82, which provides that prevailing parties are awarded attorney fees according to a scale. Number 0337 CLYDE (ED) SNIFFIN, JR.; Assistant Attorney General; Fair Business Practices Section; Civil Division (Anchorage); Department of Law (DOL), testified via teleconference, confirming that currently, the state is subject to the limitations of Rule 82, which provides that attorney fees can only be recovered according to a specific scale. He noted that this scale calls for a substantial reduction in the amount of attorney fees that the state can collect. REPRESENTATIVE JAMES pointed out that a big part of Section 2 is the establishment of the separate fund. CHAIR ROKEBERG opined that there were other problems as well. MS. LaBOLLE indicated that even having to pay only 20-30 percent of a large legal bill would still be a huge financial burden for most small businesses. In conclusion, she said that she would like business people to receive equal protection under the law. CHAIR ROKEBERG mentioned that according to his reading of HB 385, the separate fund has the potential to grow to "$680 million based on the tobacco settlement." MR. SNIFFIN pointed out that only the attorney fees portion could have gone into the separate fund proposed by Section 2, not the entire settlement. TAPE 02-36, SIDE A Number 0001 CHAIR ROKEBERG mentioned he recalled a special payment for those costs that amounted to about $15 million. MR. SNIFFIN commented that the DOL supports the concept embodied in Section 1 of providing more incentive to consumers who wouldn't otherwise bring some of these types of small lawsuits against businesses. In response to testimony from the Alaska State Chamber of Commerce representative, he pointed out that the provision of Section 1 could benefit small businesses as well in that if larger companies were victimizing them, they, too, might be more inclined to pursue litigation. Small businesses are oftentimes the subject of predatory action by other companies; small businesses get scammed just like other people, he added. MR. SNIFFIN said that the DOL primarily supports Section 2 in that there is no provision, currently, that would allow the attorney general to recover its full fees. He remarked that in a lot of the bigger, multistate cases in which the DOL becomes involved, [Section 2] could be an important settlement tool for the state. Currently, because the state cannot make a claim for full attorney fees, Alaska is not in as favorable a position as other states when settling with large, national companies; as a result, Alaska is sometimes forced to negotiate a lesser amount than other states. He also noted that adopting a provision such as Section 2 would bring Alaska in line with a lot of other federal and state laws across the country that allow for the full recovery of attorney fees in prevailing situations. MR. SNIFFIN, in response to questions posed of other testifiers, said that the DOL has not kept any statistics regarding consumers who decide not to go forward with a lawsuit because of the fear of having to pay the opposition's attorney fees. He said that a lot of consumers come to his office seeking help because they can't afford a lawyer, and he opined that Section 1 would give such people an opportunity to pursue the action on their own. CHAIR ROKEBERG asked whether Section 2 would apply to attorney fees from class action lawsuits that the state engages in. MR. SNIFFIN said it would give the state more authority when negotiating in such suits. REPRESENTATIVE BERKOWITZ, referring to page 1, line 13, asked Mr. Sniffin for his opinion regarding changing "shall" to "may". MR. SNIFFIN said that such a change would be fine with the DOL. Number 0480 CHAIR ROKEBERG asked Mr. Gara and Mr. Conn to provide the committee with examples of cases in which people wanted to file a lawsuit but didn't because they were afraid of losing attorney fees. MR. GARA said that he could provide two examples in which people decided not to pursue very valid consumer claims: one case involved an elderly woman, and the other case involved someone who was defrauded by an insurance company. He said he would be happy to send the committee written testimony regarding those examples. MR. CONN, also in response to testimony made by the Alaska State Chamber of Commerce representative, said that it is not just middleclass retired people and elderly people who contact AkPIRG for help; he also hears from small entrepreneurs all the time because they are getting abused by bigger businesses like banks, insurance companies, or suppliers. Thus, contrary to the Chamber's testimony, small businesses would also be able to benefit from HB 385, he remarked. CHAIR ROKEBERG asked Mr. Conn whether he is suggesting that commercial operators should take advantage of [HB 385] in commercial transactions. MR. CONN said he was not suggesting that. He said that he is talking about consumer fraud perpetrated against small businesses, which are also consumers. For example, the owner of a delivery service who gets cheated by a big car dealer could have his/her business destroyed. He noted that the idea "of putting small businesses on one side [and] setting them up against consumers is completely nonsensical." CHAIR ROKEBERG remarked that he has not heard from any small business owners who were clamoring for relief. REPRESENTATIVE BERKOWITZ pointed out that Mr. Conn just mentioned examples of such. MR. CONN confirmed that, noting that unlike the Better Business Bureau, AkPIRG does not "process cases"; rather, he simply tries to provide additional information, resources, and encouragement to people, including small business owners, who call AkPIRG for help. CHAIR ROKEBERG announced that HB 385 would be held over.
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