Legislature(2003 - 2004)
05/04/2004 09:07 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 227(JUD) "An Act increasing the jurisdictional limit for small claims and for magistrates from $7,500 to $10,000; increasing the jurisdictional limit of district courts in certain civil cases from $50,000 to $100,000; expanding the jurisdiction of district courts; limiting magistrates from hearing certain small claims cases; and amending Rule 11(a)(4), Alaska District Court Rules of Civil Procedure, relating to service of process for small claims." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated that this legislation would increase the jurisdictional limit of District Courts from $50,000 to $100,000. He noted that the Senate Judiciary Committee committee substitute, Version 23-LS0896\U, and an accompanying indeterminate fiscal note is before the Committee. VANESSA TONDINI, Staff to Representative Lesil McGuire, the Chair of the Senate Judiciary Committee, read the sponsor statement into the record as follows. The jurisdictional limit for district courts was last raised in 1990 when the legislature raised the limit from $35,000 to $50,000. By raising the jurisdictional limit from $50,000 to $100,000, this bill will allow for increases inflation and provide increased flexibility for litigants regarding whether to file in district court or superior court. The jurisdictional limit on small claims court and magistrate court was last raised in 1997 when the legislature raised the limit from $5000 to $7500. Small claims court offers many advantages over district court to private litigants, including less formal discovery requirements, reduced filing fees, and relaxed evidentiary rules. This bill will increase the limit to $10,000. The bill also removes prohibitions against the district court hearing claims for false imprisonment, libel, slander, and malicious prosecution. These restrictions were adopted shortly after statehood. District court judges are well qualified and there is no reason to prohibit them from hearing these types of cases. Finally, the bill will expand small claims jurisdiction over out-of-state defendants. Under current law, small claims actions against out-of-state defendants may only be brought under the landlord-tenant act or under AS 09.05.020, which authorizes services of process against owners or operators of motor vehicles involved in an accident in the State. The bill would authorize small claims jurisdiction over out-of-state defendants under traditional long-arm principles. This expanded long-arm jurisdiction is limited to district court judges. Magistrates will continue to limited by the standards set forth in current law. Ms. Tondini summarized that the bill would implement several "upgrades" to jurisdictions" of the Court system and would be consistent with the Court's "general philosophy" regarding encouraging citizen to "access lower courts in a friendly manner." She noted that the business community supports this bill. DOUG WOOLIVER, Administrative Attorney, Office of the Administrative Director, Alaska Court System, noted that while the Court System did not initiate this legislation, several changes incorporated into this bill are consistent with the Court's general philosophy regarding making the Courts more accessible to litigants. However, he noted that the downside to increasing the small claims jurisdictional limit and making the process easier, cheaper, and more relaxed for litigants to sue people, is the concern that judges might hear a large case that might not "have been adequately argued," has had no briefing, and would simply involve two people appearing before a judge. He noted that while judges are comfortable with this process when small dollar amounts are involved, the higher the limit is would increase the likelihood that the resulting ruling might not be "particularly well thought out." Mr. Wooliver stated that the Court System's indeterminate fiscal note takes into consideration that more out-of-state court cases are likely and that, due to the higher limit allowed, some non- economical cases might be heard in a small claims court. He noted however, that when the jurisdictional level was last raised, no significant court expense resulted. Senator Olson asked whether, in addition to the District Court, this legislation might affect other segments of the Court System that operate under "the rules of civil procedure." Mr. Wooliver responded "not directly, no." He continued that currently, cases involving claims in excess of $50,000 must be heard by the Superior Court, and were this bill adopted, claims up to $100,000 could now be heard by the District Court. He clarified that no jurisdictional issues involving the Superior Court would be affected. Co-Chair Green moved to report the bill from Committee with individual recommendations and accompanying fiscal note. There being no objection, CS HB 227 (JUD) was REPORTED from Committee with indeterminate fiscal note #2, dated April 7, 2004 from the Alaska Court System.