Legislature(1995 - 1996)
03/01/1995 01:12 PM 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 1, 1995
1:12 p.m.
MEMBERS PRESENT
Representative Brian Porter, Chairman
Representative Joe Green, Vice Chairman
Representative Con Bunde
Representative Bettye Davis
Representative Al Vezey
Representative Cynthia Toohey
Representative David Finkelstein
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CONFIRMATION HEARING ON THE RECOMMENDATION OF THE APPOINTMENT OF
ALISON LAUBER TO THE VIOLENT CRIMES COMPENSATION BOARD.
HB 158: "An Act relating to civil actions; amending Alaska Rules
of Civil Procedure 49, 68, and 95; amending Alaska Rule of
Evidence 702; and providing for an effective date."
HEARD AND HELD
WITNESS REGISTER
LAUREE HUGONIN, Executive Director
Alaska Network on Domestic Violence and Sexual Assault (ANDVSA)
130 Seward Street, Room 501
Juneau, AK 99801
Telephone: (907) 586-3650
POSITION STATEMENT: Testified in favor of Alison Lauber
CHUCK ACHBERGER, Director
Juneau Chamber of Commerce
124 West 5th Street
Juneau, AK 99801
Telephone: (907) 586-6420
POSITION STATEMENT: Testified in favor of HB 158
EARL WILLIAMS
P.O. Box 287
Kasilof, AK 99610
Telephone: (907) 586-6420
(907) 262-1210
POSITION STATEMENT: Opposed HB 158
ROBERT COWAN, Exxon Plaintiff
P.O. Box 1681
Kenai, AK 99611
Telephone: (907) 283-7187
POSITION STATEMENT: Opposed HB 158
MEGAN RUSH
6631 Weiner
Anchorage, AK 99502
Telephone: (907) 248-2822
POSITION STATEMENT: Opposed HB 158
ROBERT CUNNINGHAM
1920 West 32, No. 3
Anchorage, AK 99577
Telephone: (907) 277-4476
POSITION STATEMENT: Opposed HB 158
RICHARD CATTANACH, President
Union Company
Alaskans for Liability Reform
8101 Old Seward
Anchorage, AK 99518
Telephone: (907) 349-4568
POSITION STATEMENT: Testified in favor of HB 158
PHIL HENDINBURGER, General Counsel
NORCAL Insurance Company
California
Telephone: (415) 957-5616
POSITION STATEMENT: Testified in favor of HB 158
ERNESTA BALLARD
705 Main Street
Ketchikan, AK 99901
Telephone: (907) 247-0846
POSITION STATEMENT: Testified in favor of HB 158
DAVID JOHNSON, Pediatrician
Alaska State Medical Association
3612 Tongass Avenue
Ketchikan, AK 99901
Telephone: (907) 225-5144
POSITION STATEMENT: Testified in favor of HB 158
LINDA HALL, Past President
Insurance Agents Association
3111 C Street, No. 300
Anchorage, AK 99503
Telephone: (907) 561-1250
POSITION STATEMENT: Testified in favor of HB 158
CONSTANCE ROSEBROCK
1922 Commodore Drive
Anchorage, AK 99507
Telephone: (907) 344-7804
POSITION STATEMENT: Opposed HB 158
JIM FORBES, Assistant Attorney General
Fair Business Practices Section
Department of Law
1031 West 4th Avenue, No. 200
Anchorage, AK 99501
Telephone: (907) 269-5222
POSITION STATEMENT: Provided information on HB 158
DOCTOR DON LEHMANN, President
Alaska State Medical Association
700 Katlian Street
Sitka, AK 99835
Telephone: (907) 747-5861
POSITION STATEMENT: Testified in favor of HB 158
TROY REINHART, Employee Relations and Public Affairs Manager
Ketchikan Pulp Company
P.O. Box 6600
Ketchikan, AK 99901
Telephone: (907) 225-2151
POSITION STATEMENT: Testified in favor of HB 158
KIRSTEN TINGLUM, Attorney
Alaska Association of Trial Lawyers
1130 West 6th Avenue
Anchorage, AK 99501
Telephone: (907) 276-4331
POSITION STATEMENT: Opposed HB 158
BRAD THOMPSON, Director
Division of Risk Management
Department of Administration
P.O. Box 110218
Juneau, AK 99811-0218
Telephone: (907) 465-5723
POSITION STATEMENT: Testified in favor of HB 158
BRUCE HEATH
P.O. Box 1117
SEWARD, AK 99664
Telephone: (907) 224-5656
POSITION STATEMENT: Opposed HB 158
CHRISTY TENGS-FOWLER
P.O. Box 190
Haines, AK 99827
Telephone: (907) 766-2474
POSITION STATEMENT: Testified in favor of HB 158
RUSS WINNER, Trial Attorney
900 West 5th Avenue, No. 700
Anchorage, AK 99501
Telephone: (907) 277-9522
POSITION STATEMENT: Opposed HB 158
MAURI LONG, Attorney
510 L Street, Suite 603
Anchorage, AK 99501
Telephone: (907) 277-5400
POSITION STATEMENT: Opposed HB 158
MIKE SCHNEIDER
880 N Street, No. 202
Anchorage, AK 99501
Telephone: (907) 277-9306
POSITION STATEMENT: Opposed HB 158
LYNN RODDA, Risk Manager
Providence Hospital
3200 Providence Drive
Anchorage, AK 99519
Telephone: (907) 261-3078
POSITION STATEMENT: Testified in favor of HB 158
LES GARA
1242 West 10th
Anchorage, AK 99501
Telephone: (907) 276-7807
POSITION STATEMENT: Opposed HB 158
PATTI RIZER
5530 Rabbit Creek Drive
Anchorage, AK 99516
Telephone: (907) 345-1743
POSITION STATEMENT: Opposed HB 158
TOM DOOLEY
733 West 4th, Suite 200
Anchorage, AK 99501
Telephone: (907) 279-7327
POSITION STATEMENT: Opposed HB 158
LLOYD MILLER, Attorney
900 West 5th Avenue, No. 700
Anchorage, AK 99501
Telephone: (907) 277-9522
POSITION STATEMENT: Opposed HB 158
CHARLES COE, Attorney
2740 Scarborough Drive
Anchorage, AK 99504
Telephone: (907) 276-6173
POSITION STATEMENT: Opposed HB 158
PREVIOUS ACTION
BILL: HB 158
SHORT TITLE: CIVIL LIABILITY
SPONSOR(S): REPRESENTATIVE(S) PORTER, Toohey
JRN-DATE JRN-PG ACTION
02/06/95 253 (H) READ THE FIRST TIME - REFERRAL(S)
02/06/95 253 (H) JUDICIARY, FINANCE
02/17/95 (H) JUD AT 01:00 PM CAPITOL 120
02/20/95 (H) JUD AT 01:00 PM CAPITOL 120
02/20/95 (H) MINUTE(JUD)
02/27/95 (H) JUD AT 01:00 PM CAPITOL 120
02/27/95 (H) MINUTE(JUD)
03/01/95 (H) JUD AT 01:00 PM CAPITOL 120
ACTION NARRATIVE
TAPE 95-19, SIDE A
Number 000
The House Judiciary Standing Committee was called to order at 1:12
p.m. on Wednesday, March 1, 1995. All members were present.
CHAIRMAN BRIAN PORTER stated that there would be a confirmation
hearing for Alison Lauber, followed by public testimony on HB 158.
The meeting was teleconferenced to Anchorage, Kenai, Ketchikan,
Seward, and Sitka.
Number 040
LAUREE HUGONIN, Executive Director, Alaska Network on Domestic
Violence and Sexual Assault (ANDVSA), testified in favor of
confirming Alison Lauber to the Alaska Violent Crimes Compensation
Board. She said Ms. Lauber is intimately familiar with sexual
assault, rape exams, and working with victims. That is a very
important part of the Violent Crimes Compensation Board's work.
Last year they had 60 victims of sexual assault apply to them for
restitution, 43 of which were children. They believe it is
critical to have someone with expertise in these areas sitting on
the Board and they were very happy to recommend Alison Lauber for
the position.
Number 070
REPRESENTATIVE CYNTHIA TOOHEY made a motion to pass the
recommendation out of the committee to the floor of the House.
Seeing no objection, it was so ordered.
HJUD - 03/01/95
HB 158 - CIVIL LIABILITY
Number 120
CHUCK ACHBERGER, Director, Juneau Chamber of Commerce, said they
support this bill which would help them keep their costs in line.
A lot of people do not realize that when you hear about large
settlements, it actually impacts their bottom line for business
quite hard. He also supported the bill for personal reasons. He
is part of an environmental assessment company, and it is expensive
to obtain insurance.
Number 145
CHAIRMAN BRIAN PORTER asked people wishing to testify to limit
their testimony to a maximum of three minutes.
EARL WILLIAMS testified via teleconference. He was concerned about
the eight year statute of repose and putting a cap on non-economic
damages and on punitive damages. He described how his injury, as
a worker on the Swanson River Oil Field four years ago, caused him
continuing victimization by insurance companies. His insurance
adjuster refused to pay him compensation for his work related
disability. He did get the Veteran's Administration to pay his
medical costs. Through this damaging ordeal, he used all of his
savings to survive.
Number 247
CHAIRMAN PORTER explained to Mr. Williams that HB 158 would
probably not be applicable to his situation, because an on the job
injury would fall under the workers' compensation statutes.
Further testimony will confirm if this is correct.
Number 260
ROBERT COWAN spoke via teleconference on behalf of the Plaintiffs'
Executive Committee of the Exxon oil spill case. He noted this
committee was appointed by Judge Holland. He was concerned that
this legislation would leave big companies like Exxon with little
fear of consequences for their actions. These provisions would
allow Exxon to say it was not their fault, but that it was the
captain who was responsible. He said they had spoken with many
members of the United Fishermen's Association (UFA) who had
expressed the same concerns.
Number 300
REPRESENTATIVE DAVID FINKELSTEIN asked Mr. Cowan when the jury is
considering the size of an award, if the size of the company's or
individual's assets is one of the things considered. If so, in
that context, what portion of Exxon's net worth did the punitive
damages amount to?
MR. COWAN answered yes, the jury is allowed to consider the
company's assets in determining the award. He thought Exxon's
assets were somewhere between $90 million and $100 million dollars,
in 1989. He did know the yearly profits were about 5 million,
which is what the jury assessed. This equaled about one year's
worth of profits.
REPRESENTATIVE FINKELSTEIN thanked Mr. Cowan, but thought perhaps,
he meant billions of dollars.
CHAIRMAN PORTER mentioned that case took place in federal court and
this bill would only effect Alaska's state courts.
MEGAN RUSH, who testified via teleconference, objected to Section
6, which puts a cap on non-economic damages. She had suffered a
serious head injury in 1984, and had previously been a commercial
pilot. The cap was too limiting, and would not cover future
medical costs. She is not able to obtain medical insurance from a
vendor. She felt the $500,000 cap should be deleted, or else
substantially increased for victims of catastrophic injuries.
CHAIRMAN PORTER asked Ms. Rush to consider the fact that future
medical costs fall under the category of economic damages, and
there is no cap on economic damages under this bill.
Number 435
ROBERT CUNNINGHAM testified via teleconference. He has suffered a
work injury in his ear, which could possibly eliminate him from the
capability of continuing in his profession as an air traffic
controller. The federal code cuts off all of his benefits, so he,
among other people, are almost required to sue in order to receive
some sort of compensation. He was opposed to the cap on damages.
Number 490
RICHARD CATTANACH, Vice President, Union Company, testified via
teleconference, on behalf of Alaskans for Liability Reform. He
felt the civil justice system to be inefficient and in need of
adjustments. This bill will help achieve the goal. They believe
in giving more of the award to the injured party, and less money to
the attorney. The rural areas of Alaska are suffering from lack of
adequate medical provisions, due to the high cost of medical
malpractice insurance. This deters doctors from wanting to work in
these areas.
Number 610
PHIL HENDINBURGER, General Counsel, representing NORCAL Insurance
Company, testified via teleconference. They have insured half of
this country's physicians for the past several years. He felt tort
reform would generate a real savings for the people. Specifically,
the state of California's tort reform has had a dramatic impact on
the cost of malpractice premiums for physicians and hospitals.
Insurance has become more affordable, as compared to other states
who have not enacted similar reform. Over the 17 years that the
California tort reform package has been in effect, they have
allowed the costs to increase only 83 percent, while the U.S.
costs, excluding California, have increased by 413 percent. Alaska
experience shows that premiums have increased by 1620 percent over
the same 17 year period. That is an increase of 26 percent per
year, which is twice the national average (11 percent). In
California, an Obstetrician/Gynecologist (OB/GYN), will pay $30,000
a year for medical malpractice insurance. A comparable OB/GYN in
Alaska will pay $65,000 per year for the same insurance. They were
in support of this tort reform legislation.
CHAIRMAN PORTER asked Mr. Hendinburger if he thought the insurance
rates in Alaska would decrease if this bill passed.
MR. HENDINBURGER felt that they would.
Number 745
ERNESTA BALLARD, President, Ketchikan Chamber of Commerce,
testified via teleconference as a private citizen. She also faxed
in her testimony which reads:
"I have been an advocate of tort reform for many years. The
provisions of HB 158 are well thought through, and reasonable. The
bill structures injury claims fairly. Injured parties are
protected from financial ruin and will still have access to just
compensation for economic damages and medical expenses. Defendants
will be held accountable for their share of obligation to injured
parties.
"Beyond this basic equity in compensation and accountability, HB
158 takes big and important steps towards reducing the opportunism
and greed which sadly characterize much personal injury litigation.
It bars damage suits by people who received their injuries in the
course of committing a felony; it allows juries to know if a
defendant has already collected an award for the same injury; it
limits the use of punitive damages to cases which are proven to be
deliberately malicious; it allows for a payment schedule, including
interest for large awards. These are common sense provisions. HB
158 also provides for monetary sanctions against attorneys for
filing frivolous pleadings. This is not only common sense, it is
long overdue.
"As citizens of a free country, we protect our rights aggressively.
I believe the time has come for us also to accept the
responsibility that accompanies citizenship. HB 158 is a small
step toward putting those rights in the greater context of the
greater good. Reasonable control over the cost of damages will
reduce the cost of insurance and the cost of doing business, and
increase access to the free enterprise system for all."
Number 775
DAVID JOHNSON, Pediatrician, speaking for the Alaska State Medical
Association, testified via teleconference. He said a concern among
pediatricians is the issue of the ongoing statute of limitations.
Something he does today, and may not come to litigation until two
years following discovery, could crop up 20 years from now. When
this situation comes up after you are gone, or after your insurance
is gone, this creates problems. This bill would take the potential
lottery out of the system, and provide some type of predictability.
The element of unpredictability is what allows all of us to be
victimized by insurance premiums.
LINDA HALL, Past President of Insurance Agents Association,
testified via teleconference. She felt there ought to be clear and
convincing evidence of malicious intent in order to award
compensation. The intent of punitive damage is to deter future
negative behavior. Part of this award money should go to the state
and not to the plaintiff. She urged support of the bill.
TAPE 95-19, SIDE B
Number 000
CONSTANCE ROSEBROCK testified via teleconference regarding punitive
damages. She was a victim of sexual assault at work. Since her
employer would not do anything about it, she was forced to take the
defendant to court. Punitive damage awards are meant to deter
wrongful actions.
Number 080
JIM FORBES, Assistant Attorney General, Fair Business Practices
Section, Department of Law, testified via teleconference, speaking
on behalf of the Administration. Overall, the Governor recognizes
that there are ways the current system could be improved; however,
he does not want to change the system to one that would deny
ordinary citizens access to the system.
REPRESENTATIVE TOOHEY asked for an example.
MR. FORBES replied that contingency fee arrangements are the only
way middle class citizens can access the current tort system. For
example, in a case involving complex causes of injury, the lack of
ability to pay an expert witness could play into the amount of the
award.
Number 230
DOCTOR DON LEHMANN, President of the Alaska State Medical
Association, via teleconference, described the current tort system
as being a lottery, with awards based on chance and emotion, rather
than on true injury and reason. All too often, injured parties
will claim victim status, seeking recompense beyond reason. The
current system is broken, and he is strongly in support of HB 158.
As a physician, from a liability standpoint alone, this is a good
bill. The single most important measure this bill would provide is
the cap on non-economic losses.
REPRESENTATIVE JOE GREEN asked Dr. Lehmann if he felt the lowering
of insurance premium rates would trickle down to a savings for the
doctors' patients.
DR. LEHMANN felt those cost savings would be passed on to the
consumer.
Number 415
TROY REINHART, Employee Relations and Public Affairs Manager,
Ketchikan Pulp Company, spoke in favor of the bill. The limit on
non-economic damages is important. Also, establishing guidelines
for the use of expert witnesses is important. The monetary
sanctions in the bill against attorneys in civil cases who file
frivolous lawsuits is very important. The last resort for their
company is to go to court, and it should be that way for any good
business; but all too often they find they are being dragged into
court cases which are frivolous. These cases are a waste of the
court's time, the company's time, and the government's time, as
well as to the individuals involved.
Number 445
KIRSTEN TINGLUM, Attorney, Alaska Association of Trial Lawyers,
wanted the committee to reconsider economic caps. She gave the
example of a child whose mother is killed in a car accident. If
the mother did not work, the future monetary loss of that mother is
zero. If the child's mother was an attorney, the child will get
big bucks. That is not fair. All the poor child is left with is
pain and suffering. She worried that some aspects of this bill
would block ordinary people from utilizing the system.
Number 560
BRAD THOMPSON, Director, Division of Risk Management, Department of
Administration, testified in favor of HB 158. He explained that
Risk Management acts as the state's self insurance or liability
insurer, protecting all state agencies, managing problems arising
from their activities and operations. Overall, HB 158 will reduce
amounts paid currently by the state in settling, or in judgments
arising from tort actions filed against the state; and will also
reduce future costs incurred in the defense of the actions filed
against the state. The fiscal note is zero. In years to come,
future administrative costs of the program would actually decrease.
Number 640
BRUCE HEATH expressed his disappointment, via teleconference, with
a situation he has been involved in. After an injury, his lack of
finances and location of residence make it difficult for him to
receive adequate medical care. He has been refused education to
train for a different vocation. His insurance adjuster has lied to
him and refused to pay his medical costs, telling Workers'
Compensation something different than what they are telling him.
They told him to go to the Veteran's Administration (VA).
Number 690
CHRISTY TENGS-FOWLER testified via teleconference. She is a small
business owner with a bar and restaurant which has been in her
family for 43 years. They are losing their incentive to be in
business because of an incident where someone used fake
identification to buy alcohol from their liquor store. A few hours
later, he totalled his pick-up and died in a crash. It did not
matter that he had been carded by eight different employees, nor
that he had been carded that night, nor that he had been drinking
alcohol in the presence of his parent in her establishment and in
other establishments. The family turned around and sued them.
They spent two years going through a horrible lawsuit, and
everything they had saved for her father's retirement was spent on
attorney fees and settlement costs. They have since been sued by
another family for the same reason, but the judge ruled in her
favor. The point is they live in fear of being sued just by being
in this business. It took an emotional toll on the whole town.
She would like to see this bill passed.
Number 740
RUSS WINNER, Trial Attorney, testified via teleconference against
the bill. He disagreed with the statute of repose. He felt this
provision to be unfair, unconstitutional, and discriminatory. The
non-economic provision is fundamentally anti-Native, because if
someone is injured who lives in a city, he has economic damages and
can be compensated for them. If someone lives in a village with a
subsistence lifestyle, he does not have economic damages, and
cannot recover costs; he can only recover non-economic damages,
which would have a cap.
Number 830
MAURI LONG, Attorney, testified via teleconference. She felt this
bill would harm a lot of regular people, and did not feel most
people would want to give up some of these provisions. It provides
different standards of expert witnesses for medical experts than
for those in other fields. She felt the bill was not very well
thought out.
TAPE 95-20, SIDE A
Number 000
MS. LONG continued to say that Section 22 is an unnecessary
provision and is trying to solve something that is not a problem in
the first place.
Number 045
MIKE SCHNEIDER testified via teleconference. He expressed concerns
about the examples given of ordinary people being harmed by this
legislation. He felt the agenda of the bill was to truly
disenfranchise injured people. He was also concerned that the
legislature was trying to decide what fairness was. That should be
left up to the jury.
Number 125
LYNN RODDA, Risk Manager, Providence Hospital, testified via
teleconference, describing a recent litigation involving the
hospital. There was a costly case that should not have even gone
to trial. They were able to settle prior to trial, after several
attempts. Their liability insurance premium for 1994, was over
$900,000.
Number 150
LES GARA testified via teleconference. He disagreed that a fiscal
note could be zero on this. The statute of repose would spell
disaster for the state. He expressed concerns about situations
like contaminated drinking water that is not discovered within a
short period of time, because of the date of sale of the property.
Another situation would be where a fire was caused by faulty
wiring. He felt the person installing the wiring should be held
liable, even after the statute of repose.
Number 400
PATTY RIZER testified via teleconference. She disagreed with the
cap on non-economic damages, feeling that would encourage more
wrong doing. Her 11 year old son, Bart, was killed at Alyeska Ski
Resort while skiing. For her personal tragedy, this cap would not
cover economic damages for costs associated with this accident.
Most people do not have enough money to pay an attorney by the
hour. This bill will not promote safety.
Number 510
TOM DOOLEY spoke, via teleconference, against the punitive damage
section. If the Supreme Court is going to say they can only find
punitive damages against companies who have malice or conscious
disregard for another person, he had no objection to that. He
represents people up against corrupt unions, and against mafia
controlled businesses. Why on earth would you want to protect
these kinds of criminals? You have already determined there is
malice and conscious disregard for their acts; why would you not
want to bankrupt them and pull them out of their business? He did
not understand why we would want to protect that class of people.
Number 590
LLOYD MILLER, Attorney, testified via teleconference. He was
appointed to represent victims of the oil spill. He opposed the
bill and felt that Section 7 is too restrictive. You have to
remember that when punitive damages are set, the plaintiff's
economic damages have already been determined separately. Punitive
damages are not designed to compensate the plaintiff, and have to
do with the outrageous conduct of the defendant.
Number 650
CHARLES COE, Attorney, testified via teleconference. He felt that
setting this non-economic portion of the bill would be inconsistent
with what Northwest Jury Verdicts are doing in other areas of the
state of Alaska. Anyone who is realistic about the system will
realize that in an auto accident, juries tend to award minimal if
anything for non-economic damages. He felt that putting a cap on
non-economic damages would be out of line, unrealistic and
unreasonable. He did not feel the statute of repose would be a
problem.
CHAIRMAN PORTER announced the end of the public testimony for HB
158.
Number 700
ADJOURNMENT
The House Judiciary Committee adjourned at 3:30 p.m.
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