Legislature(2005 - 2006)BUTROVICH 205

04/15/2005 08:00 AM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
Heard & Held
Scheduled But Not Heard
Moved HB 91 am Out of Committee
Moved CSHB 155(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
          SB 86-STATE/MUNI LIABILITY FOR ATTORNEY FEES                                                                      
8:40:45 AM                                                                                                                    
CHAIR RALPH  SEEKINS announced SB  86 to be up  for consideration.                                                              
He  moved  Version   \G  as  the  working  document.   Hearing  no                                                              
objections, the motion carried.                                                                                                 
MR. CRAIG TILLERY,  assistant attorney general, Department  of Law                                                              
(DOL)  introduced  the bill.  SB  86  would prevent  enhanced  fee                                                              
awards  against   the  state  or   municipalities  that   are  not                                                              
authorized  by statute, but  leave those  governments open  to the                                                              
standard partial  fee awards called for  in the Civil Rule  82 fee                                                              
schedule.  Enhanced  fee  awards   cost  the  state  approximately                                                              
$600,000 per year.  SB 86 provides that, as a  matter of sovereign                                                              
immunity,   states  and   municipalities   are   not  liable   for                                                              
attorney's fees that are in excess of certain percentages.                                                                      
8:42:24 AM                                                                                                                    
MR.  TILLERY said  the Governor's  administration  believes it  is                                                              
the  Legislature's role  to  determine what  litigation  is to  be                                                              
subsidized through the use of public funds.                                                                                     
Section 1  states clearly  that were  SB 86  enacted into  law, it                                                              
would neither  preclude nor  repeal specific statutes  authorizing                                                              
the award  of costs  or fees in  particular situations.  Section 2                                                              
of the bill would  create a new provision in the  chapter of AS 09                                                              
devoted to  immunities. Section 3  would make the  bill applicable                                                              
only  to  civil  actions  or  appeals  initiated  after  it  takes                                                              
8:44:28 AM                                                                                                                    
SENATOR GRETCHEN GUESS asked the definition of attorney's fee.                                                                  
MR.  TILLERY explained  attorney's  fees are  the expenditures  of                                                              
time and the costs of travel and depositions.                                                                                   
SENATOR  HOLLIS FRENCH  asked whether  the state  has to pay  full                                                              
fees when the public interest litigant loses.                                                                                   
MR. TILLERY answered no.                                                                                                        
8:46:32 AM                                                                                                                    
CHAIR  SEEKINS clarified  if any  element of  the public  interest                                                              
litigant's case  is later enacted  by legislation, they  can claim                                                              
the attorney's fees.                                                                                                            
MR.  TILLERY explained  that  would be  the  catalyst theory  they                                                              
could seek it  under. If they win  any part of the case,  they get                                                              
full fees.                                                                                                                      
CHAIR SEEKINS said it is a complex structure.                                                                                   
SENATOR  FRENCH  clarified when  the  public litigant  loses  they                                                              
receive no restitution.                                                                                                         
8:48:40 AM                                                                                                                    
SENATOR FRENCH added  when the public litigant wins  on all claims                                                              
they are  entitled to full fees.  He asked whether  the government                                                              
has to pay to a group when a public interest litigant wins.                                                                     
MR. TILLERY said yes.                                                                                                           
SENATOR FRENCH  asked whether the  group receives cash  or whether                                                              
it is a public policy that costs the government money.                                                                          
MR. TILLERY answered  it is generally a public  policy. The public                                                              
interest  litigant can't  have  an overriding  economic  incentive                                                              
SENATOR FRENCH  stated the public  interest litigate, if  he wins,                                                              
gets  paid for  his  work. The  public interest  litigant  doesn't                                                              
enrich himself.                                                                                                                 
8:50:16 AM                                                                                                                    
MR.  TILLERY   responded  the   public  interest  litigant   works                                                              
generally for public policy purposes.                                                                                           
SENATOR FRENCH  asked Mr.  Tillery to  give an  example of  when a                                                              
public litigant could enrich himself.                                                                                           
MR. TILLERY answered  a person could have some  economic incentive                                                              
where the case could have larger consequences.                                                                                  
SENATOR FRENCH asked whether SB 86 embodies a court rule change.                                                                
MR. TILLERY responded it does not.                                                                                              
8:52:01 AM                                                                                                                    
SENATOR  GENE THERRIAULT  asked  whether  the attorney  fees  were                                                              
calculated on a standard hourly rate.                                                                                           
MR. TILLERY responded  they were calculated at the  hourly rate of                                                              
the attorney. In  the instance where an attorney does  not have an                                                              
hourly rate, they get a standard rate of $150 an hour.                                                                          
SENATOR  THERRIAULT  speculated  attorneys'  work under  a  salary                                                              
knowing  the hourly  rate the  court  would pay  covers more  than                                                              
their salary and so the entity they represent does make money.                                                                  
MR. TILLERY stated  correct. The money would go to  the entity and                                                              
then it is  between the entity  and the public interest  law firm.                                                              
He stated there is potential for profit.                                                                                        
8:53:45 AM                                                                                                                    
SENATOR  THERRIAULT  asked  Mr.  Tillery whether  he  thought  the                                                              
Alaska  Supreme  Court was  extremely  liberal in  construing  due                                                              
MR.  TILLERY   said  the  Alaska   Supreme  Court   has  zealously                                                              
protected due process rights.                                                                                                   
SENATOR GUESS  asked Mr.  Tillery to explain  whether SB  86 would                                                              
save money. She also asked him the reason for zero fiscal notes.                                                                
MR.  TILLERY  answered  the  zero  fiscal note  from  the  DOL  is                                                              
because they  don't pay  the money,  it comes  out of  the general                                                              
SENATOR  GUESS stated  it was  odd  that testimony  claimed SB  86                                                              
would save  the state money and  yet there are no fiscal  notes to                                                              
support the claim.                                                                                                              
8:55:48 AM                                                                                                                    
SENATOR GUESS  inquired as  to why the  state does not  proportion                                                              
attorney fees but is instead attempting to limit them all.                                                                      
MR.  TILLERY  answered SB  86  has  proportion  in it.  Section  2                                                              
breaks it down.  The Legislature needs to make the  decision as to                                                              
where  the  attorney  fees  come   from.  He  said  SB  86  treats                                                              
apportionment   but  it   is  really   about   restoring  to   the                                                              
Legislature the  power to control  when public funds are  going to                                                              
be used to subsidize litigation.                                                                                                
9:00:37 AM                                                                                                                    
SENATOR FRENCH  explained the chances  are a person would  sue for                                                              
a money  reason;  for example,  wrongful discharge.  If they  win,                                                              
they are  awarded 20  percent of  the attorney's  fees as  well as                                                              
the  monetary  damage  claimed.  Out of  the  awarded  money,  the                                                              
person  would  pay  the  balance   of  the  attorney's  fees.  The                                                              
difference  in  these  situations  is there  typically  isn't  any                                                              
money  involved,  its on  principle  or  enforcement of  the  law.                                                              
There is no deep economic stake in the case.                                                                                    
9:02:18 AM                                                                                                                    
SENATOR  THERRIAULT  commented in  the  instance  where there  are                                                              
multiple allegations,  the court only has to find  one instance of                                                              
violation and  the public interest  litigant would win  the entire                                                              
SENATOR  GUESS asked  the reason  public  interest litigant  cases                                                              
aren't  structured to  award fees  that are  proportionate to  the                                                              
win.  She said it  seems to  be better  public policy  to do  some                                                              
type of apportionment.                                                                                                          
9:04:20 AM                                                                                                                    
CHAIR  SEEKINS said  there is  also  a provision  under the  rules                                                              
where a  defendant can  prove the case  is frivolous  and petition                                                              
the court  for 100 percent of  the attorney's fees. When  a public                                                              
interest litigant  brings a  frivolous case  against the  state or                                                              
municipality, the state  or municipality has to defend  it yet can                                                              
never  recover the  fees.  He said  the  people's  money is  being                                                              
spent to defend against someone else's frivolity.                                                                               
9:05:50 AM                                                                                                                    
SENATOR FRENCH  asserted there is  a protection and that  is there                                                              
must be  a finding that  the individual  who brought the  suit was                                                              
seeking to vindicate strong public policy.                                                                                      
SENATOR CHARLIE  HUGGINS asked Mr.  Tillery to give an  example of                                                              
litigation  brought against  the state  by a  public interest  law                                                              
MR. TILLERY  answered there was  litigation over HB 145  two years                                                              
SENATOR HUGGINS asked the timeframe of resolution.                                                                              
MR. TILLERY answered several years from start to finish.                                                                        
SENATOR HUGGINS asked the issue.                                                                                                
MR. TILLERY answered it was the constitutionality of HB 145.                                                                    
9:08:10 AM                                                                                                                    
MR.  TILLERY  added  another  example  is  a  number  of  lawsuits                                                              
against  the Prince  William  Sound  contingency  plans where  the                                                              
state  is  defending  the  Department  of  Economic  Development's                                                              
contingency  plans. Judges  have awarded  up to  $250 an hour  for                                                              
attorney's  costs. He said  the point  of SB 86  is if  the people                                                              
are going  to expend their money  in this manner,  the Legislature                                                              
should make that decision.                                                                                                      
SENATOR  HUGGINS commented  SB 86  potentially  has a  restraining                                                              
effect on spending the people's money.                                                                                          
SENATOR  FRENCH clarified  it would  be the laws  that Alaska  has                                                              
passed that  are being  vindicated. The state  sets out  rules and                                                              
if someone  finds the state has  broken it's own rules,  the state                                                              
is forced to pay.                                                                                                               
9:10:42 AM                                                                                                                    
CHAIR  SEEKINS   suggested  many  public  interest   lawsuits  are                                                              
brought for  philosophical reasons  such as water  quality issues,                                                              
watershed  issues, and  environmental impact  issues. Groups  that                                                              
have  a  philosophical  interest  in  stopping  development  bring                                                              
lawsuits.  The court rule  the committee  is looking  at is  not a                                                              
rule established by the Legislature.                                                                                            
9:15:28 AM                                                                                                                    
SENATOR FRENCH asserted  it is important for people  to be able to                                                              
challenge the  government to  abide by it's  own rules.  He agreed                                                              
with  Senator  Guess's  suggestion  to  modify  the  attorney  fee                                                              
9:17:14 AM                                                                                                                    
CHAIR  SEEKINS  responded  many organizations  that  bring  public                                                              
interest lawsuits are multi-million dollar corporations.                                                                        
SENATOR  GUESS asked  Mr. Tillery  the  reason the  administration                                                              
isn't  addressing the  compensation  issues and  the attorney  fee                                                              
schedule issues.                                                                                                                
9:20:09 AM                                                                                                                    
MR. TILLERY said  the point of SB 86 is an attempt  to protect the                                                              
state's fiscal  purse and also to  restore to the  Legislature the                                                              
control  over which  type  of litigation  it  wishes to  subsidize                                                              
with public monies.                                                                                                             
SENATOR   HUGGINS  speculated   the  majority   of  Alaskans   are                                                              
supportive  of drilling for  oil in  the Alaska National  Wildlife                                                              
Refuge (ANWR)  and are  supportive of a  natural gas  pipeline. He                                                              
expressed  concern  over  public   interest  litigation  in  those                                                              
9:22:28 AM                                                                                                                    
CHAIR SEEKINS  referred to  Page 2, line  9 and asked  Mr. Tillery                                                              
to give an example of an award by a court of a sanction.                                                                        
MR.  TILLERY explained  the court  might  find the  actions of  an                                                              
attorney were out of bounds.                                                                                                    
9:24:22 AM                                                                                                                    
SENATOR  GUESS  asked  Mr. Tillery  to  describe  a  sanction-able                                                              
action of conduct in a case.                                                                                                    
MR. TILLERY  explained the  most typical  sanction would  be where                                                              
somebody  refuses  to  provide discovery  or  goes  against  court                                                              
9:26:09 AM                                                                                                                    
MICHAEL MCCLOUD-BALL,  executive director, Alaska  Civil Liberties                                                              
Union  (ACLU), testified  the ACLU  opposes SB  86 on the  grounds                                                              
that  it will  to  widen the  legal  advantage  currently held  by                                                              
governmental  litigants  over  private  individuals.  The  typical                                                              
plaintiff in  a public interest  lawsuit is an individual,  a non-                                                              
profit  agency,   or  a   charitable  organization.   The  typical                                                              
defendant is  a governmental entity.  The typical suit is  a party                                                              
with  limited  financial  resources  who  needs  to  hire  outside                                                              
counsel   against   a   governmental   entity   with   access   to                                                              
substantially greater  financial and legal resources.  The dispute                                                              
is usually over principle and rarely over money.                                                                                
9:27:09 AM                                                                                                                    
The public interest  litigant only receives reimbursement  if they                                                              
are acting  in the public interest  and if they are  successful in                                                              
showing that  the government  acted wrongly.  The government  gets                                                              
it's subsidies  from  the taxpayers  whether it  wins or not.  The                                                              
individual  within the  government  who caused  the government  to                                                              
violate  the  victim's  rights   is  not  made  to  reimburse  the                                                              
taxpayers for  the internal  cost of running  the government  in a                                                              
manner that  violates the public  interest. SB 86  will discourage                                                              
normal  everyday people  from  trying to  make  a difference  when                                                              
they see the government failing to do its job.                                                                                  
9:29:40 AM                                                                                                                    
MR.  MACLEOD-BALL continued  most of  the actions  are brought  by                                                              
relatively  small  organizations.   One  thing  missing  from  the                                                              
discussion  is  the amount  of  overhead  involved in  the  public                                                              
interest law firms, not just the attorney's fees.                                                                               
9:31:00 AM                                                                                                                    
MR. MACLEOD-BALL  added when a  public interest litigant  brings a                                                              
suit in a frivolous  manner, they are subject to  the same penalty                                                              
as any other party.                                                                                                             
9:31:54 AM                                                                                                                    
CHAIR  SEEKINS asked  Mr. Ball  to  give some  examples of  public                                                              
interest litigation  brought by  the poor, uneducated,  or elderly                                                              
MR. MACLEOD-BALL  offered to prepare a  list and submit  it to the                                                              
CHAIR  SEEKINS asked  Mr.  Ball the  reason  SB 86  would make  it                                                              
harder for the public to bring lawsuits against the state.                                                                      
MR.  MACLEOD-BALL  explained  when   a  person  is  fighting  over                                                              
something   other  than   money;  it   is  hard   to  find   legal                                                              
representation.  A wealthy  individual has  the advantage  over an                                                              
average citizen.                                                                                                                
9:35:47 AM                                                                                                                    
MS. ALLISON  MENDEL, attorney, testified  in opposition of  SB 86.                                                              
She said  access to  justice is almost  synonymous with  access to                                                              
lawyers.  There is  no reasonable  possibility  of litigating  any                                                              
complex  issue  without  the  help of  an  attorney.  The  private                                                              
individual  has to  have access  to a  lawyer but  no lawyer  will                                                              
take a  case where there  is no prospect  of being paid  unless it                                                              
is pro-bono. If  the government adopts an illegal  policy the only                                                              
way a  private citizen  will  be able  to challenge  it is if  the                                                              
private individual  can find legal  counsel. The people  who bring                                                              
these lawsuits are not exclusively public interest law firms.                                                                   
9:37:52 AM                                                                                                                    
People  from all  parts  of the  political  spectrum have  brought                                                              
public interest lawsuits  and have won them justifiably.  The only                                                              
people  who receive  payment  are  those who  win  in their  claim                                                              
against the government.                                                                                                         
9:39:38 AM                                                                                                                    
MS. MENDEL  continued there has  been much testimony  about people                                                              
winning  insignificant  parts of  a  lawsuit and  receiving  large                                                              
sums for  fees, which  is unrealistic.  The court  always  has the                                                              
discretion to pare down the fees.                                                                                               
9:41:14 AM                                                                                                                    
CHAIR  SEEKINS asked  for an  example  of a  public interest  case                                                              
where the litigants received nothing.                                                                                           
MS. MENDEL said cases such as that would not be reported.                                                                       
9:43:37 AM                                                                                                                    
CHAIR SEEKINS  closed public testimony  on SB 86. He  recessed the                                                              
meeting subject to the call of the chair at 9:48:21 AM.                                                                       

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