Legislature(2005 - 2006)CAPITOL 120
03/04/2005 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB107 | |
| HB175 | |
| HB95 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 175 | TELECONFERENCED | |
| + | HB 95 | TELECONFERENCED | |
| = | HB 107 | ||
HB 175 - CIVIL LEGAL SERVICES FUND 1:10:24 PM CHAIR McGUIRE announced that the next order of business would be HOUSE BILL NO. 175, "An Act relating to the creation of a civil legal services fund." REPRESENTATIVE DAHLSTROM moved to adopt the proposed committee substitute (CS) for HB 175, Version 24-LS0656\G, Bullock, 3/3/05, as the work draft. There being no objection, Version G was before the committee. 1:10:57 PM VANESSA TONDINI, Staff to Representative Lesil McGuire, House Judiciary Standing Committee, Alaska State Legislature, presented HB 175 on behalf of Representative McGuire, bill sponsor. She explained that the bill would provide a financial mechanism whereby the legislature may make appropriations to organizations that provide civil legal services to low-income Alaskans. Currently AS 09.17.020(j) provides that 50 percent of punitive damages awards in tort cases go into the general fund (GF). She said that HB 175 would establish a civil legal services fund into which the legislature may appropriate these monies, and it allows the legislature to appropriate money from the fund to organizations that provide civil legal services for low-income Alaskans. This would not create a mandatory expenditure, she pointed out; each legislature would have the option to appropriate the money into the fund. Low-income would be defined as equal to or less than the maximum income levels for Alaska as determined under 45 C.F.R. Part 1611. REPRESENTATIVE GRUENBERG asked for clarification regarding the change in Version G. MS. TONDINI explained that one change was that low-income had been defined as previously stated, whereas the original bill stated only that low-income would be determined by the Alaska Legal Services Corporation (ALSC). The ALSC, a nonprofit entity, was created in 1966 to assist Alaskans with civil legal needs and has been funded through a combination of state, federal, and private sources; she noted that these funds have been on the decline. She said, "It makes sense that civil lawsuits, [from] which these punitive damages awards come out of can be used to fund cases which are no less important, but to help out low-income Alaskans." MS. TONDINI asserted that HB 175 is important because low-income people have the same legal needs as everyone else, and they shouldn't have the burden of representing themselves unless they so choose. She stated that HB 175 addressed the current inadequate funding structure of organizations that provide legal services, and it would provide for the services using punitive damages awards for egregious offenses rather than draining other sources of funding. MS. TONDINI outlined a second change in Version G, "Any costs of collection that the state [has] incurred, with respect to the punitive damages awards, should come out of the proceeds before they [are] put into the civil legal services fund, to not act as a disincentive for the Department of Law to create the fund." She referred to lines 9-10 of Version G, which read, "less the cost of collection if any incurred by the state." 1:15:34 PM CHAIR McGUIRE pointed out: When low-income civil litigants chose to represent themselves pro se, which is the only option you have if you don't have an attorney, it ends up costing all of us ... and so you've got judges put in ... a very awkward position of advising when they shouldn't be, you have pro se defendants trying to work their way through the legal system at great cost to the courts and so on, and so there's a fiscal note to that that we don't see. And this is one mechanism of helping to fund this organization that leads these folks into the legal process, which frankly as we all know, is very confusing, and the stakes are high for many people. REPRESENTATIVE GRUENBERG asked if the 50 percent of the award that goes to the GF includes the award of attorney fees. ART PETERSON, Member, Board of Directors, Alaska Legal Services Corporation (ALSC), answered that it would not. REPRESENTATIVE GRUENBERG asked, regarding the punitive damages, if the state would normally have the plaintiff's attorney collect the portion awarded to the state, or if the state itself would do the collection. He said, "If in fact the state is not doing the cost collection in a given case, I would say it should be less the costs of collection." CHAIR McGUIRE noted that two people from the ALSC would be available for questioning. REPRESENTATIVE GARA said: The amount that would be deducted would be the amount of money the state expends in going after the private council and saying "There was an [attorney fees] recovery; we should get half of it." And sometimes there are negotiations that go on in order for the state to get its share, and so the attorney general will spend some time doing that. I think the bill sponsors need to do this to make sure ... that we don't have a fiscal note. REPRESENTATIVE GRUENBERG asked if work performed by the plaintiff's attorney, such as a writ of execution or judgment debtor examinations, would be [paid for with] the state's half of a punitive award. REPRESENTATIVE GARA replied negatively, and pointed out that the bill stated "costs incurred by the State". REPRESENTATIVE GRUENBERG asked if those costs should be deducted as well. REPRESENTATIVE GARA answered that that's a different question. 1:20:24 PM MR. PETERSON clarified: When the punitive damages award goes into the general fund ... that's a separate matter. Once the money is in the pot, then the only ... fiscal consideration ... is what the state has to do to get the money in the pot. And now we've created this little sub-pot that allows for the percentage to go to this public purpose. So if there is state expense in collecting that, ... then maybe it makes sense to deduct that. But any other areas outside that ... [are] not relevant to what the state is involved in putting the money in the pot or taking this percentage out and providing it for this legal services public purpose. MR. PETERSON commented that at one time the ALSC had 14 offices around the state and 93-97 employees. Now there are eight ALSC offices, one of which is open part-time. He said, "We've had to open and close offices because of the erratic state funding." In recent years, the ALSC had received about [$125,000] from the state, but last year, even though there was no decrease in cases, the legislature cut the funding in half, and then the governor zeroed it out with a line-item veto, Mr. Peterson pointed out. He also commented: One of the things I read that just floored me was the governor's statement to the effect that providing legal services was not a state function, as though the state were not obligated to provide equal access to all the people of the state. ... This bill will provide one little step in helping [the ALSC] secure a source of funding. My dream is to get our endowment fund up to a level that would enable us to be self- sustaining. ... MR. PETERSON continued: We need the regular appropriation from the state and we need this bill. [The ALSC] provides efficiency. The attorneys there work for a fraction of what they would get in the private section. We start our attorneys at something like [$30,000]. ... One of our staff members is a Harvard ... law school graduate. ... [He could] probably be earning close to a million dollars a year in the corporate world or the banking investment world, and he's working for something like [$50,000]. ... So it's a program that provides the biggest bang for the buck; you get more work, more service, out of any money that goes into [the ALSC] than any other program I've been aware of. ... It helps judges and helps everyone else involved with the legal system, because when judges have to try to help one side of a case because that person doesn't have enough money, doesn't know the procedure, is overwhelmed by the whole process, that slows things down enormously. MR. PETERSON related a personal anecdote in which he represented the legislature in a suit brought by a person who was not represented by an attorney. He said that the situation was complicated until a pro bono attorney offered to represent the plaintiff, and then the proceedings moved forward smoothly. MR. PETERSON commented that he was not intimately familiar with the accounting aspects of the bill, but he thought that Version G was reasonable and therefore he supported it. REPRESENTATIVE COGHILL asked Mr. Peterson to explain the current AS 09.17.020(j). 1:29:19 PM MR. PETERSON replied that he cannot. He pointed out that in his 38 years of practicing law in Alaska, he had never handled a case that involved punitive damages. He noted that Representative Gara may be more familiar with the statute. REPRESENTATIVE COGHILL asked if Mr. Peterson was familiar with 45 C.F.R. 1611, and if it was a criteria that was already in practice. MR. PETERSON replied affirmatively and explained that the regulation sets the level [for eligibility] at 125 percent of the U.S. Department of Health and Human Services' poverty guideline. The person then must go through the case priority screening before gaining services. 1:31:19 PM REPRESENTATIVE GARA remarked: I don't think that much ends up in the fund; I think it's pretty inconsistent, but it's a very small percentage of cases that ever involve punitive damages.... For those of you that don't know, you get punitive damages in a civil case if, in addition to the party that hurt you doing something wrong, they did it in a way that involved reckless disregard of your interest and safety. And so that's a high standard and it doesn't happen that often. And then often you'll get a punitive damages award and then the judge will take it away before it goes up to the appeals court. ... So I don't know what the annual average amount is that goes into that fund. I suspect it's not that much. REPRESENTATIVE GARA asked Mr. Peterson what he thought of the idea of entitling the ALSC to 100 percent of the attorney fees when a case is won. MR. PETERSON responded that there is now a federal prohibition on attorney fees going to legal services; the fees that the ALSC is now collecting are for cases that were started before the prohibition went into effect. He commented, "It's really outrageous because the other side, when they win, they can get [attorney fees] but if we win we can't get attorney fees anymore." He noted: "I hadn't really thought of the concept of equal access to justice as being necessarily a liberal or conservative issue. ... It's a matter of doing justice for everybody and it shouldn't be a [liberal] versus conservative issue." 1:36:03 PM REPRESENTATIVE GARA agreed and asked whether the committee would be amenable to creating a committee letter to the finance committee stating that there should be a state role in supporting legal services. CHAIR McGUIRE opined that some people question whether poor people are poor for the "right" reasons. She noted that people's opinions are shaped by "the place that you come from in the world," and so "it's not necessarily about bad people with bad ideas." Many people are poor due to circumstances beyond their control, she remarked, and putting a person into the legal system without someone being on his/her side will cost everyone in the long run. MR. PETERSON asked the committee members to remember that "many of us really lucked out" by having "good genes" as well as supportive family and friends. He noted that luck plays a huge role in whether or not someone might need assistance with legal services. He mentioned the book The Other America by Michael Harrington as an illustration of this fact, which is about poverty and "this percentage of the population that many of us never see ...." He recommended the book to the committee members and remarked, "That book had a lot of influence on why I put 31 years into Alaska Legal Services, and 38 years into public service in the State of Alaska." 1:43:16 PM ANDY HARRINGTON, Executive Director, Alaska Legal Services Corporation (ALSC), presented some background information on the ALSC. He relayed that the ALSC is very cost effective, and that it provides legal information to the general public through a web site and through a series of clinics offered by a staff of volunteer attorneys. He pointed out that the ALSC is not a state agency, and it doesn't represent people who have been charged with a crime. He noted that the consequences in civil cases can be just as significant for a family, for example: loss of family shelter or health care coverage; garnishment of a wage earner's income; or jeopardizing the right to be free from domestic violence. He clarified that the ALSC's eligibility is set at 125 of the poverty level for Alaska, which equals about $14,000 per year for one person. MR. HARRINGTON stated that the ALSC's mission is to provide equal access to justice in resolving civil legal problems of low-income clients, promote family stability, and reduce the legal consequences of poverty. He noted: Providing representation to low-income clients helps the court system function more efficiently for everyone, including judges and other litigants. A civil case in which one or both people are unrepresented takes more time and attention from the judge and increases the chances that the judge's decision will be based on incomplete information. MR. HARRINGTON shared two anecdotes to illustrate how the ALSC was able to help clients. He noted that on the criminal side, the legislature has promoted equal justice for all people regardless of income restrictions; HB 175 reflects a similar approach on the civil side. 1:50:37 PM REPRESENTATIVE COGHILL said he would be interested in Mr. Harrington's information on punitive amounts. MR. HARRINGTON stated that according to his understanding, approximately $150,000-175,000 had come to the state under AS 09.17.020(j) in the last fiscal year, and for the most recent fiscal year it amounted to $300,000-400,000. He said he anticipates that the funds will fluctuate; he expects that most years little or no money will come into the fund because "neither the plaintiff nor the defendant have a particular incentive to settle for punitive damages, and most civil cases are resolved by settlements, so it will be an exception to the rule when there ... are punitive damages at all, and very much an exception when there is a large punitive damage award." REPRESENTATIVE COGHILL asked what the cost of collection would be. MR. HARRINGTON said that he did not know. He commented that he had posed this question to the acting attorney general, who told Mr. Harrington that he didn't think it was much, perhaps around $10,000-20,000 worth of attorney time. Mr. Harrington noted, "We did talk about whether he would prefer ... having some sort of administrative fee of 3 percent or 4 percent, or whether he would prefer having his attorneys keep track of any time they put it on any of these particular tasks," and the attorney general had indicated that he preferred the latter, which led to the language in Version G. REPRESENTATIVE COGHILL remarked that this would probably provide a mechanism for the attorneys to make sure that they kept track of their time. 1:53:51 PM REPRESENTATIVE GARA again raised the issue of recovering full attorney fees, and asked Mr. Harrington if there was a potential of letting the "sort of branch-off group that legal services has that is allowed to ... work on the monetary cases," recover full attorney fees. MR. HARRINGTON indicated that might be a possibility for such organizations such as the Alaska Pro Bono Program Incorporated (APBP). He explained that when the restrictions were put on all Legal Services Corporation funding recipients, the [ALSC] established the APBP as a separate entity so that if there were attorneys willing to volunteer to handle those cases, they wouldn't be blocked by the restrictions on the ALSC. He noted that the attorneys who volunteer their time through the APBP can recover attorney fees. REPRESENTATIVE GARA asked Mr. Harrington to contact him with any further thoughts or information. 1:56:45 PM RUSS WEBB, Trust Program Officer, Alaska Mental Health Trust Authority (AMHTA), testified on behalf of the AMHTA board in support of HB 175. He said that the AMHTA believed that the bill would provide the legislature with a good tool for putting to appropriate use the 50 percent of punitive damages awarded in civil suits that are deposited into the GF. He remarked that the AMHTA supports the bill because it will help ensure the availability of legal assistance to the AMHTA beneficiaries, who are people with mental disabilities and low income who are eligible for legal services from the ALSC. He noted that the AMHTA beneficiaries are particularly vulnerable and unable to advocate effectively for themselves. He said: "They are often in need of legal services to obtain federal disability benefits, VA benefits, access to housing, health, and other services. ... They are the subject of and vulnerable to discrimination and exploitation, and they're clearly less equipped to be their own advocates and to obtain justice." HB 175 would help make sure that the AMHTA beneficiaries get the assistance that is needed in order to obtain benefits which help them overcome their disabilities, he noted. 2:00:15 PM MARIE DARLIN, Coordinator, AARP Capital City Task Force, remarked that the AARP had sent the committee a letter of support for HB 175. She stated that the bill would be one more way of trying to solve some fiscal problems, and it would be helpful to older Alaskans. REPRESENTATIVE GARA noted that the legislature passed a bill last year that would let the attorney general's office receive full attorney fees when it wins a consumer case, and that this year the governor's office has proposed to hire some attorneys who would represent seniors in fraud cases. MS. DARLIN commented that the AARP is concerned about that issue and hopes that it would be addressed. 2:02:59 PM CAREN ROBINSON, Vice-Chair, Board of Trustees, Alaska Mental Health Authority (AMHTA); Lobbyist, Alaska Women's Lobby; Lobbyist, Alaska Network on Domestic Violence and Sexual Assault, noted that all the trustees of the AMHTA support HB 175. She agreed with comments made by Chair McGuire and Mr. Peterson. She pointed out that women from domestic violence and sexual assault situations often need assistance; she offered the example of a rape victim who needs help to get out of an apartment lease so that she can move somewhere safer. She noted that in the 1980s, the ALSC was the only agency that could assist women in getting protective orders. MS. ROBINSON reminded the committee of all the work that lawyers had done toward setting up [the ALSC]. She commented: "We expect sometimes that lawyers are supposed to just jump in and do the pro bono work that's needed.... Even though quite a few lawyers may be willing to put their name out there to help, they may not have the expertise." She remarked that the advantage of using people who have committed their life to this field is that they have the expertise that is truly needed to help these folks. 2:08:26 PM REPRESENTATIVE GRUENBERG offered his understanding that before the federal prohibition, the ALSC was getting approximately several hundred thousand dollars a year in attorney fees. He asked for clarification about the prohibition. MR. HARRINGTON related that the regulation states that the ALSC can neither collect nor retain attorney fees, and if a court were to award fees sua sponte, the ALSC would be required to file a motion stating that the ALSC cannot collect and retain the fee. REPRESENTATIVE GRUENBERG suggested that in any case in which the ALSC represented the prevailing party, the attorney general would have the right to seek attorney fees, which would go into the GF and then into the new fund. The legislature could then appropriate the funds to the ALSC. This way the ALSC would neither be seeking fees nor receiving them. MR. PETERSON asked if the legal fees sought by the attorney general would be based on the attorney time put in by the ALSC attorney. REPRESENTATIVE GRUENBERG answered affirmatively. MR. HARRINGTON commented that this was an idea that could be explored, and offered to research that issue. CHAIR McGUIRE suggested that the issue be explored but she did not wish to hold the bill over. REPRESENTATIVE COGHILL noted that the bill had a finance referral and so there was time to explore the issue. CHAIR McGUIRE stated that she thought the idea needed more work, and she preferred to pass the bill through the committee. 2:13:37 PM REPRESENTATIVE COGHILL commented that he preferred the wording in Version G, but was reluctant to adopt federal code into statute by reference because federal code could change. He said that "equal to or less" helps to define [the poverty level], but he would research other options. REPRESENTATIVE GARA asked if it was legal to adopt something that changes in the future. REPRESENTATIVE COGHILL noted that the state has had to revise statutes in the past when the referenced regulations changed. CHAIR McGUIRE said she would be amenable to going back to language in original bill. She proposed that low-income be defined as 125 percent of poverty level. 2:17:48 PM REPRESENTATIVE COGHILL commented that he would rather the committee define it, and suggested a conceptual amendment to define low-income as 125 percent of the poverty level. REPRESENTATIVE GRUENBERG pointed out that the reference is to the organizations that would be able to access the fund. He noted that the ALSC has federal standards that it must meet, and "to be certain that [the ALSC] can access this fund, we must reference the federal ... level it has to meet. He asked Mr. Harrington why the changes were made in the CS. MR. HARRINGTON replied that he was told that it is more appropriate for state statute to reference an existing law or regulation, whether state or federal, than it is to make reference to a federal corporation. He pointed out that the federal government sets a different poverty ceiling for Alaska than it does for the Lower 48 states. Therefore, he opined, it would be important to reference 125 percent of the Alaska poverty level. REPRESENTATIVE GRUENBERG asked Mr. Harrington which of the three choices he preferred. MR. HARRINGTON stated that the language he would prefer would be the language that would be most likely to pass. 2:22:20 PM REPRESENTATIVE COGHILL made a motion to adopt Conceptual Amendment 1, which would define low-income as 125 percent of the Alaska poverty level. CHAIR McGUIRE asked whether there were any objections to Conceptual Amendment 1. There being none, Conceptual Amendment 1 was adopted. 2:23:18 PM REPRESENTATIVE KOTT moved to report the proposed CS for HB 175, Version 24-LS0656\G, Bullock, 3/3/05, as amended, out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, CSHB 175(JUD) was reported from the House Judiciary Standing Committee.
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