Legislature(2003 - 2004)
02/25/2004 08:00 AM Senate JUD
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* first hearing in first committee of referral
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SB 333-IF UNREAS. AGENCY DELAY, COURT DECIDES
CHAIR SEEKINS announced that Version A of SB 333 was before the
committee.
SENATOR GENE THERRIAULT, sponsor of SB 333, told members this
legislation is the third piece of a package of bills he
introduced that makes changes to the regulatory and
administrative hearings process. SB 203 reforms the internal
administrative process with a central panel concept; SB 287
provides for legislative input into the regulatory process; and
SB 333 allows a person to take an administrative hearing case to
the superior court if he or she feels caught in an endless loop.
SENATOR THERRIAULT explained that SB 333 provides a safety valve
in the administrative process. Under current law, a person has
no access to the court system until he or she has exhausted the
administrative process. However, it is possible that a final
decision may never be reached in that process. People caught in
that process often feel that delays are an attempt to wear them
down. SB 333 establishes an extraction option by allowing the
court to intervene. It will provide an incentive to finalize
administrative hearings and leave the integrity of the
administrative process intact; however, it changes the dynamics
by putting hearing officers on notice.
MR. DAVE STANCLIFF, staff to the Administrative Regulation
Review Committee (ARRC), informed members that this reform is
based in part on testimony heard on SB 203. People said they
have been stuck in the administrative hearing process for
growing periods of time while costs accrue to both state
government and the private sector. The principle behind SB 333
is similar to the 120-day legislative session limit so applying
a time limit on the executive branch does not chart new ground.
In addition, the judicial review process under AS 44.62.300
allows a petitioner to find that a regulation is invalid. SB 333
gives the court wide discretion to determine whether or not the
petitioner is making a valid argument that he or she no longer
has the financial resources and will be damaged without quick
finality to a decision.
MR. STANCLIFF said he worked with one of Senator Ogan's
constituents who came to Senator Ogan saying he needed to get
his case into court. He said people often feel they are being
denied due process because of the expense and time the
administrative hearing process takes. SB 333 will provide some
assurance for people with fewer resources. He noted that the
cost to the private sector is 3 times the cost to state
government so SB 333 will provide a stable, predictable business
climate.
8:40 a.m.
SENATOR OGAN asked if SB 333 could act as a "stand alone" bill
even though it is part of a package.
MR. STANCLIFF said SB 333 could have been incorporated into SB
203 but the sponsor and those involved with the negotiations
felt this matter should stand independently.
SENATOR THERRIAULT clarified that the language on page 2, lines
5-12, contains the conditions that must be satisfied before a
person can ask for court intervention. SB 333 does not allow a
shortcut; the petitioner must have satisfied all procedural
requirements and show that further delay will cause financial
harm. The court must then determine that the agency has
unreasonably delayed the process.
SENATOR OGAN expressed concern that "unreasonably delayed" is a
subjective term.
SENATOR FRENCH asked how long a typical administrative hearing
takes.
MR. STANCLIFF said the length of time varies a great deal,
depending on the complexity of the matter, the agency and which
rules apply under the Administrative Procedures Act (APA). He
thought that a sufficient track record has been established from
which the court can make a determination. He also thought that
the timelines that will come into play with SB 203 will help the
court decide whether an agency has been timely. He noted the
court could establish a time certain for resolution by the
agency or decide to take it up. He said a number of people have
been stuck in the administrative hearing process for over 10
years, and a fair number over 5 years, according to statistics
gathered by the ARRC. Nothing requires an agency to resolve a
matter in finality within a certain timeframe. The number of
times an agency can ask for information is unlimited, and an
agency can continually remand decisions within areas of
expertise. He said if a person has expert legal advice, he or
she will not approach the court without a solid history and
track record of the case.
SENATOR FRENCH said he heard two answers: that the court can
look at a track record and that there is no way to tell. He said
if a track record exists, he would like to see a copy. He
pointed out that a court does not do research on its own; it
asks for evidence and whoever brings the best evidence wins. The
petitioner will have to convince the court that an agency delay
is unreasonable so it will fall on the petitioner to determine
the average length of cases. He sees that as onerous for the
petitioner and asked Mr. Stancliff if he has done any research
in that area that would give the court some guidelines.
MR. STANCLIFF said he asked the senior law judge of Colorado the
longest amount of time a person should be held in the
administrative hearing process. He said 180 days.
CHAIR SEEKINS maintained that the courts interpret words like
"egregious" or "frivolous" regularly so he does not believe a
judge would have difficulty determining an unreasonable
timeframe. He said he believes SB 333 will provide an incentive
to agencies to make sure their practices are defensible in front
of a judge.
SENATOR OGAN said the Regulatory Commission of Alaska (RCA) is
one of the more controversial agencies with administrative
hearing powers, especially in regard to the telephone industry.
That industry is one of the fastest changing, regarding
technology and services.
TAPE 04-8, SIDE B
He said by the time the telephone companies get a ruling, the
industry has morphed to a whole new dynamic and the ruling may
be a moot point. He asked if SB 333 affects the RCA and will
motivate it to issue decisions in a timelier manner.
MR. STANDCLIFF indicated SB 333 touches the RCA and every other
regulatory body in the state. He said SB 333 can save the state
and private sector an incalculable amount of money but its main
purpose is to provide a better way for the government to do
business and to balance the power of the executive branch with
the legislative and judicial branches.
SENATOR FRENCH asked if the administrative hearing process would
continue while the court makes its determination or whether the
proceeding would be automatically stayed upon an action being
filed in court.
MR. STANCLIFF said SB 333 is silent on that issue. He said he
believes the agency would be able to continue and that it might
entice the agency to wrap a case up rapidly to avoid court
action.
SENATOR THERRIAULT said he would want the administrative process
to continue. He stated:
...The fact that you are availing yourself of the
ability to go to court may [indisc.] the agency to
wrap things up. They may realize that their actions
have been egregious and rather than suffer the
embarrassment of going to court and being told so,
they'll wrap things up. What we're trying to get to
here is the final decision so I wouldn't want this
process to prevent you from getting to a final
decision. It's not like a court case, I don't think,
where you feel something has been determined
incorrectly and you want to stay the whole process
while you get that question answered necessarily on
appeal. So, unless Senator French has some reason to
do otherwise, I think letting the process forward is
probably the correct thing to do.
SENATOR FRENCH referred to the language on page 2, lines 24-28,
and said it implies that the administrative proceeding is stayed
because it says if the court decides that a person is not
eligible for judicial relief, the agency shall continue the
proceeding. He argued that direction would be unnecessary if the
proceeding was allowed to continue simultaneously.
SENATOR THERRIAULT thought that language needs further
clarification and said he does not want a court filing to
automatically stop the administrative proceeding.
SENATOR OGAN asked if the court could remand the case to the
agency.
MR. STANCLIFF explained that the language on page 2, lines 15-
22, gives the court wide discretionary authority. The court
could enjoin the administrative proceeding, which suggests to
him that until it does so, the proceeding continues. He
suggested getting an interpretation from the legal drafter.
CHAIR SEEKINS agreed.
SENATOR FRENCH asked if the bill contains a limit on the number
of times a person can go to court and claim that the
administrative proceeding is taking too long.
MR. STANCLIFF said it does not.
CHAIR SEEKINS announced the committee would take public
testimony.
MR. DOUG WOOLIVER, Administrative Attorney, Alaska Court System,
said as is the court's typical practice, it takes no position on
SB 333. He said the Alaska Court System submitted an
indeterminate fiscal note because it does not have a good sense
of how many cases will be filed. He explained that in order to
move out of the administrative setting into the superior court,
the petitioner must allege the agency is unreasonably delaying
the process and the delay is causing significant and irreparable
harm. The petitioner would file a petition but the court is
unlikely to rule without considering the agency's rebuttal and
holding a hearing to decide whether the delay is unreasonable.
He said it is entirely likely that the court system will only
see a handful of cases, particularly in light of the other
proposed reforms. He added that if the administrative hearings
were not stayed when a motion is filed, SB 333 would spur quick
agency action. He noted, however, that a significant number of
people within the administrative process will feel the process
is unreasonably delayed. He said many hundreds of cases may be
pending before the regulatory agencies and only a small number
of those could have a big impact on the court system. The court
system does not have a clear idea of whether this option will be
used judiciously. He said he is putting the court's uncertainty
on the record in case it is necessary to request relief from the
legislature next year.
CHAIR SEEKINS asked how the court would determine an
"unreasonable" delay.
MR. WOOLIVER said that determination would be fact-specific and
made on a case-by-case basis. It may depend on how many times
the agency asks for information, whether the issue is seasonal
and could vary by industry.
CHAIR SEEKINS asked how long it might take for the court to
create guidelines for future cases.
MR. WOOLIVER said that is possible to some extent but superior
court cases are not precedent setting. He said attorneys who do
a lot of work in this area would start to get a sense of
timeliness but attorneys will not necessarily present the
petitioners.
SENATOR THERRIAULT believed the expense of taking a case to
court would keep a lot of cases without merit from being filed.
He then said the purpose behind the central hearing officer
panel is to create a more efficient system.
SENATOR FRENCH asked Mr. Wooliver if he sees any right of appeal
from a superior court's determination to the supreme court.
MR. WOOLIVER said a person always has one right of appeal to the
supreme court, except criminal cases or an appellate case.
CHAIR SEEKINS asked if the regulatory agency is more likely to
appeal a decision.
MR. WOOLIVER said he believes so.
SENATOR THERRIAULT asked Mr. Wooliver to comment on Senator
French's question about the number of times a person could file
a petition and whether he believes the bill should contain a
cap.
MR. WOOLIVER said that is the legislature's call. He imagined a
first appeal might not be meritorious but a second one could be.
He noted the court has rules to deal with frequent litigants.
The court can require a person to jump through specific hoops
before filing another claim. He said the court tends to have a
high tolerance at first but then shuts the door.
The committee took a 5-minute recess.
MR. DAN HOUGHTON, Alaska Regional Hospital, recounted an
administrative hearing procedure the hospital was involved in.
The hospital appealed its 1991 [Medicaid] rate setting. A
hearing officer heard the appeal in March of 1997 and issued a
favorable decision on May 26, 2000. The decision was submitted
to Commissioner Livey, who issued his final decision in April of
2001, which reversed the hearing officer's decision. The Alaska
Regional Hospital then appealed to superior court, which ruled
favorably. However, that decision was then sent to the
commissioner's office, and the hospital awaits an oral argument
with a hearing officer. He stated support for SB 333 and said
had the Alaska Regional Hospital had the ability to take its
case to superior court earlier, the agency would have been
motivated to move the case forward and both parties would have
saved time and effort.
CHAIR SEEKINS announced that with no further testimony, he would
hold SB 333 in committee.
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