Legislature(2003 - 2004)

03/25/2003 01:32 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
             SB 120-CLAIMS BY STATE-EMPLOYED SEAMEN                                                                         
                                                                                                                              
CHAIR BUNDE announced SB 120 to be up for consideration.                                                                        
                                                                                                                                
MS. SUSAN COX, Assistant Attorney  General, explained that SB 120                                                               
would have  the state limit  its waiver of sovereign  immunity as                                                               
it  pertains to  injury  claims brought  by  state employees  who                                                               
happen   to  be   seamen  and   instead   provide  for   worker's                                                               
compensation coverage  for those state employees.  The Governor's                                                               
transmittal letter  indicates that the  intent of the bill  is to                                                               
provide   state   employees   who  are   seamen   with   worker's                                                               
compensation coverage,  similar to all other  state employees. To                                                               
do  that, the  statute by  which the  legislature has  waived the                                                               
state's  sovereign   immunity,  thereby  opening  itself   up  to                                                               
litigation in  tort claims, personal injury  claims, and maritime                                                               
personal injury claims, must be amended.                                                                                        
                                                                                                                                
MS. COX explained that amending  AS 09.52.050 is an approach that                                                               
was  identified in  a  1963 Attorney  General's  opinion and  was                                                               
referenced in  an Alaska Supreme  Court decision on a  case known                                                               
as the  State of  Alaska Department of  Public Safety  vs. Robert                                                               
Brown in  1990. At that  time, the  [court] held that  the Alaska                                                               
Workers'  Compensation  Act  could  not  be  applied  to  be  the                                                               
exclusive  remedy  of  state employees,  because  the  state  had                                                               
waived  its  immunity  without  limitation  for  personal  injury                                                               
actions. If the state wanted to  withdraw its consent to suit and                                                               
apply  worker's  compensation  to  its state  employees  who  are                                                               
seamen, it could do so in a bill like this.                                                                                     
                                                                                                                                
She  explained  from 1983-1991  most  state  employed seamen  who                                                               
worked  aboard  our  state   ferries  had  collective  bargaining                                                               
agreements that  provided for  workers' compensation  benefits in                                                               
lieu  of the  Jones Act  and other  maritime remedies.  For eight                                                               
years those  employees enjoyed workers' compensation  coverage in                                                               
lieu of  litigation. In  1991, a  different Alaska  Supreme Court                                                               
decision,  another (Dale)  Brown decision,  said that  collective                                                               
bargaining   agreements  providing   for  workers'   compensation                                                               
instead  of the  Jones Act  were void  and therefore  couldn't be                                                               
negotiated as a matter of union contract.                                                                                       
                                                                                                                                
MS.  COX said  the purpose  of this  bill is  to bring  the state                                                               
employees  who are  seamen under  workers' compensation  and take                                                               
the state  out of the  realm of  maritime remedies and  Jones Act                                                               
coverage. The  Department of  Law expects  it to  ultimately save                                                               
the  state  money.  The  effective  date is  July  2003,  but  if                                                               
enacted, it  would apply  only to  injuries or  illness occurring                                                               
after that  date. So, anyone  who was  injured in the  last three                                                               
years,  because of  the three-year  statute of  limitations under                                                               
the Jones Act,  would still be able to bring  suit under the laws                                                               
that exist now.                                                                                                                 
                                                                                                                                
MS. COX expects a legal challenge  if this law is passed. She has                                                               
looked at legal  arguments pertaining to those.  The Robert Brown                                                               
decision  from the  Alaska  Supreme Court  and  other cases  from                                                               
several  jurisdictions point  in this  same direction.  She added                                                               
that decisions by  the U.S. Supreme Court in the  last five years                                                               
have made it clear  that if a state does not  consent to be sued,                                                               
the Congress cannot impose liability upon the state.                                                                            
                                                                                                                                
2:57 p.m.                                                                                                                       
                                                                                                                                
CHAIR BUNDE asked  what the volume of claims is,  how it compares                                                               
with workers'  compensation and what  the state's net  gain would                                                               
be.                                                                                                                             
                                                                                                                                
MS. COX replied that at this  point in time the Department of Law                                                               
handles  the  litigation  with ferry  employees.  The  department                                                               
expects to  see a  continuation of some  cases for  injuries that                                                               
occurred in  the last  three years.  Starting with  the effective                                                               
date of  this law,  new injuries  and illnesses  would go  to the                                                               
workers'  compensation  system.  The state  is  self-insured  and                                                               
workers'  compensation  is  obviously   a  no-fault  remedy.  The                                                               
department would expect to see,  by and large, automatic coverage                                                               
of  workers' compensation  matters and  an eventual  reduction in                                                               
the  amount of  litigation the  Department of  Law would  have to                                                               
handle.                                                                                                                         
                                                                                                                                
CHAIR BUNDE  asked about the  volume of claims the  department is                                                               
dealing  with. He  also  asked  if all  employees  of the  Alaska                                                               
Marine Highway  System are seamen  and whether they have  to meet                                                               
other criteria under this legislation.                                                                                          
                                                                                                                                
MS.  COX replied  that for  all intents  and purposes,  those who                                                               
work  aboard the  vessels are  seamen and  are covered  under the                                                               
maritime remedies  that she referred  to. Office  workers onshore                                                               
are  not necessarily  seamen. The  department deals  with a  much                                                               
higher volume of  claims with respect to the  maritime workers in                                                               
the ferry system than other state agencies.                                                                                     
                                                                                                                                
SENATOR  STEVENS asked  about  the Dale  Brown  decision and  the                                                               
basis for voiding the contract.                                                                                                 
                                                                                                                                
MS. COX answered  in the Dale Brown decision,  the Alaska Supreme                                                               
Court decided  as a matter  of labor  law, that unions  could not                                                               
bargain away their individual  members' rights, pre-injury, under                                                               
the federal law.                                                                                                                
                                                                                                                                
SENATOR FRENCH asked if this  would put all state employees under                                                               
the same workers' compensation scheme.                                                                                          
                                                                                                                                
MS. COX replied that is the plan.                                                                                               
                                                                                                                                
SENATOR  SEEKINS asked  if she  had seen  the letter  from Beard,                                                               
Stacy, Trueb and Jacobsen.                                                                                                      
                                                                                                                                
MS. COX replied that she saw it in the hall.                                                                                    
                                                                                                                                
SENATOR SEEKINS  asked for her  opinion based on the  theories of                                                               
law that were set forth in it.                                                                                                  
                                                                                                                                
MS. COX  said she  would be happy  to do that  and noted  she has                                                               
already  evaluated some  of the  theories because  she frequently                                                               
deals with  that firm in  her cases.  Mr. Trueb has  expressed an                                                               
interest  in a  uniform  approach to  maritime  remedies for  all                                                               
seamen. The  Governor disagrees and  she disagrees with  a number                                                               
of the points Mr. Trueb raised in his letter.                                                                                   
                                                                                                                                
SENATOR SEEKINS said  he was particularly interested  in a couple                                                               
of representations  in the letter  about the jurisdiction  of all                                                               
state courts in regard to injuries.                                                                                             
                                                                                                                                
MR. BRAD  THOMPSON, Director, Division  of Risk  Management, said                                                               
this division  acts as  the self-insurer  and handles  the claims                                                               
filed by  state employees.  He noted he  provided members  with a                                                               
chart  that compares  maritime  claims to  those  of other  state                                                               
employees. The  frequency of claims  in 100 full  time equivalent                                                               
positions (FTE)  for all state  employees is  8 per 100  FTE. The                                                               
Departments  of Corrections,  Transportation, Public  Safety, and                                                               
Administration have 10 per 100  FTE. The average cost of maritime                                                               
workers' claims  is $197,000 per  100 claims compared  to $64,000                                                               
for workers' compensation claims.                                                                                               
                                                                                                                                
CHAIR  BUNDE said  he frequently  hears that  commercial fishing,                                                               
logging and aviation are very high  risk jobs and asked if he had                                                               
information  on  how  the  Alaska   Marine  Highway  System  jobs                                                               
compare.                                                                                                                        
                                                                                                                                
MR. THOMPSON  replied that he  thought the  Worker's Compensation                                                               
division would have  a rate per 100 FTE on  its annual report; he                                                               
estimated it was about 10.                                                                                                      
                                                                                                                                
CHAIR BUNDE asked if the expanded  number of claims is due to the                                                               
fact that working  on ferries is inherently  dangerous or because                                                               
ferry workers are more inclined to present a claim.                                                                             
                                                                                                                                
MR.  THOMPSON replied  that the  remedy is  different. Wages  are                                                               
paid to  the end of the  voyage and that is  perhaps an incentive                                                               
for frequency  of claim.  Workers' compensation  only compensates                                                               
for a  time loss  greater than  three days.  He pointed  out that                                                               
within the Robert  Brown decision, the court  clearly stated that                                                               
if the state desires to limit  its tort liability to the Workers'                                                               
compensation Act,  it may  do so by  legislative enactment  of an                                                               
exception to the  waiver of sovereign immunity, which  is what SB
120 is proposing.                                                                                                               
                                                                                                                                
SENATOR SEEKINS  asked what  is so dangerous  about working  on a                                                               
ferry and noted the claim rate is very high.                                                                                    
                                                                                                                                
MR. THOMPSON agreed the rate of claims is high.                                                                                 
                                                                                                                                
MR. JOE  GELDHOF, Marine  Engineers Beneficial  Association, said                                                               
his organization  represents the  marine engineers on  the Alaska                                                               
Marine Highway  System and licensed engineers  on Alaska tankers.                                                               
SB 120 only  relates to state workers who are  seamen and a small                                                               
number of people  in the Departments of Fish and  Game and Public                                                               
Safety. He said this problem has  been around for years and he is                                                               
not convinced it is really good to go at this time.                                                                             
                                                                                                                                
TAPE 03-15, SIDE A                                                                                                            
                                                                                                                              
MR. GELDHOF  noted that the  marine engineers and  other maritime                                                               
unions have worked  with the state administration  and with Susan                                                               
Cox, who has a lot of  historical knowledge, in the past. He said                                                               
significant legal problems  within the bill need  to be addressed                                                               
before  it moves  out of  committee.  He explained  in one  Brown                                                               
case, the  court struck down  provisions based on a  challenge to                                                               
contractual language brought by  an individual mariner. The other                                                               
Brown  case,  which  preceded  that   one  by  about  two  years,                                                               
addressed sovereign immunity  and how to fix the  problem, but it                                                               
was based  on an attorney  general's opinion issued in  1963 when                                                               
Lyndon Johnson was  in the first year of his  presidency. He said                                                               
that opinion is  fairly dated and suggested  the current attorney                                                               
general update it.                                                                                                              
                                                                                                                                
MR.  GELDHOF  said  one  theory is  that  sovereign  immunity  is                                                               
imbedded  in  the  Alaska  Constitution so  it  would  require  a                                                               
constitutional  amendment  rather  than a  statutory  change.  He                                                               
thought  it would  be wise  to  get an  opinion from  legislative                                                               
counsel and  to then refer  the bill to the  Judiciary Committee.                                                               
He  noted  the  bill  also  needs a  fiscal  note  regarding  the                                                               
administration of workers' compensation.                                                                                        
                                                                                                                                
He added  that real  differences account for  what appears  to be                                                               
substantially  more claims  coming  from  marine activities.  For                                                               
example,  cooking  during   an  8-hour  shift  in   a  prison  is                                                               
fundamentally  different than  on a  ship when  the weather  gets                                                               
rough. He maintained:                                                                                                           
                                                                                                                                
     If you  take the  Tustumena out  to Dutch  Harbor, it's                                                                    
     probably  not a  stationary  deck and  it's long  days.                                                                    
     People are  often sleep  deprived.... There  really are                                                                    
     genuine  differences   in  the  maritime   trades  from                                                                    
     landlubbers like me.                                                                                                       
                                                                                                                                
CHAIR BUNDE asked Ms. Cox to  provide a fiscal note and said that                                                               
interesting legal  points were raised,  but the  Senate President                                                               
would decide whether to refer  SB 120 to the Judiciary Committee.                                                               
With  no  further  business  to come  before  the  committee,  he                                                               
adjourned the meeting at 3:15 p.m.                                                                                              

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