Legislature(2003 - 2004)

05/04/2004 09:07 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                                                            
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                                                            
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                                                            
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.                                                                                                   

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