Legislature(2005 - 2006)BUTROVICH 205
04/15/2005 08:00 AM JUDICIARY
Download Mp3. <- Right click and save file as
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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 effect. 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 involved. 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 process. 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 fund. 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 case. 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 firm. MR. TILLERY answered there was litigation over HB 145 two years ago. 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 schedules. 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 areas. 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 rules. 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 public. MR. MACLEOD-BALL offered to prepare a list and submit it to the committee. 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.