Legislature(1993 - 1994)
03/12/1994 10:00 AM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
March 12, 1994
10:00 a.m.
MEMBERS PRESENT
Rep. Brian Porter, Chairman
Rep. Jeannette James, Vice-Chair
Rep. Pete Kott
Rep. Gail Phillips
Rep. Joe Green
Rep. Cliff Davidson
Rep. Jim Nordlund
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."
MOVED OUT OF COMMITTEE
WITNESS REGISTER
DANIELLA LOPER
Committee Counsel
House Judiciary Committee
Alaska State Legislature
Capitol Building, Room 118
Juneau, Alaska 99811
Phone: 465-6841
POSITION STATEMENT: Testified regarding HB 292
CHRIS CHRISTENSEN
Staff Counsel
Alaska Judicial Council
303 K Street
Anchorage, AK 99501-2084
Phone: 264-8228
POSITION STATEMENT: Testified 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
02/16/94 (H) MINUTE(JUD)
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
03/11/94 (H) MINUTE(JUD)
ACTION NARRATIVE
The House Judiciary Standing Committee was called to order
at 10:12 a.m. on March 12, 1994. A quorum was present.
Chairman Porter announced that the committee would continue
its consideration of HB 292.
TAPE 94-39, SIDE A
Number 000
CHAIRMAN PORTER: "We are continuing with the consideration
of HB 292, with the amendments being offered by Rep.
Nordlund. For identification, Representative, I've started
-- the next one that we would be on would be Amendment 28.
I've just gone through your amendments sequentially from
there, finishing with 38.
REP. NORDLUND: "I may not offer all of them."
CHAIRMAN PORTER: "Okay. We can renumber."
REP. NORDLUND presented Amendment 28, which deals with the
section on punitive damages. Rep. Nordlund stated that the
amendment might be characterized "as a lower level standard,
by which somebody could be awarded punitive damages; not
only where it would be malicious or conscious acts, but also
by `clear and convincing evidence of gross negligence or
reckless misconduct.' The reason for that is that there are
probably situations in which you would want to have punitive
damages awarded, in which acts are not consciously done, but
they are done with reckless disregard to public health or
the welfare of individuals." Rep. Nordlund concluded that
"...this would seek to make sure that we have that added
protection for the public."
Number 074
CHAIRMAN PORTER: "During the discussion on this section in
the previous committee, as Rep. Green will remember, the
original wording of this phrase was `evidence of malice and
conscious acts showing deliberate disregard.' The concern
there was that this was too high a standard, and the
adjustment towards seeking a high standard, which one would
expect in punitive damages, but not unreasonably
restrictive, was to make it `or'. Malice or conscious
deliberate acts, and that was amended to do that. I think I
would not be in favor of the amendment to then say, `or
clear and convincing evidence of gross or reckless
misconduct,' because, to me, it would add too many
qualifications, as to be confusing to the court as to which
standard you're under. And, it would, if understood,
reduce the level that punitive damages would be awarded."
Number 108
REP. NORDLUND cited an example he had invoked at an earlier
hearing, the crash of the EXXON VALDEZ, which "was not an
act of malice or a conscious act, but was certainly
negligent, probably grossly negligent; and I think that
those are the kinds of situations in which you want to make
sure that corporations and other businesses that operate in
this state, make sure that they need to take reasonable care
in the way they conduct their business. You want to be able
to use punitive damages in a way to punish wrongdoing
corporations and other businesses. Punitive damages are
seldom awarded in this state. The whole section on punitive
damages, in my opinion, is fixing something that isn't
necessarily a problem."
Referring to a memorandum from the Department of Law, REP.
NORDLUND quoted, "`This section appears to limit to reckless
indifference to the rights of others as a basis for punitive
damages.' I am seeking to make sure that standard continues
to apply."
Number 137
CHAIRMAN PORTER: "I think `conscious acts showing
deliberate disregard to another person' is certainly
depicting that standard. I'm not familiar with the EXXON
VALDEZ case, whether there was or was not punitive damages.
It seems to me there was an awful lot of cost associated to
that, that had to be paid, as we're still trying to decide
how to distribute here in the legislature, but I don't think
I have any concern that the EXXON VALDEZ situation met with
appropriate compensation from the offender."
Number 153
DANIELLA LOPER, Committee Counsel, House Judiciary
Committee: "That language on the definition of punitive
damages was taken directly out of the two latest state
Supreme Court decisions."
CHAIRMAN PORTER: "And, again, the compromise having already
been made that, instead of saying, `malice and conscious
acts,' malice or conscious acts." He requested that Rep.
Nordlund proceed to offer the amendment.
Number 160
REP. NORDLUND offered Amendment 28.
CHAIRMAN PORTER objected to Amendment 28.
CHAIRMAN PORTER: "We have, then, a motion and the objection
on Amendment 28. Is there further discussion?"
Number 170
REP. GREEN asked counsel to clarify the scope of the term
`deliberate disregard.' He asked, "If my actions are such
that I show deliberate disregard, would that cover a grossly
negligent act?"
Number 187
CHAIRMAN PORTER: "As regards for another? Because of my
background I relate everything to criminal statutes. For
example, in a criminal setting, if I say, `I am going to
shoot you,' and go, BANG, then I have met the elements of
first degree murder; I intentionally shot you. But if I
come in here with an automatic weapon and go, BBRRRPPPTTT,
it would be very difficult to establish that I intentionally
killed someone who died as a result of that action - but it
is well established that the natural, probable result of
that action is such that it isn't necessary to prove [the
intention], it's presumed. And when you show deliberate
disregard for the safety of another person, that's gross
negligence."
REP. GREEN explored Chairman Porter's analogy and said, "I
think your analogy is good. So, if this in effect does
cover the concerns of Rep. Nordlund..."
Number 216
MS. LOPER: "The standard is a little bit higher than gross
negligence. It's going to include gross negligence, but
it's a little bit higher." She offered an example of a
person going into a theatre who screams "Fire!" and then
injuries or deaths are sustained by people fleeing the
building to illustrate her point.
Number 267
REP. NORDLUND: "It's not hard to imagine situations in
which a person could be negligent, or grossly negligent,
which I guess it is up to a court to determine - that is not
a conscious act. You can be negligent without consciously
being negligent. In fact, negligence, to me, in some ways
defines the fact that you were somewhat unaware that you are
causing harm, but you should have taken reasonable care so
as to prevent that harm from happening. I'm not an
attorney. I wish I could better explain the difference
between a `conscious act' and a `negligent act,' but I see
them as two different things."
Number 242
REP. JAMES: "I see them as two different things, too, and
that's why I don't want it in here. I really like it better
the way it is, because I think it does cover the intent of
the law for punitive damages."
Number 248
MS. LOPER: "The Alaska Supreme Court has always had a
history of making sure that the punitive damages are
extremely strict. It's a very strict standard as opposed to
a lot of the states in the Lower `48. And so... this
definition is taken directly out of the cases, because
punitive damages... [are] held to the highest degree, and so
the standard in Alaska is held to be very strict."
Number 267
REP. NORDLUND: "One point on that point. This is a scaling
back, at least the way I read it in the Department of Law's
memo, it is a scaling back from the current standard; the
current standard does take into account `reckless
indifference to the rights of others,' and so you're
limiting that possibility here by adopting `malice or
conscious acts.' It's tightening the standard. Just so we
know what we're doing here. I think that's the intent, and
I disagree with the intent."
CHAIRMAN PORTER called for a roll call vote on Amendment 28.
Reps. Green, Kott and James and Porter voted "No"; Reps.
Nordlund and Davidson voted "Yeah" and Rep. Phillips chose
to pass. Amendment 28 therefore was not adopted by the
committee.
Number 288
REP. NORDLUND withdrew Amendment 29. He said, "My intent
here was to deal with the long discussion we had yesterday
about tightening down health care provider areas, and I
think that the amendment we previously adopted did that, so
I withdraw this amendment."
Number 304
REP. NORDLUND reviewed Amendment 30, referring the committee
to page 16, line 4, in the section requiring the Division of
Insurance to compile a report. Amendment 30 would
specifically require the Division of Insurance to report on
the effects of HB 292 on insurance rates. He noted that the
amendment had not been drafted as he wished it to read. As
drafted, the amendment required information solely on
reductions in insurance rates. Rep. Nordlund wished to know
of any effect of the legislation on insurance rates.
CHAIRMAN PORTER and REP. NORDLUND discussed the possibility
of changing the wording of the amendment to read, "...and
determine if the enactment of this Act has an effect on
insurance rates in the state."
Number 340
REP. JAMES: "Are we putting an emphasis on that, then? Or,
are we going to be getting other information from the
insurance that's important..."
CHAIRMAN PORTER: "We'd be getting other information..."
REP. JAMES: "Because [there is] other information that
actually is even more important to me than the insurance
rates."
REP. NORDLUND: "I'm not eliminating the other information,
just adding. I think that was probably what was implied
here, that in this report you'd be looking at the effect on
insurance rates, but I think we should directly ask the
division to do that."
REP. JAMES stated that her intent in supporting HB 292 was
not primarily reduced insurance rates, but rather her hope
for (a) an increase in availability of insurance; (b) a
decrease in litigation; and (c) increased economic activity.
She said, "So, the information that I would want to get
would be all those kinds of things, not just necessarily
reduction in insurance..."
Number 356
REP. KOTT and other committee members discussed the language
and placement of the amendment, "My understanding of this
amendment is that we are going to tag on to the end of
Amendment 2, which deleted lines 1 through 4, and added a
new -- really, it reads somewhat clumsy."
CHAIRMAN PORTER: "I would say, for the record, and most
certainly, I could not imagine that their report would not
try to reflect a response to that question and to the
questions that Rep. James asked. Most certainly, one of the
goals of this legislation is reduction of insurance
rates..."
Number 388
REP. NORDLUND: "I maintain my desire to offer the amendment
because I think that, certainly, the driving force behind
this legislation is that insurance rates are too high,
supposedly, and this will help bring them down."
CHAIRMAN PORTER: "I don't have any problem with it, it's
just a matter of the form, of saying one thing and then not
adding all the others..."
Number 394
REP. PHILLIPS: "I realize that this whole issue is a major
issue, but I also question, and I'd like some analysis, of
other major issues that we put before the public, where we
put a clause similar to this; whether the enactment of this
Act has an effect on insurance rates. This is a major
issue. But, in my recollection, this isn't normal - that we
pass a piece of major legislation and then come back with a
statement like this for response."
Number 405
CHAIRMAN PORTER: "Well, rather than take up the time to try
to rewrite the other amendment, I'll say on the record that
this most certainly is one of the things that we're going to
be expecting from the Division of Insurance, along with the
things Rep. James stated - availability of insurance, effect
on the economy, new businesses, those kinds of things."
REP. DAVIDSON: "In light of our conversation yesterday, and
the couple of amendments that we passed, I think it should
be added that those expectations will not be known,
probably, until the next millennium."
CHAIRMAN PORTER remarked that that could be and then asked
if there was further discussion on Amendment 30.
REP. NORDLUND moved Amendment 30.
Number 430
CHAIRMAN PORTER: "I'll object, for the reasons stated."
Chairman Porter called for a roll call vote on Amendment 30.
Reps. Davidson and Nordlund voted "Yeah"; Reps. Green, Kott,
Phillips and Porter voted "No" and Rep. James did not vote.
Amendment 30 was therefore not adopted by the committee.
Number 437
REP. NORDLUND offered Amendment 31.
CHAIRMAN PORTER objected "for purposes of discussion, at
least until we figure out what it is."
REP. NORDLUND: "This deals with the section of the bill I
think is a good one, that allows for increases in inflation
on periodic payments. I am simply helping the court decide
how to determine what inflation is based on, the CPI. It's
the standard language used throughout the statutes, when we
try to compensate for inflationary effects."
CHAIRMAN PORTER asked for clarification regarding the CPI.
REP. NORDLUND responded that "there is really only one CPI
available for the state of Alaska, and it's tied to
Anchorage."
Number 453
CHAIRMAN PORTER said he could not think of any other logical
way of computing inflation rates and removed his objection
to Amendment 31. There being no further discussion or
objection, Amendment 31 was adopted by the committee.
Number 468
REP. NORDLUND presented Amendment 32. He said, "This is the
section that deals with periodic payments. It leaves it
permissive for the court to order periodic payments.
Instead of saying `the court shall, at the request of a
party, order periodic payments,' `the court... may order
periodic payments.' The intent here is that it may be the
best judgment of the court that in some cases you don't want
to have periodic payments just because one of the parties
requests it. It gives the court that authority to decide.
We've been over this a lot."
Number 491
CHAIRMAN PORTER: "I would go along with you if it were the
court's money that were being spent, but it's not the
court's money, it's the defendant's money; and, as long as
there's protection for the victim, or the plaintiff, I think
fair's fair and either party should be able to have the
choice, so I would maintain the objection."
REP. JAMES: "This is the one that I have a problem with."
CHAIRMAN PORTER: "Oh, we've labored hard over this."
REP. JAMES: "We've labored hard."
Number 500
CHAIRMAN PORTER: "Let me tell something else about periodic
payments that didn't come up, as a matter of fact, that I
just got from a guy who runs a business that does this sort
of thing. According to him, and I have no reason to
disbelieve him, but I admit readily that I don't have the
study that he's repeating - in national and local [levels],
in the period of two months to five years after the award of
lump sum payment; at two months, two point five out of ten
people have expended all of those funds; at five years, nine
out of ten have expended all of those funds. We're not our
brother's keeper, but...
"Additionally, there's an advantage to a plaintiff to take
periodic payments because of a tax break. The adjustment
that we've just defined on being able to get an inflation
built into your periodic payments, is not taxable. That
increase comes at a time when it is at that rate the value
of that money, so it is not taxable. If you get a lump sum
payment, and put it in the bank, you immediately start
paying taxes on the interest. So there's all kinds of good
reasons, and we've debated it, and I don't know that I'm
going to change Jeannette's mind, but..."
REP. NORDLUND: "All kinds of good reasons to leave it up
the court to decide."
CHAIRMAN PORTER: "I'll maintain the objection. Could we
have a roll call vote, please?"
A roll call vote was taken. Reps. Davidson, Nordlund and
James voted "Yeah" and Reps. Phillips, Green, Kott and
Porter voted "No". Amendment 33 therefore was not adopted
by the committee.
Number 533
REP. NORDLUND withdrew Amendment 33, saying, "I have a very
similar amendment that I could offer in its place right now,
or, I think it's at the end of your pack, we could do it
then."
CHAIRMAN PORTER invited discussion on Amendment 34.
REP. PHILLIPS: "We have Amendment 22, that follows damage,
already adopted."
REP. NORDLUND: "I'd like to offer Amendment 34, and I'll
explain the difference."
CHAIRMAN PORTER: "I'll object. Go ahead."
Number 535
REP. NORDLUND presented Amendment 34, which increased the
liability of design professionals beyond the strictures of
intentional or reckless disregard and required these
professionals `...to follow applicable design plans or
specifications or building codes.' Under the terms of the
amendment the statute of repose would not relieve design
professionals of these obligations. Rep. Nordlund remarked,
"I think that design professionals have an obligation to
follow, you know, the plans, and codes and specifications on
a project, and if they don't, I don't think they should be
immune from liability after six years."
Number 556
REP. PHILLIPS: "Basically, the only difference I see
between the amendment we adopted and this, is the difference
in the wording `intentional or reckless disregard' versus
`failure to follow.' It seems to me like those would be
pretty much the same, would mean pretty much the same
thing."
Number 563
CHAIRMAN PORTER: "Well, it's a different standard. The one
that we passed is a standard of gross negligence, and the
one that he is offering is simple negligence, which is just
oversight, really. I would say, again, that the provision
that we made was made with the spirit of recognition that
some degree of compromises should be made; but there are, I
believe, 40 states with statutes of repose that don't have
these kinds of qualifications that we've already put on. I
don't think this is an unusual situation."
REP. PHILLIPS: "At some point in time a change order on a
construction project could come in, changing the original
design plan, and if something happened you could have -- the
change order could be approved -- you could have somebody
sue because they didn't follow the original plan."
REP. NORDLUND: "It doesn't say `original', it says
`applicable', and I think, if there has been a change order,
that's applicable."
Number 582
REP. JAMES: "My objection to the amendment is to just allow
it to say `failure to follow'...because that brings in too
many small things that I don't think might be applicable. I
think that if the problem is sufficient enough to be
implementing great damage, that it would fall under
`intentional or reckless disregard.' `Failure to follow'
could be something that was very insignificant, but if they
found that, then they could have some damages. And I think
it might not necessarily relate to the damages. So, I think
that `failure to follow' is too loose, and I prefer the way
it's been. I think that will take care of the problems."
Number 596
REP. NORDLUND: "One more comment, and that is, that if
there are damages, and somebody is going to have to pay, and
if the architect or whatever didn't follow the plans, I
think that should be the person who would have to pay. Now,
without that, either the injured party has to pay, or
somebody else gets sued, or the state has to pay, or
somebody, but not the person who is responsible for not
following the plans. That's the party who's most directly
responsible for the failure of the billing, and that should
be the person who pays."
Number 603
REP. JAMES: "I guess the point I wanted to make is that
there are a lot of things that could be not followed
specifically according to the plan and or building codes,
that was not a problem and didn't create the problem, that
the problem was from something totally different. And, in
knowing how it works when you have attorneys working on a
case, they look until they can find some little deficiency,
and they build their case on that deficiency. And I think
they might be building their case on a deficiency which
doesn't relate to the problem."
Number 614
REP. DAVIDSON contested the implication that juries and
courts would fail to challenge irrelevant accusations and he
expressed greater faith in the judicial process.
Number 622
REP. JAMES: "If the problem that caused the problem was
sufficient to cause the problem then I think it would fall
under intentional disregard. That's my point. In other
words, if the flaw in the construction or the design or the
building code was a flaw that was sufficient to cause this
collapse or damage or whatever it is, then I think that that
would fall under intentional or reckless disregard. I think
that saying `failure to follow applicable design plans'
opens up a whole new problem: that because something
happened, and they found something like this, then they
could say, `Well, it says right here, failure to follow -
and they failed to follow.'" Rep. James concluded that the
language already adopted by the committee in the prior
version of the amendment was sufficient to "cover all of the
damages."
Number 639
REP. NORDLUND: "If you've designed a building, and you have
a certain number of columns supporting a beam, for instance,
and it wasn't adequate, and the roof fell in, it's going to
be difficult to prove that that contractor or that architect
did that intentionally. But it certainly didn't follow the
code, or it may not have followed the building plans. I
don't know how a court would determine that the architect
did that intentionally, or recklessly."
REP. JAMES: "You mean the contractor? Well, you would
expect the contractor to follow what the design plan was,
and if he didn't [indisc.]..."
REP. NORDLUND: "But how do you prove that it was done
intentionally? That's my question."
Number 652
MS. LOPER and CHAIRMAN PORTER briefly reviewed the language
in Amendment 22 and standards for gross negligence.
Number 657
REP. GREEN: "Is what Rep. James was concerned about
essentially the difference between the plethora of
litigation that could come from simple negligence, is that
kind of then set aside in a gross negligence case? Neither
one is intent, but, I am trying to get at the fact that
there are a number of people who objected to the use of
gross negligence in favor of simple negligence. For my poor
brain, can you kind of give an overview as to the degree of
difference?"
MS. LOPER: "I don't know a lot about the construction
industry, but I can imagine it would go something like this:
on the simple negligence - well, there's no such thing as
simple negligence. On a negligence case..."
REP. GREEN interjected a request for an example with which
Ms. Loper was familiar.
MS. LOPER: "All right. If the architect... puts together
the design plan and then hands it to the construction
industry or a construction agent, and then he's the one that
goes through and builds the house; well, if the architect or
the engineer said, `The door needs to go here' or `a pipe
needs to go here' and the person who was building the house
put it in the wrong place, did not follow the plans, that
would be gross negligence."
REP. GREEN: "And then simple negligence in that similar
type situation would be...?"
MS. LOPER: "Something that is less than reckless disregard
of a specific [indisc.]"
CHAIRMAN PORTER: "If there was a typographical error in the
specs and he didn't catch it?"
MS. LOPER: "Yes... it would be very, very..."
CHAIRMAN PORTER: "That's negligent. Because he's a
professional..."
REP. GREEN: "But not simple negligence, right?"
CHAIRMAN PORTER: "I don't know if there is simple
negligence; there's negligence, gross negligence and
intentional negligence."
REP. GREEN: "Okay, thank you."
CHAIRMAN PORTER called for a roll call vote on Amendment 34.
A roll call vote was taken by the committee. Reps. Nordlund
and Davidson voted "Yeah" and Reps. Kott, Phillips, Green,
James and Porter voted "No". Amendment 34 was therefore not
adopted by the committee.
Number 699
REP. NORDLUND offered Amendment 35.
CHAIRMAN PORTER objected to Amendment 35.
REP. NORDLUND discussed Amendment 35. He noted that the
absence of page or number noted on the amendment under
discussion was because it pertained to another, previously
adopted amendment. He said, "If I remember, there are
certain exceptions that you allowed, in the previous
amendment, to the $500,000 limit that goes up to $750,000
for situations where you have quadriplegics and serious
injuries. I'm just making the policy call that the $750,000
is too low. I think it should be $1 million."
CHAIRMAN PORTER: "Keeping in mind that the cap that we're
establishing here is not the total compensation for a
paraplegic or a quadriplegic or whatever. This is just for
the noneconomic pain and suffering... Right now there are,
I believe, 15 bills before the U.S. Congress dealing with
this topic, and I'm told 13 of them have a cap on
noneconomic damages in these kinds of cases of $250,000 with
no exceptions. So, I don't think we're being too stiff by
expanding the already in place $500,000 cap to $750,000."
Number 730
REP. DAVIDSON asked if the figure would include loss of
consortium.
CHAIRMAN PORTER responded, "We may be providing something
that they don't. Yes, this is loss of consortium."
REP. DAVIDSON: "I mean, talking about, the bills you were
talking about in Congress."
CHAIRMAN PORTER: "I don't know. Loss of consortium, we're
bringing in, I think, because of a court case, here."
MS. LOPER: "It would be considered, yes, in noneconomic
damages."
REP. GREEN: "Your question was whether the other bills in
Congress..."
REP. DAVIDSON: "Right, and we don't know. So we don't know
whether the loss of consortium is high or low in this
instance."
CHAIRMAN PORTER: "It may be that loss of consortium isn't
even covered by those bills. We're specifically covering
it."
REP. DAVIDSON: "But why do we want to put a $750,000 cap on
it?"
[UNIDENTIFIED VOICE]: "It has to stop someplace."
Number 740
CHAIRMAN PORTER: "So that there will be some finality to
the assessment of how much it's going to provide insurance
for these kinds of exposures."
Number 744
REP. DAVIDSON: "I thought a long time about this, and if I
were to lose my partner in life, the money really wouldn't
mean that much, but the loss, with our three children, would
mean a heck of a lot. And also, I don't think that this sum
is in fact so great. If you think about what your wife is
worth to you, you can't do it terms of money. But you can
certainly search your soul to know that, if you're trying to
deal with your children or your grandchildren... I'm going
to support this change, because I think that compared to
what we've talked about with these other states... I don't
think $1 million is so great a sum for such a loss. It's an
immeasurable loss."
Number 761
REP. GREEN: "Well, we agonized over this, as you recall,
certainly, in Labor & Commerce, to some degree... I
sympathize with you, and I asked the question there, and
I'll repeat it here: You indicated that that loss is
immeasurable. And I agree. It truly is. If I were to lose
my mate, there isn't any amount of money in the world that I
would accept for that. Now, that sounds like a grandiose
speech, but I truly mean that. But that's maybe because I'm
not starving. Money doesn't mean as much as having her with
me.
"But would, given the fact that she were taken from me, or
our children, would it be worth $250,000 more or $2-1/2
million more? Or $5 million more? There is some degree out
there, perhaps, when somebody is just so overwhelmed by the
amount of money that they may say, `Well, yeah, now I'll
sell out for that much money.' I think, in the real world,
that when we're talking about a large sum of money, a
quarter of a million dollars, we've already upped it a
quarter of a million dollars, and I think there would end up
being a ratcheting that is going now beyond the loss, and
it's going almost into the greed. `I am hurting, I won't
hurt as much if I get a little bit more money.' I really
fail to see that. After really coming from a position where
you were, and I think the chairman can relate to this in my
own moving, is that there comes a point where you just say,
`Okay, we'll give some amount, but it's got to be a rational
amount' because after that you're no longer serving the
loss, you're serving the greed. I think somewhere in this
range that we're between, $500,000 and $750,000, is probably
the reasonable point."
Number 788
REP. JAMES suggested that the measure of the cost of
negligence should be more specifically a function of the
actual liability of defendants and represent "the extent of
their infraction." She added that everyone is affected by
the size of caps imposed and noted that very large caps may
create problems for more individuals than simply the
defendants.
REP. JAMES remarked, "I think there's some inherent risk in
living," and reflected on the need to place outside limits
on the costs imposed, not only on the defendant, but on
society at large for a dereliction of duties; for, she said,
referring to someone who has sustained the loss of a loved
one, "there's absolutely no money, absolutely no money, that
you can give that person to replace the death of a loved
one. None."
Number 811
REP. DAVIDSON responded to Rep. Green's remark concerning
the `greed factor.' In those cases, he said, "I think we're
not talking about human beings... we're talking about a
different, lowly kind of life."
In response to Rep. James' comments on dereliction of duty,
REP. DAVIDSON cited a situation with which he was closely
familiar wherein a mother of three had been so severely
incapacitated by an injury that her family had been forced
apart. "Her husband had to divorce her, because they could
not afford the doctor bills. The legal case just didn't
make it - there were some mistakes made. So you have a
situation where the three children have now gone their
separate ways, a couple of whom have been traumatized by
what happened to their mother; the individual is living with
her mother, because she is a ward of the state... the 80-
plus years old mother is taking care of this person, and
there is not sufficient money... available under that
state's program to care for this person. I think it would
be nice if that person could afford to go get some therapy,
to see if maybe that 55 year old person could get out of
diapers. And so, dereliction of duty?"
Number 835
REP. GREEN observed that sometimes situations did not come
out they way they should. He stated, "Inherent risk with
life? It wasn't that individual's fault that she ended up
like that. So I'm going to vote for $1 million, and I would
hope that you guys could find it in your own hearts to do
so, as well."
Number 844
REP. NORDLUND: "This has been a really interesting
discussion amongst us all. Nobody is intending, I don't
think, intentionally to try to take away the just damages
due to people. But this is exactly the kind of discussion
that should take place in a jury, in a normal trial
situation. Except that a jury is looking at the facts of a
particular case: particular individuals, particular
damages, and then should render a judgment. I raised this
to $1 million because I think it's a mild improvement.
"I basically don't really believe in the caps at all. For
one thing, $1 million would rarely be awarded, given the
evidence of the past history of the kinds of damages that
are awarded."
Furthermore, REP. NORDLUND said, for the legislature to
speak arbitrarily concerning future cases would be
"fundamentally wrong. We have to let our peers decide on
the merits of a particular case and come up with what they
think are the just damages."
Number 858
REP. DAVIDSON: "If this bill were to become law, how long
do we hold on to that $1 million cap? The next 20 years?
25 years? We don't make positive changes for individuals
very easily around here. I say, leave it to the jury
system, leave it to the courts, and let's stop trying to
nit-pick our way through fantasy numbers that are supposed
to, somehow, do justice. Because I don't think they do."
CHAIRMAN PORTER: "I think there hasn't been one point of
view spoken on this amendment that's incorrect. We're just
going to have to make a policy decision, that's what it is.
So, could we have a roll call vote please?"
A roll call vote was taken by the committee on Amendment 35.
Reps. Nordlund and Davidson voted "Yeah" and Reps. Phillips,
Green, Kott, James and Porter voted "No". Amendment 35 was
therefore not adopted by the committee.
Number 875
REP. NORDLUND moved Amendment 36 and CHAIRMAN PORTER
objected to this amendment.
REP. NORDLUND reviewed Amendment 36. He stated, "This is
the section of the bill that deals with reducing damages by
future taxes that would be paid on those damages. What the
amendment does is deletes, takes that automatic deduction
out of the bill and replaces it with language that allows
the jury to consider what the future taxes would be. Again,
the Congress has decided that damage awards are not taxable,
and I certainly believe that the intent of that was to allow
that to go to the beneficiary or, in this case, the
plaintiff, or the person who was injured. By adopting the
language that we have in the bill, you're passing that
benefit on to the wrongdoer. My amendment is basically a
compromise..." [Abrupt end to tape; some text lost.]
TAPE 94-39, SIDE B
Number 000
REP. NORDLUND: "...But it just seems to me that the jury
should just be made aware of the fact that they'll not be
taxed on it. With that information in mind, they might
decide to reduce the award. And that it shouldn't be
automatically reduced. There's some real problems, too,
incidentally, in trying to anticipate what the future tax
liability is going to be of the individual, years down the
road, and to set it statically at what the taxes are being
paid at the time the judgment is made. I think it's
cumbersome to try to do that, and I think that if you just
allow the jury to take that into consideration, it's a
neater way of handling it."
Number 025
REP. GREEN: "I think, in effect, the way that it's worded
now does take a compromise effect in that it says it will be
the tax rates in effect on the date of the injury. Except
for the recent - and I'm talking about under the Reagan -
years, income taxes generally slide up. And so, future
earnings would be taxed. In future years it would appear
that they would be taxed higher than they would be if it
happened now. So, in effect, that does go in a direction
that you're talking about; that there is a compromise
already built in to this."
CHAIRMAN PORTER: "I'd like to think that taxes are going
down, but I doubt it."
Number 042
REP. NORDLUND: "It's not just the tax rates, though, but
it's the individual taxpayer's liability with whatever their
exemptions would be, their standard deductions... my taxes
have changed every year, based on particular circumstances.
It's not hard to imagine that in the future somebody's tax
burden would go down for some reason, and yet they'd still
be having these benefits taken out based on an earlier rate.
It's just hard to anticipate what somebody's tax burden is
going to be 25 years from now."
Number 058
REP. JAMES: "This time I agree with Rep. Nordlund, and let
me tell you why it is that I do that. And I agree that the
fact that these awards are not taxable is an intent to be a
benefit to the receiver of these funds are opposed to the
person who is paying them. But there's other benefits. And
just allowing them to consider it, in determining what the
economic damages are, that it is indicated that your gross
income is your benefit, even though some of it is taxable,
there is payments off of your gross income that go for FICA
and so forth that you do end up with getting some benefit
for. Maybe some other state taxes that you may or may not
get a benefit for. But to say that the economic damages
will be reduced by the amount of federal and state income
tax that would have been paid on those earnings, I think,
according to what Rep. Nordlund..., I agree that there's no
way to actually calculate that. I think it would be fair to
let the jury consider that. And not say that `they shall
reduce' the economic damages by that amount."
Number 093
CHAIRMAN PORTER: "In putting this in the bill, it, to me,
was an equity issue that I think makes sense. The idea is
to make a person whole, not to make them rich. If you're
giving them money that they would have had to pay in taxes,
you'll be giving them something that they wouldn't have had
in the first place. And, again, this is on the economic
damages, not in the other kinds of areas that they could get
compensation. Economic damages are supposed to replace, not
enhance, the economic losses - in wages in this case - that
you would have received. And I would agree with Rep. Green
that, to me, wording it the way we worded it, is the best
possible break for the plaintiff in terms of what his tax
consequences would be. 25 years from now I don't know what
to imagine, what we're going to be paying, but - I think
that the table has shifted in the plaintiff's benefit and
the way that we're saying that it should be done. I think
it provides the court with some specificity instead of a big
harangue about how they are going to establish this, make
this decision, and seeks to make the person pay what is
really due, and allow the plaintiff to receive what he has
actually earned."
Number 130
REP. JAMES: "This is some of the same argument that I had
before on how much - the economic damages are - is to be
paid by the person who created the infraction, and it
depends on who he did the damage to, it would be a different
amount of the same period of economic damages, and I
understand that, but it just seems to me that the only
reason that the federal government made this money be not
taxable is to help the person who is in this situation, not
necessarily to help the person that has to pay. And I think
this does make it be helping the person who has to pay and
not the person that is getting it. And I think it would be
very difficult to figure out what that person's taxes would
be, on that amount."
Number 177
CHAIRMAN PORTER: "Well, I certainly don't know what the
history of the federal determination was, but, I would like
to think that it was made looking at the issue of from the
point of view that I think I'm looking at, and that is, that
we're not going to tax it, so it doesn't have to be paid, it
doesn't have to be received, we're just going to take it out
of this thing altogether. So, I don't know. Is there any
further discussion?"
REP. NORDLUND: "Again, this is just allowing the jury to
take that into consideration. It's not necessarily giving a
benefit to either the plaintiff or the defendant."
REP. DAVIDSON: "Why are we trying to do so much of the
jury's work here?"
CHAIRMAN PORTER: "So we don't have to pay so much for the
court budget. I'm not being facetious when I say that. One
of the issues involved in this is the effect of all this on
the court, when we set up a scenario that's going to cause
an awful lot of extra litigation. I think we should try to
avoid that. Could we have a roll call vote, please?"
A roll call vote was taken on Amendment 36. Reps. Davidson,
Nordlund and James voted "Yeah" and Reps. Green, Kott,
Phillips and Porter voted "No". Amendment 36 was therefore
not adopted by the committee.
Number 194
REP. NORDLUND moved Amendment 37.
CHAIRMAN PORTER objected.
Number 200
REP. NORDLUND presented Amendment 37. He said, "The heart
of the amendment deals with deleting materials, deleting
Section 26, and everything else is a conforming to that.
What Section 26 is, is the infamous Rule 82 section of the
bill, and it just simply deletes the - as I understand it,
this does not delete all of Rule 82, but just Rule 82 as it
pertains to tort [indisc.]."
Number 217
CHAIRMAN PORTER: "Rule 82 is being offered for being
deleted because - we have in the bill, a section that deals
with specious litigation. Rule 82 is the rule that
originally provided just that attorney's fees would be
awarded to the prevailing party of the suit. It was then
messed with a little bit and now has a laundry list of
things that can be considered when determining how much and
who prevailed, to the extent that the past chief justice
wrote an opinion that I totally agree with that said this is
going to cause more litigation than it's going to stop.
With all that in mind, and considering that we have in the
bill something that gets at an inducement to avoid
unnecessary litigation, I would support leaving the deletion
of Rule 82 in."
Number 247
REP. NORDLUND: "I would draw the committee's attention to a
rare letter from the Supreme Court that was addressed to us
on this issue of Rule 82. Very seldom, it says in the
beginning of the letter, `Very seldom does the Supreme Court
take a policy position on issues...' Actually, Mr.
Christensen who wrote the letter is here, but I'll just say,
just a few short words from the letter:
`First, Rule 82 discourages unfounded lawsuits by
plaintiffs. Second, Rule 82 gives plaintiffs a
personal stake in a lawsuit. Third, Rule 82 makes it
more likely that insurance companies will settle before
the hiring of lawyers or the filing of lawsuits.
Fourth, Rule 82 allows plaintiffs with small cases to
bring them. Fifth, Rule 82 discourages marginal
appeals by the losing party.'
"Their final point is that `Rule 82 is simply a matter of
fairness.' I would think that we would put great stock in a
letter like this from the Supreme Court, when they rarely
make recommendations. I think that they obviously feel that
it works very well in our court system to have Rule 82. For
the very reasons I mentioned, I would strongly encourage
that we delete this section of the bill."
Number 270
CHAIRMAN PORTER: "I don't disagree that that was the intent
of Rule 82. I guess what I'm saying is that it has gone
past that, and we have things in this bill that also
provide, and I think with a better target than the shotgun
of Rule 82, inducements to settle because of the offers that
we've made, and, on the ability of the court to give an
immediate hearing to someone who believes that they are
being prosecuted maliciously or speciously, with unfounded
litigation. The Supreme Court does not totally support that
memo because, as I say, when Rule 82 was recently changed by
the Supreme Court, there was a dissent by Justice
Rabbinowitz to change. I guess it's kind of like any
situation dealing with judges, or dealing with Supreme Court
decisions, it's rare that you've got a five - zero reading,
or, whatever, and when it comes down to it, it's a policy
call."
REP. NORDLUND: "I wonder, since Chris Christensen has been
sitting through all these meetings, if you might ask him if
he does have anything to say. If he doesn't, that's fine."
CHAIRMAN PORTER invited Mr. Christensen to speak.
Number 309
CHRIS CHRISTENSEN, General Counsel, Alaska Judicial Branch,
briefly addressed the committee. He said, "If I were going
to make remarks, it would be to restate the statements in
the letter. I won't waste the committee's time by doing
that. I guess I would like to say that the court is
unanimous in its support of this letter. Justice
Rabbinowitz' dissent was not to Rule 82 itself, it was just
some amendments to Rule 82 that were made last year.
Amendments which, essentially, have the effect of making the
rule even fairer for defendants. Other than that, I would
be happy to answer any questions. I realize that the intent
of parts of the bill, as you indicated, are to match some of
the perceived benefits which the court sees in Rule 82. I
think that most of the benefits of Rule 82, while there are
some benefits in the bill which attempt to deal with the
same problems that Rule 82 does, I think that most of the
benefits of Rule 82 are not met by the specific provisions
of the legislation. I guess, just at a very basic level,
the court believes that Rule 82 is about fairness. One
person should be in a lawsuit, and the other person
shouldn't. Someone wins and someone loses. Someone was
right and somebody was wrong. And Rule 82 simply is about
fairness. It says that the person who wins, the person who
should not have been involved in this whole thing, should be
getting some compensation for the amount that they were
forced to pay out."
Number 343
REP. DAVIDSON: "It seems somewhat - I was going to say,
incredible, but I don't want to get sensational, here - but
I don't understand how after we hear how unanimous Supreme
Court feeling is about this, why we would want to second
guess that august body? Because I'm sure that they know
more about Rule 82 than I would ever want to know in my
lifetime. So, I'm going to take that as a lead, and I'm
going to support this amendment, because I think it makes
sense to follow the recommendations of our state's highest
court and its members."
Number 366
CHAIRMAN PORTER: "I'll try to be nice when I say
generically that to follow that logic, one would have to say
that you agree with every majority decision that that august
body has ever produced, and I'll just suffice it to say that
I don't. Consequently, I'm not persuaded because they have
a position to buy it."
Number 370
REP. DAVIDSON: "I'm not asking you to buy every decision,
or every recommendation, I'm only asking for this one."
CHAIRMAN PORTER: "I see. Can we have a roll call vote,
please?"
A roll call vote was taken on Amendment 37. Reps. Nordlund
and Davidson voted "Yeah" and Reps. Green, Kott, Phillips,
James and Porter voted "No". Amendment 37 was therefore not
adopted by the committee.
Number 430
The committee took up discussion of Amendment 26, which had
been on hold.
CHAIRMAN PORTER: "Page 2, line 15. The discussion came
down to Rep. Nordlund's position that there were a few
limited circumstances where adequate compensation wasn't
going to be paid, and my point of view was that that was not
an appropriate thing to say because that isn't what we're
implying. Any further discussion on Amendment 26? Can we
have a roll call vote, please?"
A roll call vote was taken on Amendment 26. Reps. Davidson
and Nordlund voted "Yeah" and Reps. Phillips, Green, Kott,
James and Porter voted "No". Amendment 26 was therefore not
adopted by the committee.
Number 441
The committee took up discussion of Amendment 24, which had
also been on hold.
CHAIRMAN PORTER: "Page 8, line 5. I believe Ms. Loper
looked this up for us. Daniella?"
Number 460
MS. LOPER: "The question on the amendment yesterday was
about, what if the municipality becomes insolvent? What
happens to the plaintiff? It sets out in Alaska Statute
29.06.050 and 29.06.520, that if something like that does
happen, that the state will succeed and pay up upon this."
CHAIRMAN PORTER: "This amendment was suggested by the
Department of Law. Further discussion on 24?"
Number 475
REP. JAMES: "This has nothing to do with this amendment,
specifically, but it does have to do with this thing that
comes in right after `or' on this amendment; an authorized
insurer may not have required a security. And I'd like to
have a definition of authorized insurer, as to why they're
so special."
CHAIRMAN PORTER requested that the committee conclude
discussion of Amendment 24 and said that the committee would
return to Rep. James' question.
Number 488
REP. GREEN: "If this happens, and it could, certainly, that
a municipality is unable to perform and excluded here
without any security - the state comes in, as we just heard
- is there any kind of a delay in that? Is this an
automatic thing, that just takes up from where the clock
started? Or is this stretched way out so that the plaintiff
may be at jeopardy for some length of time before the state
kicks in? And I certainly wouldn't want that to happen. I
know there's no guarantee, but I'm just wondering what - has
it happened, do we have any kind of a track record?"
Number 507
CHAIRMAN PORTER: "I don't think that there's ever been a
municipality that went bankrupt in the state of Alaska."
Number 521
REP. GREEN: "Do we have any knowledge of - because there
have been some municipalities in other parts of the
country?"
REP. JAMES: "There have been municipalities that have tried
to disenfranchise their municipal standing."
REP. GREEN: "In order to get away from an obligation?"
REP. JAMES: "Either that, or to accept a different type of
government [indisc.]."
CHAIRMAN PORTER noted that statutes currently provided for
an insurance pool among political entities such as
municipalities. "And they have done so, and very
successfully; there is an insurance pool for municipalities.
Generally for the smaller ones. The Municipality of
Anchorage is self-insured... most do. The pooling of the
insurance available for the smaller communities is also -
somewhat speaks to the ability to meet their obligations."
Number 521
REP. GREEN: "And to that point, Mr. Chairman, the concern I
have is that one of the first things that happens in an
economically troubled entity, individual, whatever, is that
payments to something like that generally are the first to
go. If the insurance from this pool lapses, then is this
municipality, that ends up being a litigant, excluded then,
because of lack of payments? I may be making a mountain out
of a molehill, but I'm just concerned that we don't require
any kind of protection guaranteed from perhaps a shaky
entity."
Number 531
REP. JAMES: "Well, I guess that I share some of Rep.
Green's concerns. The City of Fairbanks is not in my
district, but the City of Fairbanks has been woefully close
to having to file bankruptcy in the last few years. And
their finances are not getting any better. I know that if
they were to file a bankruptcy it probably would not be a
liquidation, it would probably be some kind of plan to get
out of their dilemmas. They also don't have a very good
history of not getting themselves into lawsuits and problems
with people. Particularly in employment and doing good
employment practices. They've had a rash of these things,
and a lot of those were pretty expensive. I guess that if I
were injured and I were filing a suit against the City of
Fairbanks and I was on periodic payments because the court
said they had to do it that way, or because it says that we
`shall' do this, I wouldn't feel very comfortable about
getting periodic payments from the City of Fairbanks without
some kind of a guarantee. And so, for that reason, and who
knows... There's another thing, I think, and I don't mean
to be a real pessimist in this issue, but we're facing an
economic downturn in this state that is very, very real.
And any time you come in to an economic downturn, even in
your personal life, you find that reducing your spending is
extremely difficult. And we don't even know what the
circumstances that will be created or the results of that
would be. So I don't feel real comfortable with having a
municipality in here, and I don't see any reason why they
shouldn't be able to either pay or put up security for a
periodic payment. So, I guess, I would feel okay if the
state was in there, but I feel uncomfortable about the
municipality. I feel equally uncomfortable with authorized
insurer. Because they can go bankrupt as well."
Number 570
CHAIRMAN PORTER: "Would the, speaking to this amendment,
would the committee be comfortable with the removing of
`municipality'?"
REP. JAMES: "Yes, I would."
Number 570
REP. DAVIDSON: "I certainly concur in a large part of the
remarks by Rep. James, although I tend to have more
municipal confidence because we do have a sales tax in
Kodiak, but, Mr. Chairman, the pooling that you talked about
- are you talking about the Alaska Municipal League
pooling?"
CHAIRMAN PORTER said yes.
REP. DAVIDSON: "Well, I have some entities in my own
constituency, or my own district, that cannot afford to make
those payments. And, of course, we're looking at a
recommendation to cut revenue sharing and municipal
assistance by a full 50 percent and the letters are coming
in and that person or that entity that's not able to pay
now, I think will be multiplied manyfold by the end of this
fiscal year, if we continue in the path we're on. So, I
would be most comfortable to take out `municipality'."
CHAIRMAN PORTER: "I will look at a friendly amendment..."
[UNIDENTIFIED VOICE - PHILLIPS?]: "So moved, Mr. Chairman,
to remove municipality." There was no objection.
CHAIRMAN PORTER: "We now have in front of us Amendment 24,
as amended by the deletion of `a municipality.' Further
discussion on Amendment 24? Is there objection?" There
being no further discussion or objection, Amendment 24 as
amended was adopted by the committee.
Number 616
REP. NORDLUND moved Amendment 38.
CHAIRMAN PORTER objected to Amendment 38.
REP. NORDLUND: "This gets back to the hospital part of the
bill again. If this legislation passes the way it recently
reads, we will allow certain health care providers,
primarily physicians - basically the hospitals will not be
responsible for any malpractice that may be have been
committed while they were operating in the hospital as long
as they are acting as an independent contractor. I stated
earlier that that does leave the public exposed in some
cases because 25% of the doctors in this state do not have
insurance. Rep. Phillips asked me to get some verification
of that and I've gotten this from the Alaska State Medical
Association. This is based on a survey that they did, I
guess in 1990; these percentages might have changed. In any
case, it does show you the size of the problem in Alaska.
If we don't adopt this amendment and the bill passes the way
it is, we will be in a situation in which neither the
hospital nor the doctors will have malpractice insurance,
and, other than going after the doctor's personal assets,
there is no protection for a victim of malpractice. So,
what my amendment does is simply require that physicians
operating as health care providers - I'm not sure if the
language is going to comport with what we have adopted -
but, the intent, at least, is to require that they have a $1
million worth of malpractice insurance, so as to provide
that protection to the public."
REP. GREEN: "I wonder if the $1 million was arrived at
prior to review of the proposal that we have now. What I'm
getting at is, what would the maker of the amendment be
amenable to? To a lesser amount of money because of the
caps that we're imposing through tort reform? For example,
half that amount?"
REP. NORDLUND: "The $1 million is arbitrary, admittedly.
However, the exposure could be much greater if you consider
economic and noneconomic damages. All compensatory damages
could be more than the $500,000 cap. When you add up the
economic damages, it could go beyond that. And in certain
limited instances, very limited instances, even punitive
damages, so..."
Number 657
REP. JAMES: "I think this is a given, probably to the fact
of making the doctors have the insurance or they don't
operate in the hospital. But it doesn't force the hospital
to do that. I have a tendency to support this amendment, is
the reason I am saying that. I would hope that this tort
reform would make it so that doctors could be able to afford
to have a $1 million worth of malpractice insurance, which
currently they can't. So, if that's the intent of this tort
reform, and we're passing this in tort reform, then we
shouldn't be fearful about putting this particular amendment
in, because it would say that they won't be able to operate
at the hospital because, if they don't, the hospital kicks
in. And so I think that that does cover a gap in where
people may or may not be covered, and may not understand
that they're covered. So, unless someone can give me some
really good reasons why I shouldn't support this amendment,
I guess I have a tendency to say, I think it is a good
amendment."
Number 675
CHAIRMAN PORTER: "Well, let me endeavor to do so. The
adjustment that we're making in terms of coverage that
addresses the Jackson B. Powers case is addressing the
situation where the court in its infinite wisdom decided
that emergency room physicians should be covered by the
hospital. That's the only thing we're changing. Right now,
doctors are not required, unless the hospital has that
policy, to have insurance. If we said this we would be
making a giant leap of insurance reform, or whatever you
want to call it, which we really haven't had an awful lot of
testimony on or consideration. The statistics, as Rep.
James points out, very correctly, indicate a need for this
bill. That's exactly one of the problems that we're trying
to address. Especially, the 56 percent of Bush physicians
that don't have insurance. As we've stated, the effect on
insurance rates of this legislation is going to be several
years out. And then, it's iffy on whether or not we've
dotted all our i's and crossed all our t's. I think we
would be doing a disservice to physicians, and especially to
medical service in the Bush, if we put this in, and for the
short term, created a situation that further exacerbates the
ability of a physician to get insurance, or to afford
insurance. So I would not support the amendment."
Number 702
REP. NORDLUND: "As I understand it, and I am sorry I don't
have any documentation of this, but, there are two hospitals
in the entire country that do not require their physicians
to have medical malpractice insurance: Alaska Regional and
Providence Hospital in Anchorage. This would apply to those
two hospitals. It would not affect anything else."
Number 708
REP. JAMES: "Just as an example. I worked in a doctor's
office for a couple of years when I was in Washington State.
In order to be a member of the Washington Medical
Association you had to have malpractice insurance. I don't
know what the rules are now, that's more than 20 years ago,
but I think that any professional - let's talk about the
design professionals. What would happen if they didn't have
insurance for the six year period - would the public be
protected? I don't think so. So, I think there is a little
glitch in what we've got right now, as to whether or not the
general public is being protected. I would think that the
malpractice insurance with this passing of this tort reform
would be more reasonable and that doctor's could afford to
do it."
Number 725
REP. GREEN: "I concur. The fact [is] that we have taken a
giant step, I think, in the right direction, to prevent the
frivolous or the ridiculous lawsuits by the tort reform
package. On the other hand, if that's at the expense of a
loophole where there could be a certain number of physicians
operating that aren't covered, and it would be to the
detriment, unbeknownst to the person who was treated, that
there was not a requirement from the hospital - I don't
think this is an unreasonable request. The only concern I
have is that if you make it too pricey, you haven't
accomplished what you wanted to. And so, that's why I would
like to offer to the maker of the amendment, a reduced
amount, still adequate enough to protect, so..."
CHAIRMAN PORTER: "We have a possible amendment we're
working on here, so, let's see how we're doing."
REP. GREEN: "This is an amendment to your amendment?"
REP. NORDLUND: "Yes."
CHAIRMAN PORTER: "In having this amendment previously, and
doing some discussion, if the health care provider, were a
health care provider by contract, and if the hospital had
the ability to decide the level of coverage, my objections
to this would be removed."
[UNIDENTIFIED VOICE - JAMES?]: "Okay, so that the coverage
would be by the hospital?"
CHAIRMAN PORTER: "Yes."
REP. JAMES: "How would you work that?"
CHAIRMAN PORTER: "Scratch `of at least $1 million' and put
in `decided by hospital' - `to be determined by the
hospital'." An unidentified voice pointed out that the
amount could be much bigger. Chairman Porter acknowledged
this.
Number 735
REP. NORDLUND: "The two parts of your amendment - the one
you would say `the health care provider by contract' - the
intent there is, are those, independent contractors? Okay,
that would be fine. I would consider that a friendly
amendment. I would not agree, however, to allowing the
hospital to decide the level of coverage."
CHAIRMAN PORTER: "One of the reasons that I think that
would be appropriate is that there are different levels of
insurance premiums based on different specialties within the
field of medicine. One of the problems in the Bush that
we're really trying to get at with this is the cost of
insurance for obstetrics, for example. There are doctors in
the Bush who are remaining in the Bush but just not
performing that service because they can't afford that
coverage."
REP. JAMES: "Do they have hospitals there?"
CHAIRMAN PORTER: "No, no, no, this is just their own
malpractice for their clinics or their own offices."
REP. JAMES: "This has only to do with hospitals."
CHAIRMAN PORTER: "Well, I recognize that. But, I'm using
that as an example to show that the same thing may be in a
hospital where the doctor is involved in obstetrics as
opposed to [indiscernible due to noise]."
Number 762
REP. NORDLUND: "Let me tell you the practical and political
problem with allowing the hospitals to decide. You're into
the same problem right now - Fairbanks Memorial has been in
battle with their own medical community up there, trying to
get them to have - basically, finally forced the doctors to
have to have insurance. What's happening in Anchorage is
that you've got a large enough group of doctors who
basically are very influential within the power structures
in those two hospitals, that have been manipulating it to
the point that hospitals aren't requiring them to have
insurance. Those same political forces will be at play in
deciding the level of coverage, and that level of coverage
could come back as $1 or $3 or something ridiculous like
that. I don't think that allowing the hospitals under that
kind of a situation - allowing the hospitals to set the
level of coverage affords enough protection."
Number 793
REP. GREEN: "On that point, then, what would happen,
Daniella, if a situation were to come up where the hospital
required a very nominal amount, and the doctor is a new
doctor that hasn't accumulated his fortune; would the
hospital, then, because they are the ones who determine the
rate, or the amount of coverage, would they in turn pick up
the liability? Or is there a loophole, here, still?"
CHAIRMAN PORTER: "We have provided that independent
contractors are not within the scope of responsibility of
the institution or facility."
REP. GREEN: "That's true, but now there's a tie here,
because now you're going back, and it seems to me there's a,
thin though it may be, an umbilical cord because the amount
of coverage I as a doctor might need has been determined by
this institution."
Number 805
MS. LOPER: "A health care provider is by contract, and
obviously there are contracts that are established between
the independent contractor that works for them, and this has
been going for quite some time. I don't think I've ever
seen a hospital ask a contractor to be covered by $3
insurance coverage. I imagine that in their contract they
go in and explain exactly what kind of coverage. So, on
just a legal issue, just because this is here, does not
affect liability. That's decided completely on something
else, and that is, by the bill, and Jackson B. Powers."
Number 817
REP. JAMES: "Speaking to the `determined by the hospital,'
I guess that I wouldn't be fearful that that would be too
low. I might be fearful that it might be too high. And I
would be more - if we don't like $1 million - I would rather
change that to some other number. I'm not familiar with
what the costs and what the ability is for physicians to get
malpractice now. I know that it's been tough to get and the
prices are very high and I don't know what those numbers
are. I don't want to impose something on a physician that
would make them not be able to be a physician if they're a
new one, or whatever. So I might be willing to take a
lesser amount. But I feel, that putting it in as the
hospital making the decision, I guess the hospital could
say, `You can't do it unless you have $2 million in
insurance' or something like that, and I don't know that I
would like to have that be subjected to the hospital. Now
they could say, `You can't do it if you don't have some.' I
think they could still do this, without us even putting it
in here. The hospital could make that determination. If we
don't put this in there, that's what's going to happen."
CHAIRMAN PORTER: "No. We cannot tell a hospital that they
can't make a policy to exceed what we've said is a minimum.
They could not - if we, for example, said that you have to
have at least a $1 million coverage, and we passed that into
law, they could say, `You've got to have $5 million.' They
couldn't say, `You only have to have $500,000.'"
REP. JAMES: "I understand that. My point is, that if we
don't put this amendment in there, the way it stands without
it is, the hospital can say, `You can't operate here without
$5 million worth of coverage.'
CHAIRMAN PORTER: "As they can now."
REP. JAMES: "And they still could, after we get this in
here. What it does do is force the hospital to make them
have some insurance, when we've already taken the hospital
out of the responsibility of that."
CHAIRMAN PORTER: "And that is precisely what I'm saying.
Perhaps $1 million is not required. So what I'm saying is,
that right now they have the ability to place any
requirement they want. I'm saying we ought to leave it at
that, and require it for contract doctors."
Number 850
REP. GREEN: "And I think that's why the maker of the motion
has made it. Because in at least the [examples] he cites,
their determination has been zero. Is it in the public's
best interest to have it that low? Where it is, I don't
know, and that's why I suggest that maybe half - it ties to
other portions of this tort reform bill, and I don't think
prohibitive, $500,000 certainly shouldn't be prohibitive for
a physician."
CHAIRMAN PORTER: "If adding by contract to health care
provider is a friendly amendment..."
Number 862
REP. NORDLUND: "I have been rethinking that, now. I just
want to make sure of the intent. If you are intending to -
I want to get into a situation where we can require those
physicians or whoever are on contract to have insurance.
Setting aside the level, I want to make sure that this would
require that. When you say `by contract' - you can't force
people into a contract by the law. I want to make sure that
this is not the effect of the amendment. We just can't do
it. We can't say that `the hospital shall contract with a
doctor for [malpractice] insurance.' But if you're trying
to say that those people who are independent contractors
shall have coverage, then I agree with it. I don't think it
says it. In fact, health care provider has already been
defined. So I don't think we need to say `by contact.'
Health care provider is, by definition, those independent
contractors through our circuitous definition."
CHAIRMAN PORTER: "We would have to say `health care
provider as defined in,' because we've got..."
REP. NORDLUND: "Okay, `health care provider as defined in,'
that would be fine, that would be better than by contract."
REP. JAMES: "I believe that one of the things that we're
trying to do in here is to not require..." [Cut off by end
of tape.]
TAPE 94-40, SIDE A
Number 000
REP. NORDLUND: "...[W]e already know the hospitals are not
going to be responsible, because of what we adopted here,
so..."
Number 005
CHAIRMAN PORTER: "What I'm saying is, that we're talking
about institutions all over this state, and not just the two
in our home town. And I don't want to say that the clinic
in Bethel has to have nobody in it that doesn't have $1
million worth of insurance. I think that clinic should be
able to say what they think they can afford. And if they
can't afford any at all, maybe that's what they're going to
allow. Because they are going to have to serve us. So I
recognize the anomaly, really, in Anchorage, but, this is a
state-wide policy, and I don't want to annihilate the Bush,
or Homer, or anybody else, just because we're trying to get
at two institutions in Anchorage. Let's put it this way.
If we have `health care provider as defined in,' and we're
talking about in the section..."
REP. NORDLUND: "Then I would consider that a friendly
amendment."
CHAIRMAN PORTER: "And that is the independent contractor -
doctor."
REP. NORDLUND: "Right. The people that that hospital is
[indisc. - not? now?] responsible for."
Number 041
CHAIRMAN PORTER: "Okay. Let me suggest that I will offer
an amendment to the amendment that would strike `of at least
$1 million' and replace `to be determined by the.' What are
we calling them? Medical facilities?"
REP. JAMES interjected a request to pause "and see what
18.21.030 does. It says `hospital has the meaning given in
AS 18.21.030'."
CHAIRMAN PORTER: "I'm changing `hospital.' I'm not going to
say hospital, I'm going to say whatever we're calling it --
No, it says hospitals here, doesn't it." [Assenting voices
from committee.] Okay, so we can use `hospitals'."
REP. JAMES: "I need to have that definition. Because I
don't think that necessarily means clinics in the Bush."
REP. PHILLIPS: "Before we do go on to passing this
amendment, I want us to identify that section there."
CHAIRMAN PORTER: "Okay. That would be page 14, lines 14-
15... health care providers was number 19."
Number 101
REP. NORDLUND: "I've got the definition of hospital if you
want me to read it."
CHAIRMAN PORTER asked him to do so.
REP. NORDLUND: "`Hospital means an institution or
establishment, public or private, devoted permanently to
providing diagnosis, treatment or care over a continuous
period of 24 hours each day for two or more nonrelated
individuals suffering from an illness, physical or mental
disease, injury or deformity, or any other condition for
which the medical or surgical services would be
appropriate'."
CHAIRMAN PORTER: "This wouldn't be a traditional clinic,
but it would be any facility that has two or more people in
it spending the night. And that's a lot of small
facilities."
REP. JAMES: "There are. There's even, up on the slope, we
have some of those that meet that criteria, that have
overnight."
CHAIRMAN PORTER: "So we would be affecting an awful lot of
small facilities."
REP. GREEN: "But we're affecting the doctors, rather than
the facility."
CHAIRMAN PORTER: "No, we're affecting the ability of the
facility to get a doctor to perform services there."
REP. GREEN: "That's right. But it's not the facility that
has to pay the premiums."
CHAIRMAN PORTER: "But if we say that they have to demand a
$1 million worth of insurance for a doctor to practice in
their facility, they may not get any doctors."
REP. JAMES: "I'll buy that."
REP. GREEN: "And the [indisc.] is, they may have none, and
so you still have this uninsured potential."
CHAIRMAN PORTER: "So, in answer to `as defined in' will
be..."
REP. PHILLIPS: "Section 27 (c) (1)?"
CHAIRMAN PORTER: "Well, 09.65.096. Section 27, paragraph
(c), number (1), yes."
REP. PHILLIPS repeated this information at the request of
Ms. Loper, saying, "We need to identify in this amendment
the section. So, it would be Section 27 (c) (1)."
CHAIRMAN PORTER: "So, that's what we'd be defining. And
I'm offering the amendment to the amendment which would
replace `of at least $1 million' to read `coverage to be
determined by the hospital'."
REP. NORDLUND: "I object to the amendment to the
amendment."
CHAIRMAN PORTER: "Can we have a roll call vote on the
amendment to the amendment?"
A roll call vote was taken on the amendment to Amendment 38.
Reps. Phillips, James and Porter voted "Yeah"; Reps.
Nordlund, Green and Kott voted "No" and Rep. Davidson did
not vote. The amendment to Amendment 38 was therefore not
adopted by the committee.
CHAIRMAN PORTER noted that they now had before them the
amendment as amended by the friendly amendment.
REP. JAMES: "Since that one didn't pass, I have a little
problem now with the things that we've been talking about."
REP. PHILLIPS: "Yes. You're not going to be able to put a
$1 million policy on a clinic or facility in the Bush
anywhere."
REP. JAMES: "The insurance probably isn't even available."
CHAIRMAN PORTER: "My recommendation to the committee would
be to not support the amendment and leave it the way it is."
REP. NORDLUND: "I would think it would be better to have
your language in it as to have no amendment at all."
REP. JAMES: "I agree with that."
REP. NORDLUND: "If the whole amendment is going to go down,
I would reconsider my vote on your amendment."
Number 198
REP. GREEN: "Well, in order to overcome my concern that
we've still got a loophole, could there be something in that
portion where we're talking about at least $1 million per
occurrence to reduce that to a more palatable amount, of
something to the effect to read like this `of at least
$500,000 or the maximum amount of insurance obtainable,
whichever is less'."
CHAIRMAN PORTER: "Rep. Green, we have had no information
put before this committee about what is appropriate rates,
appropriate coverage. I really feel ill-equipped to be
making these kinds of decisions. This isn't an insurance
reform bill, it's a tort reform bill."
Number 213
REP. PHILLIPS: "We talk about the difference between urban
and rural, but there are very great differences in the rural
areas also. We could be looking at the hospital in Homer
vs. the hospital in Seldovia, and you're talking about a
tremendous amounts of differences between those two."
REP. GREEN: "That's why I offered the latitude."
REP. PHILLIPS: "Yes, but in Seldovia you would never find
anybody that could - it's just the $500,000, even would
be..."
REP. GREEN: "Or the `maximum obtainable'."
CHAIRMAN PORTER: "It may well be that an [indisc.]
situation would not be able to be addressed because of this.
We're talking about many, many areas that have one doctor."
REP. NORDLUND: "Well, I'm not sure, Mr. Chairman, how to
count the votes here."
REP. PHILLIPS: "We could move to rescind our action, first,
in failing to adopt."
REP. NORDLUND moved to rescind the committee's action in
failing to adopt the amendment to Amendment 38.
CHAIRMAN PORTER: "We've got a motion to rescind our motion
to reject the amendment to the amendment. Is there
discussion? Is there objection? We have rescinded our
motion. We have in front of us the amendment to the
amendment, which, again, on Amendment 38, U59, would
replace, on the second line of the verbiage `of at least $1
million' with `to be determined by the hospital'."
Number 248
REP. JAMES offered a comment. "I think this is probably the
most fair way to do it. And actually, what we're doing, by
putting this `if' in here, previously we have said that the
hospital is not going to cover these physicians that are
independent contractors. And what we're putting in here,
`if they have malpractice insurance as determined by the
hospital,' which means that if they don't, then the hospital
has to cover them. Is that correct? Isn't that the way
this wording will do this?"
CHAIRMAN PORTER replied in the negative.
REP. JAMES: "Then I better read some more here."
REP. GREEN: "If they decide you don't need any, this
sentence says you don't need any."
CHAIRMAN PORTER: "And that's exactly the latitude that I
think we ought to be providing."
REP. GREEN: "I think that's a mistake."
Number 260
REP. JAMES: "Okay, but it says that you have to look at it.
It says you have to make a conscious decision as to
whether... In our bill here the hospital is not responsible
for the liability of these people. That is established in
this tort reform. And then we're saying that they're not
responsible for these people if these people have
malpractice insurance. If we put this in here, then that
means the hospital is making a choice as to whether they
want to cover them with their responsibility or whether the
hospital..."
CHAIRMAN PORTER: "No."
REP. NORDLUND: "The level is all they're deciding. Isn't
that correct, Mr. Chairman? They're deciding the level of
the insurance, not whether or not they have to have it or
not."
Number 270
REP. JAMES: "I understand that. But if we don't pass this
amendment, then there are some people that there's not a
decision by the hospital. They're just not covering these
doctors. If these doctors don't have any insurance the
patients are just - out to lunch."
Number 275
CHAIRMAN PORTER: "No... they have to post, in the facility,
that these independent contractors are not covered by their
insurance, so that there's notification, and the patient
then knows that, if they are concerned about this, they
better ask their doctor whether they have insurance. And if
they're concerned about that, then get one that's got
insurance."
REP. JAMES: "Just don't be sick."
CHAIRMAN PORTER: "No, that isn't it."
REP. GREEN: "But that's what would happen if there was only
one doctor in the Bush like you're talking about. [Indisc.]
get another doctor, and he's not covered, so they take their
risk. And I don't think that's right."
CHAIRMAN PORTER: "Well, there's inherent risk in living,
but I think I'd rather have an uninsured doctor than no
doctor if I had a problem. In some areas of the Bush,
that's exactly what they're facing."
[Off the record discussion amongst members.]
CHAIRMAN PORTER: "Okay, let's go back on the record. Rep.
James?"
Number 288
REP. JAMES: "Leaving out the `determined by the hospital,'
leaving that completely out, just the first part of this
amendment, which would fit into here, it says, `The hospital
is not liable to civil damages as a result of an act or
omission by a health care provider who is not an employee or
actual agent of the hospital if the health care provider is
insured under a policy of malpractice insurance in an amount
to be determined by the hospital'." So, in other words,
what this is saying - the main amendment here, what this
main amendment is saying - is that the hospital is either
going to cover them, or the doctors are going to cover
themselves, at the request of the hospital."
CHAIRMAN PORTER: "That is correct."
REP. NORDLUND: "That is the intent."
REP. JAMES: "So that the gap is closed."
CHAIRMAN PORTER: "Unless the facility recognizes that a
doctor doesn't have his own insurance and requires him to
have none."
REP. JAMES: "The way I read it, he has to have some, or
else the hospital's liable."
Number 363
CHAIRMAN PORTER: "I am going to step back and say this. I
am really nervous about getting into this area at all. I am
not aware of enough facts in this area to be writing law on
it, to tell you the truth. And I know what the situation is
now. And, while there's differences of opinion on whether
it's good, bad or indifferent, I don't have enough, with the
information that we've been receiving during testimony on
this bill, to make a decision on how to change it. So I'm
just going to, I just can't support the amendment at all."
Number 378
REP. NORDLUND: "I recognize the difficulty in setting an
amount at $1 million, or whatever. Not only because of the
problems that it represents in rural Alaska, but because of
the different exposure liability that the different
specialties have, and a range of problems, that arbitrarily
setting an amount at $1 million - I agree. I don't really
know exactly if that's the right level or not. So if we
allow the hospital to set that amount, as you suggested,
while it doesn't offer a great deal of protection, at least
it's better than not having this at all. I think this is,
at least, if nothing else, a statement to the hospitals that
they should consider - that everybody has to have some level
of insurance, and if it's a big problem, they can set it so
low as to be affordable for anybody, anywhere. But I think
it's important to proceed with the amendment."
REP. JAMES: "The way I understand the situation, and I
agree with you that we're getting into an issue area of
insurance we haven't had the testimony on... I don't really
know. I have the same concerns that you do. But my biggest
concern is, that the way I understand it now, is if a doctor
is operating in a hospital, and that doctor doesn't have
malpractice insurance, and then there is a problem, that the
hospital's insurance could be held liable, or the hospital
could be held liable for having a doctor operating without
any ability to pay for his problems. Whether they have
insurance or not. I believe that's the way it is now. And
that what we're doing now is saying that the hospital is not
responsible for these doctors that are independent
contractors."
Number 413
CHAIRMAN PORTER: "No, that's not my understanding. The
case that we're - as I believe the law is now, is just the
opposite of that. Independent contractors are recognized as
independent contractors, with the single exception in the
case that we're trying to deal with here, and that's the
Jackson Powers case, which said that, one court said that,
an emergency room doctor would be an employee rather than an
independent contractor. So, we're not changing the ball
field, here. We're just addressing one little area and
trying to level it up, saying that an emergency room doctor
is just the same as a doctor in surgery; a doctor is a
doctor, and it's an independent contractor, and should be
looked at that way. I am comfortable going that far. I am
not comfortable getting into insurance areas and required
insurance and all that kind of stuff. So, as I say, I would
rather not, I would rather err by allowing status quo than I
would by stepping on something that I don't know what I'm
stepping on. So I am really going to back away from this
amendment, totally."
Number 430
REP. NORDLUND: "I understand Jackson Powers, and I
understand the problem that's there, but the wording in this
bill goes beyond that. You can read it, on page 13, line
27: `A hospital is not liable for civil damages as a result
of an omission by these independent contractors.'"
CHAIRMAN PORTER: "They're not now."
REP. NORDLUND: "They're not now?"
CHAIRMAN PORTER: "No. With the exception of Jackson
Powers, which brought in the emergency room doctor - which,
to me, should be up to the hospital. If they want to hire
him as an employee, that's fine. They can do that and then
he's covered by them. If they want to make him an
independent contractor, that's fine. They've got to post it
-- I mean, we're doing things in terms of notifying people,
that aren't available now. But, to get, then, the other
step, into the insurance..."
REP. NORDLUND: "I see what I read here, and it says that
hospitals aren't liable for those physicians, and that a lot
of those physicians are going bare. I think we're doing one
two-step here that's not in the best public interest."
Number 452
CHAIRMAN PORTER: "Well, I'm going to withdraw my amendment
to the amendment. If somebody else wants to make it, they
can."
Number 460
REP. JAMES: "I really would like to get some more
information on this, and maybe you have it to provide to me.
I was not of the opinion that hospitals could not be held
liable for a doctor operating in their hospital without
ability to pay, financial responsibility for their actions."
Number 462
REP. PHILLIPS: "That's why some hospitals have made the
policy, have made independent policies in their own
hospitals; independent requirements, what they require of
their doctors. That is up to the hospital facility."
REP. JAMES: "I understand that. But we're putting it in
law that they're not responsible for a certain amount of
people that they're now responsible for if those people are
not financially responsible."
CHAIRMAN PORTER: "They're not now responsible."
REP. PHILLIPS: "They're not now responsible."
REP. JAMES: "Are you saying they are not now responsible?"
CHAIRMAN PORTER "I am saying they are not now responsible."
REP. JAMES: "So we're not changing this law in this tort
law?"
CHAIRMAN PORTER: "Only as it affects the emergency room
doctor. And that's only if you think Jackson B. Powers is
the law of the land."
Number 472
REP. DAVIDSON: "I think we're on to a hot pistol here. We
don't have the experts in this room to tell us, really, what
it is that we should be thinking about on this bill. I
would highly recommend that we hold this amendment until we
get some expertise in here because seven laymen, trying to
get into a situation between doctors, hospitals and lawyers,
just doesn't cut it. I would ask that we either move on or
finish up and try to get the people in here who know about
this issue, so that we can at least, as the public policy-
makers, make some kind of educated guess as to how this
thing should work out. I am not comfortable, with all due
respect to my beloved colleagues, I just don't think we have
the information."
REP. PHILLIPS: "Let's call for the question on the
unamended amendment."
REP. DAVIDSON: "Objection."
CHAIRMAN PORTER: "Okay, the question has been called. We
have in front of us Amendment 38."
REP. DAVIDSON: "Again, I just ask, why can we not at least
try to get the information before we send this bill off to
the next committee of referral, so we at least understand it
ourselves?"
CHAIRMAN PORTER: "By not passing the amendment, which is
what my advice to the committee is, we will be avoiding the
area that we feel uncomfortable getting into."
REP. DAVIDSON: "We're sitting here as a Judiciary
Committee. This obviously has a lot to do with our
jurisdiction as a committee. And yet, we're trying to avoid
our task?"
Number 507
CHAIRMAN PORTER: "I don't think we're avoiding anything, I
think we're being very prudent. This is not a mandatory
insurance bill. It's a tort reform bill. If somebody wants
to take that one up next year, I'll be happy to give them
all the support they need."
REP. NORDLUND: "If members of the committee feel
uncomfortable with the amendment, I can understand; then I
feel uncomfortable with Section 27 altogether. And, since
that is a change in the existing law, maybe we should not do
the amendment and not do Section 27 and we're at the status
quo."
CHAIRMAN PORTER: "We have in front of us Amendment 38. Is
there further discussion? There is objection. Roll call
vote, please?"
A roll call vote on Amendment 38 was taken. Reps. Davidson
and Nordlund voted "Yeah" and Reps. Phillips, Green, Kott,
James and Porter voted "No". Amendment 38 was therefore not
adopted by the committee.
REP. DAVIDSON: "In view of the fact that we're not getting
the information we need, I would move to delete Section 27
from the bill. I offer that as an amendment."
REP. PHILLIPS: "Objection."
CHAIRMAN PORTER: "Discussion? Objection is maintained.
May we have a roll call vote, please, on the unnumbered
amendment to remove Section 27?"
A roll call vote was taken on the unnumbered amendment
[Amendment 39] to remove Section 27. Reps. Davidson and
Nordlund voted "Yeah" and Reps. Phillips, Green, Kott, James
and Porter voted "No". The unnumbered amendment [Amendment
39] to remove Section 27 was therefore not adopted by the
committee.
CHAIRMAN PORTER: "We have in front of us what we will call
Amendment 40."
Number 560
REP. NORDLUND: "I move Amendment 40 - that's U60."
CHAIRMAN PORTER objected.
REP. NORDLUND presented Amendment 40, regarding the number
of years cited in the statute of repose. He said, "This
goes back to the statute of repose. Simple change. Six is
an arbitrary number, and 15 years, I guess, is an arbitrary
number. After the AG's opinion came out, I feel that
offering this amendment is like arranging deck chairs on the
TITANIC, because I think the whole section is going to go
down. The reason I stated 15 is because, as you know, HB
160, the statute of repose dealing exclusively with
architects or design professionals, left the House at 10
years; it was amended in the Senate to 15; it's back to the
House for a concurrence. There could be major problems in
us passing one statute of repose that says 15 - which is
about to pass, or maybe it will, I don't know, we'll see -
and this bill, which establishes six. It's an
inconsistency."
Number 572
REP. PHILLIPS: "A clarification on Rep. Nordlund's
statement. HB 160 is back to us for nonconcurrence, not
concurrence."
Number 580
REP. NORDLUND: "If it goes to conference, the choice is
between 10 and 15. My point remains, that there will be an
inconsistency between the six that's required in this law
and the 15 or the 10 that's adopted on 160. Somewhere along
the line this is going to have to be rectified and I am
suggesting that we do it here. I'd be glad to change it to
10. In terms of the policy, I think six years is too short
a time. I think that the constitutional problems that are
pointed out in the AG's memo might be somewhat alleviated by
extending it somewhat, by not making such a short period of
time."
Number 590
CHAIRMAN PORTER: "Do you remember the information provided
in the back of the folder that showed what the other states
are doing? Six really looks to me like an average of the
other states. I won't get into the Alice in Wonderland
decision, but I think it's been, it was obvious by its
absence of consideration with the other 49 states, and the
constitutionality, it obviously exists there. I would say
that undoubtedly there will be some marrying of 160 and 292
at some point, but I don't think I want to do it here. So I
would recommend against supporting Amendment 40."
Number 601
REP. GREEN: "I would oppose Rep. Nordlund's 15 years, but
if Rep. Nordlund would accept a friendly amendment to 10, I
can see some merit, since it did pass the House in 160 at
10, a compromise. There may actually be some merit in this
whole program. If we maintain six, as you said, Mr.
Chairman, somewhere along the way, the same place 160 got
changed, this may also be changed. But I certainly would
oppose 15."
Number 610
REP. JAMES: "If this was only relating to buildings, I
think I might agree. But this relates to a lot more than
buildings."
CHAIRMAN PORTER: "That's a fact. Rep. Davidson, quickly."
REP. DAVIDSON: "Well, okay, you're in a hurry. Go ahead."
CHAIRMAN PORTER: "We had this bill before, and this
committee has had a lot of discussion on this point."
REP. DAVIDSON: "It's a tough bill. It has far reaching
effects. So I'm not in a hurry."
CHAIRMAN PORTER: "I don't think we've demonstrated a rush."
REP. NORDLUND: "For the information of the committee, if
Rep. Green or anybody else wants to amend it to 10, I would
consider that a friendly amendment."
REP. GREEN: "Oh, I'm not offering an amendment."
REP. DAVIDSON moved to amend Amendment 40 by deleting the
insertion of `15' and inserting `10.'
REP. PHILLIPS objected and moved another amendment inserting
`8' instead of `10.'
CHAIRMAN PORTER: "I don't think we can do that. I think
we've got to finish the `10.' Would the maker of the `10'
consider `8' a friendly amendment?"
REP. DAVIDSON: "Unfriendly."
CHAIRMAN PORTER: "Okay. We're going to have a motion on
the amendment to amend to `10.' Roll call vote, please?"
A roll call vote was taken on the amendment to amend to `10'
the statute of repose figure in Amendment 40. Reps. Green,
Nordlund and Davidson voted "Yeah" and Reps. Kott, Phillips,
James and Porter voted "No". The amendment to amend to `10'
the statute of repose figure in Amendment 40 was therefore
not adopted by the committee.
A roll call vote was taken on Amendment 40. Reps. Nordlund
and Davidson voted "Yeah" and Reps. Phillips, Green, Kott,
James and Porter voted "No". Amendment 40 was therefore not
adopted by the committee.
REP. NORDLUND moved his final amendment, Amendment 41.
CHAIRMAN PORTER offered objection.
REP. NORDLUND: "This amendment deals with the section in
which economic damages are limited to $10,000 for people who
have died and do not have any dependants. I think that the
section is drawn too narrowly in who it defines as
dependants. What my amendment would do is simply state that
that limitation would not apply if there are beneficiaries
indicated in a will."
REP. PHILLIPS: "Why did they use the word `devisee' instead
of `designee'?"
REP. NORDLUND: "I don't know."
CHAIRMAN PORTER: "I don't know what a `devisee' is.
Committee members discussed the term `devisee.'
MS. LOPER explained that it referred to the drafter's
choice, like `designee' and confirmed Rep. Nordlund's belief
that it could mean `beneficiary.'
CHAIRMAN PORTER: "If I understand the amendment, we're
saying that economic damages should not go to a
nondependant. We're saying that dependants are spouse,
minor child or other dependant."
REP. JAMES: "What about provision for a girlfriend or
boyfriend?"
CHAIRMAN PORTER: "I guess, you could have `girlfriend' or
`boyfriend' if they were the designee in a will."
Number 656
REP. NORDLUND: "Sure. Or anybody else. If the person was
thoughtful enough to want to will something to them after
they died, they would probably want this benefit to go to
them just as much as they would to a dependant. I think the
dependants here are too narrowly drawn. You wouldn't want
to limit it exclusively to just dependants."
Number 681
CHAIRMAN PORTER: "I would speak against the amendment. I
think that's exactly what we're trying to do, is limit it
exclusively to dependants, because otherwise there isn't any
rationale for somebody to get money for something that they
wouldn't have received anyway. That's the whole idea of
this."
Number 698
REP. DAVIDSON: "How about the situation where, say, a
nephew or a niece would be living with an aunt or an uncle
or somebody like that, where he wasn't a legal dependant,
but -I suppose it would be too cold-hearted to maybe afford
that person $10,000 if he were a minor."
CHAIRMAN PORTER: "He would get $10,000. He has a claim on
$10,000. We're saying we're not going to give him more, for
economic losses. He can have noneconomic losses, he can
have [inaud. - voices crossing over]."
Number 710
REP. DAVIDSON: "We can sit here and make all the laws we
want, but most of the laws will never consider all the
perspectives that we're trying to cover. And there will
always be exceptions that are very unfair from the work that
we craft in the end. That's why I would support this
amendment. I think there are extenuating circumstances.
Humans get in the weirdest of situations. I think this is a
little acknowledgment of that."
CHAIRMAN PORTER: "I appreciate that, but I think we've got
it covered by saying `dependants'."
Number 717
REP. NORDLUND: "In most cases, the people designated in the
will are going to be the very people you're talking about
here. But in some cases, maybe not. Again, if that person
thought that there should be benefit from their estate, even
though they're not listed as a dependant, I think that these
benefits should go, there shouldn't be the $10,000
limitation."
CHAIRMAN PORTER: "Further discussion? Objection. Roll
call vote, please."
A roll call vote on Amendment 41 was taken. Reps. Nordlund,
Davidson and James voted "Yeah" and Reps. Kott, Phillips,
Green and Porter voted "No". Amendment 41 was therefore not
adopted by the committee.
Number 728
REP. PHILLIPS: "On this amendment, I'd like to state for
the record, if we could send the message to drafting,
particularly Mike Ford, that the word `devisee' means
nothing to me. Absolutely nothing. And if he means
`designee' it would be real nice if he used that word
instead. It's a word that we all understand."
Committee members further discussed word `devisee.'
CHAIRMAN PORTER: "There is one more amendment. We will
call that Amendment 42. It's a single page by Rep.
Davidson. Rep. Davidson?"
Number 755
REP. DAVIDSON: "This amendment, page 8, line 25, addresses
the problem of choice. I know that if you have a job and
you have insurance and you're pretty well taken care of, you
probably don't have any need for this amendment. But it's,
I think, significant that this is the last amendment that
we're doing, because these are the people at the bottom of
the ladder, generally. They are people who are either
dependant on public health or just don't have the means even
to access the system. So, all it does is attempt to level
the playing field so that people do have a pretty decent
chance of choosing their own future medical costs, if they
get into a situation where that's necessary, and which
involves, of course, the quality of care. A specific
situation might be even where a child, getting hurt in a
school, and the school district's insurance would be forced
to pay for future medical costs - or, say, special education
costs. By having this thing in here, then, that means that
that person would not have the opportunity to go get maybe a
private rehabilitation cost. So, that's the spirit in which
I offer this amendment, and would ask for your support, and
move the amendment..."
REP. PHILLIPS: "Objection."
Number 762
CHAIRMAN PORTER: "Amendment 42 is moved and objected. Rep.
Davidson, as I understand the effect of this amendment, what
we're saying in the collateral benefits is that, again, we
want to consider that a plaintiff that gets an award, gets
all of their award, but not all and again their award. And
we're saying that they should be, from a total claim, they
should deduct the collateral benefits. Things that they've
already received or, in this case, what you want to remove,
or that they reasonably expect to receive. If, for example,
turning it around, I guess, and looking at somebody trying
to be devious - if somebody were to, if this were not here,
and somebody had an insurance policy that provided coverage
and provided for medical expenses, you could double-dip from
the extent of having that policy in place, that's going to
be paying on into the future, and say that I'm going to have
these costs, and so I should get that money now. Well, I
think in the spirit of collateral benefits, you should
consider what you've already received, and what you
reasonably have an expectation of receiving."
Number 780
REP. DAVIDSON: "I guess I don't see it quite that way, Mr.
Chairman. Everybody should have the opportunity if it's
possible to choose the absolute best medical care or
rehabilitation experts that they can afford. And I see that
happening by deleting this part of the bill. Otherwise, I
think, saying to someone who can reasonably expect services
from, say, the Indian Health Service, is going to be stuck
with whatever level of quality of care that that particular
organization has."
Number 791
REP. NORDLUND: "When we're talking about reasonable
probability of receiving, there's no guarantee, obviously,
that those benefits will be received; and yet, the award
could be less. I guess my problem is, what about in those
situations where you probably will receive future benefits,
what if those future benefits don't actually come in?"
CHAIRMAN PORTER: "I would say that you probably would have
an entree back to your judgment."
REP. NORDLUND: "I would hope so, although I don't know that
that's the case. There's no guarantee of that in this
language."
Number 799
There being no further discussion on Amendment 42, a roll
call vote was taken by the committee. Reps. Davidson and
Nordlund voted "Yeah" and Reps. Phillips, Green, Kott, James
and Porter voted "No". Amendment 42 was therefore not
adopted by the committee.
CHAIRMAN PORTER: "I believe we have no more amendments.
What is the wish of the committee?"
REP. JAMES: "I would be willing to move this out of
committee now except that we've made so many changes to it,
I'd like to see the final draft, if we could do that without
having a lot of discussion again."
CHAIRMAN PORTER: "I would really like to move it, Rep.
James. I think we will certainly have the ability to,
because it is scheduled to go from here to Finance. I don't
know if we're going to be required to go to Finance, or not,
in all honesty, but I don't have any problems that what
we've done is going to be adequately reflected in the CS."
Number 822
REP. DAVIDSON: "I would concur with the concerns of Rep.
James. We have made a lot of changes to a very, very
important bill that affects a lot of people for a long time
to come. I haven't made every single meeting on this bill,
but I think probably 75 to 80 percent of them. I haven't
had the level of expertise or exposure to that level of
expertise that I am comfortable with in such a bill, but I,
too, would like to see what the final product is. There is
a companion bill in the other body. There are 60 days,
almost, left, in this legislative session, so I think
there's plenty of time. So, I don't know what the hurry is,
but I would prefer to have at least one more look at it. I
know oftentimes you get the final product after it's left
your committee, and it's sometimes, a mistake has been made,
and you wish that you had not let it go so quickly."
Number 841
CHAIRMAN PORTER: "Speaking to that, there certainly will be
the ability, if we... we will get the final product Monday
or Tuesday, I presume. If that product contains anything
that is not what we did, we most certainly will, I will seek
to amend it on the floor, if that's what's required. But I
do feel a sense of urgency considering the deadlines that we
have on getting our bills and rules and those kinds of
things."
REP. JAMES: "Then I'll move the bill, out of committee,
with individual recommendations."
Number 850
REP. DAVIDSON: "There is not a rule that hasn't been broken
in this area, or in this body, or in this whole process at
one time or another. So I think that most time frames are
just to encourage things, rather than say, `This is the way
it is.' I know you haven't been through a final session of
a legislature, but things can get whiz-bang very quickly
around here, so, I would only offer these comments to allay
your fears that time is short."
CHAIRMAN PORTER: "I appreciate that, but I'm one of those
guys that, if there's a rule, I try to meet it. Further
discussion?"
REP. PHILLIPS: "Do you think we'd have the final draft by
Monday or Tuesday?"
Number 860
CHAIRMAN PORTER: "I would guess Tuesday. This is Saturday.
As I say, I will certainly, if any of you, which we will
have adequate time to be looking at the CS, when it's
determined whether it's going to Finance or not, or
whatever; if there are any mistakes that we've made, I mean,
that come out in that CS, compared to what we did, I'll
either bring it back here, or whatever."
REP. NORDLUND: "If we think the whole bill is a mistake,
does that...?"
CHAIRMAN PORTER: "Anything that we did."
Number 870
REP. PHILLIPS: "On that point, if there are inconsistencies
in the CS, I'd rather it come back to this committee before
we send it to Finance."
Number 873
CHAIRMAN PORTER: "We can do that. Further discussion? Is
there objection to the motion?" There being objection, a
roll call vote on the motion to move HB 292 out of the House
Judiciary Committee was taken by the committee. Reps. Kott,
Phillips, Green (as conditioned), James and Porter voted
"Yeah" and Reps. Nordlund and Davidson voted "No". HB 292
as amended was therefore moved out of the House Judiciary
Standing Committee.
ADJOURNMENT
The meeting of the House Judiciary Standing Committee was
adjourned at 12:45 p.m.
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