Legislature(2003 - 2004)
04/23/2003 01:10 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 86-INJUNCTIONS AGAINST PERMITTED PROJECTS Number 2287 CHAIR McGUIRE announced that the final order of business would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 86, "An Act relating to permits issued by the state; and amending Rules 65, 79, and 82, Alaska Rules of Civil Procedure." CHAIR McGUIRE indicated no testifiers had signed up. Number 2275 JIM POUND, Staff to Representative Hugh Fate, Alaska State Legislature, presented SSHB 86 on behalf of Representative Fate, sponsor, noting that the bill had been rewritten in order to pass muster constitutionally. Mr. Pound explained that it approaches the issue of asking for and receiving injunctions that delay work on already permitted projects. Under current law, a plaintiff who files for an injunction against a project and loses in court is responsible for part of the court costs and part of the attorney fees for the defendant. Indicating the bill will guide the judiciary but leave decisions up to the bench, he told members that SSHB 86 makes those who improperly seek and cause an injunction responsible for full court costs and attorney fees. MR. POUND explained that SSHB 86 also adds statutory language which requires that costs incurred as the result of a delay will be paid for by the responsible party; those include wages and salaries for employees working on the project, material costs, and penalties and interest on contracts associated with the project. When a project is permitted, a contractor goes to work hiring employees and purchasing materials; these are commitments that a contractor makes. An improper delay of a project costs more than just court costs and attorney fees, he said; it disrupts the lives of the contractor, his or her employees, and subcontractors who do the work. "It is unreasonable for someone to have an effect on this many lives without bearing some of the true cost," he concluded, adding that SSHB 86 means that the responsible party will have to be responsible. He urged support for the bill. CHAIR McGUIRE brought attention to the phrase "bad faith legal challenge" on page 1, line 10. She asked whether that is referring to Rule 11 [of the Alaska Rules of Civil Procedure] as the standard that will be in law. MR. POUND replied that "bad faith" comes up a lot in insurance [case] law and that it seems every judge has a different definition for what it is or isn't. "We're leaving that to the discretion of the bench," he specified. CHAIR McGUIRE offered her belief that Rule 11 sets up that standard, whereas this would leave it to the judge's discretion. She asked at what stage of the litigation the bad-faith determination would be made. MR. POUND offered his understanding that in most cases, it will be determined with the final decision by the judge or jury because it will fall under "the substantially prevail situation." Number 2155 REPRESENTATIVE OGG asked why the present court rules that deal with frivolous lawsuits don't cover this issue. MR. POUND replied that existing court rules allow for partial court costs and partial attorney fees, but nothing else for a construction-type project. REPRESENTATIVE OGG noted that [page 1, line 11] says "substantially prevail". He asked whether someone could prevail and yet not "substantially prevail", and thus could be a winner but also a loser under this. MR. POUND responded: That is another one of the terms, sort of like "bad faith", where a lot of it ... really depends on the particular court and particular judge. ... About the best definition I could come up with came out of the U.S. Fifth Circuit Court [of Appeals is]: a plaintiff may be considered a prevailing party - which they do reference back to "substantially prevail" - if they succeeded on any significant issue of litigation ..., which achieves some of the benefits that the party sought in bringing the suit. Number 2078 REPRESENTATIVE OGG asked whether Mr. Pound believes that "prevailing" isn't a high enough [standard]. MR. POUND responded, "I believe we need to have a higher standard in order to spell out what the legislative intent is." He relayed that the goal is to eliminate frivolous suits and frivolous injunctions before the process ever starts. REPRESENTATIVE OGG observed that there are penalties for people who bring frivolous lawsuits. He requested clarification about bringing those together [under] the "substantially prevail" standard. MR. POUND replied that frivolous lawsuits fall into one category that presently allows for partial court costs and partial attorney fees. However, this primarily deals with permitted projects that have gone through the entire public process and "all the hoops" to get the needed permits. He used as an example an intertie from the Healy coal project up to Fairbanks that had gone through all the permitting: Someone filed a lawsuit saying it was an eyesore and received an injunction that held the project up for nearly a year and a half. There were millions of dollars in attorney fees [and court costs]. There also were people, including contractors and laborers, who were unable to work on the project, although they'd planned to do so and had made related commitments to subcontractors and for materials. He said that while it may not be considered a frivolous lawsuit, the judge may look at the information basic to the injunction process, grant the injunction, and then later decide there was no reason for it in the first place. REPRESENTATIVE OGG asked whether the court action was determined to have been frivolous in the preceding example. MR. POUND apologized, saying he wasn't that familiar with the case, but knows the project is now moving forward. He offered his belief that "all the company got out of it was [attorney] fees and court costs." CHAIR McGUIRE shared a point brought to her attention, that Rule 11 deals with sanctions against attorneys, rather than plaintiffs themselves. Number 1912 REPRESENTATIVE ANDERSON remarked that he could see the merit of the bill on face value, since an injunction delays a project, thereby slowing development and economic growth, and since a person would be less likely - under the bill - to unjustly pursue delaying a project. Conversely, however, it would discourage a person from [rightly] seeking an injunction against a state-permitted project. He mentioned the confusion in the committee over Rule 11 and bad faith; he suggested that discussing those is appropriate for the committee. REPRESENTATIVE ANDERSON acknowledged that sometimes injunctions produce results beneficial to the public. He referred to page 2 [lines 6-7], which read, "(5) any other costs or damages that the person who is materially damaged demonstrates were caused by the disruption." Characterizing those damages as "fairly expansive," he cautioned against making it so prohibitive that people are frightened away from to [seeking an appropriate injunction]. He again highlighted the undefined nature of "bad faith." MR. POUND reiterated that the "bad-faith" argument is seen a lot in "insurance case law." He suggested that leaving its definition up to the bench would be best. CHAIR McGUIRE asked, "Why don't we just make it ... discretionary to the judge to award damages as well, so the defining of 'bad faith' is [discretionary] and then the awarding of damages is discretionary too? Why do we have it as 'shall be liable'?" MR. POUND indicated that [the bill] expands it beyond the discretionary court costs and attorney fees that currently can be awarded under the court rules. Number 1751 REPRESENTATIVE GARA explained his concerns. First, the bill is confusing, he said, apart from the substance. It says a person should not be allowed to file a bad-faith injunction. Although it is a fair point, Representative Gara noted that he'd asked legislative counsel to share with him the standards one must meet before being able to obtain an injunction or preliminary injunction in the first place. He reported that injunctions rarely are granted; furthermore, the issue of whether a claim is frivolous is always dealt with in an injunction case at the outset. REPRESENTATIVE GARA, to that point, referred to page 3 of a memorandum [dated April 7, 2003] he'd received from Kathryn Kurtz, legislative drafter, noting that it quotes from an Alaska case with regard to the abuse-of-discretion standard and balance-of-hardships test used by the Alaska Supreme Court to review preliminary and temporary injunctions. Representative Gara pointed out that it says the plaintiff must raise serious and substantial questions going to the merits of the case; that is, the issues raised cannot be frivolous or obviously without merit. Representative Gara summarized by saying that before a court will prohibit someone from doing something pending the outcome of a trial, the court already imposes a heightened standard and says that it had better not be a frivolous claim, and there is a hearing on that. REPRESENTATIVE GARA questioned the need for the bill, noting that if it passes, the court would make the determination at the outset and have a hearing to ensure there was merit to the claim; the defendant would get a second bite at the apple later by requesting another hearing on whether the claim was frivolous. He said it seems the protection already exists, and asked whether the need to change existing law had been [thoroughly] considered. MR. POUND responded, "Essentially, that's correct. But the reality of it is," he added, "when it's all said and done, the judge looks at the defendant and says, 'We'll award you part of your [attorney] fees and part of your court costs.'" REPRESENTATIVE GARA replied, "I could agree with what you wanted; I think what you want is already in the law, though." He offered his understanding that [the sponsor wants more than partial attorney fees] if someone has filed a frivolous claim and obtained an injunction; in that case, he agreed that the person should be entitled to full attorney fees, but relayed his belief that [a party already may be awarded full attorney fees] under Rule 11 or Rule 82, the way the courts interpret it, when a claim is frivolous. He suggested that it is "sort of circular" whether an injunction can properly be obtained on a frivolous claim in the first place, because it appears that hurdle with the court must be cleared first. Highlighting how unlikely it would be to have a frivolous injunction, he reiterated that he agreed with awarding full attorney fees if it happened. REPRESENTATIVE GARA explained that his bigger concern with the bill, however, is that it goes beyond awarding full attorney fees. It says the plaintiff may be charged for all lost profits during the time the injunction was in place. He said that if the other remedies were deleted and it just said full attorney fees, he'd sign off on the bill right now. However, he said he worries about real-world examples. Number 1699 REPRESENTATIVE GARA offered an example of a "gas lease off the Kenai River" for which some fishermen believe that it is a bad idea and that the gas lease is illegal. They succeed in getting an injunction from a court that sees it as a good-faith claim. The injunction lasts two years, and ultimately the plaintiffs lose for whatever reason. It has cost the oil company millions of dollars. Representative Gara noted that under the bill, a fisherman or average person, when filing for such an injunction, could be liable for millions of dollars. Furthermore, under Rule 65, the person would have to post a multimillion-dollar bond before filing the suit. He suggested that it would leave injunction law available to just the richest of people, knocking 95 percent of Alaskans out of the mix. He asked why that would be good policy. MR. POUND answered by posing a scenario in which a commercial fisherman owns a boat, has boat payments, has house payments, and has a crew working for him. If a group decides to get an injunction because that fisherman might catch a seal in his net, that fisherman would lose the entire season of fishing and instead spend it in court, hiring an attorney and incurring court costs. He asked, "If it was a frivolous case, why should you not be allowed to recover your loss?" REPRESENTATIVE GARA replied: If we could write a law that said in that case, you can get the remedies you have in this bill, but in the other case, when you're trying to get them against the fisherman and you're the oil company and you wouldn't apply this bill, I'd be OK with that. But the reality is, to apply it in your case, you also have to [have] it apply in my case. And by passing this bill, it's going to be a bill of ... general applicability. It will be used by the large oil companies to scare a fisherman out of court in the first place. MR. POUND responded, "I'm not inclined to say that the large oil companies won't use this." He suggested a hypothetical situation in which an oil-service company subcontracts to another company, which subcontracts to another company, which, ultimately, hires an employee, all under a contract. Once a project is stopped at the highest level, it has a trickle-down effect that hurts not just the large corporation, but also the individual who just wants to go to work. Number 1448 REPRESENTATIVE GARA asked Mr. Pound whether he has any evidence that too many frivolous injunctions are being granted today. MR. POUND replied: I have no specific -- but this is also a preventative [measure]. We have many large projects that are getting ready to start in this state in the next four years; ... certainly the potential is going to increase as we start looking at resource development in the state. REPRESENTATIVE SAMUELS remarked that it's not only the lost profits, but also the lost operating expense. He suggested deciding on a policy, regardless of whether it is a big oil company or some small construction company. If someone is filing an injunction in bad faith and talks a judge into it, and the judge later decides [the plaintiff] should have known better, that the person should be punished, he opined. REPRESENTATIVE HOLM, on the issue of whether any frivolous lawsuits have been filed, mentioned a right-of-way for Golden Valley Electric Association (GVEA) that was completely permitted across the Tanana Flats. When someone sued, it cost $7 million and nine years of greater costs in electrical power to the people of Interior Alaska, but there was no penalty, no charges for attorney fees, and no reimbursement whatsoever, he said. He added that he believes this bill is intended reduce lawsuits. REPRESENTATIVE HOLM opined that [Representative Gara] is more concerned about preserving the profits of attorneys, whereas he himself is worried about preserving the profits of others. Number 1273 REPRESENTATIVE GARA objected on "a point of personal privilege." REPRESENTATIVE HOLM asked, "This bill preserves the profits of attorneys, right?" CHAIR McGUIRE warned: "Well, let's be careful, there, Representative Holm. Representative Gara doesn't practice in this area of law, and I don't think he's trying to preserve profits." REPRESENTATIVE HOLM suggested there is a concern about preserving the ability of attorneys to be compensated for what they are doing. He then referred to the discussion that this bill allows the judge to decide whether the case is substantial or has merit. He said he could offer hundreds of examples - although he didn't have them at his fingertips - where judges have, in his opinion, "ruled very inappropriately." He said it may be correct that Rule 11 says attorneys can be sanctioned for inappropriate or frivolous actions, but then he alluded to a successful lawsuit against [the McDonald's Corporation] over some very hot coffee, and suggested that many times, judges take cases just to make a name for themselves. CHAIR McGUIRE acknowledged Representative Holm's frustration. She said she doesn't believe the bill's premise is wrong, and opined that injunctions probably are too liberally granted in some areas. However, she observed, at least seven different terms seem vague, including "substantially prevail", "materially damage", "disrupt", and "improperly disrupt". Notwithstanding Mr. Pound's suggestion that "bad faith" would be interpreted by a judge, she emphasized the there is still a need to consider sideboards and definitions. She asked whether, for example, if a judge determines that a person was correct on two claims but not a third, does that constitute "substantially prevail"? CHAIR McGUIRE also asked Mr. Pound whether there had been any consideration given to looking at Rule 65 itself with regard to raising the standard for when a court will actually grant an injunction. Instead of imposing large penalties on people [who obtain injunctions], she suggested that a higher standard could provide a "stopping point" for the judge because of the consequences on businesses, jobs, "and so forth." She remarked that if something is right, it is right for big businesses, small businesses, and individual employees. She noted that corporations represent working people because they provide jobs for the average men and women in Alaska. Number 0963 CHAIR McGUIRE added that she's long believed Rule 11 doesn't have enough teeth, but questioned whether creating a whole new "crime/penalty" is the right way to go. She agreed with [Representative Anderson] about not wanting a chilling effect on a person who believes something is wrong but who doesn't have a million-dollar bond. She again asked Mr. Pound whether there had been any consideration given to looking at Rule 65 itself and raising the standard for injunctions. MR. POUND referred to discussions with the Department of Law and said the department was leaning towards dropping any reference to the court rules whatsoever. He noted that he had an amendment to that effect. CHAIR McGUIRE clarified that she agrees there are many instances when someone files for an injunction to purposely disrupt an economically viable and environmentally sound project for impure motives; she said Rule 11 could apply to an attorney that would bring that [action]. Putting that aside and looking at the plaintiffs themselves, however, she explained: We're saying that bad faith is a standard in and of itself, and I don't disagree that we ought to have one. But I think it's the commiserate damages that you're then asking this individual ... to pay, which could be literally billions of dollars, that is somewhat troubling to me from the standpoint of chilling legitimate injunctions that might be granted. And so I guess what I'm wondering is whether or not we don't want to go back one step - rather than the point at which it's already said and done and you've got a billion-dollar penalty hanging over your head - that you go back up one step, to the granting of the injunction itself, and put more teeth in that, so that the judge has the ability to say, "This doesn't look right, feel right, or anything else; we're not granting the injunction." And ... if these injunctions have been granted in a frivolous way, clearly, either the judge ... has done it improperly or the judge doesn't have enough tools at his or her disposal. CHAIR McGUIRE, in response to Mr. Pound, specified that she was speaking of Rule 65, not Rule 11, since the latter clearly deals with sanctions against attorneys. Number 0748 REPRESENTATIVE OGG suggested focusing on the laws themselves. He said the fishing industry has been held up many times by "the environmental side of programs," even though in good faith. He suggested the problem is that the statutes and regulations under which the agencies manage the fisheries aren't tight enough as written. He explained, "They don't have the information, or they're written in such a way that, in good faith, somebody can come and, based on that law, say that this fishery is not being managed properly." He read from Rule 11 and indicated that if the permit law is wrong itself, an injunction could be done in good faith and yet there could be a chilling effect "based on what you have here." REPRESENTATIVE OGG offered his belief that a defendant has the ability to file a counterclaim for compensatory damages under the present law in relation to an injunction. He questioned the need to duplicate it with SSHB 86. MR. POUND responded that this bill is primarily designed to clarify what those compensatory damages could be. Now, he suggested, it is anyone's guess regarding what would be awarded under existing statute. REPRESENTATIVE OGG noted that Mr. Pound hadn't previously mentioned counterclaims, and said he wanted more time to study this bill. REPRESENTATIVE SAMUELS referred to page 2 and said somebody is going to pay for the costs incurred. Assuming it is a bad-faith injunction, he suggested that everyone will pay for it because of higher insurance costs "and so forth." He said he agreed with the need to separate the good-faith claims from the bad- faith claims, however, adding that people who go forward with bad-faith claims should pay full costs, not just attorney fees. Number 0423 CHAIR McGUIRE said she believed that was a valid point. When the situation is at the point when the bill applies, she noted, everyone will be in a bad spot: all the costs will have been expended, and someone will have to pay them. She emphasized, however, that she wants to "bump it back a step" to avoid all the damages that anyone would pay, one way or the other. She again mentioned altering the injunction standard. CHAIR McGUIRE offered her understanding that the statute brought up by Representative Ogg is AS 09.40.230, mentioned in the memorandum [from Ms. Kurtz]. She suggested that that statute could be a place [for amendment], since it pertains to the authorization for an injunction itself. She proposed perhaps adding a [paragraph] (4) to that statute to specify that it cannot be based on bad faith "and so forth," to raise [the standard] more, "if you don't think Rule 11 gets you there." REPRESENTATIVE GARA suggested, heated discussion to the contrary, that there wasn't that much difference of opinion on the bill. He surmised that if Rule 11 were clarified to provide full attorney fees for a frivolous lawsuit, that would resolve the problem. He said that this isn't a matter of people suing corporations. Rather, this addresses the public process - the right of citizens to challenge their government's conduct. He cautioned about treading softly in this area, noting that this bill only comes into play if the government issues a permit and a citizen believes the government didn't act properly. He said that businesses know this is part of the governmental process: the permit is issued, and someone may challenge it, which is likely to happen on a controversial project - the public is invited to the table. REPRESENTATIVE GARA pointed out that what stops people from improperly challenging the government's conduct in a way that causes businesses huge amounts of unjustified damages is the threat of paying huge amounts of attorney fees if the lawsuit is unsuccessful - the bigger the project, the more attorney fees. He noted that even against a small business, attorney fees might be $50,000, whereas against a large business the amount of might be up to $1 million. Again proposing to clarify Rule 11, he emphasized that the law already deters people from doing frivolous things in court. REPRESENTATIVE GARA suggested this bill could be rewritten to deter people from doing things frivolously, but cautioned against requiring damages to include [all those listed in the bill]. He emphasized that this could "chill somebody out of the courtroom" and would take away citizens' rights to challenge government conduct in cases involving large and medium-sized corporations. REPRESENTATIVE GARA referred to Representative Holm's mention of the GVEA case; he noted that Representative Holm had indicated the court allowed the injunction and that the plaintiff wasn't penalized. Representative Gara remarked that this suggests that what Representative Ogg said was correct. TAPE 03-43, SIDE A Number 0001 REPRESENTATIVE GARA, elaborating, said that perhaps when the law allows for an injunction, maybe it's the law that the sponsor has the dispute with - maybe the law is a bad law - but the court was enforcing the law. He suggested that if the plaintiff had a frivolous claim, it would not have held up the project for 10 years. The claim probably involved a law that many would disagree with; that's different from a frivolous claim. By increasing the penalty for attorney fees and lost profits, the legislature has just closed the courtroom doors, taken away peoples' due process rights, and peoples' rights to challenge the government. It's a balance. REPRESENTATIVE GARA acknowledged Representative Samuels's point that there's a burden on the business community, especially when they're doing things right. Alaskans try to appoint the best judges possible, he noted, adding that there is a high standard before a plaintiff can get an injunction. He said he would like to hear strong evidence that injunctions are being issued willy- nilly, for no good reason; he remarked that he doesn't think that is happening. He surmised that judges have made terrible mistakes in the past, but noted that it's not happening in a big enough way to justify a radical change in the law as is proposed by SSHB 86. REPRESENTATIVE OGG read sections of Rule 65, noting that there is always a balancing test in the court: The plaintiff must be faced with irreparable harm, and the plaintiffs have to make a showing of what that is. In some [cases], he explained, the court will require bonding by the plaintiff to cover the damages the defendant may suffer should the case not work out in the [plaintiff's] favor. The court has plenty of tools, he said, adding that the plaintiff must raise serious and substantial questions going to the merits of the case. All of these things are discussed by the court and the opposing parties before the judge grants the injunction. Number 0201 REPRESENTATIVE OGG said that [an injunction] is a very serious move on the part of the court and there are high standards before the court will grant an injunction. He said some study of this would be helpful before the committee starts changing things. Maybe the answer, he surmised, involves adding more teeth to the statute that deals with injunctions. He said he agrees that these standards should surface early in the lawsuit process, not after everybody has expended time and energy in court; that determination of a frivolous case needs to be made upfront. He said he thinks that Rule 65 requires that [merit] has to be [demonstrated] before an injunction is granted. REPRESENTATIVE SAMUELS reiterated that "somebody has to pay." He then proffered the following example of an air carrier with an injunction prohibiting it from flying to certain destinations. While the injunction is in force, the carrier still has to make aircraft payments, still has 450 employees to pay, and still has leases to pay and sales to honor. The business's money is tied up, with the company never knowing when the injunction will be lifted. The situation worsens: the employees being laid off are finding other jobs, and there are training costs for new ticket agents and ramp workers. That's the way a large oil company looks at an injunction, he surmised. So once the injunction is lifted, and the case is determined to be frivolous according to SSHB 86, who makes the business whole, he asked. Who makes up for the aircraft that were returned or who gets the company out of bankruptcy? REPRESENTATIVE GARA remarked that if such an example were the reality, he would be much more sympathetic to the bill. But its not, he assured members, adding that "that's why nobody has ever gotten an injunction against your company to keep it from flying all over the state." REPRESENTATIVE SAMUELS argued there have been injunctions against airlines. Number 0514 REPRESENTATIVE GARA said it's not so easy to get an injunction for no reason, adding that SSHB 86 has to do with a reality that's different from the hypothetical case Representative Samuels presented. This bill concerns state permits and whether someone can get an injunction that says a state permit is invalid. He said he disagrees that somebody can get an injunction easily for no reason; it's just not that easy and it doesn't happen. Were injunctions against state permits an everyday circumstance, were this happening all the time, he said, he would support this bill. But its not; he said the committee is considering a bill to deal with a circumstance that doesn't exist. If the committee considers the circumstances that do exist, all of a sudden the injunctions start looking reasonable. Were there rampant injunctions out there for illogical reasons, he would be much more sympathetic, he said; however, that isn't the case. CHAIR McGUIRE remarked that, clearly, [injunctions] will involve things in which development is occurring and generally it pertains to sub-surface development, oil and gas, minerals, railroads, et cetera. She noted that there is a tendency to villainize the oil and gas and development industries of the state. CHAIR McGUIRE requested a few real-life examples from the sponsor's staff. She said that she agrees with what Representative Samuels and Mr. Pound are saying with respect to the policy, and with what Representatives Gara and Ogg are saying with regard to the chilling effect. She acknowledged that more information would help identify any areas in which injunctions are being improperly granted. Furthermore, she also acknowledged, this could be the fault of the legislature in not changing the court rule or the statute or both in order to provide the judge more guidance. She agreed that Rule 11 in combination with Rule 65 and AS 09.40.230, regarding authorizations for injunctions in the Alaska Statutes, should be enough for a judge to review something that's clearly in bad faith and [deny the injunction] based upon one of the aforementioned. Number 0912 MR. POUND directed the committee's attention to the committee packet, which included six pages from Stoel Rives, LLP, of cases from states other than Alaska that are representations from environmental law. He offered the following as a quote from Fran Ulmer: "Anyone advocating more marine protection areas in Alaska must be able to demonstrate convincing scientific evidence that such an extreme action is necessary and not be driven by simplistic desire to limit commercial fishing." MR. POUND explained that when an individual or group challenges a permit, the first process should be the administrative process. Ultimately, when these go to court, they go through superior court, where they fall under a different set of guidelines because there are standards of review for administrative proceedings at the superior court level. Mr. Pound claimed that nonprofit law firms tend to approach many of their cases in the same manner as the advertising which implies that [Alaska] is killing wolves left and right. He added that he wouldn't put it past such groups to use the same tactics in their initial argument to obtain an injunction. Number 1039 CHAIR McGUIRE noted that a judge is allowed to weigh scientific information. Therefore, she suggested including a separate standard for environmental-related injunctions under Title 9 wherein "the Fran Ulmer standard" is adopted. Such a standard would require that one demonstrate convincing scientific evidence that an extreme action is necessary. MR. POUND pointed out that such language was included in the original legislation; however, there was a [potential] problem pertaining to due process. Therefore, the sponsor substitute was introduced and its language is a variation of Utah's law. CHAIR McGUIRE noted that the judge is already ascertaining whether it's broad and in good faith. She also noted that in the area of injunctions, a series of three different additional questions must be answered before an injunction can be issued. Therefore, she said she still questions why a judge couldn't decide whether the injunction request is based on scientific information. She asked if there is a legal opinion on the due process issue. MR. POUND answered that both Legislative Legal and Research Services and the Department of Law agreed that there were due process problems. REPRESENTATIVE HOLM said that the GVEA situation is a classic example of "this." He noted that when he was on the borough assembly, it dealt with this problem at length because [the process resulted in] 100,000 people in the borough having increased electric payments for seven years. When the process finally went through for an expansion of GVEA, Fort Knox entered [the market] and the cut price in the area by 20 percent. He relayed his understanding that Representative Fate is trying to create a positive environment for economic development rather than one that is under the thumb of potential litigation. He agreed that [the legislature] doesn't want to chill the ability of people to question government. REPRESENTATIVE HOLM asked if there is some methodology whereby [the law] could require judges to come down on certain sides of issues rather than providing freedom with their judgments. Although he said he didn't know how the process works, he said he did know how it impacts people when the process is stopped even though the individual has gone through all the proper steps. For example, he noted, the Susitna Dam was stopped due to litigation. He added that if the purpose is to put Alaska on firm financial footing, then these issues need to be addressed without destroying the ability of people to address government's inappropriate actions. Number 1381 REPRESENTATIVE OGG stated that when there is an ambiguity in law, the courts try to tighten it up and make it clear, which the legislature can do when it sees the need to clarify the court's discretion. He pointed to mandatory sentencing as an example, and noted the need to be careful when crafting such. Representative Ogg mentioned that in none of the cases cited in the backup material was there an example in which the appellate court said an injunction was granted and it was frivolous to begin with, [or] that the trial judge made an error at the inception. Representative Ogg requested that concrete examples be provided to the committee, preferably from the Ninth Circuit Court of Appeals or the Alaska Supreme Court. If there aren't any cases in Alaska in which the courts say that the injunction was granted on a frivolous basis, then there isn't a problem, he surmised; if there are such cases, the judges' [remarks] could be reviewed and the language could be crafted such that it does the most good. REPRESENTATIVE GARA reminded the committee of a well-meaning district attorney who was recently before the committee presenting one side of a case saying it was outrageous. However, the district attorney left out the other side. Therefore, Representative Gara said, it would be helpful to have both sides of the story in the examples. He said he believes this is about snail darters and the Susitna Dam, in some sense. In such cases, the problem isn't the injunction process but rather the law that the court is enforcing. REPRESENTATIVE GARA relayed his understanding that in the snail darter situation, there was a law that said snail darters are an endangered species. If there is a law specifying that, or supporting such a conclusion, then perhaps an injunction is warranted and maybe someone should revisit the law classifying the snail darter as an endangered species. With regard to the Susitna Dam, Representative Gara recalled that there was a vigorous debate with regard to whether the project was one in which the economic benefits exceeded its fisheries impact or whether the fisheries impact exceed the economic benefits; again, the question relates to Alaska's law rather than the injunction process. Representative Gara predicted that in most of these cases, one would find examples in which courts are enforcing existing laws. Number 1611 REPRESENTATIVE SAMUELS offered his belief that a dam project would involve groups that are philosophically opposed to the dam and that would look for a way to slow down the project. With regard to the suggestion that injunctions are part of the process, he opined that injunctions are part of the problem with the process. CHAIR McGUIRE announced that she would hold SSHB 86 over until [the next meeting].
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