Legislature(1993 - 1994)
03/11/1994 01:15 PM House JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
March 11, 1994
1:15 p.m.
MEMBERS PRESENT
Rep. Brian Porter, Chairman
Rep. Jeannette James, Vice-Chair
Rep. Pete Kott
Rep. Joe Green
Rep. Jim Nordlund
Rep. Cliff Davidson (1:40 p.m.)
Rep. Gail Phillips (1:45 p.m.)
COMMITTEE CALENDAR
HB 292: "An Act relating to civil actions; amending Alaska
Rules of Civil Procedure 49 and 68; and providing
for an effective date."
HEARD AND HELD
*HB 445: "An Act relating to operating or driving a motor
vehicle, commercial motor vehicle, aircraft, or
watercraft."
NOT HEARD
*HB 460: "An Act relating to bail after conviction for
various felonies if the defendant has certain
previous felony convictions."
NOT HEARD
HB 376: "An Act relating to services for and protection of
vulnerable adults; and providing for an effective
date."
NOT HEARD
(* First public hearing.)
WITNESS REGISTER
DANIELLA LOPER, Committee Counsel
House Judicial Standing Committee
Alaska State Legislature
Capitol Building, Room 118
Juneau, AK 99811
Phone: 465-6841
POSITION STATEMENT: Informational testimony regarding
HB 292
MICHAEL FORD
Legislative Legal Counsel
Legislative Affairs Agency
Goldstein Building, Room 404
130 Seward Street
Juneau, AK 99801
Phone: 465-2450
POSITION STATEMENT: Informational testimony regarding
HB 292
PREVIOUS ACTION
BILL: HB 292
SHORT TITLE: CIVIL LIABILITY
SPONSOR(S): LABOR & COMMERCE
JRN-DATE JRN-PG ACTION
04/23/93 1459 (H) READ THE FIRST TIME/REFERRAL(S)
04/23/93 1459 (H) L&C, JUDICIARY, FINANCE
09/10/93 (H) L&C AT 09:00 AM CAPITOL 17
11/22/93 (H) MINUTE(L&C)
01/27/94 (H) L&C AT 03:00 PM CAPITOL 17
01/27/94 (H) MINUTE(L&C)
02/01/94 (H) L&C AT 03:00 PM CAPITOL 17
02/01/94 (H) MINUTE(L&C)
02/03/94 (H) L&C AT 03:00 PM CAPITOL 17
02/03/94 (H) MINUTE(L&C)
02/07/94 2280 (H) L&C RPT CS(L&C) NEW TITLE 3DP
4NR
02/07/94 2280 (H) DP: HUDSON, MULDER, PORTER
02/07/94 2280 (H) NR: GREEN, WILLIAMS, SITTON,
MACKIE
02/07/94 2280 (H) LETTER OF INTENT WITH L&C
REPORT
02/07/94 2280 (H) -ZERO FISCAL NOTE (LAW) 2/7/94
02/16/94 (H) JUD AT 01:15 PM CAPITOL 120
02/18/94 (H) JUD AT 01:15 PM CAPITOL 120
02/18/94 (H) MINUTE(JUD)
02/21/94 (H) JUD AT 01:15 PM CAPITOL 120
02/21/94 (H) MINUTE(JUD)
03/02/94 (H) JUD AT 01:15 PM CAPITOL 120
BILL: HB 445
SHORT TITLE: DWI LAWS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
02/04/94 2261 (H) READ THE FIRST TIME/REFERRAL(S)
02/04/94 2262 (H) JUDICIARY, FINANCE
02/04/94 2262 (H) -3 ZERO FISCAL NOTES (2-ADM,
LAW) 2/4/94
02/04/94 2262 (H) -FISCAL NOTE (DPS) 2/4/94
02/04/94 2262 (H) GOVERNOR'S TRANSMITTAL LETTER
03/11/94 (H) JUD AT 01:00 PM CAPITOL 120
BILL: HB 460
SHORT TITLE: NO BAIL FOR FELONS W/PREVIOUS CONVICTIONS
SPONSOR(S): REPRESENTATIVE(S) NAVARRE
JRN-DATE JRN-PG ACTION
02/11/94 2344 (H) READ THE FIRST TIME/REFERRAL(S)
02/11/94 2345 (H) JUDICIARY, FINANCE
03/11/94 (H) JUD AT 01:00 PM CAPITOL 120
BILL: HB 376
SHORT TITLE: ASSIST & PROTECT VULNERABLE ADULTS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
01/14/94 2066 (H) READ THE FIRST TIME/REFERRAL(S)
01/14/94 2066 (H) HES, JUDICIARY, FINANCE
01/14/94 2067 (H) -4 FNS (3-DHSS, ADM) 1/14/94
01/14/94 2067 (H) -ZERO FISCAL NOTE (ADM) 1/14/94
01/14/94 2067 (H) GOVERNOR'S TRANSMITTAL LETTER
02/09/94 (H) HES AT 03:00 PM CAPITOL 106
02/09/94 (H) MINUTE(HEB)
02/09/94 (H) MINUTE(HES)
02/11/94 2341 (H) HES RPT 4DP 3NR 1AM
02/11/94 2341 (H) DP: BUNDE, TOOHEY, B.DAVIS,
NICHOLIA
02/11/94 2341 (H) NR: KOTT, G.DAVIS, OLBERG
02/11/94 2341 (H) AM: VEZEY
02/11/94 2342 (H) -ZERO FISCAL NOTE (DPS) 2/11/94
02/11/94 2342 (H) -4 PREVIOUS FNS (ADM, 3-DHSS)
1/14/94
02/11/94 2342 (H) -PREVIOUS ZERO FISCAL NOTE
(ADM) 1/14/94
03/11/94 (H) JUD AT 01:00 PM CAPITOL 120
ACTION NARRATIVE
TAPE 94-37, SIDE A
Number 000
The House Judiciary Standing Committee was called to order
at 1:23 p.m. on March 11, 1994. A quorum was present.
Chairman Porter announced that the committee would take up
HB 292.
HB 292 - CIVIL LIABILITY
Number 028
CHAIRMAN PORTER: "We are to take up the conclusion of HB
292 and we will continue where we were with the amendments.
We are on Amendment 12. Let me add before we start that
most of you have heard and in some cases read the 35 page
treatise we got finally from the Department of Law. I hope
I would characterize it correctly as saying that they found
no problems with 3/4 of the bill. They found equivocal
concerns with another 15 percent. They spent a considerable
amount of time and space on two items: the statute of
repose and the medical malpractice statute of limitations.
Within those two areas, quite frankly, some of the things
that they mention are interesting; some of them are bizarre.
There will be, before the end of the meeting, for each
member of the committee, that 35 page report and responses
that we have already received from other points of view on
their feelings on those two sections that they've
challenged. I think with a careful reading of those you can
see that while there are no guarantees, ever, [indisc. -
dealing with our Supreme Court?], the concerns expressed by
the two members of the Department of Law who furnished us
with their opinions, I think, have been countered. So, with
that said, let's move along to Amendment 12. Daniella,
would you tell us about that."
Number 081
DANIELLA LOPER, Committee Counsel, House Judiciary Standing
Committee, recommenced her review of the amendments of HB
292 with Amendment 12:
"This section is talking about collateral benefits. We
believe and have been asked by the trial courts, that
subsection (c) talks about the claimants' rights, the
coverage [inaud. - exhaustion?] pleaded by the payment of a
collateral benefit, and what they've paid out to get this
collateral benefit. We believe that it's very important
that the fact-finder take this into consideration. What we
have done is to shorten up the section; we have removed it
from subsection (c) and have placed it in subsection (b).
So, after `benefits' on line 9, we are saying `Or the amount
of value lost by payment' and simply saying that they'll
take that into consideration."
REP. JAMES [?] moved the amendment.
Number 133
REP. GREEN: "What I heard you say was that this small group
of words in effect does (c). Sounds good to me."
MS. LOPER: "Yes."
Number 146
REP. NORDLUND: "I'm not sure if I'm understanding this,
but, does this amendment affect the use of collateral
sources of evidence in relation to before or after a finding
of fact?"
Number 165
MS. LOPER: "Section (c) does not even deal with that.
Section (c) talks about showing the fact-finder evidence on
the claimant's monies that he or she has expended by getting
this collateral benefit. So, by putting it in (b), it's
saying the same thing, because Section (b) is also talking
about offering evidence to the fact-finder and showing them
this. So, it's kind of a balancing scale. It's showing
them the collateral benefit, but on the other hand, it's
also showing what the plaintiff has expended to get this
collateral benefit. We believe that both of these issues
should be taken into consideration."
REP. NORDLUND: "What that explanation, I guess I don't have
an objection."
Number 185
There being no further discussion or objections, Amendment
12 was adopted by the committee.
Number 192
MS. LOPER reviewed Amendment 13a and Amendment 13 (page 10,
lines 24-25):
"Sue Cox from the Department of Law felt that there was some
ambiguity with the language on line 24, even though the
phrase has been in the books for umpteen years, when it
talks about that it `reduces the claim against the others to
the extent of any amount stipulated by the release.' This
amendment involves a defendant who is offering a settlement;
the plaintiff takes it; there are maybe two or three other
defendants involved, and so what happens is that after the
jury renders their award, the amount shall be decreased by
the settlement that the plaintiff accepted from one of the
defendants, and then the rest will be proportioned by the
rest of the defendants at fault.
"And so, just simply to clarify the language, instead of
saying `but it reduces the claim' she felt that that
verbiage didn't really clarify what was going on, so in 13a
we simplified it in saying `but it reduces the total amount
awarded by the jury or court to the extent of any amount
stipulated by the release or the covenant.' Just, simply, a
clarification."
Number 247
REP. JAMES moved Amendment 13a. There being no discussion
or objections, Amendment 13A was adopted by the committee.
Number 254
MS. LOPER: "Amendment 14 deals with rate of interest. On
the books we have Alaska Statute 4.54.510. In this
particular section it talks about that there should be a
10.5 percent interest on this judgment taken into
consideration. As you can see in the bill, we state that it
is three percent above the 12th Federal Reserve District
discount rates; sort of a floating discount rate. It is not
a fixed rate. It is something that is going to be a
variable, that can be looked at in the course of the year
and in the future. This is why we put [in] Amendment 14 to
say `notwithstanding 4.54.510.' On top of that, this entire
section really relates to, and also includes prejudgment
interest, not just interest on the judgment. We wanted to
clarify that as well. It should read something like this:
`Notwithstanding 4.54.510' - you know, the rate of interest
on judgment including prejudgment interest and so forth."
Number 285
REP. GREEN moved Amendment 14.
CHAIRMAN PORTER asked if there were any objections to the
amendment.
Number 287
REP. KOTT: "I'm not really wanting to object to movement of
the amendment. Let me just hold my comment until a little
later."
Number 293
REP. NORDLUND requested clarification regarding the three
percent above the federal reserve rate. Was Ms. Loper
saying that previously it did not apply to prejudgment
interest and now it was being applied to prejudgment
interest also?
CHAIRMAN PORTER replied that it did previously apply to
prejudgment interest, but this was being made clearer.
Number 305
There being no further discussion or objection, Amendment 14
was adopted by the committee.
Number 314
MS. LOPER: "Amendment 15 is taking a look at page 12, line
17. This has to do with the wrongful death issues. As it
stands on the books today in current law, when there are
nondependents that are seeking a claim on a wrongful death,
they are limited to pecuniary, or economic, loss. We are
opening up the door to say that in wrongful death actions a
nondependent plaintiff can sue for economic loss limited to
$10,000 as well as noneconomic and punitive. In order to do
that we needed to delete that phrase `but shall be limited
to economic loss' and we simply said, `when the decedent is
survived by no spouse or children or other dependents the
amount recovered shall be administered as other personal
property of the decedent as provided in AS 9.55.580', which
limits the economic loss to $10,000, but it doesn't limit or
it does not prevent a plaintiff from pursuing noneconomic or
punitive damages."
Number 345
REP. JAMES: "You're putting that back like it was before?"
Number 357
MS. LOPER: "No, actually, we are completely deleting `but
shall be limited to economic loss' and we're simply saying,
hey, refer to that statute that has a $10,000 cap on
economic loss, but you're not going to be limited just to
economic loss."
REP. JAMES asked for confirmation that the amendment being
discussed was the second, not the first Amendment 15, and
Ms. Loper confirmed this.
Number 357
REP. JAMES moved Amendment 15.
CHAIRMAN PORTER: "Amendment 15 has moved, then. For
anybody looking at all this after the fact, Amendment 15,
the one we're talking about, is the one that does not have a
date and Michael Ford number on it; rather, it has nothing
at the top right. It merely has `Amendment 15'."
There being no further discussion or objection, Amendment 15
as described was adopted by the committee.
Number 370
MS. LOPER: "In Amendment 16, on page 14, line 17, after
`hospital' we are defining `independent contractor' since
the whole section deals with it. `Independent contractor'
means a licensed health care provider, is a member of a
hospital's medical staff, or has otherwise been granted
specified privileges to render health care services directly
or indirectly to patients at the hospital, but who is not an
employee or actual agent of the hospital in condition with
the rendition of the health care services. That is the
definition of an independent contractor."
Number 385
REP. JAMES moved Amendment 16 and Chairman Porter invited
discussion.
Number 388
REP. NORDLUND: "For the information of the committee, I am
going to be offering an amendment that attempts to tighten
this section down a little bit. I see this as an attempt to
tighten it down and define exactly who would be covered and
wouldn't be." He explained that his amendment would state
which parties could contract with a hospital without the
hospital being responsible for them. This one moves down
the road towards that definition. I think the problem has
been, as I understand it, primarily with physicians. I
don't think we want to have hospitals be relieved of the
duty for not covering their nurses and any of the rest of
their staff. I would vote for this amendment because I
think it's an improvement, but my amendment is more of an
improvement beyond this."
Number 407
There being no further discussion or objection, Amendment 16
was adopted by the committee.
Number 411
MS. LOPER introduced discussion of Amendment 17 on page 15,
line 5. "In this particular section we are attempting to
make a stab at trying to stop frivolous lawsuits by using
Federal Court Rule 11. Where it says `an initiative shall
immediately set the matter for hearing', the trial courts
suggested that we simply eliminate `shall' and place `may' -
- `may immediately set the matter for hearing.' That
hearing is already established. It's called a summary
judgment hearing."
Number 429
REP. GREEN: "You said `may immediately.' The way this is
written, we would knock out both `shall' and `immediately'
and just say `may', not `may immediately'?"
Number 449
MS. LOPER: "Right. Exactly. That's what I meant." After
some inquiries from and discussion among committee members
concerning numbering within the amendment, Ms. Loper said,
"This whole entire section directly affects Rule 11 and Rule
95. So when we put a special order to hold an immediate
hearing, that went against that Court Rule 11 and 95 the way
it's been set up for years. We thought about it and said,
no, let's just go on with 11 and 95, and that's why you see
the deletion of just those two numbers."
Number 458
REP. GREEN: "By going to `may', which would then imply that
the court may not, what affect would that have on this
section?"
Number 460
MS. LOPER: "By eliminating `shall immediately' we are going
back to what is happening today, and what has been occurring
today. That particular hearing is called a summary
judgment. The judge will take into consideration the motion
for summary judgment on [what might be] a frivolous lawsuit,
and he or she will review the facts or the claims that each
party is making. And then if there is some kind of
foundation to the claim, then, they may hold, based on what
they see, a summary judgment hearing."
CHAIRMAN PORTER remarked that this was a response to
concerns about possibly improper litigating scenarios.
Number 481
There being no further discussions or objection, Amendment
17 was adopted by the committee.
Number 486
MS. LOPER addressed Amendment 18 on page 16, line 6. "This
section is asking the Division of Insurance to come up with
and compile information on exactly how the bill has affected
insurance rates. The date that is in the bill at this time
said that the information must be compiled by June 1, 1995.
The intent behind the amendment is this: first of all, you
have within two years an accrual to discover that there is
an injury. So that's two years. Then finally, to file the
suit, could be a matter of another year or two years, maybe
three. That's if the case isn't appealed. That is the only
way that we are really going to find that time period, to
find really if there has been any effect. So, June 1, 1995,
does not give enough time in order to have the whole process
be taken into consideration. So we have changed the date to
1998."
Number 509
REP. DAVIDSON: "What was the last so-called tort reform
bill we did? How long ago was that? Three, four years ago,
right? So, what kind of data do we have on how the rates
were affected from that legislation? It's been four years
now, which is what you're asking for here. Do we know? Do
we have that information?"
Number 516
CHAIRMAN PORTER: "No, and the main reason that we don't is
another reason why we may get something relevant and may not
from this date. I could argue logically that we should have
this report ten years out, because it takes that long before
the challenges that will automatically accrue with this
legislation if it passes are going to be ultimately settled.
We passed, by initiative, doing away with joint and several
liability; a loophole was found in the wording of the
initiative, and now some folks think we have joint and
several liability, and some folks think we don't.
Consequently, tracking what effect that initiative has is
difficult if not impossible because we don't have it yet."
Number 531
REP. DAVIDSON challenged the paucity of data, asking, "Is it
not true not all of these things are always appealed?
Right? You're going to have a database that..."
CHAIRMAN PORTER stressed four years as an optimal period of
time. Referring back to Ms. Loper's comments, he reminded
committee members, "Nothing that is in the pipeline right
now will be affected by this law, that's ex post facto....
Civil cases in the norm take three years to get resolved
unless they are settled out of court.... Insurance companies
have to wait and see what happens." Chairman Porter noted
that after the three years there might yet be an appeal, but
in any case it would be a year beyond that period before
statistics could be assembled. He concluded, "That's four
years, that's 1998."
REP. DAVIDSON expressed willingness to accept 1997 as an
initial point for compilation and analysis of data, but
urged against delaying such review until 1988, asking, "Who
knows what we're going to be stuck with as a result of
another effort at tort reform as far as insurance rates are
concerned?"
REP. PORTER asked if there was further discussion or any
objections on Amendment 18. There being objection, a roll
call vote was taken. Rep. Davidson voted "No" and Reps.
Nordlund, Green, Phillips, Kott, James and Porter voted
"Yeah". Amendment 18 was therefore adopted by the
committee.
Number 570
MS. LOPER began discussion of Amendment 19a, saying, "We
wanted to tighten up this section." She referred the
committee to page 14, lines 14-15. "You see where it says
health care provider. Health care provider as defined in
this bill includes almost everyone. We wanted to make sure
that we hit the particular areas that are at issue." Ms.
Loper noted that providers included doctors of medicine,
surgeons, psychologists, osteopaths, dentists, optometrists
and registered nurses of anesthesiology. Regarding the
latter she explained, "In many rural communities, it is a
registered nurse who is the anesthesiologist, who works with
the doctor on the operating table."
Number 599
REP. PHILLIPS: "Wouldn't the definition of health care
provider include nurses, general nurses?"
Number 604
MS. LOPER: "That is correct. We do not want to use the
word `physician' as you can see on the amendment. We want
to cross that out and put `health care provider.' We want
to delete `physician,' we want to insert `Health care
provider includes,' and therefore, a nurse would be."
Number 608
REP. PHILLIPS: "At that point, then, it should be `health
care providers includes but is not limited to' because you
don't have nurses, regular nurses?"
Number 610
CHAIRMAN PORTER: "No. That is correct. We don't want
regular nurses. The idea of this division is that we don't
think that the hospital should be required to be responsible
for people that they don't supervise. Basically, that's
physicians, unless the physician is a contract person with
them. The definition of `health care provider' includes
everybody down to the -- you know... what the industry wants
is not what everybody that criticizes this section feels,
that eventually they are going to make independent
contractors out of nurses and janitors and be responsible
for nobody. What we're saying is, `No, that isn't what
we're after. We're after just these guys.'"
Number 624
REP. DAVIDSON: "So, what is the responsibility of the
hospital? Because these people are going to be independent
contractors, and I guess I'm having trouble understanding
why all these different specialists are each going to have
to have their own insurance policy -- because they're not
going to be accredited to practice in a hospital without
some kind of insurance, right? My question is, why is it
that all of these different policies will be less expensive
than one large policy that the hospital will cover? How
does this affect the billing for the patient? Are we
thinking of the patient at all?"
Number 638
CHAIRMAN PORTER: "That is precisely one of the recognized
criteria for separating an independent contractor from the
hospital people. The hospital doesn't bill for the doctor's
fees even though the surgery was performed in the hospital.
That's something traditionally that the doctor bills for.
The hospital will bill for the medicines and the support
staff and all that... but the doctor's fee is a separate
bill. That is the kind of separation that you look for when
you're trying to determine who is really an independent
contractor, and who isn't. The other main differentiation
is that the facility doesn't supervise, instruct, control
this person's activities. The profession of medicine does,
so to speak, with the certification of the state. So, what
we're trying to say is that they shouldn't be responsible
for things that they don't control. They do control their
own employees and they ought to be responsible for them --
the nurses, and everybody else."
Number 658
REP. DAVIDSON: "I don't know exactly how it works, but it
seems that the hospital has a certain responsibility as to
who they allow to practice in their hospital."
CHAIRMAN PORTER: "Yes. And that's covered also. The
hospital is responsible for exercising reasonable care in
granting staff privileges to practice in the hospital, for
reviewing those privileges on a regular basis, for taking
appropriate steps to revoke or restrict privileges in
appropriate circumstances. The hospital is not otherwise
liable for [indisc.]."
REP. DAVIDSON: "What kind of standard is reasonable care,
Mr. Chairman?"
Number 666
MS. LOPER: "Reasonable care is just a standard used in law,
just a general standard."
MR. DAVIDSON: "Is there a lesser standard, or a greater
standard? What would be the next greater standard?"
MS. LOPER: "You can put anything down, if you want, to make
it a higher standard or lesser standard, but this is the
standard that you use, and that's pretty strict in itself."
Number 675
REP. JAMES: "I have a question, not necessarily on that
point, if Rep. Davidson has not finished with that question,
but I do have a question regarding this amendment. Are you
finished?"
REP. DAVIDSON did have further inquiries on the points he
raised. He said, "There really then does not exist a higher
standard here, as regards a situation like this in granting
staff privileges as far as the law is concerned?"
Number 683
MS. LOPER: "This is the way it is written. I mean, this is
the way it's been, it's just the way it's done. Any time
that a hospital reviews their doctors -- I mean, they have
to, I imagine, check out their license to make sure that
nothing, that the doctor is not in violation of any of this,
and they would use and exercise a reasonable care."
Number 692
REP. GREEN: "Wouldn't this be somewhat akin then to, say, a
torts liability case where somebody was under a duty for
negligence to exercise the degree that the average
reasonable person would exercise under the same or similar
circumstances; that kind of thing?"
MS. LOPER: "Exactly."
REP. GREEN: "And that's, I know, been in the law for years
and years."
Number 697
REP. JAMES: "On the question that Rep. Davidson had about
the insurance, about why would we be paying all this
insurance? I might point out that I believe that all of
these people would already have insurance because they don't
only operate at the hospital, and so this gives it so that
the hospital isn't also covered."
Number 706
REP. NORDLUND stated a correction to Rep. James' assertion
concerning physicians' insurance, saying, "Twenty-five
percent of the physicians in this state do not have any
insurance. That's a fact." He noted he had an amendment
concerning these insurance issues that he would subsequently
be offering. Rep. Nordlund cautioned, "Since we are letting
the hospitals out of the responsibility of providing
coverage for these people, I think we have to make
absolutely sure that the doctors themselves have insurance."
REP. PORTER: "We'll debate that one when we get to it.
Rep. Green?"
Number 711
REP. GREEN: "Not on that issue, back on this amendment.
Does AS 18.23.070, [indisc.], in the statute, does it
tabulate the persons..."
CHAIRMAN PORTER: "We've taken that out..."
REP. GREEN: "No, that question hasn't anything to do with
what this amendment..."
MS. LOPER: "Are you simply asking what is included in
18.23.070?"
REP. GREEN: "Yes, we're requesting now to drop that
language out...?"
MS. LOPER: "It is because there is just a huge list, almost
to the janitor of the hospital, literally, that this is what
it includes. The intent behind this amendment is to say,
`No, we don't want the janitor of the hospital to be
included. These particular professions should only be
included.' So it limits what 18.23.070 is a list of."
Number 726
REP. GREEN: "The reason I am asking is that we now have an
abbreviated list, but in other areas where lists have been
included, we always get heartburn, because when you start a
list, then, have you excluded, or have you included, does
that modify, does that change? It's because of the long
list that you're trying to avoid, is why you're listing a
short list."
Number 732
CHAIRMAN PORTER: "No, we're trying to make sure that what
we mean is what we say. What we mean is, that we just want
doctors, who are not otherwise supervised by the hospital
and employed by the hospital, to fall into this category."
Number 735
REP. GREEN: "That's kind of what I thought. It seems to me
that the wording that you've got does that, does not include
a hospital employee, or the hospital. But now you've got
these people -- I'm wondering, for example, in some
hospitals, if a physical therapist might be an independent
contractor..."
CHAIRMAN PORTER: [Indisc.]
REP. GREEN: "Okay, but that's not listed."
CHAIRMAN PORTER: "That's right, and we don't want to list
it, because we want them to be..."
REP. GREEN: "They're not in the hospital..."
CHAIRMAN PORTER: "Oh, I see what you're saying. I see what
you're saying."
REP. GREEN: "They're not on this list. And I'm just
pointing that out as one, and there may be others."
Number 770
REP. JAMES: "That's why it said `including but not limited
to'."
CHAIRMAN PORTER: "The only thing I can say is that this was
reviewed by the medical facility representatives who didn't
have a problem with it. Maybe physical therapists are..."
REP. GREEN: "Maybe not in this state..."
Number 752
REP. JAMES: "A couple of things, and on that point, I would
suspect that the reason that you have this list is because
this is a list, and even though Rep. Nordlund says that 25%
of the doctors don't have malpractice insurance, that this
is a list of those people that you would expect to have
malpractice insurance, and not be a double insurance.
However, I think that if the hospital stops covering these,
one of the hospital's options is to not let anyone practice
in their hospital unless they have it. And that's pretty
effective. In any event, and the fact is they would do
that, if their insurance wasn't covering them, I believe
that they would. But the other point is, on line 5, where
it says `the following health care providers are independent
contractors and are not employees of the hospital, see
specific health care providers,' is that a reference down to
this issue that we're putting in here? Or is that list
supposed to be in that area?"
Number 768
CHAIRMAN PORTER: "Line 9, `The hospital is [not?] otherwise
liable for the acts or omissions of the health care provider
who is an independent contractor."
REP. JAMES: "Up at the top..."
REP. GREEN: "In the parenthetical portion -- is that
complete that way? Is there some list to go...?"
REP. JAMES: "This is a form, [indisc.], and then they have
to have those lists... okay, I'm sorry, I misunderstood
that."
Number 773
MS. LOPER: "Mr. Chairman, and Rep. Green, just to follow up
on your question. You're asking the question on [an]
independent contractor and [the] making [of] a list. There
are a lot of janitorial services that are independent
contractors with hospitals. So, if we simply just stated
18.23.070, that could include them as well. There are many,
many, many professions that use the hospitals as independent
contractors besides physicians, and so that is why there is
a list. It is not an example list, that is why it is `not
limited to but also including,' that is why we have used
this list in particular, to really hone in on the
professions that deal with the patients."
Number 784
CHAIRMAN PORTER: "I'm guessing that there is some
supervisory relationship between a physician and a physical
therapist, and if that physical therapist has been ordered
by one of these independent contractor doctors, then that
might fall under that category. The doctor might be
responsible for him or her. As I say, this is the wording
that -- we asked them to give us wording that depicted what
it was that we understood them to mean when they wanted this
exclusion, and that was just the doctors that [we're?] not
responsible for... and that's what we're trying to say."
Number 794
REP. NORDLUND commented, "The more practitioners we add to
the list, the less protection to the public we're affording
here. Not that it might be doubled, but I think that we
want to try and limit it. On Rep. James' comment -- That is
a good point about hospitals requiring their doctors to have
insurance. Fairbanks Memorial, as you probably know, has
gone through that battle and is now requiring that.
However, Alaska Regional and Providence do not require their
doctors to have insurance. That's where the public is left
exposed.
"I have a question. We just adopted the independent
contractor definition and now we're adopting a definition
for health care provider. I don't see that they necessarily
conflict, but it is somewhat confusing why we need two
separate definitions. One says, `the independent contractor
is a member of a hospital's medical staff.' What is,
exactly, the medical staff? Are they the nurses? Or just
the doctors? Or? I don't know what, exactly, the medical
staff is."
CHAIRMAN PORTER: "Staff physicians."
REP. NORDLUND: "Medical staff is not nurses?"
CHAIRMAN PORTER: "No, those are employees."
REP. NORDLUND: "We're defining what are and what aren't
employees. We're using a term to define a term. I don't
know what `medical staff' means. Mike Ford is here, maybe
he could help us through some of this stuff, too, since he
wrote them up."
MS. LOPER agreed that Mr. Ford might be able to assist the
committee in clarifying these definitions.
Number 821
MICHAEL FORD introduced himself as an attorney with Legal
Services. "I can't tell you what `medical staff' is limited
to. There is no definition of it. I think the common
meaning of the term is someone who is employed by the
hospital in the practice of medicine."
Number 828
REP. DAVIDSON: "It could be a nurse."
MR. FORD: "It could be a nurse. Right."
Number 831
CHAIRMAN PORTER: "Is there anyone here who is associated
with the Hospital Association in the audience?" There was
no response from the audience to this question. "Well, what
is the inconsistency that we're trying to fix?"
Number 832
REP. NORDLUND: "Originally we talked about health care
providers as being independent contractors. Then we went on
to define what an `independent contractor' was. Now we're
also defining what `health care provider' is, and I think
there's an inconsistency there. [Words muffled by other
voices and shuffling of papers.] I don't mean to impede
what you're trying to do here, I just think that you can
rework this and come up with a definition that's
consistent."
REP. JAMES [?]: "No, there is no connection between
`independent contractor' and `health care provider.' They
are two different [inaud.]."
CHAIRMAN PORTER and committee members reviewed their bill
texts to research the question of possible inconsistencies
between the terms `health care provider' and `independent
contractor.'
REP. JAMES [?]: "I think we do have an inconsistency."
[Further skimming of texts and exchanges thereon; largely
inaudIBLE.]
REP. NORDLUND: "It may not be inconsistent, but I think it
is at least confusing." [Concurring voice audible, identity
not clear.] Rep. Nordlund pondered and analyzed potentially
confusing situations.
Number 868
MR. FORD: "I don't think it's inconsistent, but I think
it's circular. That's the odd thing about it. If you say,
you're a health care provider who is an independent
contractor when this happens, but you're defining both
`health care provider' and `independent contractor'
intertwined with each other, I'm not sure that you achieve
anything. But I don't think it's inconsistent. It's simply
circular."
CHAIRMAN PORTER: "It's circuitous."
MR. FORD: "They blend into each other. An `independent
contractor' is a `health care provider' who is an
`independent contractor' to get the benefit of the section."
Number 873
REP. JAMES: "These specific names of workers that we have
in this line will be the list of specific health care
providers that will be on the form where people will see
it."
CHAIRMAN PORTER: "If the hospital so elects, yes. This
doesn't require hospitals not to hire [inaud.]."
REP. JAMES: "It just allows them to [inaud.]."
Number 879
CHAIRMAN PORTER: "Yes. It does what it is that we want,
so..."
Number 880
REP. JAMES: "I'll move Amendment 19."
CHAIRMAN PORTER: "Is there further discussion of number 19
as amended?"
Number 882
REP. PHILLIPS: "Getting back to Rep. Green's comment on the
physical therapist. What do we do about them?"
CHAIRMAN PORTER: "I think that they would be employees
under that circumstance. Certainly physical therapists can
be employed by a hospital, a clinic, or whatever. If a
physical therapist is working independently, I would guess
they would have to be under the supervision of a doctor, and
I..."
TAPE 94-37, SIDE B
Number 000
REP. DAVIDSON: "There are other specialists, too, involved.
I remember I went to the hospital once about a pulmonary
problem. I was under the supervision of a doctor but there
was another specialist who worked with me." This
specialist, a pulmonary specialist, was not a physician.
Rep. Davidson explored the issue of how one might define the
insurance position of such a supervised nonphysician,
querying, "If you say that that type of person is under the
supervision of that doctor, does that mean that that
doctor's insurance policy hangs in the balance because of
the way that person [functions] under that doctor's
supervision? And, if not, why not? And if so, then that
makes that person's irresponsible acts come under the
hospital's insurance policy, is that correct?"
Number 040
CHAIRMAN PORTER: "If I interpret this correctly, the only
category of person that we're saying can be an independent
contractor, for the purposes of not falling under the
responsibility of the hospital, are these physicians that
we've named as independent contractors, and these nurse
anesthesiologists."
Number 047
MR. FORD: "That's not exactly true. There are other
classes of independent contractors who would not be liable
because they are independent contractors. The hospital
would not be liable. I don't think we've changed that law
at all. What we've really done is set up a class of people
who are independent contractors who would not otherwise be
independent contractors under the case that the Supreme
Court decided that we're attempting to reverse, I believe.
So, what we're actually doing is changing law for certain
classes of health care providers -- those people are going
to be independent contractors under the provisions of this
section. But there may be other people, such as your
physical therapist, who are independent contractors, under
the review of the court now. Those are not affected by
this. They'll still be independent contractors."
Number 070
CHAIRMAN PORTER: "Further discussion?"
Number 073
REP. DAVIDSON: "So the intent here is to save the hospital
money, right? We're trying to save some costs for the
hospital by ensuring that these people that we've listed, by
their acts, do not jeopardize the hospital's insurance? Is
that correct?"
Number 091
CHAIRMAN PORTER: "Thereby saving the patient money, yes."
REP. DAVIDSON: "`Thereby' -- does that mean, then, that we
would expect to see a drop in hospital rates, then? And if
not, why not?"
CHAIRMAN PORTER: "That's the thing that we wanted to give
enough time to be able to assess. That is one of the
ingredients of this, yes."
REP. DAVIDSON, assessing the putative fiscal benefits of the
legislation, noted it did not contain price controls.
"...[If] in fact the numbers come out and the price
continues to rise, that's too bad, right? There's nothing
that says we've got to have that price control."
Number 102
CHAIRMAN PORTER: "No, that's true, and the reason that we
can't bring something like that right on there is just for
the reason that I explained why we would have been ill-
advised to have done it in 1987 when we passed the
initiative. Because look what's happened to it. We're
trying. There's no guarantees, but we try. Further
discussion of number 19?"
Number 116
REP. JAMES: "I feel, and I have no other way of doing it,
and I think this is perfectly fine and it will work that
way, but `independent contractor' and `health care provider'
are two terms that can really reach out and take care of
lots of things. It's difficult to find them in here
specifically. I suspect that when it relates to an
independent contractor, should there be some reference to
this list? Or is it fine just to have it in the section? I
think it's sufficient." However, Rep. James continued, "If
they only read part of the section they are going to be
totally misled, is the point, and I don't know whether -- I
don't know how many times `independent contractor' is in
here, I don't know how many times `health care provider' is
in here."
CHAIRMAN PORTER: "This is only for this section, that we're
referring to."
REP. JAMES: "I know, but I don't know how many times it
says `independent contractors' or it says `health care
providers.' Is having a description like this, is that
going to be sufficient to get the point across?"
Number 145
MS. LOPER: "Since this section is particularly just
focusing on the civil liability of hospitals for
nonemployees, that's why the list is there -- because it
directly affects the hospital and nonemployees."
Number 153
CHAIRMAN PORTER: "In these three definitions `hospital'
also would be following one right after the other."
Number 155
REP. JAMES: "This is a pretty blank sentence. It says,
`The hospital is not otherwise liable for the acts or
omissions of the health care provider who is an independent
contractor.' Without the definition of a specific list of
health care providers, or a specific list of those who meet
the criteria of an independent contractor, that sentence
could be misleading. I'm just wondering if it should say
something like `omissions of certain health care providers
who may be an independent contractor' or something..." Rep.
James expressed some ambivalence concerning the language of
the amendment, saying she felt that while she had no more
suggestions or changes and was convinced that the language
was OK, "I just feel a little uncomfortable with it."
Number 174
CHAIRMAN PORTER: "I understand what you're saying. I just
think that this is a statute, and it's very rare that a
patient, if you will, is going to be reading these statutes.
They're going to be read by people who in the main are
familiar with interpreting statutes. Whenever they reach a
term that they are not familiar with, or they see has a
pivotal bearing on the thing, they look for a definition
section and this thing follows probably on the same page."
REP. JAMES: "Okay."
Number 189
MS. LOPER: "When there is a section just on definitions, it
is the only... by that definition alone, that is what they
are limited to, period."
Number 202
CHAIRMAN PORTER: "They've even -- when I've been reviewing
statutes, as many years as I've been doing that, sometimes
when there's a big definition section in the back, that's
kind of frustrating. This is right in the section. Further
discussion? Is there objection?"
There being no further discussion or objections, Amendment
19 as amended by adding `health care provider' instead of
`physician' and `registered nurse of anesthesiology' after
`optometrist', was adopted by the committee.
Number 212
MS. LOPER presented Amendment 20. "As the testimony went by
Sue Cox of the Department of Law, they urged that a standard
shall be set for persons who are committing or attempting to
commit or have committed a felony. Remember, that is the
sections that are relating to the exception to the cap on
noneconomic or punitive damages. So, in here we are just
putting `who by a preponderance of the evidence was'...and
that is the standard used in the civil law."
Brief discussion ensued between committee members. Several
superfluous appearances of the word "who" were removed from
the amendment's text and the language was clarified.
Number 259
Amendment 20 was moved by Rep. James. There being no
further discussion or objection, Amendment 20 as amended was
adopted by the committee.
Number 264
MS. LOPER took up Amendment 21, found on page 9, line 21.
She said, "See where it says `a person who provides a
collateral benefit admissible under (a) or (b) -- oops, that
actually has nothing to do with admissing into evidence
anything, it's actually (b) or (c). So (b) talks about
evidence that's admissible, and (c) talks about the same."
Responding to questions from committee members, Ms. Loper
said that every amendment needed to be independent and that
(c) would be X'd out after the drafter had gone though the
text.
Number 286
REP. JAMES moved Amendment 21. There being no further
discussion or objection, Amendment 21 was adopted by the
committee.
Number 291
MS. LOPER continued with Amendment 22 on page 4, line 5.
She stated, "Amendment 22 deals with the statute of repose
in the construction industry. In this amendment, the intent
is to open up the doors a little bit further to plaintiffs
`where a defendant intentionally or recklessly disregarded
specific project design plans and specifications or building
codes.' We've made an exception to the statute of repose in
the construction industry."
REP. JAMES moved Amendment 22.
Number 314
REP. DAVIDSON requested further explanation of Amendment 22,
which CHAIRMAN PORTER paraphrased:
"This is the infamous statute of repose as it applies to
contractors. After six years there is a bar from suit --
and there is a bar from suits in general under the statute
of repose, except for certain situations -- and we're
saying, in addition to those standard exceptions, we want to
add another exception to that six-year statute of repose
that said it does not apply to a claim resulting from an
intentional or reckless disregard of specific project design
plans or specifications or building codes. Well, if
somebody intentionally or really messed up and didn't apply
the right codes or specs, this is an exception to the six-
year statute of repose."
Number 337
REP. DAVIDSON: "Intentional or reckless disregard. Is that
a difficult thing to prove in law?"
Number 346
MS. LOPER: "It depends. If the facts pretty much speak for
themselves I guarantee that it is not going to be that hard.
As you can tell, in Section (b), there is already a section
established that gives a window out of the statute of repose
if it was caused `intentionally or resulted from gross
negligence, fraud, fraudulent misrepresentation or breach of
an express warranty or guarantee.' What this amendment
really hits at is, it's trying to really look at the
construction industry -- and I imagine that when you put
together a house there are project design plans,
specifications and building codes -- and so it's saying that
even in these particular areas that they have to work on, if
there is intentional or reckless disregard, in these three
specific areas, we will not take a look at the statute of
repose, and allow a claim to be brought in, at any time."
REP. DAVIDSON: "There was a constituent I had who bought a
house and he had real big problems with the foundation...
with the placement, and how they placed the foundation.
Would this affect that person's ability to go after the
contractor, because he apparently did not do the foundation
correctly considering the location of where the foundation
was? Is that a different matter entirely?"
Number 386
MS. LOPER: "If I understand your fact scenario right, if he
intentionally misrepresented the foundation and said, `This
is a perfect foundation, you're not going to have any
problem with it,' I imagine that that would raise a red flag
to fraudulent misrepresentation of the foundation, so the
plaintiff will be given a window of opportunity there --
particularly if it affects the construction of the house,
and if the person had a design plan that was whipped up by
an architect, and the construction agency used that, and
they intentionally or recklessly disregarded the design plan
or the building codes. Of course, then, they would
definitely be given that window."
Number 404
REP. DAVIDSON: "This was done under current law, and the
man had incredible problems trying to go after this person.
I'm trying to decide whether this helps that constituent or
if his situation becomes more difficult."
Number 409
CHAIRMAN PORTER: "Well, it's really difficult to answer the
question not knowing what the problems are that he's having.
Is it a problem with the statute of repose, or a problem
with the building code, or a problem with....?"
Number 412
REP. NORDLUND: "Maybe I can help with Rep. Davidson's
question. I think in a limited, a very limited way, it does
help your person's situation. My opinion, though, Mr.
Chairman, is that this does not go far enough. I think that
at a minimum we have to trust that design professionals will
at least follow the specifications and building plans and
applicable codes. And if they don't, they should be liable
to suit. The standard is way too high for intentionally or
recklessly disregarding those codes. I think, simply, if
they have not followed the building codes and did not follow
the design specifications or building plans that they should
be open to suit. I have an amendment to that effect later.
I think that this is an improvement, but it does not go far
enough."
Number 427
REP. GREEN: "I'm wondering -- this doesn't object to,
necessarily, the wording, but.... why wouldn't we start with
the middle of the second line there with `intentional' and
put it down here where we have these other exceptions? In
other words, if we were to start with `intentional or
reckless disregard' and put that after `warranty' on line
11, it seems like then somebody reading this would see
altogether where the exceptions are and not have to page
through it."
MS. LOPER said it did not matter "if it's situated there or
in Section 2," noting, "but we have the bill drafter here,
and Mike."
Number 443
MR. FORD analyzed the wording placement in the text of
Amendment 22 and concluded that he felt it was acceptable.
CHAIRMAN PORTER asked if there was further discussion or
objection on Amendment 22. There being objection, a roll
call vote was taken. Reps. Green, Phillips, Kott, James and
Porter voted "Yeah;" Reps. Davidson and Nordlund voted "No."
Amendment 22 was therefore adopted by the committee.
Discussion of the next amendment, which was not numbered,
followed. It was agreed to number it 23 and renumber other
amendments as needed.
Number 488
MS. LOPER began discussion of Amendment 23, beginning on
page 11, line 10. She said, "This particular section is
talking about the settlement offers. On line 10 it
says, `the offeree shall pay the actual costs and attorney
fees.' We looked at the definition of actual costs and
felt that it is somewhat ambiguous, and in fact there is a
specific court rule, 79, that hits on, exactly, defining
costs, a list of the costs that it includes, and there is
already a rule that is developed. That is why we said,
`costs allowed under the Alaska Rules of Civil Procedure.'
And, in fact, in this Civil Rule 79, if a party contests a
certain cost, that there is a hearing that they can go to.
It's already a procedure that's developed. And then, when
we looked at attorney's fees, we wanted to put the word
`reasonable' attorney fees."
Number 511
REP. PHILLIPS: "Following Rep. Davidson's arguments, is
there a definition of `reasonable attorney's fees' anywhere
in any statutes? What is `reasonable' to one attorney may
not be `reasonable' to another attorney."
Number 524
CHAIRMAN PORTER: "That's why we have courts."
REP. PHILLIPS: "I don't think the word `reasonable' here is
going to mean a darn thing to the judge."
Number 525
REP. NORDLUND: "Within the context of this section, if
you're trying to create an inducement to settle, and you're
qualifying it by saying `reasonable fees,' that means the
fees could be less, and there would be less inducement to
settle. That's what we're trying to do here with this
section, right? I don't really have an objection to it, but
I think that could be the effect of it."
Number 536
CHAIRMAN PORTER: "Well, I think, fair being fair, even with
an inducement to settle, which obviously this is what this
is for, I wouldn't want a court, and I wouldn't think many
judges would interpret this this way, but I certainly
wouldn't want anyone trying to convince a court that what we
meant when we said this was every attorney fee, or every fee
that a particular attorney dreamt up, and applied to this
case -- whether it was right or wrong or indifferent -- the
term to me is inherently definable. It's reasonable. It
gives the judge the ability to say, `This is reasonable'."
Chairman Porter asserted the preferability of a flexible
over an absolute term.
Number 552
MS. LOPER: "That is why we particularly excluded the word
`actual' because we wanted to make sure that costs and
attorney's fees both would be reasonable. Furthermore, we
found a Civil Rule of Procedure, Rule 79, that goes through
and allocates what our costs, what's the definition of it,
what's reasonable, so it follows along with the intent."
Number 561
REP. PHILLIPS: "Chairman, do we want to identify the Rules
of Procedure rule?"
Number 562
CHAIRMAN PORTER: "Not really, because it might change, they
might reconfigure them. Mike?"
Number 563
MR. FORD asked if he could raise a separate issue on the
section.
CHAIRMAN PORTER replied that they would finish with the
amendment first.
Number 567
REP. DAVIDSON: "When we talk about costs under these rules
of procedure, and `reasonable,' would this then include all
these different delay motions, and will the judge take into
consideration the extended time in the process, and would
some of those then be ruled unreasonable? Because it seems
like there is an unreasonable amount of time that passes
every time some of these cases go to court; it seems like
just the judge and the attorneys involved are the only ones
who understand the delay. It seems like there's always
another hoop that they can jump through. How does
`reasonable' affect that kind of thing, as far as the
judge's mind is concerned? Some of them are obviously delay
tactics, and so people who are responsible for the fees --
on either side of the issue, the plaintiff or the defendant
-- they get zapped with even greater attorney's fees. How
does that affect that in this instance?"
Number 588
MS. LOPER: "In the section, Alaska Rule 79, it goes through
and just talks about exactly, makes a list of all the costs
that are to be considered under this settlement. And then,
to answer your question on attorney fees, I don't think that
there is a clear definition of what is reasonable." She
noted the existence of a civil rule that contemplates the
question of what is reasonable -- $175? $75? -- which does
not arrive at a clear definition, but rather leaves the
matter to the discretion of the judge on a case by case
basis.
Number 605
MR. FORD: "If your concern is undue litigation, that sounds
like what you're talking about, then I think the amendment
would be one you're in favor of, because it limits the fees
to those that are reasonable as opposed to those that are
actual. If you had actual fees then it wouldn't matter how
long it took, as long as you fell under the provisions of
the section. Not everyone will. It's only in a certain
case where you make the offer and the offer meets the
criteria set out here, that you get the benefits of this
section. But assuming you do, and you have actual fees,
then it's whatever they are. By putting `reasonable' in
here, I think you at least take a step down the road towards
dampening that effect of undue litigation, someone who
delays, for example, for no reason."
Number 618
REP. DAVIDSON: "That was my concern, `undue delay' in
litigation. Undue delay -- the clock rate clock is ticking
for both of the parties. But one party is going to lose.
Even if you win, and you get these fees, it seems that there
will be a certain amount of the fees you will not get
because it's just not included in what we're trying to
accomplish here. But you're saying that to try to be fair
to the person who prevails, this would be a good step."
Number 631
MR. FORD: "This is a good step, not only for the person who
prevails, but the person who prevails in a manner that
doesn't delay unnecessarily."
CHAIRMAN PORTER: "`Justice delayed is justice denied.'
Further discussion on number 23?"
Number 637
REP. NORDLUND: "Because we are introducing the possibility
of differing interpretations of what is reasonable, could we
get into a situation here where there would be further
appeals filed based on what is `reasonable'?"
CHAIRMAN PORTER: "I would guess that we would be reducing
that, because if we said `attorney fees' it begs the
question. Now, do you mean any attorney fee that I put in?
Or what the judge thinks is reasonable, or what? I think
we're reducing that chance by saying `reasonable.' I mean,
we're at least making reasonable people look at this --
maybe that's a contradiction in terms -- from a standpoint
of, there's going to be a standard, like we've said
previously, of `reasonable care;' there's going to be a
standard of `reasonable attorney fees' applied to this, and
most attorneys know which judge they're dealing with, and
that kind of gives them a feeling of where to go. But [if]
you just say `attorney fees,' you can argue to an otherwise
reasonable judge that, `No, no, no, you don't have any
discretion in what this means.' Further discussion on
number 23?"
Number 656
REP. PHILLIPS requested the committee review the allowed
costs section in Rule 79 and read aloud a portion of the
rule.
Number 673
CHAIRMAN PORTER asked if there was any further discussion or
objection on Amendment 23.
Number 675
REP. DAVIDSON: "I'm not objecting, I'm just thinking of the
case we had here last year where the lawyer sued his client
for not taking his legal advice." [Startled unidentified
voice: "Can they do that?"] "Well, I'm talking about the
Division of Elections..." [Very brief exchange among
committee members.]
Number 682
CHAIRMAN PORTER: "With that in mind... is there any further
discussion on number 23?" There being no further discussion
or objection, Amendment 23 was adopted by the committee.
Chairman Porter recognized Mike Ford to make a point on the
next section at hand.
Number 687
MR. FORD made a recommendation for amending this section of
HB 292. "[This] is something we have discovered as we have
in the past, going through the bill. The way we have
amended this section of law, under `offer of judgment,' what
we have done here is to delete the provision on awarding
interest, and instead insert the attorney fee and cost
language. However, in looking at our section on amending
this rule, we have not clearly indicated that in fact we are
removing the award of interest. So, I would suggest that
the committee amend, I think it's Section 31, to clearly
indicate that the rule is amended to eliminate the award of
interest as well as to deal with awarding costs and attorney
fees, to avoid any confusion on that point. If we passed it
the way it reads now, the court simply can say, `Well, we
have a rule here on awarding interest, now we're awarding
interest, costs and attorney fees.'"
Number 703
REP. DAVIDSON requested that Mr. Ford explain under what
circumstances interest would be awarded; why was the
provision on deleting interest being deleted; and what would
be the effect of doing so?"
Number 707
MR. FORD: "Well, as the provision of law reads now, you get
an interest adjustment depending on who you are. If you
qualify for the benefit. What this section of the bill does
is take that out -- the intent, I believe, is to take that
out, and to award costs and attorney fees as we've just
amended, in our last amendment. By the fact that we are
amending the rule in court, however, means we have to set
out a separate section and tell the court system what we're
doing, in amending the court rule. Because there's a court
rule on this section here, the offer of judgment. There's a
court rule specifically on that. So all I'm saying is to be
clear in what we are doing to the court rule, we should
indicate that not only are we providing for the award of
costs and attorney fees, but we are deleting an award of
interest."
Number 721
REP. DAVIDSON: "So, traditionally, the award of interest
began to accrue from when? The time the case went to trial?
And then going through all the appeal process? We're
talking about interest that could have been earned on that
money over the course of however long that case takes to be
resolved?"
MR. FORD: "Correct."
REP. DAVIDSON: "I'm not in favor of removing that because
it seems to me in essence the amount that an aggrieved
person is rightfully entitled to."
Number 733
MR. FORD: "Well, what we've done is actually switched
penalties here. We have simply removed the interest and
inserted a higher penalty. We haven't removed the incentive
to settle. I think we have enhanced the incentive to
settle, which was the purpose of this section. The section
is intended to reduce litigation, and it does that by
providing an incentive to someone who makes an offer of
judgment in good faith, and the other person will accept it,
or, if they don't accept it, then they're hit, under
existing law, with an interest adjustment. So, what we've
done in this section is say, well, we're going to remove the
interest award, but we're going to substitute something
that's even harder, a bit more difficult hit, if you will,
in costs and attorney fees."
Number 747
REP. DAVIDSON: "There's so many things to consider in a
situation like this that I have great fear that we're going
to take a damaged individual and make them more damaged in
some way."
Number 752
CHAIRMAN PORTER: "When we ran this through different kinds
of scenarios, small cases, big cases, whatever, this usually
came out to be a greater incentive than just the interest.
And that is what it is designed to do, to get it out of
court."
CHAIRMAN PORTER addressed Section 31, suggesting that
committee members consider page 15, Section 31, line 20, a
friendly amendment to Amendment 23, augmenting the language
as discussed. There being no objection to Amendment 23 as
amended, Amendment 23 as amended was adopted by the
committee.
Number 773
MS. LOPER presented Amendment 24 on page 8, line 5. She
said, "The Department of Law looked this section over...
it's dealing with the periodic payments. If a party does
choose to go after periodic payments, the court is going to
set up this security to be posted, and so forth. The
Department of Law suggests that a city or a municipality or
a state should not be subject to this." The result of
Amendment 24 is that the court may not require a security be
posted by a state or municipality.
Number 790
REP. PHILLIPS asked, "What would happen in the case of a
small municipality that doesn't have the finances available
for security against a claim?"
Number 793
CHAIRMAN PORTER said he believed the municipality would have
to acknowledge to the court their obligation to discharge
the judgment.
Number 795
Committee members, Ms. Loper and Mr. Ford reviewed the use
of the term `self-insured' in terms of state or municipal
entities and discussed state responsibility and authority
with respect to municipalities. There being some ambiguity
in these matters, it was agreed for the time being to set
aside further discussion of Amendment 24.
Number 813
MS. LOPER introduced Amendment 25, which she said should
replace Amendment 8. "In Amendment 8, that we have passed,
we said that the threshold for periodic payments should be
$50,000. Under the suggestion of the Department of Law, we
have raised the threshold to $100,000."
REP. PHILLIPS asked whose recommendation that was and Ms.
Loper replied, "The Department of Law." Rep. Phillips asked
for the Department's justification for the change.
CHAIRMAN PORTER replied it was a policy call reflecting a
review of the range of thresholds in other states.
REP. PHILLIPS expressed the belief that $50,000 had been a
middle range figure.
CHAIRMAN PORTER acknowledged that this was "a little bit of
a concession to those that think periodic payments are not
something that should be considered" for smaller cases.
REP. DAVIDSON moved Amendment 25. There being no further
discussion or objection, Amendment 25 was adopted by the
committee.
TAPE 94-38, SIDE A
Number 000
REP. NORDLUND presented some suggested amendments. He noted
that they might not be in the order that they would appear
in the bill.
The first amendment was on page 2, line 15, in the Purpose
section, adding additional language to conform with No. 4 in
the Findings section, which, Rep. Nordlund said, "...just
recognizes the fact that...`on the whole, society would be
better served with a statute of repose even though in a few
limited circumstances injuries may go without compensation.'
"That same kind of concept is then carried down into the
Purpose section, so it would read: `The purpose of this act
is to reduce the costs associated with the civil justice
system while ensuring that adequate and appropriate
compensation for persons injured through the fault of others
is available except in a few limited instances.'"
Number 044
REP. PHILLIPS asked for the legal ramifications of the
amendment.
CHAIRMAN PORTER asked Ms. Loper to comment.
REP. JAMES was more immediately familiar with the portion of
the bill under discussion, however, and provided an
analysis.
Number 063
REP. JAMES: "Well, it's two different issues. First of
all, in No. 4, it says, `On the whole society is better
served with the statute of repose even though in a few
limited instances injuries may go without compensation.'
And then... [there is] this one, where it indicates that
`reduced costs associated with the civil justice system
while ensuring that adequate and appropriate compensation
for a person's injury through the fault of others is
available,' and there is nothing to say up above that there
is fault. My reason for even picking at that is,
particularly in the statue of repose, it is possible without
any fault of the person that's doing the building, or
whatever, that there is something that goes wrong with the
building and people could then be found to be compensated.
I think that saying `through the fault of others' we're
trying to determine here that when the fault is there they
will get paid; when the fault is not there, they won't. And
that is one of the reasons for the repose -- to stop
unnecessary lawsuits when there is no fault."
Number 094
REP. NORDLUND: "I just think that you are going to find
that in a few limited circumstances that there will not be
adequate compensation for people who are injured. And it's
not hard to imagine that there will be situations when
people are injured beyond the $500,000 cap that's imposed by
this bill. And this is just recognizing that fact."
Number 103
CHAIRMAN PORTER said he felt it was recognizing the point of
view and not necessarily the law and stated that he would
not support the amendment.
Number 107
REP. GREEN asked for clarification of the intent of the
amendment and the kind of cases in which an injured party
would not be compensated.
REP. NORDLUND: "I guess what I'm trying to get at here is
simply that when you set caps arbitrarily, that there will
be a few limiting instances where people will not receive
adequate compensation."
CHAIRMAN PORTER: "Well, we have set caps on punitive
damages and noneconomic damages. Those are, by your
definition, arbitrary. Somebody has got to make up their
mind. For us to say that we're going to recognize it -- I
think it goes without saying that any time there is an award
in those kinds of cases the plaintiff wanted more and the
defendant wanted less. But to say that we expect in a few
limited circumstances that [the award] wouldn't be adequate
is not the intent, and that's what this section is, and so I
would oppose it."
Number 146
REP. JAMES stated opposition, for the same reason. "In no
way, shape or form would I be proposing to pass this if I
thought that there were going to be some people who were
going to be not getting compensation. I believe that this
legislation does provide adequate compensation."
Number 155
REP. DAVIDSON: "If Rep. James has that feeling, why do we
have that on line 3? We're making the admission here that
there are going to be some injuries that go without
compensation, and I think it makes the effort here a little
more honest."
Number 165
MS. LOPER: "I think that there are two completely different
issues here. Rep. Davidson, you are looking at the statute
of repose, which in some instances, people will wait past
the six years or whatever length of time and they will miss
bringing a claim to the courts. However, in the section
that Rep. Nordlund is referring to, it is referring to the
issue of percentage fault, what is adequate and appropriate
compensation for persons injured through the fault of
others. I imagine that it might involve caps and damages
but, in particular, it's looking at the percentage of
fault."
Number 185
REP. DAVIDSON: "That may be so, but sometimes people are
not going to get compensated who would be eligible for
compensation. Because when you look and see what we've been
doing, we're not giving people more access to the legal
system, we're giving them less access to the legal system.
And, you know the cuts that we see going on? That's the
thing that bothers me. Justice denied is where we're
headed. I think [this amendment] makes it a little more
honest. It may be two different issues, but I have real
concerns about the way we're going."
Number 205
REP. NORDLUND offered clarification, saying, "This could
easily apply also to the statute of repose. People will not
be receiving appropriate compensation for injuries they
receive if they get in an automobile accident and the car is
six and a half years old. They will absolutely not receive
adequate compensation for that, because of the effect of
this bill. So it does apply directly to the statute of
repose as well as to the caps on damages."
Number 216
CHAIRMAN PORTER: "Well, the statute of repose -- your
example presumes that the fault was a manufacturing fault
that was absolutely the fault of the manufacturer that was
found six and one half years later. As is the general
consideration for statutes of repose, those kinds of
problems are in the main either intentionally hidden, as is
the case in the Pinto case that was graphically portrayed by
the Department of [indisc.], or the fact that there is
negligence on the part of the owner or the maintainer. So,
from that standpoint, I would disagree with your statement
that a person who had a problem after six and a half years
is automatically out of the running for any compensation.
That's not the case. Maybe they don't have any coming
because they injured their own car and more than likely it
was a maintenance problem and perhaps if they were doing
their own maintenance that's their maintenance that's their
fault. If someone else was doing it, they have a problem
with them. There's all sorts of other alternatives other
than suing the manufacturer."
CHAIRMAN PORTER asked if there was further discussion on
Amendment 26.
REP. PHILLIPS suggested holding the amendment to give her
the opportunity to check with the Department of Law
concerning the insertion of the statement proposed in the
amendment. It was agreed that Amendment 26 be held.
Number 253
Committee members discussed numbering of amendments.
REP. NORDLUND presented Amendment 27, which would remove
from the statute of repose the section dealing with newly
manufactured products. Rep. Nordlund recognized a perceived
need and desire among Alaskans for a statute of repose
encompassing Alaskan professionals such as contractors,
architects and medical personnel. He urged, however, that
Alaskans maintain their legal protections from injuries or
deaths caused by outside manufacturers.
REP. NORDLUND: "I cannot understand, for the life of me,
why we're seeking to protect outside manufacturers from
injuries that they might cause to Alaskans. I see this
section as being particularly un-Alaskan, as unfriendly to
the Alaskan public. We're not a large manufacturing state.
Most of the products we purchase up here are produced out-
of-state, and frankly, I haven't even been able to identify
any of the interest groups out there that are strongly
supporting this part of the bill. I think it's a great
disadvantage to the folks in our state."
Number 298
REP. DAVIDSON amplified Rep. Nordlund's concerns, saying, "I
would even call it anti-Alaskans.... I do think Alaska is
the end of the line. We get a lot of shoddily manufactured
goods up here... they just send [them] up -- `ha, ha, ha,
the Alaskans took it!' That's why I strongly support this
amendment...." Rep. Davidson enumerated factors unfavorably
affecting Alaskan consumers and concluded that Rep.
Nordlund's proposed amendment was important in protecting
Alaska citizens.
Number 325
CHAIRMAN PORTER: "If I may, by way of response, I would ask
the previous two speakers to review the material that we
have... supporting this point of view, and this whole bill."
Chairman Porter referred to a survey by the small business
association of the state, asserting that the small business
people in the state strongly support the bill.
CHAIRMAN PORTER stated, "[I]f we can provide an environment
that's healthy for business, then we won't have so many
outside manufacturers, we'll have some inside manufacturers
who we can go down and talk to personally." He cited
testimony from a small business person in Juneau "who was
trying to make it but was having problems with their
insurance costs, and supported very vigorously this bill,
just for that reason, that they want to be able to continue
to provide quality products here in this state.... I think
that what we're trying to do is create a business-friendly
environment here by this bill."
Number 353
REP. JAMES reinforced Chairman Porter's comments with
further testimony, citing the example of a Fairbanks sports
dealer who'd been put out of business after ten years,
"through no fault of his own," after a recreational vehicle
he had been selling for ten years was involved in an
accident and it was established that there was a design
defect in the product. Noting that the manufacturer and the
dealer were both put out of business, Rep. James concluded,
"I think we need to protect our business people."
Number 373
REP. DAVIDSON: "Perhaps there is a more creative way we
could protect our Alaskan business people. Certainly the
argument is there, and I would want to do that. But why
should we be protecting everybody else and have the Alaskan
consumer end up with all the junk that's left over? I see
the problem, but it seems to me we could be more creative in
protecting the Alaskan businesses manufacturer. It seems
ironic that a[nother] state that does not have a six-year
statute of repose, if we are exporting things [to it], they
can still come after that Alaskan business in another state.
Isn't that correct?"
CHAIRMAN PORTER requested clarification of the question.
REP. DAVIDSON: "If an article is manufactured here and
shipped out to another state and is purchased, and this kind
of suit is brought against the manufacturer here in Alaska,
because that state does not have a statute of repose of six
years, does that mean that that person could bring an action
against that Alaskan manufacturer?"
MS. LOPER: "That is correct, yes, but in 22 states they
have a statute of repose."
CHAIRMAN PORTER: "This isn't new ground."
REP. DAVIDSON: "Well, it's new every day, for me."
CHAIRMAN PORTER asked if there was further discussion.
Number 410
REP. NORDLUND: "I'd just like to point out that, in the
memo that did come from legal, this is one of the areas
where they point out a possible [indiscernible because of
another voice over this portion - constitutional?] problem."
Number 425
CHAIRMAN PORTER: "Ah, good, we'll deal with that right
after we deal with this amendment. There is objection to
Amendment 27. Can we have a roll call vote please?" Reps.
Porter, James, Phillips and Green voted "No;" Reps. Nordlund
and Davidson voted "Yeah." Amendment 27 was therefore not
adopted by the committee.
The meeting of the House Judiciary Standing Committee was
adjourned [no time given]. Chairman Porter noted that
committee members now had before them a folder containing
the Department of Law analysis of HB 292, as well as
responses to the criticisms presented. He encouraged
committee members to review it prior to the next scheduled
House Judiciary committee meeting scheduled for 10:00 a.m.
the next morning.
HB 445 - NOT HEARD TODAY
HB 460 - NOT HEARD TODAY
HB 376 - NOT HEARD TODAY
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