Legislature(1997 - 1998)

02/26/1997 01:10 PM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE JUDICIARY STANDING COMMITTEE                              
                       February 26, 1997                                       
                           1:10 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Joe Green, Chairman                                            
 Representative Con Bunde, Vice Chairman                                       
 Representative Brian Porter                                                   
 Representative Norman Rokeberg                                                
 Representative Jeannette James                                                
 Representative Eric Croft                                                     
 Representative Ethan Berkowitz                                                
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 All members present                                                           
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 *HOUSE CONCURRENT RESOLUTION NO. 11                                           
 Urging the Attorney General of the State of Alaska to use every               
 appropriate resource and due diligence to defend the state's                  
 interests in the civil action filed against the state challenging             
 the 1996 revisions of the Northstar unit leases, and respectfully             
 requesting the Superior Court of the State of Alaska to give                  
 expeditious consideration to the matter.                                      
                                                                               
      - MOVED CSHCR 11(JUD) OUT OF COMMITTEE                                   
                                                                               
 SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 58                                      
 "An Act relating to civil actions; relating to independent counsel            
 provided under an insurance policy; relating to attorney fees;                
 amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules           
 of Civil Procedure; amending Rule 702, Alaska Rules of Evidence;              
 amending Rule 511, Alaska Rules of Appellate Procedure; and                   
 providing for an effective date."                                             
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HCR 11                                                               
 SHORT TITLE: NORTHSTAR AGREEMENT LITIGATION                                   
 SPONSOR(S): REPRESENTATIVE(S) PHILLIPS                                        
                                                                               
 JRN-DATE     JRN-DATE             ACTION                                      
 02/19/97       398    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/19/97       398    (H)   JUDICIARY                                         
 02/26/97              (H)   JUD AT  1:00 PM CAPITOL 120                       
                                                                               
 BILL:  HB  58                                                               
 SHORT TITLE: CIVIL ACTIONS & ATTY PROVIDED BY INS CO.                         
                                                                               
 JRN-DATE     JRN-DATE             ACTION                                      
 01/13/97        43    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/13/97        43    (H)   JUDICIARY, FINANCE                                
 01/16/97        95    (H)   COSPONSOR(S): COWDERY                             
 02/17/97       373    (H)   SPONSOR SUBSTITUTE INTRODUCED-REFERRALS           
 02/17/97       374    (H)   JUDICIARY, FINANCE                                
 02/19/97              (H)   JUD AT  1:00 PM CAPITOL 120                       
 02/19/97              (H)   MINUTE(JUD)                                       
 02/21/97              (H)   JUD AT  1:00 PM CAPITOL 120                       
 02/21/97              (H)   MINUTE(JUD)                                       
 02/21/97       429    (H)   COSPONSOR(S): BUNDE                               
 02/24/97              (H)   JUD AT  1:00 PM CAPITOL 120                       
 02/24/97              (H)   MINUTE(JUD)                                       
 02/26/97              (H)   JUD AT  1:00 PM CAPITOL 120                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 REPRESENTATIVE GAIL PHILLIPS                                                  
 Alaska State Legislature                                                      
 Capitol Building, Room 208                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3472                                                    
 POSITION STATEMENT:  Sponsor of HCR 11                                        
                                                                               
 DALE BONDURANT                                                                
 P.O. Box 1197                                                                 
 Soldotna, Alaska  99669                                                       
 Telephone:  (907) 262-0818                                                    
 POSITION STATEMENT:  Testified against HCR 11                                 
                                                                               
 JERRY McCUTCHEON                                                              
 No Address or Telephone Number Provided                                       
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-27, SIDE A                                                            
 Number 0000                                                                   
                                                                               
 CHAIRMAN JOE GREEN called the House Judiciary Standing Committee              
 meeting to order at 1:10 p.m.  Members present at the call to order           
 were Representatives Green, Porter and Rokeberg.  Representative              
 Bunde arrived at 1:17 p.m., Representative James arrived at 1:18              
 p.m., Representative Berkowitz arrived at 1:19 p.m. and                       
 Representative Croft arrived at 1:20 p.m.  This meeting was                   
 teleconferenced to Anchorage, Kenai and Cordova.                              
 HCR 11 - NORTHSTAR AGREEMENT LITIGATION                                     
 Number 0010                                                                   
                                                                               
 CHAIRMAN GREEN announced the first item on the agenda was HCR 11,             
 Urging the Attorney General of the State of Alaska to use every               
 appropriate resource and due diligence to defend the state's                  
 interests in the civil action filed against the state challenging             
 the 1996 revisions of the Northstar unit leases, and respectfully             
 requesting the Superior Court of the State of Alaska to give                  
 expeditious consideration to the matter.                                      
                                                                               
 Number 0028                                                                   
                                                                               
 REPRESENTATIVE GAIL PHILLIPS, sponsor of HCR 11, said on February             
 13, 1997, British Petroleum announced they would immediately stop             
 production work on their Northstar oil field development project.             
 The company indicated the reason for the work stoppage was their              
 concern about a lawsuit challenging revisions to the Northstar                
 lease terms ratified by the Alaska legislature and signed into law            
 by the Governor last year.  She said HCR 11 asks the attorney                 
 general of the state of Alaska to use every appropriate resource              
 and due diligence to defend the state's interest in this case.  It            
 also respectfully requests the superior court to expedite                     
 consideration of appending legislation so that work on the project            
 can resume as quickly as possible.                                            
                                                                               
 REPRESENTATIVE PHILLIPS said, in 1996, the legislature authorized             
 the commissioner of natural resources to revise the Northstar unit            
 oil and gas leases.  At the time there was a strong commitment to             
 Alaska hire, Alaska build and Alaska buy in the development of the            
 field.  Following the revised lease agreement, construction of                
 modules for the Northstar project began in Anchorage.  Several                
 Alaskan construction and oil service companies made preparations              
 for the increased work load.  People were hired and plans were put            
 into place.  The lawsuit has directly resulted in many Alaskans               
 losing their jobs.  In the interest of all Alaskans, this case must           
 be resolved quickly.  The resolution simply asks the court to act             
 as expeditiously as possible on the hearing, in order to put                  
 Alaskan families back to work.                                                
                                                                               
 REPRESENTATIVE PHILLIPS said there is a work draft before the                 
 committee.  She said committee changes were incorporated in the               
 work draft, but she had one other suggestion.  Referring to page 2,           
 line 16, of the work draft, she recommended that line 16 be amended           
 from "would ask" to "has asked" in light of the newspaper article             
 which said that the Governor had asked the judge to toss out the              
 lawsuit on Northstar.  She said HCR 11 will go hand in glove with             
 the Governor's request.  Both the legislature and the Governor                
 would ask the courts, while fully recognizing the separation of               
 powers, to act as expeditiously as possible in this matter.                   
                                                                               
 Number 0267                                                                   
                                                                               
 DALE BONDURANT testified next via teleconference from Kenai.  He              
 said that this state will non-competitively give away the Northstar           
 royalty provision is another bump in the present legislative                  
 giveaway program of Alaska's own resources for the real purpose of            
 increasing industry profit at the expense of the public's long term           
 benefits.  Even after industry enters into and are successful in              
 the open and competitive bidding process, they come back and demand           
 self-interest changes in their contractual commitments.  He said              
 industry is saying they can't have any more restrictive                       
 regulations, but are readily demanding lower than their contractual           
 commitments, including their refusal to voluntarily pay their                 
 royalty debts.                                                                
                                                                               
 MR. BONDURANT said this resolution and the voluntary changes of the           
 industry's bidding contract liability is just another example of              
 the numerous pending bills intended to lower responsibility of                
 environmental protection, resource conservation and the public                
 trust rights as owner of Alaska's common property resource.  The              
 1997 legislature's attitude flies in the face of the first                    
 statement on HCR 11, "Whereas a majority of Alaskans support safe             
 and responsible oil development in the state".  He ended there and            
 challenge the sponsor to add the following statement, "as proof of            
 this responsibility we offer the examination of the intent of the             
 following pending regulations which include HB 28, HB 29, HB 4, HB
 23, HB 57, HB 58, HB 31, HB 60, HB 68, HB 109, HB 128."                       
                                                                               
 MR. BONDURANT said industry's continued demand for more favorable             
 financial climate shows their self-interest attitude by extending             
 its lobby of a reduction in state budget funding for education and            
 sports.  This includes a reduction of commitment for                          
 extracurricular activities such as sports, music, crafts and social           
 activities as well as cutting health care for the young and                   
 elderly.                                                                      
                                                                               
 Number 0543                                                                   
                                                                               
 JERRY McCUTCHEON testified next via teleconference from Anchorage.            
 He asked why BP (Alaska) Inc. started the Northstar modules knowing           
 that they were going to be sued.  He said Badami is going to go on-           
 line before Northstar, the crews from Badami will transfer to                 
 Northstar.  He questioned why Northstar modules were started before           
 work began on the Badami modules, especially when the modules are             
 the same.  He asked why the Badami modules are going to be built in           
 Calgary and why BP was in such a hurry to get the Northstar modules           
 started.  He further questioned why BP didn't bother to check with            
 the Department of Transportation and Public Facilities (DOT/PF) as            
 to the adequacy of the three bridges to get the modules across of             
 which there will be four by the end of summer.  Given all those               
 questions, it is rather obvious that BP started the Northstar                 
 modules for the simple purpose of cancelling them.                            
                                                                               
 Number 0710                                                                   
 REPRESENTATIVE CON BUNDE made a motion that the committee adopt the           
 committee substitute O-LS0615\B, dated February 26, 1997, as the              
 committee's working document.  Hearing no objections, CSHCR 11(JUD)           
 was before the committee.                                                     
                                                                               
 Number 0756                                                                   
                                                                               
 REPRESENTATIVE BRIAN PORTER made a motion to adopt Amendment 1,               
 located on page 2, line 16, deleting the words "would ask" and                
 replacing them with "has asked" to CSHCR 11(JUD).  Hearing no                 
 objection Amendment 1 was adopted.                                            
                                                                               
 Number 0794                                                                   
                                                                               
 REPRESENTATIVE BUNDE made a motion to move CSHCR 11(JUD) from                 
 committee with individual recommendations as amended.  Hearing no             
 objection CSHCR 11(JUD) was moved from the House Judiciary Standing           
 Committee.                                                                    
 SSHB 58 - CIVIL ACTIONS & ATTY PROVIDED BY INS CO.                          
                                                                               
 Number 0814                                                                   
                                                                               
 CHAIRMAN GREEN announced the next item on the agenda was SSHB 58,             
 "An Act relating to civil actions; relating to independent counsel            
 provided under an insurance policy; relating to attorney fees;                
 amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules           
 of Civil Procedure; amending Rule 702, Alaska Rules of Evidence;              
 amending Rule 511, Alaska Rules of Appellate Procedure; and                   
 providing for an effective date."  He called a brief at ease at               
 1:23 p.m.  The committee meeting resumed at 1:50 p.m.                         
                                                                               
 Number 0888                                                                   
                                                                               
 CHAIRMAN GREEN withdrew the amendment labeled H.8 by Green, having            
 to do with the statute of repose.  He then referred to Amendment 1,           
 H.1 Green, having to do with the civil liability of electrical                
 utility companies and said he wished to amend Amendment 1.  He                
 called a brief at ease at 1:53 p.m.   The meeting resumed at 1:55             
 p.m.                                                                          
                                                                               
 CHAIRMAN GREEN referred to Amendment 1 and suggested a change                 
 occurring on line 8, remove the "." after utility and add the                 
 following words, "relating to the production and delivery of                  
 electrical service."  Amendment 1, located on page 16, following              
 line 5: insert a new bill section to read: "*Sec.35.  AS 09.65 is             
 amended by adding a new section to read: Sec. 09.65.085.  Civil               
 liability of electric utility.  (a)  A utility offering electrical            
 service to the public for compensation under a certificate of                 
 public convenience and necessity issued by the Alaska Public                  
 Utilities Commission under AS 42.05.221 may not be held strictly              
 liable for property damage, death, or personal injury resulting               
 from an act or omission of the utility relating to the production             
 and delivery of electrical service.  (b) This section does not                
 preclude liability for civil damages that are the result of an                
 intentional, reckless, or negligent act or omission."  and renumber           
 the following bill sections accordingly.                                      
                                                                               
 Number 1014                                                                   
                                                                               
 REPRESENTATIVE PORTER made a motion to revise Amendment 1.  Hearing           
 no objection the revised Amendment 1 was before the committee.                
                                                                               
 Number 1030                                                                   
                                                                               
 REPRESENTATIVE PORTER spoke to Amendment 1 and said it was his                
 understanding that there has not been a case in this state which              
 has determined that an electrical utility is strictly liable for              
 any incidence resulting from their delivery and production of                 
 electrical service.  There have been some cases in the state where            
 the finding seems contrary to (Indisc.--paper shuffling) law and              
 there is a current case in existence in this state that has not yet           
 been decided.  He said SSHB 58 would not affect that case, but it             
 was because of this case that the utilities thought it was                    
 appropriate to think ahead instead of waiting for the ax to fall.             
 The additional language relating to the production and delivery of            
 electrical services, basically, is added so that we're sure that              
 we're not exempting utilities from some other strict liability that           
 they may have in relation to some other activity that their                   
 utilities might find themselves involved in.  He said he did not              
 know what other strict liability they might have, but obviously               
 this amendment only refers to the production and delivery of their            
 electrical service, not some leaky storage tank that for whatever             
 other federal consideration might provide some other standard.                
                                                                               
 Number 1122                                                                   
                                                                               
 CHAIRMAN GREEN said Amendment 1 is probably a little bit of "belt             
 and suspenders" as there is the (b) section which would probably              
 exclude any of those things, but it's innocuous and it makes sure             
 that we are only talking about those acts generating electricity.             
                                                                               
 Number 1137                                                                   
                                                                               
 REPRESENTATIVE ETHAN BERKOWITZ said it has been a long time since             
 he has played in the realm of strict liability, but he recalled               
 that if there was an inherently dangerous material that created a             
 problem, usually dynamite that explodes somewhere, then strict                
 liability is attached.                                                        
                                                                               
 Number 1161                                                                   
                                                                               
 REPRESENTATIVE PORTER said in many cases this is the truth.  Having           
 read the hornbook recitation in Prosser, the hornbook indicated               
 that in most instances they do not find strict liability when the             
 provision of a service is required and regulated as opposed to                
 handling something inherently dangerous because you choose to do              
 so.  He clarified that utility services are regulated and it is a             
 requirement that they be provided.                                            
                                                                               
 CHAIRMAN GREEN said the subsections would fall under that same                
 category.                                                                     
                                                                               
 Number 1210                                                                   
                                                                               
 REPRESENTATIVE ERIC CROFT said his concern on strict liability was            
 that there are inherently dangerous activities.  He said the intent           
 is understood to be that providing electricity is a service rather            
 than a product within the strict product liability rules.  He said            
 he would be more comfortable with language that talked about strict           
 products liability, rather than all the other product liability and           
 subsection (b) comes closer towards that language.  He said he                
 would not fight about this language as long as it is understood for           
 the record that we are really talking about products liability and            
 that we think of electricity as a service rather than a product.              
                                                                               
 Number 1273                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ referred to the language in Amendment 1              
 which talks about the production and delivery of electrical                   
 services and said he was leery of the conjunctive "and" as opposed            
 to the disjunctive "or".  He said he would much prefer the word,              
 "or", because when you use the word, "and", you impose two elements           
 of proof.                                                                     
                                                                               
 Number 1303                                                                   
                                                                               
 CHAIRMAN GREEN said he would accept that language change as a                 
 friendly amendment to Amendment 1.                                            
                                                                               
 REPRESENTATIVE BERKOWITZ said he would propose "and" be changed to            
 "or" in Amendment 1.  Hearing no objection, Amendment 1 was                   
 modified.                                                                     
                                                                               
 Number 1324                                                                   
                                                                               
 REPRESENTATIVE BUNDE made a motion to adopt Amendment 1.  Hearing             
 no objection Amendment 1 was adopted.                                         
                                                                               
 Number 1332                                                                   
                                                                               
 CHAIRMAN GREEN said Amendment 2 is titled, Rokeberg, located on               
 page 8, line 13, delete: "Anchorage, all items index" and                     
 inserting: "U.S. City Average, all urban consumers, all items                 
 indexes".                                                                     
                                                                               
 Number 1344                                                                   
                                                                               
 REPRESENTATIVE PORTER said he had discussions with Representative             
 Rokeberg about Amendment 2 and would move to adopt it to SSHB 58.             
                                                                               
 Number 1358                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ objected for the purposes of discussion.             
 He asked how the averages compare in terms of the results.                    
                                                                               
 Number 1365                                                                   
                                                                               
 REPRESENTATIVE PORTER said Representative Rokeberg's research into            
 this area had been for a different bill, he found that the                    
 Anchorage, all items index, as established by the Department of               
 Labor had shrunk to only being published once a year.  The U.S.               
 City Average, all urban consumers, all items indexes, as                      
 established by the U.S. Department of Labor is published every                
 month.  Representative Rokeberg's said this index would be more               
 current and the applicability would better than the other index.              
 Representative Porter did not know what the differences would be in           
 terms of results.                                                             
                                                                               
 Number 1419                                                                   
                                                                               
 CHAIRMAN GREEN commented that fiscal problems would be addressed in           
 the House Finance Standing Committee, if this is a major concern.             
                                                                               
 Number 1436                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said he was interested in knowing how much           
 the Alaskan user is being helped or hurt by the tort system.                  
                                                                               
 CHAIRMAN GREEN suspected the amount was not going to be as much of            
 a difference as had been addressed.  He said the availability of it           
 and the fact that it is a broader index would be the difference.              
                                                                               
 Number 1449                                                                   
                                                                               
 REPRESENTATIVE JEANNETTE JAMES said she did not have faith in the             
 Consumer Price Index or any type of index upwards, she would like             
 the index to go down.                                                         
                                                                               
 Number 1474                                                                   
                                                                               
 CHAIRMAN GREEN offered a friendly amendment to Amendment 2 to                 
 change the word "indexes" to "indices".                                       
                                                                               
 Number 1488                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ made a motion to move the friendly                   
 amendment.  Hearing no objection "indices" was added to Amendment             
 2.  He maintained his objection until clarification could be given            
 on what would result from the change in indexes.                              
                                                                               
 Number 1498                                                                   
                                                                               
 A roll call vote was taken on Amendment 2.  Representatives Bunde,            
 Porter, James and Green voted yea.  Representatives Croft and                 
 Berkowitz voted nay.  Representative Rokeberg was absent for the              
 vote.  Amendment 2 was adopted.                                               
                                                                               
 Number 1560                                                                   
                                                                               
 REPRESENTATIVE CROFT made a motion to move Amendment 3, located on            
 page 5, line 21, following "(1)": delete "is a hemiplegic,                    
 paraplegic, or quadriplegic and has permanent functional loss of              
 one or more limbs resulting from injury to the spine or spinal                
 cord" and insert "suffers severe disfigurement or sever physical              
 impairment".                                                                  
                                                                               
 CHAIRMAN GREEN objected to the motion.                                        
                                                                               
 REPRESENTATIVE CROFT said Amendment 3 takes the current cap                   
 structure for non-economic damages and without changing it, simply            
 broadens the category of persons who we would consider to be                  
 severely injured.  Right now the category is extremely limited and            
 only includes those people suffering from a spinal cord injury.               
 Amendment 3 replaces this list with, "suffers sever disfigurement             
 or severe physical impairment".  He referred to the difficulties              
 the committee has had with making a list of who we consider to be             
 badly hurt.                                                                   
                                                                               
 REPRESENTATIVE CROFT referred to a case that he worked on where a             
 person who did asphalt paving lifted the lid and was covered in hot           
 asphalt.  His spinal cord was not injured, but he was almost                  
 killed.  They never thought he would live, he is still in great               
 pain, he still has to wear soft, specially made suits under                   
 anything he wears.  It was one of the most horrible injuries he               
 could imagine where essentially this person was aflame for an                 
 extended period of time.  This person does not have a spinal injury           
 and he is not a paraplegic.                                                   
                                                                               
 REPRESENTATIVE CROFT worried about the bill saying the only these             
 people so we consider to have $500,000 of non-economic damages,               
 those non-economic damages being pain and suffering.  This person             
 is in what he would consider the worst pain and suffering he could            
 imagine, yet this statute would put him in the lower category of              
 $300,000.  He said he did not want to get into the debate of whose            
 injury is greater but did not think it was true that the only                 
 person, that we or a reasonable jury would consider to have                   
 $500,000 in non-economic damages, would be somebody who has a                 
 spinal cord injury.                                                           
                                                                               
 REPRESENTATIVE CROFT said the person he referred to would not have            
 significant wage damages, his wage differential would be small.               
 The punitives were not really an issue in this case, but they would           
 be capped under SSHB 58.  The money he received would essentially             
 be the money on which he would survive the rest of his life.  He              
 said it constrains the jury's ability to estimate what the pain and           
 suffering of that injury and added that he disagrees with the whole           
 concept of capping.  Amendment 3 simply says, if you are going to             
 cap it, recognize that there are other things which cause                     
 tremendous pain and suffering which a reasonable jury could award             
 $500,000.  This list should not just include spinal cord injuries             
 or in the interest of completeness the person who has permanently             
 impaired cognitive capacity and is incapable of making independent,           
 responsible decisions.  He said he would understand this to mean              
 brain damage.                                                                 
                                                                               
 Number 1750                                                                   
                                                                               
 CHAIRMAN GREEN said he shared his concern and shared that when he             
 was in high school he had an impairment to one eye.  He said                  
 blindness is not covered in this list.                                        
                                                                               
 Number 1774                                                                   
                                                                               
 REPRESENTATIVE PORTER said everyone in the committee could come up            
 with an individual case that is very compelling personally.  He               
 said if the injury happened on the job, it would be covered under             
 worker's compensation and SSHB 58 would not affect it because there           
 are no non-economic damages in worker's compensation cases.  If               
 there happened to be some possibility of a third party defendant in           
 the worker's compensation case then that case could be heard in               
 superior court.  The case that Representative Croft cited is                  
 compelling, but Amendment 3 does not represent that case.  It                 
 represents virtually the wide-open, ill-defined, undefined version            
 that exists in current law with the exception of adding to the                
 term, "disfigurement", "severe disfigurement".  He said there is no           
 definition for severe disfigurement, there is no definition for               
 severe physical impairment and that is the essence of the problem.            
                                                                               
 REPRESENTATIVE PORTER recognized that Amendment 3 is within the               
 restraints of the proposed bill.  The problem is that these                   
 exceptions, disfigurement or severe physical impairment, are the              
 exceptions to non-economic damages that without the caps provides             
 a totally open-ended possibility.  He said that is the problem                
 which creates concern, on anyone who might find themselves as an              
 unintentional tort feasor, that potentially they might be wiped out           
 by an open ended, ill-defined potential claim.  For that reason, he           
 spoke out against Amendment 3.                                                
                                                                               
 Number 1876                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said we have a great system where lawyers            
 from two parties can get together in a court room and talk to a               
 jury of 12 people.  One side can make a compelling case that severe           
 disfigurement has occurred and the other side can make a compelling           
 argument that severe disfigurement hasn't occurred.  We have juries           
 solely to sort out questions like this.  He expressed his trust in            
 an Alaskan jury to be able to make the determination of whether               
 someone who has been horribly burned would qualify for non-economic           
 damages as opposed to someone who has lost a limb or suffered some            
 form of paralysis.  He said that when the rights of the jury are              
 circumscribed and we seek to impose our legislative view of the               
 world, we do a disservice to the jury system.  He understood the              
 need to have certainty in the civil process and is supportive of              
 that, but he also believed that we have to trust people to make               
 decisions.  Whether it is the person who winds up committing a tort           
 or suffering a tort or sitting on a jury, we have to give some                
 trust to the people.  He spoke in favor of Amendment 3.                       
                                                                               
 Number 1943                                                                   
                                                                               
 REPRESENTATIVE PORTER said if every case that was filed which had             
 this potential went to that jury, he would not be quite as                    
 insistent as he is about not liking Amendment 3.  He referred to              
 testimony, and testimony from previous hearings on this bill in               
 previous legislative years, and said 95 percent of the cases filed            
 don't go to trial, they are settled.  They are settled by virtue of           
 exposure once a determination has been made that a defendant has              
 some responsibility, that there was some negligence involved.  He             
 then asked how much the individual defendant could afford.  There             
 was testimony regarding this issue and said he believed that many             
 settlements are higher than they should be.  This has an impact all           
 over the state because of the open-ended nature and the ill-defined           
 nature of non-economic damages and punitive damages.                          
                                                                               
 Number 2007                                                                   
                                                                               
 REPRESENTATIVE JAMES said she did not share the same confidence               
 that Representative Berkowitz has in the judicial system.  She                
 separates the judicial from the legislative process and said her              
 obligation is to the legislative process as a separate part of                
 government.  The legislature establishes the ground rules and then            
 the judicial system is supposed to follow them.  She said she likes           
 to give the judicial system as little leeway and as much guidance             
 as possible because most of the time they don't find things like              
 she does.  She questioned who is to say she is right or they're               
 right, but this is the way the system works.  She would rather have           
 it specifically defined so as not to be defined by some other                 
 method.  She said $500,000 is a lot of money when they are going to           
 get other monies.                                                             
                                                                               
 Number 2061                                                                   
                                                                               
 REPRESENTATIVE CROFT said Amendment 3 has no effect on the amount             
 of the caps, it really says that some categories of injury might be           
 worth $500,000 instead of $300,000 in non-economic damages.  He               
 agreed that it uses a general standard because he is worried about            
 the legislature defining what severe disfigurement is.  He is                 
 worried that the legislature would say that the only thing that can           
 require an increased, but still capped, level of damages is spinal            
 cord or brain damage injuries which is the language as SSHB 58                
 currently stands.  Amendment 3 does not allow the jury to break               
 somebody or the unlimited ability to access damages over $500,000.            
 It simply gives them the ability to say what is severe.  Right now            
 we say, in our determination, severe is only spinal cord or brain             
 damage injuries.                                                              
                                                                               
 REPRESENTATIVE CROFT referred to the chair's example and his                  
 example and said these are two incidences which a reasonable jury             
 would consider severe enough injuries to increase the amount of               
 non-economic damages to $500,000.  He did not feel a capped,                  
 contained $500,000 for the non-economic loss, the pain and                    
 suffering, the loss of enjoyment of life, loss of consortium                  
 equaled blindness of a child.  These are the areas that we are                
 compensating.  Other than these non-economic damages in SSHB 58,              
 you get wages.  We are defining the worth of a person,                        
 encapsulating the enjoyment of their life into three piles, setting           
 aside punitive, non-economic and economic damages.  Economic                  
 damages for someone who does not earn that much is not highly                 
 valued.  This non-economic category allows us to value all of the             
 different aspects of life that they have lost from this injury.               
 Currently it is a list structure which simply says the only                   
 serious, severe injuries are paralysis and brain damage.                      
                                                                               
 REPRESENTATIVE CROFT said whatever list was made today would be               
 incomplete and we should allow, within a cap, a structure for a               
 general definition which would let the jury decide.  He referred to           
 Representative Porter's comment on the worker's compensation aspect           
 and said this was quite right.  Addressing the concerns that the              
 defendant could be wiped out and that Amendment 3 is the type of              
 unlimited category that we currently have, he said it is the                  
 standard we had for unlimited assessment, but the cap remains.  It            
 just allows a jury to determine for itself what is severe, rather             
 than just saying it is brain damage or paralysis.                             
                                                                               
 Number 2224                                                                   
                                                                               
 A roll call vote was taken on Amendment 3.  Representatives Croft             
 and Berkowitz voted yea.  Representatives Porter, James, and Green            
 voted nay.  Representatives Bunde and Rokeberg were absent for the            
 vote.  Amendment 3 failed to be adopted.                                      
                                                                               
 Number 2278                                                                   
                                                                               
 CHAIRMAN GREEN raised the concern that when you have a list you               
 automatically exclude what isn't on it.  He said a loss of hearing            
 or a loss of sight is a measurable quantity as compared to severe             
 disfigurement or severe physical impairment.  He said the category            
 should include the loss of hearing and the loss of sight.  He                 
 offered an amendment that on page 5, line 21, the word "complete"             
 between functional and loss, and then after "loss" add "of hearing            
 or sight or loss".  So that it would read, "functional complete               
 loss of hearing or sight or loss of one or more limbs".  He said he           
 would put the word, "complete" in that to clarify how much loss is            
 a loss.                                                                       
                                                                               
 Number 2329                                                                   
                                                                               
 REPRESENTATIVE CROFT said functional would seem to encapsulate the            
 concern that if they have one eye they can see, but if their sight            
 is so impaired it is then a functional loss.  He worried that                 
 somebody could lose use of their arm, except for a twitch, perhaps            
 a pinky movement.  He did not have an objection to simply adding              
 hearing or sight to the wording.                                              
                                                                               
 Number 2370                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said the committee is bartering with                 
 different types of human misery.  He applauded the effort to expand           
 the universe of cases that would come within the reach of this                
 paragraph, but it demonstrates the problems the legislature faces             
 with trying to categorize all the possible afflictions that can               
 result in non-economic damages in excess of a cap or even within a            
 cap.  He urged the committee to accept this amendment because it is           
 better than what we have, but it does not go far enough.  It                  
 wouldn't cover the burn victim and said there would be hundreds of            
 horrors that the committee is not even beginning to approach                  
 listing in this part of the bill.                                             
                                                                               
 Number 2408                                                                   
                                                                               
 REPRESENTATIVE JAMES said this section puts a cap on non-economic             
 damages with the exception of a few cases which could have an                 
 additional $200,000.  She commented that who you are depends on how           
 extensively a particular loss would be.  It is difficult to                   
 compare, when you are looking at apples and oranges, what the                 
 effect is going to be on that person.                                         
                                                                               
 TAPE 97-27, SIDE B                                                            
 Number 0000                                                                   
                                                                               
 REPRESENTATIVE JAMES said a maximum level has been set at $300,000            
 unless you have the items listed which could result in another                
 $200,000.  She said whether or not the person receives $300,000 or            
 $500,000 is a choice made by someone other than the legislature.              
 She said the more that this section is played with, without some              
 sort of scientific process, the more messed up the bill gets.                 
                                                                               
 CHAIRMAN GREEN withdrew the amendment.                                        
                                                                               
 Number 0078                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said the minority members were in an                 
 awkward position because if they left, the proceedings would be               
 required to cease under Mason's.  He did not want to be                       
 unnecessarily rule bound, but felt awkward staying.                           
                                                                               
 Number 0101                                                                   
                                                                               
 REPRESENTATIVE CROFT said SSHB 58 is one of the most important                
 things the legislature would consider this year or in the next two            
 years and said he wanted the opportunity to convince                          
 Representatives Bunde and Rokeberg that the proposed amendments are           
 important qualifications to the changes being made to the tort                
 system.  He said he is uncomfortable staying when he does not have            
 the opportunity to convince to those two members.                             
                                                                               
 CHAIRMAN GREEN called a brief at ease at 2:32 p.m.  The meeting               
 resumed at 2:45 p.m.  He said the next item was Amendment 4, page             
 5, line 17: following "exceed", delete "$300,000", insert                     
 "$500,000" and on page 5, line 19: following "section", delete "may           
 not exceed $500,000", insert "are not limited".                               
                                                                               
 Number 0085                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 4.                  
                                                                               
 Number 0172                                                                   
                                                                               
 REPRESENTATIVE PORTER objected to the motion.                                 
                                                                               
 Number 0182                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said no one has yet explained to him where           
 the $300,000 comes from, why that number was chosen and what it is            
 the product of.  It seemed to him that it is not a lot of money               
 over the course of a lifetime, it is barely enough money to buy a             
 house and pay for its upkeep and doesn't seem fair compensation for           
 a serious injury.                                                             
                                                                               
 Number 0206                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said a lot of what goes on in a courtroom            
 or in the trial process is a search for finding equities, trying to           
 get to a fair solution to a conflict.  Fairness depends on the                
 circumstance of each individual situation.  For the committee to              
 circumscribe how much fairness someone is entitled to is very                 
 problematic.  Settlement negotiations do not happen in a vacuum,              
 there is not an arbitrary quality to legal proceedings that people            
 seem to think and referred to a book that was thick with legal                
 rules on how to proceed in a courtroom.  There are damages                    
 involved, a universe of knowledge to gather which can help you                
 determine the negotiation result.  If someone has a car crash that            
 results in this type of injury or that type of damage to the                  
 vehicle then there are other cases where you can look to see what             
 sort of damages have been awarded.  The process is not entirely               
 arbitrary.  Some of the results are due to the attorney's powers of           
 persuasion, but some of it is due to existing facts and what other            
 juries have recognized to be acceptable settlements.                          
                                                                               
 REPRESENTATIVE BERKOWITZ said Amendment 4 says that we can't really           
 establish what is fair without looking at the circumstances of each           
 case.  The legislature is sort of in an ivory tower above                     
 everything, not down on the ground looking at the particulars of              
 each case, and we ought to let the folks who can make those                   
 decisions make those decisions.                                               
                                                                               
 Number 0284                                                                   
                                                                               
 REPRESENTATIVE PORTER clarified that the committee was talking                
 about the subjective area of pain and suffering, not of the loss of           
 a house.  He said Representative Berkowitz alluded to fairness and            
 said that is why he felt caps should be in place.  Amendment 4                
 would eliminate the cap on the exceptional and have it open ended             
 again.  He said a lot of the settlement has to do with the                    
 attorney's power of persuasion.  There is unfairness of this                  
 situation, in his mind, if the plaintiff has an eloquent attorney.            
 He said it is fair if there are reasonable caps in these areas so             
 that there can be consistency and fairness.                                   
                                                                               
 Number 0354                                                                   
                                                                               
 CHAIRMAN GREEN said sales organizations rely on the mentality of a            
 persuasive barrister or a persuasive attorney.  He referred to the            
 coffee cup case.  A case could be brought before a jury, who might            
 be affected and award something they don't feel is the right award            
 following the case such as people regret buying items on impulse              
 the morning after the purchase.  He said there are some land deals            
 that have a buyer's remorse provision included with some out that             
 allows the buyers to go back and change the agreement.  You don't             
 have that when a jury awards a tremendously large sum, except                 
 through the appeals process.  He said if we remove the $500,000               
 cap, we might as well not have tort reform.  We need to bring some            
 degree of assurance to the tort system and for that reason he                 
 opposed Amendment 4.                                                          
                                                                               
 Number 0419                                                                   
                                                                               
 REPRESENTATIVE JAMES raised the issue of why should we have a cap.            
 She used the analogy of her children telling her something isn't              
 fair and her reply that life isn't fair.  She said a person might             
 feel that there is no amount of money that can give them back what            
 they lost.  She questioned how you can put a value on something               
 like the death of a child.  No amount of money is going to make it            
 better.  She said where the money comes from is the issue.  To                
 establish some kind of equilibrium in the system where people can             
 go on with their life.  There is a proper role for putting caps on            
 these issues, what the cap is or should be she could not answer.              
 She referred to the work that people have put in with this issue              
 and said it should be based on what the awards have been, what                
 people have an availability to pay or how much insurance they can             
 afford to carry and still be able to do business.                             
                                                                               
 REPRESENTATIVE JAMES said the bottom line of the whole issue is if            
 we don't have economic activity occurring, we don't have people who           
 are willing to put their investment into providing jobs and work              
 for people then these people are not going to have any support at             
 all.  She supported having some caps and balance within the system.           
 There also needs to be some semblance of issues out there that will           
 let economic activity continue in this country.                               
                                                                               
 Number 0578                                                                   
                                                                               
 REPRESENTATIVE CROFT clarified that death came under (b).                     
                                                                               
 Number 0609                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked how the $300,000 figure was                    
 determined.                                                                   
                                                                               
 Number 0612                                                                   
                                                                               
 REPRESENTATIVE PORTER said it started as $250,000 which was, at the           
 time, the tracked amount in federal legislation going through the             
 U.S. Congress.  During the process which occurred in the previous             
 legislature, the bill did not start from ground zero, it started              
 (indisc.--coughing) two and then it moved up to $300,000.                     
                                                                               
 Number 0639                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ referred to Representative James'                    
 testimony that tort actions were somehow impeding economic activity           
 and asked her to explain what she meant.                                      
                                                                               
 Number 0650                                                                   
                                                                               
 REPRESENTATIVE JAMES said she would discuss this issue, but did not           
 see how it would be relevant to the discussion right now.                     
                                                                               
 Number 0674                                                                   
                                                                               
 REPRESENTATIVE CROFT said Amendment 4 represents the only way for             
 us to estimate the entirety of a person's worth after we've given             
 them what the marketplace recognizes.  That amount of worth                   
 includes everything but how much you could have earned and the                
 medical expenses you have, to generalize, and added that there are            
 some other smaller categories.  He said if we are going to value              
 people beyond what they make, this is the area of the bill in which           
 we do it.  He expressed having problems with only valuing people by           
 how much they make and also of having problems with capping,                  
 particularly at this low level, the entirety of a person's worth.             
 He listed some non-traditional employment such as a housewife and             
 a subsistence hunter.                                                         
                                                                               
 REPRESENTATIVE CROFT said to estimate what a blind child could have           
 earned would be difficult.  As a jury he could try to estimate what           
 the loss is.  He said it would not make the child whole or sighted            
 and added that this would be the best solution.  Money is always              
 going to be an insufficient remedy for the injuries we are talking            
 about here.  There are some things that can be done with money that           
 allow them to live a better life.  You can have enough money to               
 learn how to read again without sight, you have enough to try and             
 make up for what you have lost.  For the legislature to say that              
 the death of a child is worth $300,000 plus what we can figure out            
 they might have earned in their life is simply insufficient to                
 estimate the entirety of a person's worth.                                    
                                                                               
 Number 0809                                                                   
                                                                               
 REPRESENTATIVE PORTER disagreed.  He said it is much easier to                
 figure out future wages, even for an infant, than it would be to              
 say how much the loss of a child or the loss of this person's                 
 ability to function is worth by an abstract manner.  If it is that            
 this person lost their sight and has to then learn how to read by             
 Braille, it is an economic damage.  He disagreed that economic                
 damages are wages only.  Any legitimate cost that accrues from the            
 injury, which you can demonstrate you wouldn't have had, is an                
 economic damage that you can ask payment for.  What you get, of               
 course, is going to be the result of your own persuasion.  It is              
 certainly a legitimate request, a legitimate claim, in requesting             
 economic damages.                                                             
                                                                               
 Number 0863                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said if you look at some of the problems             
 with breast implants and people who have suffered poisoning as a              
 result of botulism, you can get the economic damages of how much              
 money they would have earned had they not been hurt.  You can get             
 the numbers for how much it's going to cost them to go through                
 therapy, those are the economic damages.  You can't get those                 
 numbers when you are talking about someone who has been a housewife           
 or a househusband.  You can't get those numbers for someone who has           
 been living a subsistence lifestyle.  There has to be another                 
 avenue to correct those harms.  He said we are talking in the realm           
 of compensatory damages, not punitive damages.  Compensatory                  
 damages are divided into economic and non-economic categories.  We            
 have limited the economic damages, essentially, to those who have             
 an economically measurable lifestyle.  By capping non-economic                
 damages we are doing nothing to right an injustice that has been              
 done to someone who is living at home, working at home, living in             
 the bush, leading a subsistence lifestyle.  There are whole                   
 categories of people who will never have access to the complete and           
 total justice they deserve if we put caps on it.                              
                                                                               
 Number 0942                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said there has been talk that SSHB 58 is             
 good for business.  He said he has learned that insurance rates               
 have fallen in seven of the last nine years.  The argument that               
 tort reform is an essential predicate for the reduction of                    
 insurance rates doesn't hold water.  Businesses in Alaska are                 
 flourishing in spite of the existing tort system.  He cautioned               
 going through a wholesale revision of a system that most of us know           
 very little about without completely understanding the                        
 consequences.  There is the law of unintended consequences that               
 people talk about over and over regarding legislation.  He can't              
 detail all the consequences that will arise from passage of a bill            
 like this, but the unintended will rear up and bite us as surely as           
 he was sitting here.                                                          
                                                                               
 REPRESENTATIVE BERKOWITZ said one of the greatest guarantees we               
 have that people will behave appropriately with one another is a              
 result of the check and balance that comes in the courtroom.  He              
 said if we do anything to erode that check, we are showing a lack             
 of confidence in our system.  He said he believed, essentially,               
 that the system works.  It needs some tinkering, but SSHB 58 is not           
 going to fix what's wrong.                                                    
                                                                               
 Number 1022                                                                   
                                                                               
 REPRESENTATIVE PORTER said if someone on who was a subsistence                
 hunter or an unemployed person who was injured to the extent that             
 they could no longer provide their own subsistence style of living            
 or provide their own activities within the house, then they could             
 claim those things as economic damages and that someone will have             
 to do those activities for them.  It is the concept of making the             
 person whole as a result of someone else's negligence.  We are                
 talking about pain and suffering.  A reasonable cap on an otherwise           
 open-ended area of compensation.  Testimony was given that there              
 are a number of things that affect insurance rates and as we have             
 improved our safety, we have produced some benefits in rates.                 
                                                                               
 Number 1077                                                                   
                                                                               
 REPRESENTATIVE CROFT said if a housewife is injured or killed you             
 can get the economic damage of having a maid come in, but you don't           
 get any value for her life other than what she would have earned.             
 The primary value for that person's life is on the economic side as           
 it is on the medical.  The pain, suffering, inconvenience, loss of            
 enjoyment of life, loss of consortium are what the bill caps which            
 is the rest of the value of that life.  He submitted that the                 
 economic part would put a very low value on a housewife's life.               
 Here in this section is where you value them as a person and this             
 is where we are arbitrarily capping their value.                              
                                                                               
 Number 1138                                                                   
                                                                               
 CHAIRMAN GREEN expressed concern that if we did not have a cap we             
 would be saying that whatever value the injured person and the                
 attorney who takes a case places upon their life or injury is what            
 should be received.  An elevated compensation for non-economic                
 damages which then could affect the amount received for punitive              
 damages because there is a multiplier effect.  You as an attorney,            
 pleading this case, convince the jury how critical it is that we              
 compensate this person and then take a third or more of that                  
 compensation.  He said this is the difficulty he has with this                
 issue.                                                                        
                                                                               
 Number 1233                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said if you get compensation that is                 
 hugely out of line, the defendant thinks it is hugely out line,               
 then the defendant will appeal.  Exxon has not paid out its $5                
 billion, they are exhausting their appeals because they think that            
 it is too much money while people in Alaska think that amount is              
 fair.  The courts are going to hear the evidence in a deliberate              
 fashion.  He said courts are somewhat inoculated to the persuasive            
 abilities of lawyers and the courts will make a determination to              
 lower the judgement if that is in the interest of justice.  There             
 are phrases that come across in a courtroom time and time again               
 such as "interest of justice" and "fairness".  He said                        
 Representative James indicated that she did not feel that there was           
 fairness in the world.  He said there is no absolute fairness, but            
 he thought we are all compelled to pursue fairness and justice and            
 when we abdicate that responsibility, we're abdicated our                     
 responsibilities as legislators or advocates of justice which he              
 personally felt was a step that should not be taken.                          
                                                                               
 Number 1300                                                                   
                                                                               
 CHAIRMAN GREEN expressed concern that, in the cases discussed, the            
 attorney had persuaded the jury to award too much.  The defendant             
 appeals and then the decision about award is left to the judge or             
 whatever the makeup of the appellate court is.  He said that                  
 judgment is really not in the interest of justice, even though the            
 judge or court is well trained.  The whole concept of our form of             
 government is that elected people might have a better handle than             
 someone who is either appointed, or elected to the court in the               
 event that the case goes to the Supreme Court.                                
                                                                               
 Number 1355                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said the legislature is wed to process               
 because it provides order.  There is order in the courts.  He                 
 referred to the McDonald's case and said the judgment might have              
 been very high, but it was reduced significantly as it went through           
 the court process.  He said he was not prepared to discuss the                
 equities of that case, but the cases that people read about in the            
 newspaper are the extreme cases.  You don't hear about the cases              
 that are regularly settled for $20,000 or $200,000 when it is a               
 fair judgement and within the realm of the norm.  You only hear               
 about the unusual cases.  It is not a good precedent for us to                
 legislate based on these unusual cases.                                       
                                                                               
 REPRESENTATIVE BERKOWITZ said one of his complaints during the                
 course of this debate is that the committee has not had access to             
 the facts.  He question the numbers at which people were settling.            
 Most of the lawyers he knew are rational human beings and would not           
 try to get more than they were actually going to receive.  It is a            
 risk calculus every time you get out there.  You know what is in              
 your hand and pretty much what is in the other guy's hand, but                
 there are upper limits to the game.  He said it is not this                   
 production of damages that takes place within a vacuum.                       
                                                                               
 Number 1513                                                                   
                                                                               
 REPRESENTATIVE CROFT said the contingent fee is the irritant to a             
 lot of people.  He said he would hate to see the legislature                  
 deprive injured people of their recovery because we're irritated              
 that attorneys keep a portion of it.  The contingent fee is                   
 necessary because it is very often injured poor people who cannot             
 afford to take on an attorney, like a defendant can, for three                
 years, paying the expenses and costs and then only at the end                 
 getting their investment back.  He said the question is do we want            
 to allow people to set up an alternative arrangement, or do we want           
 to require them to pay as they go.  He said we would not want to              
 deprive people of that right to making an independent, contractual            
 right to make an alternative arrangement which would suit their               
 needs.                                                                        
                                                                               
 Number 1601                                                                   
                                                                               
 REPRESENTATIVE CROFT said, in the eloquence issue, there are good             
 defense attorneys as well as good attorneys for the plaintiff.  He            
 did not feel the jury was being bamboozled by brilliance on one               
 side.                                                                         
                                                                               
 Number 1622                                                                   
                                                                               
 REPRESENTATIVE PORTER said he rejected the attitude and image that            
 plaintiffs are poor people who can't afford to retain a lawyer and            
 that the defendant is Ford Motor Company.  The vast majority of               
 businesses in Alaska are small businesses, people with a lot of               
 guts that are taking a big risk which a lot of us aren't doing.               
 They can't afford attorneys anymore than poor plaintiffs can.                 
                                                                               
 Number 1676                                                                   
                                                                               
 CHAIRMAN GREEN said there might be an initial reaction to a large             
 settlement which can be changed through appellate court proceedings           
 to fall below the caps being discussed in SSHB 58.  He said it is             
 perhaps a disservice to say that without a cap you can shoot for              
 the moon, when perhaps it will be beaten down below the amount.               
                                                                               
 Number 1718                                                                   
                                                                               
 A roll call vote was taken on Amendment 4.  Representatives Croft,            
 and Berkowitz voted yea.  Representatives Porter, James and Green             
 voted nay.  Representatives Bunde and Rokeberg were absent for the            
 vote.  Amendment 4 failed to be adopted.                                      
                                                                               
 Number 1771                                                                   
                                                                               
 CHAIRMAN GREEN called a brief at ease at 3:16 p.m.  The meeting               
 resumed at 3:37 p.m.  He said the issue before the committee was              
 Amendment 5, located on page 9, line 15 through page 10, line 16:             
 delete all material and renumber the following sections                       
 accordingly.  Page 20, line 11 through line 20: delete all material           
 and renumber the following sections accordingly.  Page 24, lines 13           
 through 17: delete all material and renumber the following sections           
 accordingly.                                                                  
                                                                               
 Number 1820                                                                   
                                                                               
 REPRESENTATIVE CROFT made a motion to adopt Amendment 5.                      
                                                                               
 Number 1823                                                                   
                                                                               
 REPRESENTATIVE PORTER objected to the motion.                                 
                                                                               
 REPRESENTATIVE CROFT said this was out of the cap and monetary area           
 and into the apportionment of fault which requires a brief                    
 description of how it works now and how it would have to work under           
 SSHB 58.  Making clear at the outset that we have complete                    
 apportionment of fault, the question is how will we do it and what            
 mechanisms will structure it.  He said 20 to 30 years ago we had a            
 joint and several liability in sort of a mixed form.  Now the                 
 statute is completely clear that the parties are allocated at their           
 appropriate fault and that is all they have to pay.  The question             
 is whether it is a party or a person who has to be sitting in the             
 chair at the trial.  The way it works now, after the case Benner v.          
 Wickman, which required that the plaintiff sue who they thought did          
 it.  The defense might say that they are the only one who could be            
 liable, or they might argue that they're not liable or there are              
 other people that are liable which would result in the defense                
 bringing those people into the case.  That is, for a number of                
 reasons, the most logical way to approach this situation.                     
                                                                               
 REPRESENTATIVE CROFT said the question is, phrased in the law,                
 whether you can point to an empty chair.  Whether a defendant could           
 say, without having the guts to bring them in, it was so and so               
 that did it.  That person is not there, they have no opportunity to           
 defend themselves and that anything that the plaintiff against them           
 is not binding according to the law, it essentially becomes a wash.           
 Civil rule 14, after Benner v. Wickman was enacted, says exactly            
 that.  He said the defense could say it was a whole litany of                 
 people who did it, then the plaintiff could say that those people             
 should be brought into the case.  If the defense is right, then the           
 defense will get a portion of the attorney's fees and costs, have             
 the power to do offers of judgement and it all logically works.               
 The defense can bring whoever they want to blame the situation on             
 into the case, they have the liability for costs if they are wrong            
 and they get the benefit of costs and attorneys fees if they are              
 right.  He said it is a complicated structure, but all the rules              
 work.  The person that says the other person did it has to bring              
 them in to show that they did it.                                             
                                                                               
 REPRESENTATIVE CROFT said the bill allows a system where you can              
 blame everyone.  He would argue that you would not be doing your              
 job as a defense attorney if you didn't blame the world.  This                
 strategy can lessen the blame on the defense and confuse the issue            
 to the jury.  He said this type of defense strategy creates                   
 multiple suits when the plaintiff doesn't believe a specific person           
 has done it.  He said design professionals complain that they often           
 get thrown into the suit when it is a maintenance issue.  He said             
 once the maintenance issue is raised the plaintiff doesn't have a             
 choice but to include them in the suit, because if they allocate              
 any portion of damage to them it has no effect unless the plaintiff           
 brings them into the suit.  He said the plaintiff runs the risk of            
 mutually contradictory, multiple suits unless they bring in people            
 who they don't believe did it.  Those are the two options under               
 SSHB 58 as it is written.                                                     
                                                                               
 REPRESENTATIVE CROFT said there are many aspects of the current               
 system of which there are legitimate concerns about whether it                
 works or doesn't work; on caps, on punitive damages and whatever.             
 He said the current system has a logic.  Our state as one of the              
 only states that require attorney's fees to be paid by the losers,            
 with our attorney's fees, our costs and our offers of judgement it            
 all creates a system which makes sense.  The person you bring in is           
 the person you thought did it.  If the defendant is trying to point           
 to other people, then they should have the guts to bring them in.             
 He said we ought to keep this and it is this area that the bill               
 does confusing damage to.                                                     
                                                                               
 Number 2432                                                                   
 REPRESENTATIVE PORTER said there are two reasons to object                    
 Amendment 5, the best one is that the people of the state of                  
 Alaska, in 1988, voted in an initiative that they were buying an              
 elimination of any form...                                                    
                                                                               
 TAPE 97-28, SIDE A                                                            
 Number 0000                                                                   
                                                                               
 REPRESENTATIVE PORTER continued...party to the suit, rather than              
 (Indisc.)  Consequently, we are half way back to where we started             
 from, unless the defendant brings in someone that they wish to make           
 this argument about that there will be an inability because they              
 are not a party to the suit, to describe somebody else's potential            
 responsibility.                                                               
                                                                               
 REPRESENTATIVE PORTER said it is terribly wrong to have what is               
 described as the empty chair, an argument that falls apart in two             
 different areas.  One, current law already creates an environment             
 for any case that has to do with an employee, employer and a third            
 party defendant.  Unless a third party defendant can show that this           
 employer, who can't be brought into the case because of the                   
 worker's compensation laws, is 100 percent at fault then any                  
 awarded damages don't get apportioned to that employer.  He said              
 there is already an area that creates the empty chair situation.              
                                                                               
 REPRESENTATIVE PORTER said there is a need for this kind of thing             
 and an elimination of joint and several liability because of the              
 strategy in some people's law firms to try and find a deep pocket             
 while trying not to name defendants who are judgment proof.  That             
 is to say, those who don't have any money.  It wouldn't do any good           
 to get a judgment against them because it wouldn't be beneficial in           
 terms of being able to recover money.  He referred to Michael                 
 Schneider's testimony that said there is a disincentive to sue                
 judgment proof people and that the deep pocket is someone they try            
 to go after.                                                                  
                                                                               
 REPRESENTATIVE PORTER said he has a bias for people who are in                
 business, to the extent that there is a presumption that they can             
 afford to do anything.  It is okay under the current result by case           
 law of apportion to fault if a defendant feels that they are being            
 singled out and there is someone else responsible.  It is okay for            
 them to have to go through the time and expense to bring somebody             
 else into this suit, but if the plaintiff doesn't want to then he             
 doesn't have to do so.  He did not feel that this is right and it             
 is what the people of Alaska thought when they voted against joint            
 and several liability.  The notion that all of a sudden this jury,            
 who is capable of deciding what damages we should have, has an                
 almost unlimited sideboards on what they could come up with are               
 now, all of a sudden, not capable of seeing a specious argument               
 about a potential defendant who may or may not have some real                 
 culpability in this thing.  He thought the jury could make this               
 judgment.                                                                     
 REPRESENTATIVE PORTER did not feel that the empty chair, except in            
 employer situations that are barred by law, would exist in any                
 event if there was any way, shape or form that there really was               
 someone else who was culpable because during discovery the fact,              
 that a defendant was going to lay responsibility on somebody else,            
 would come out.  The plaintiff has the opportunity to amend his               
 complaint and say this is true and we are going to accuse them as             
 well.  If there is an empty chair, it is because they don't think             
 that it is even worth it and the argument would fail or because it            
 is the employer which is already covered by law.   He said                    
 Amendment 5 should be rejected.  He said we should stick with what            
 the people wanted and the committee should eliminate joint and                
 several liability.                                                            
                                                                               
 Number 0395                                                                   
                                                                               
 CHAIRMAN GREEN asked if there was a situation where a plaintiff               
 loses his legs and knows that one person is guilty, but the case              
 involves five unknown people.  He asked if the one person should be           
 held responsible for the $500,000.                                            
                                                                               
 Number 0453                                                                   
                                                                               
 REPRESENTATIVE CROFT said you will find out, during discovery, who            
 you believe is responsible for your injury, it is your burden to              
 prove that responsibility.  He did not know how you would get an              
 anonymous person known as an actor to the injury.  You can                    
 speculate who might have contributed to the injury, but did not               
 know of a situation where you would get a situation where it was              
 "pretty sure they did it, don't know who they are."  He said a                
 plaintiff would sue who he thought did it.                                    
                                                                               
 REPRESENTATIVE CROFT said Representative Porter was right in his              
 colloquy with Mr. Schneider.  Some cases you might say that maybe             
 this person had a portion of fault in this case, but they are                 
 bankrupt and I don't want them involved in this case.  I'd rather             
 have all of the award be assigned to the two solvent people and               
 leave the third insolvent person out of the case.  He asked what              
 the remedy would be for that situation.  He questioned whether                
 defendants should be allowed to point everywhere or allow                     
 defendants to point, bring in and have the responsibility for that            
 insolvent person and let the jury sort it out.  The jury will                 
 either say that person is not involved and is not liable or they              
 will say they are liable, in which case you get some extra money in           
 attorney's fees.  The situation is solved by individual                       
 responsibility for who you bring into a lawsuit.  We don't know if            
 they don't bring in a person because they never thought they were             
 involved or if they are not bringing them in because they don't               
 have any money.  The way to sort this out is for the defendant to             
 bring that person into the case.                                              
                                                                               
 Number 0612                                                                   
 REPRESENTATIVE JAMES referred to Representative Porter's comments             
 on Amendment 5 and added that she had just a little bit of                    
 rebuttal.  Her attitude on this issue is that the plaintiff is the            
 one who is trying to get some recovery, some healing.  They are               
 doing it to this defendant.  The defendant, in her opinion, is also           
 a victim.  The perception out there is that it is too easy to take            
 someone to court.  As a plaintiff you have to make the choice of              
 whether or not you can win or lose, but there is an additional                
 possibility of winning a settlement.  The cost of defending a suit            
 is so high, settlement is a preferred option.  She suggested that             
 we need to do something to slow down the process to make it a                 
 little bit more difficult for a plaintiff to go after a deep                  
 pocket.  She said this plethora of lawsuits causes our courts to be           
 full and is the reason why there are more attorneys per capita in             
 Alaska than any other occupation.  She said SSHB 58 is an attempt             
 to slow this process down.                                                    
                                                                               
 Number 0811                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said she was right in a lot of ways about            
 the need to slow down the process.  He said it was one of the                 
 problems he had with SSHB 58, it does nothing to address the front            
 end of cases.  It addresses a case in the middle and addresses a              
 case in the end.  The bill doesn't do anything to expedite                    
 discovery, nothing to mediate or perform alternative dispute                  
 resolution at the beginning.  He reminded the committee that suits            
 are proliferated in and around Alaska.  The number of suits have              
 held steady with about 1,000 cases a year since 1988 according to             
 data taken about court system filings between 1988 and 1995 in the            
 superior court.  The number of district court cases declined from             
 532, in 1994, to 398, in 1995.  Cases are more or less holding                
 steady.                                                                       
                                                                               
 REPRESENTATIVE BERKOWITZ said there is probably an impression that            
 more cases are going to trial because there is more attention and             
 more hysteria whipped up about this subject.  He said in many ways            
 it is the perception of a problem, creating anxiety which adds to             
 the problem.  He said a debate based on facts would be able to                
 ameliorate many of the concerns about the court system.  He said we           
 need to address cases before they become frivolous.                           
                                                                               
 Number 0912                                                                   
                                                                               
 REPRESENTATIVE PORTER said the court system has just completed a              
 review and amendment of their discovery system regarding the amount           
 of motions that are available and other such things.  He said it              
 would be presumptuous of the legislature to jump in and not wait to           
 see the changes happen for a few years, to see what Judge Karl S.             
 Johnstone's work has accomplished.  These revisions include an                
 alternative dispute resolution (ADR).  He suggested that instead of           
 jumping into something, the judicial counsel can review existing              
 programs between this session and the next session.  He said the              
 state of Washington has an existing program in the area of                    
 mediation and added that we need to find out what is going on out             
 there.                                                                        
                                                                               
 Number 0976                                                                   
                                                                               
 REPRESENTATIVE PORTER said the provision in the offer of judgment             
 is aimed right after discovery has been accomplished so that a                
 person has a feel for how the case is, one way or the other.  The             
 offer of judgments section comes into play and will certainly                 
 induce early settlement, if at all possible.                                  
                                                                               
 Number 1021                                                                   
                                                                               
 REPRESENTATIVE CROFT referred to the 1988 amendment and its intent.           
 He said the ballot measure, now law, statement in support and                 
 opposition is that people are assessed damages based on their                 
 percentage of fault.  There will be a jury determination of it, the           
 amendment does not deal with who has to bring the guilty parties              
 into the case.  He questioned who has to take the burden to bring             
 them in if you say they did it.  He said SSHB 58 goes contrary to             
 the spirit of ballot measure 2 and creates a system where you can             
 have conflicting assessments of fault by multiple juries, then you            
 aren't able to assess damages on the basis of a person's degree of            
 fault.   There is a multiplication of lawsuits, rather than a                 
 simplification.                                                               
                                                                               
 Number 1100                                                                   
                                                                               
 REPRESENTATIVE CROFT said worker's compensation laws exists for the           
 empty chair but it is because we say, with the comprehensive                  
 worker's compensation law, that we're going to make a deal.   We              
 are wiping out the employees ability to sue, in exchange for quick            
 but limited damages in the compensation system.  He said it is a              
 product of saying you have no right to sue your employer for work             
 place injuries that creates the small, anomalous result there.  The           
 reason why the weird 100 percent provision has to come in is if               
 your employer is 100 percent liable, then you as the employee are             
 not liable at all.                                                            
                                                                               
 Number 1155                                                                   
                                                                               
 A roll call vote was taken on Amendment 5.  Representatives Croft             
 and Berkowitz voted yea.  Representatives Bunde, Porter, James and            
 Green voted nay.  Representative Rokeberg was absent for the vote.            
 Amendment 5 failed to be adopted.                                             
                                                                               
 Number 1193                                                                   
                                                                               
 REPRESENTATIVE CROFT made a motion to move Amendment 6, located on            
 page 3, line 11 through page 4, line 10: delete all material and              
 renumber the following sections accordingly.                                  
 Number 1197                                                                   
                                                                               
 REPRESENTATIVE PORTER objected to the motion.                                 
                                                                               
 Number 1200                                                                   
                                                                               
 REPRESENTATIVE CROFT said Amendment 6 removes the current general             
 statute of repose and said proposed Amendment 7 would discuss the             
 minor statute of repose.  He said the concept of a statute of                 
 repose is that, whether or not you know your cause of action, it              
 can die after a period of time, it can expire.  The statute of                
 limitations, that Alaska as well as every other state has,                    
 generally provide, Alaska globally provides, that the statute                 
 starts when you knew or should have known of your cause of action.            
 You have some reason to believe that you ought to be suing someone.           
 It is not just that I knew, I may not have treated this with                  
 reasonable diligence in investigating things.  I can honestly say             
 that I didn't know, but if a reasonable person would have known               
 then the clock would have started ticking and I might have been out           
 of time.  He said these are typically short periods, two, three.              
 For actions where it is sometimes harder to discover or evidence              
 doesn't go away that quickly, like contract actions, they allow               
 six.                                                                          
                                                                               
 REPRESENTATIVE CROFT said these cases are especially pernicious for           
 that exact reason.  For someone who was not at fault, had no way to           
 know about it and lose their rights before they would have had a              
 chance to get them.  He suggested a massive dose of radiation might           
 be an example for this type of situation.  These provisions do                
 nothing to discourage litigation because you had no way to know               
 about it.  In fact, they encourage some litigation.  If someone               
 comes into a law office with any type of claim and it is about to             
 reach eight years then you have to sue.  Under the general statute            
 of limitations and discovery you only have an incentive if there is           
 some reason to know of your cause of action.  Now things are just             
 going to be lost when you had no way of knowing.  You can                     
 investigate more thoroughly, discover whether you have a cause of             
 action or not.  It puts a devil's choice.  Lose it absolutely or              
 risk a frivolous lawsuit.  At some state of knowledge you are                 
 forced into that, it is seven years, 360 days and you question what           
 you should do.                                                                
                                                                               
 REPRESENTATIVE CROFT said the most objectionable thing is that                
 there are injuries that don't show up and referred to previous                
 testimony given to the committee.  He said this is a ridiculously             
 extreme provision, it says none shall be done.  Maybe there are               
 very few but, if you meet the threshold of discovery and within the           
 statute, why are we cancelling out those very few.  He questioned             
 that if the doctor couldn't say any, then why was the committee               
 saying never.                                                                 
                                                                               
 Number 1420                                                                   
 REPRESENTATIVE PORTER said there is a very good, legitimate public            
 policy why the committee is suggesting that there should be a                 
 statute of repose and one that fits into this general area of time.           
 He said any profession, doing business in Alaska, is required by              
 practical common sense to have liability insurance and that level             
 of coverage is expensive.  He said the insurance, called claims               
 made coverage, covers you for a period of time and for any claim              
 that is made.  When professionals retire, there is possibility of             
 purchasing what is called a "tail" to your liability exposure but             
 it is for an extremely limited time, most of them only are allowed            
 to be written for three years, but some go up to five years.                  
                                                                               
 REPRESENTATIVE PORTER said a statute of repose for eight years                
 would still leave a professional exposed for another three years to           
 possible lawsuits.  He felt Alaska ought to give its citizens the             
 opportunity to have the best professionals whether it is doctors,             
 lawyers, engineers, architects, contractors or some other                     
 professional.  It is well within reason that some people,                     
 especially those at a level of expertise, are going to go to some             
 state that has a statute of repose.                                           
                                                                               
 Number 1549                                                                   
                                                                               
 REPRESENTATIVE PORTER said if someone came into a law office it is            
 obvious that they have discovered damage or a problem, thus they              
 would fall under the statute of limitations as it is now because              
 the accrual has already started.  There was testimony about a six             
 year statute of limitations that the supreme court upheld saying              
 that there is an inability after a certain length of time to recall           
 facts correctly.  Memories fade, documents are lost and there                 
 should be a limited period of time after which you shouldn't be               
 accused because of a loss of those facts.  He said this is the                
 other area that makes the statute of repose correct.  The best                
 example of this logic is it applies to criminal cases.  He referred           
 to a case involving sexual assault and death that was perpetrated             
 by someone recently released from jail with a prior conviction for            
 a similar crime.  If that the person who committed that                       
 reprehensible act would not have been discovered within five years,           
 it would not have been possible to bring that person before the               
 court because of all of these things that decrease the likelihood             
 of having reasonable evidence, memories and documents.  He said               
 these reasons form the basis for the statute of repose which exist            
 in other states and criminal statutes and added that it is very               
 logical to apply it to this bill.                                             
                                                                               
 Number 1705                                                                   
                                                                               
 CHAIRMAN GREEN said section (b) seems to allow for a significant              
 number of situations that would not be subject to this statute.               
                                                                               
 Number 1717                                                                   
                                                                               
 REPRESENTATIVE PORTER said part of the process of compromise went             
 into the establishment of this list.  The list includes defective             
 products, any intentional fraud, fraudulent misrepresentation acts,           
 gross negligence and similar things do not fall within this statute           
 of repose because those limits have already been established.                 
                                                                               
 Number 1758                                                                   
                                                                               
 A roll call vote was taken on Amendment 6.  Representatives Croft             
 and Berkowitz voted yea.  Representatives Bunde, Porter, James and            
 Green voted nay.  Representative Rokeberg was absent for the vote.            
 Amendment 6 failed to be adopted.                                             
                                                                               
 Number 1812                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ made a motion to move Amendment 7, located           
 on page 4, line 14: following "provider", and delete "if the                  
 injured person is, on the date of the alleged negligent act or                
 omission, less than six years of age unless the action is commenced           
 before the person's eighth birthday", and insert "unless commenced            
 within eight years of the date of the alleged negligent act".  He             
 said this is the most confusing part of the bill for him.  It seems           
 that what we are doing is denying children the same protection that           
 we afford adults.  If a child somehow suffers a negligent injury at           
 the hands of a health care provider before the age of six, she or             
 he has to bring suit before the age of eight.  He said we don't               
 impose what is essentially a two year burden on adults, we give               
 adults a full eight years.                                                    
                                                                               
 REPRESENTATIVE BERKOWITZ said the example that springs to mind is             
 someone who negligently receives bad blood, maybe they go in for              
 surgery or stitches and there is no reason to suspect anything is             
 wrong until after they are eight-years-old.  This limitation would            
 bar such an action and he thought it was unfair.                              
                                                                               
 Number 1877                                                                   
                                                                               
 REPRESENTATIVE PORTER said it is not intended to and added that he            
 did not think it makes a restriction on kids that doesn't apply to            
 adults.  It actually gives an expanded statute of limitations to              
 kids whereas an adult would only have two years.  The outside of              
 this is eight years which is the statute of repose, six years plus            
 the two for the statute of limitations.  Otherwise, if there were             
 an injury to an infant or shortly thereafter and the parent who               
 makes the suit should have known that it happened, it doesn't make            
 any difference.  We won't bar those prosecutions because of the               
 statute of limitations, this expands it to six years plus two.                
 There was testimony that birth injuries in most cases are evident             
 within three years.  The vast majority of those injuries are                  
 evident by the time they get into preschool.  As opposed to be a              
 detriment to kids at that age, it is a positive exception to the              
 statute of limitations so that anything that might happen to a                
 child, during those years when there is an inability for them to              
 communicate like a normal child, there would be this exception.               
                                                                               
 Number 1978                                                                   
                                                                               
 REPRESENTATIVE CROFT said an exception used to be made for a minor,           
 until they were 18-years-old.  He said SSHB 58 changes the current            
 law in that we no longer allow to them to become adults before we             
 require them to know whether or not to bring up a suit.  He said in           
 many situations, but not all, it would be the parents who would               
 make that decision.  He said he was unsure of Representative                  
 Porter's comments on the statute of limitations, but this the bill            
 is no better on the statute of repose.  We should be treating                 
 children better.  Even though we have a number of exceptions, but             
 the exception for a child that turns eight and does not have anyone           
 looking after them is not there.  We are presuming that every child           
 is cared for by someone that has their best interests at heart and            
 also has a good legal foundation who knows that there is something            
 magical about the eighth birthday.  He said we should provide more,           
 not less, protection for children.  Whether we are doing that in              
 some respects under the statute of limitations, we should be doing            
 more under the statute of repose.                                             
                                                                               
 Number 2052                                                                   
                                                                               
 A roll call vote was taken on Amendment 7.  Representatives Croft             
 and Berkowitz voted yea.  Representatives Porter, James and Green             
 voted nay.  Representative Bunde abstained from voting and                    
 Representative Rokeberg was absent for the vote.  Amendment 7                 
 failed to be adopted.                                                         
                                                                               
 Number 2083                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ made a motion to move Amendment 8, located           
 on page 6, line 11: following "gain", delete "and", insert "or".              
                                                                               
 Number 2085                                                                   
                                                                               
 REPRESENTATIVE PORTER objected to the motion.                                 
                                                                               
 Number 2088                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said, rather than focusing on the entire             
 cap on punitive damages which he disagreed with, he focused on one            
 small word.  He said, whether it is a situation where someone is              
 running a stock scam or crashing a tanker into the rocks, there is            
 a situation where Sections 1 and 2 have to occur together.  He said           
 he could be running a stock scam, making piles of money without               
 anyone getting hurt.  When you put the conjunctive "and" into this            
 subsection it requires proof that both wrongful conduct in the                
 commercial activity and likelihood of death, serious physical                 
 injury occurred.  He said we would not want to encourage people to            
 perpetrate economic wrong on one another and the way to deter it is           
 to go after the proceeds and to punish them accordingly.                      
                                                                               
 Number 2150                                                                   
                                                                               
 REPRESENTATIVE PORTER said the "and" after line 11 makes one and              
 two a requirement in order to establish both and said this is for             
 a very good reason.  If you eliminate that "and" then the                     
 additional higher level of punitive damages could be awarded to               
 anyone who was in business, anyone who is in a commercial business            
 is motivated by financial gain.  If there is a business that is out           
 there which is not motivated by financial gain they would not be in           
 business for very long.  Consequently, to eliminate the limited               
 scope for which it was intended to cover he would not withstand               
 more criticism than he has already received for this section                  
 already.                                                                      
                                                                               
 Number 2198                                                                   
                                                                               
 REPRESENTATIVE CROFT said every business is motivated by financial            
 gain, but not every wrongful conduct or admission is motivated by             
 financial gain.  The "and" does say, that the connection with                 
 commercial activity be motivated by financial gain and said this              
 language could be cleaned that up a little.  It seemed to him that            
 you would want to identify areas that were particularly worrisome.            
 One such area would be where the wrongful conduct was motivated by            
 financial gain, another might be where serious bodily injury was              
 likely and that either/or would be appropriate in sanctioning those           
 at the higher level.                                                          
                                                                               
 Number 2241                                                                   
                                                                               
 REPRESENTATIVE PORTER said he could be talked into eliminating the            
 additional expanded cap, but not enhancing it.                                
                                                                               
 Number 2253                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said we are proceeding under the                     
 assumption that (Indisc.--coughing) are always on the receiving end           
 of suits, but there are some 8,000 small businesses that took                 
 advantage of wrongful conduct in order to begin a suit that                   
 resulted in punitive damages.  The businesses he referred to were             
 the commercial fishermen who achieved and earned punitive damages             
 based on the Exxon Valdez case.  Under this construction, he did              
 not think they would have been able to collect punitive damages.              
                                                                               
 Number 2289                                                                   
                                                                               
 REPRESENTATIVE PORTER said commercial fishermen would get punitive            
 damages within the provision of (b), they wouldn't get it under               
 (c).  The provision of (b), if the Exxon Valdez case had been in              
 state court, would have resulted in several billion dollars worth             
 of punitive damages within SSHB 58.  He said this bill does not               
 affect the Exxon Valdez settlement, this bill wouldn't affect it if           
 it happened the day after the day became enacted because it is a              
 federal case in a maritime area of law which does not revert back             
 to state law.                                                                 
                                                                               
 Number 2329                                                                   
                                                                               
 A roll call vote was taken on Amendment 8.  Representatives Croft             
 and Berkowitz voted yea.  Representatives Bunde, Porter and Green             
 voted nay.  Representatives James and Rokeberg were absent for the            
 vote.  Amendment 8 failed to be adopted.                                      
                                                                               
 Number 2349                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ made a motion to move Amendment 9 located            
 on page 10, lines 30 through 31: delete lines 30 and 31, page 11,             
 line 1: preceding "trained", delete (2)", page 11, line 2:                    
 following "issue", delete";and", insert "." and page 11, lines                
 three through six: delete lines three through six.                            
                                                                               
 Number 2361                                                                   
                                                                               
 REPRESENTATIVE PORTER objected to the motion.                                 
                                                                               
 Number 2370                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said a time honored response to an                   
 objection in court is to argue that the evidence being proposed               
 should be admitted and that the objection should not be sustained             
 because the objection merely goes to the weight versus the                    
 admissibility of the evidence.  In other words if someone has a               
 quarrel with evidence, they can argue against it and say it's not             
 important, its not relevant, it comes from a biased source.  This             
 provision attacks the admissibility of evidence that should be                
 admitted and be subject to examination based on its weight.                   
                                                                               
 REPRESENTATIVE BERKOWITZ said it is not always easy to get experts            
 to testify in the bush because of the expense.  He said this also             
 assumes that such an individual exists to discuss the standard of             
 care.  Once again the committee is in the position of determining             
 which standards of care might apply.  We could be talking about               
 someone who is whaling out of Barrow, there is no one who has been            
 licensed to do that.  He suggested that we limit the restrictions             
 imposed by this section and we allow it to revert to the body of              
 law that is pretty accurately described in the rules of evidence.             
                                                                               
 Number 2457                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said we are not always going to find                 
 people who are licensed, we are not always going to bring them in             
 and it poses an undo burden.                                                  
 Number 2462                                                                   
                                                                               
 REPRESENTATIVE PORTER said this expert witness qualification as it            
 says in the first line, "in an action based on....                            
                                                                               
 TAPE 97-28, SIDE B                                                            
 Number 0000                                                                   
                                                                               
 REPRESENTATIVE PORTER continued...expert opinion on that                      
 professional's negligence should be in the ballpark of the                    
 qualifications of that professional trained in the same basic                 
 disciplines.  He referred to a similar bill that was in the                   
 legislature a few years ago and said there were two or three pages            
 of much broader and restrictive language on who we thought would be           
 appropriate to testify in these kinds of cases.  This bill is                 
 really a mitigation of that two or three pages worth of                       
 requirements.  He said this bill recognizes that there might not be           
 specific boards in existence for some professions and if there                
 isn't then we don't expect it.  If there are specific boards then             
 that is where the knowledge should be obtained from to testify as             
 an expert.                                                                    
                                                                               
 Number 0045                                                                   
                                                                               
 REPRESENTATIVE PORTER referred to testimony in past years that                
 there are "hired gun" experts whose particular point of view on               
 certain things is well known and these people are sought to testify           
 in cases where that well known point of view would be of benefit to           
 a particular side of the case.  He said this is the reason for the            
 limited expert witness qualification provision.                               
                                                                               
 Number 0077                                                                   
                                                                               
 CHAIRMAN GREEN said instead of saying a profession who is licensed            
 if appropriate, the "if appropriate" is redundant because it is               
 implied that if they are not required to have a license there just            
 won't be a requirement.                                                       
                                                                               
 Number 0090                                                                   
                                                                               
 REPRESENTATIVE CROFT said this works to the advantage of closed               
 professional societies such as the law or medical professions.                
 This requirement is difficult to obtain in small communities.  When           
 a requirement is made that if you are going to sue a professional,            
 then one of their own professionals would need to testify against             
 them.  The more specialized the profession is or the smaller the              
 state, the harder it is going to be to get anyone to break ranks              
 and say they didn't do a good job in engineering, law, medicine, et           
 cetera.  For a long time there was a gentleman's agreement that you           
 didn't testify against someone else in your profession in a small             
 community.  You had to find someone else to say why their action              
 was wrong such as a professor of law or medicine, a chiropractor or           
 someone who wouldn't be ostracized from their profession for doing            
 testifying.  It is still problematic to prove that a professional             
 did anything wrong by forcing other professionals in the field to             
 testify against them, saying that the only people that the public             
 can trust are the people who are friends with the defendant.                  
                                                                               
 Number 0158                                                                   
                                                                               
 REPRESENTATIVE PORTER said this problem exists in another area that           
 he did not think anyone had any controversy with, the review                  
 committee on medical malpractice cases.  He said this isn't what              
 the particular provision says, on line 30, page 10, "may not                  
 testify unless a professional who is licensed in this state or in             
 another state or country".  If you find somebody who meets these              
 qualifications from other states, the board certification only has            
 to be recognized by people in this state.                                     
                                                                               
 Number 0194                                                                   
                                                                               
 REPRESENTATIVE CROFT said very often in a professional malpractice            
 you are talking about the community standards that are there, so it           
 is very difficult to get an outside opinion on what the Anchorage             
 practice is.                                                                  
                                                                               
 Number 0209                                                                   
                                                                               
 CHAIRMAN GREEN asked, if you had a professional who was falling               
 into this category, how would you establish the credibility of                
 witnesses who may not understand or be knowledgeable enough to                
 testify against the defendant.  He referred to an engineer on trial           
 and said you probably need someone who is a professional engineer             
 to make sure what the engineer did was wrong.                                 
                                                                               
 Number 0235                                                                   
                                                                               
 REPRESENTATIVE CROFT said you do want a professional opinion.  He             
 said the credibility of hired guns is pretty low and it is fairly             
 easy for any defense attorney to show that.   He said there are               
 questions that can be used to reveal their bias such as, "How many            
 times have you testified sir?",  "How many times have you testified           
 for the plaintiff as opposed to the defendant?",  "What are you               
 being paid for being here today?"  As an attorney you tell the jury           
 that this person is a quack and you tell it by proof.  You are                
 given free rein to go into their qualifications.  A plaintiff is              
 going to be better advised to get professional witnesses, but he              
 asked if this should be a requirement.  If you cannot find this               
 professional witness should you not be allowed anyone?                        
                                                                               
 Number 0276                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said usually what happens when you want to           
 introduce an expert is that you tell the other side and the judge             
 that you want to introduce an expert on this and that subject.  Out           
 of the presence of the jury there is some discussion about the                
 expert's qualifications.  You qualify as an expert by reason of               
 knowledge, skill, experience, training or education and you can               
 testify accordingly.  The judge will make a determination whether             
 someone who purports to be an expert is an expert.  The judge will            
 do the standard balancing test that always happen.  Is it more                
 prejudicial than probative to let this expert testify?  That way              
 hopefully you are weeding the quacks out before the jury has to               
 listen to them.                                                               
                                                                               
 REPRESENTATIVE BERKOWITZ said we already have well established                
 rules about experts.  There can't be more than three experts                  
 testifying in a case unless the court says it is too many or there            
 should be more experts who testify.  He said for the legislature to           
 try and superimpose the court's discretion in a particular area               
 without being aware of the particular facts and circumstances of              
 particular court cases.  He felt that it ran the risk of placing an           
 undo burden not just on plaintiffs, but also on defendants to                 
 produce the experts and this will ultimately work against the                 
 interest of justice.                                                          
                                                                               
 Number 0341                                                                   
                                                                               
 REPRESENTATIVE PORTER said with all due respect to the court                  
 system, that is the problem.  The courts are made up of individual            
 judges who have individual opinions on who should be able to give             
 an opinion in their court.  The very subjective rule that they can            
 consider experience, college or those things has a wide latitude of           
 wiggle room.  This bill tries to say that it is appropriate and               
 good public policy that if a professional is going to be judged,              
 then a professional of at least someone in the same general area              
 knowledge and background should be the person to offer another                
 opinion on the disputed action.                                               
                                                                               
 Number 0380                                                                   
                                                                               
 A roll call vote was taken on Amendment 9.  Representatives Croft             
 and Berkowitz voted yea.  Representatives Bunde, Porter, James and            
 Green voted nay.  Representative Rokeberg was absent for the vote.            
 Amendment 9 failed to be adopted.                                             
                                                                               
 Number 0401                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 10                  
 located on page 7, lines 6 through 7: following "of", delete "a               
 party", insert "both parties" and on page 24, line 6: following               
 "by". delete "a party", insert "both parties".                                
                                                                               
 Number 0404                                                                   
                                                                               
 REPRESENTATIVE PORTER objected to the motion.                                 
 Number 0406                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said the problem that he has with how this           
 section is structured is that once a judgment has been rendered it            
 seems a little peculiar to allow a person who has lost to dictate             
 the terms of payment.  A situation occurs where the plaintiff owes            
 medical bills, the hospital wants them to pay right away, but the             
 other side doesn't want to give me the lump sum.  They want the               
 amount to trickle out over a period of time and the plaintiff is              
 still stuck with the bulk of the medical bills.                               
                                                                               
 REPRESENTATIVE BERKOWITZ said he did not see how this section helps           
 reduce insurance costs or how it helps businesses.  The business              
 would have been adjudged guilty or if it is an individual, has                
 already been found to be liable.                                              
                                                                               
 Number 0475                                                                   
                                                                               
 REPRESENTATIVE PORTER referred to proposed Amendment 16 which would           
 make clear that what we are talking about in this periodic payment            
 section addresses future damages and not current medical bills or             
 anything like that.  He referred to line 8, page 7, the word                  
 "future" would be put back in with Amendment 16.  Assuming that               
 Amendment 16 would pass, we are left with the idea that the                   
 defendant should be able to elect this as well as the plaintiff.              
                                                                               
 REPRESENTATIVE PORTER said the defendant should be able to do this            
 because we are addressing future damages which are things that will           
 occur in the out years, may be paid in the out years.  This makes             
 sense because there have been studies that people who come by                 
 large, single amounts of money at one time have a propensity to               
 expend them much quicker then if they had come into the money under           
 normal circumstances.  This would leave someone who was injured and           
 unable to work in a position of costing the state.  This provision            
 is a benefit to the defendant if they can do this within the                  
 limited area of future damages where they might be able to set up             
 a strictly established annuity or periodic payment with the                   
 security that it will be there.  If this is set up correctly then             
 the money can be invested and there can be some return from the               
 investment and it will reduce the overall total that they would               
 have to put in, varying percentages of reduction based on what a              
 good investment year was.  It could make the difference between               
 somebody having enough wherewithal to set up this thing or going              
 out of business.  If they go out of business, nobody wins.  The               
 plaintiff doesn't get any money and a business shuts down.                    
                                                                               
 Number 0629                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said the plaintiff should be accredited              
 the same opportunity to spend the money as he or she chooses.  We             
 are all supposed to be people of free will, independent and if I              
 want to blow my money it is my prerogative.  If I want to hoard it            
 and use it wisely, it is also my prerogative.  It is unduly                   
 paternalistic for us to say we should dictate how a victorious                
 plaintiff is going to spend the proceeds of a lawsuit, whether it             
 is future or incurred damages.                                                
                                                                               
 Number 0679                                                                   
                                                                               
 A roll call vote was taken on Amendment 10.  Representatives Croft            
 and Berkowitz voted yea.  Representatives Porter, Bunde, James and            
 Green voted nay.  Representative Rokeberg was absent for the vote.            
 Amendment 10 failed to be adopted.                                            
                                                                               
 Number 0700                                                                   
                                                                               
 REPRESENTATIVE CROFT made a motion to adopt Amendment 11, located             
 on page 16, line 8, following "hospital" through page 16, line 31:            
 delete all material and insert "may not escape liability for the              
 actions or inactions of emergency room physicians by contractual              
 device, change in employment status, or purported notice to or                
 waiver by emergency room patients.  Nothing in this section is                
 intended to modify the standard of care for emergency room                    
 physicians or apply to a physician that is independently hired and            
 not associated with the hospital's provision of emergency                     
 services." and renumber the following sections accordingly.                   
                                                                               
 Number 0704                                                                   
                                                                               
 REPRESENTATIVE PORTER objected to the motion.                                 
                                                                               
 Number 0706                                                                   
                                                                               
 REPRESENTATIVE CROFT said the purpose of Amendment 11 is to                   
 enshrine Jackson v. Powers rather than contradict it.  The bill             
 would overrule Jackson V. Powers and Amendment 11 would take                
 essentially the text from the case and make it part of state law.             
 Jackson v. Powers is used because, in part, emergency rooms are             
 required services.  If you set up a hospital then you have to set             
 up an emergency room.  A hospital will financially benefit by the             
 provision of their general medical services and in exchange they              
 will provide emergency medical services.  The individual doctors              
 and hospital could not fracture the negligence picture by limiting            
 their liability where only individual doctors would be liable for             
 their own services.  In general, enterprises are liable for the               
 torts of their employees.  The businesses make a profit and part of           
 the cost of doing business is the harm their business caused.  The            
 more they can reduce the harm their businesses cost, the more                 
 profit they have.  It is an appropriate principle we've had in the            
 law for hundreds of hundreds of years.                                        
                                                                               
 REPRESENTATIVE CROFT said this provision of the bill is                       
 particularly troublesome in how it proposes to notify victims.                
 These are emergency room patients.  They are coming into a hospital           
 because a traumatic event has happened and there is a sign located            
 there that says Dr. so and so are your doctors, but the hospital is           
 not going to take any responsibility for what they do.  As a lawyer           
 that is confusing, as a non-lawyer that would be confusing.  He               
 questioned whether someone should or shouldn't be supervising those           
 doctors.                                                                      
                                                                               
 REPRESENTATIVE CROFT referred to testimony regarding this issue,              
 when a witness was asked if he would provide an employee, someone             
 he trusted enough to take responsibility of a situation, the                  
 witness said there were no employee doctors.  The doctors are all             
 independent contractors, a legal construction that most people                
 don't understand.  It depends on a multi-factored test.  In reality           
 those doctors don't work for the hospital, the hospital has                   
 contracted with those doctors to provide services or with Jane                
 Smith Inc., a doctor professional corporation.  He said not only is           
 your liability limited to that professional, it often limited to              
 that professional corporation of limited liability of which the               
 sole employee is Jane Smith.  It seems to be a poor trick to play             
 on the injured people of this state that when they go into a                  
 hospital they are given a notice that is confusing to understand.             
 If the notice was explained the injured person would still not have           
 an option and in any event they are not in the situation to make              
 much of a rational decision because they are injured.                         
                                                                               
 Number 0912                                                                   
                                                                               
 REPRESENTATIVE CROFT said there is a superficial appeal to having             
 only the individual person be responsible for their individual act.           
 It has been a principle of law, for some time, that an enterprise             
 is responsible for the ordinary conduct of its employees when they            
 do it.  A trucker hits somebody and that is Acme Trucking's                   
 responsibility because driving is within the performance of the               
 employee's duties.  If we don't allow this, we so fracture the                
 system that nobody injured by the normal conduct of an enterprise             
 can get recompensed.                                                          
                                                                               
 REPRESENTATIVE CROFT read the section from "Jackson v. Powers" that           
 he summarized, "we are persuaded that the circumstances under which           
 emergency care is provided in a modern hospital mandates the rule             
 we adopt today.  Not only is the rule consistent with the public              
 perception of the hospital as a multi-faceted health care facility            
 responsible for the quality of medical care and treatment rendered,           
 it also treats tort liability in the medical arena in a manner that           
 is consistent with the commercialization of American medicine.                
 Finally we simply cannot fathom why liability should depend upon              
 the technical employment status of the emergency room physician who           
 treats the patient.  It is the hospital's duty to provide the                 
 physician which it may do through any means at its disposal.  The             
 means employed, however, will not change the fact that the hospital           
 will be responsible for the care rendered by physicians it has a              
 duty to provide."                                                             
 REPRESENTATIVE CROFT said, in conclusion, a couple of red herrings            
 proposed by a witness who talked about how this might lead to this            
 or that.  The decision itself says that this holding is necessarily           
 limited.  We do not change the standard of care with which a                  
 physician must comply, nor do we extend the duty which we find non-           
 delegable beyond its natural scope.  Our holding does not extend to           
 situations where the patient is treated by his or her own doctor in           
 the emergency room; such situations are beyond the scope of acute             
 care.  Amendment 11 encapsulates those clarifications; if you are             
 treated by your own doctor then it is your own business, but if you           
 are treated in an emergency room then the emergency room will be              
 responsible if they individually or collectively harm you.  He said           
 this is a reasonable expectation of the people of this state.                 
                                                                               
 Number 1051                                                                   
                                                                               
 REPRESENTATIVE PORTER said if the people that he has talked to                
 about this particular area of the law had the opportunity to                  
 present opinions to the court, there is no doubt in his mind that             
 this court decision would have gone the other way.  The hospital,             
 by law, has to provide emergency room services and thus have                  
 entered into other agreements in order to provide this service.               
 There are reasons why in most cases, with the exception of                    
 intentional acts, businesses are held responsible for the acts of             
 their employees.  In many instances those businesses provide the              
 training of the function that the employee is doing.  In almost all           
 situations a business provides the step by step procedures for                
 their employees.  The business provides the supervision to see that           
 the employees are doing it this way and that way.  They provide the           
 discipline if that doesn't happen and controlling the purse strings           
 allows for some degree of control over other people.                          
                                                                               
 REPRESENTATIVE PORTER said none of these things accrue to a                   
 contract doctor in an emergency room.  The hospital doesn't have              
 the ability to set procedures for them.  They are an independent,             
 professional expert in the medical field and will apply what they             
 learned in medical school and in their own training.  They are not            
 trained or supervised by the hospital.  If you don't have the                 
 authority to control somebody's actions, you should not be held               
 responsible for them.  The hospital does not even have the                    
 authority to say they are not going to get into this field.                   
                                                                               
                                                                               
 Number 1196                                                                   
                                                                               
 REPRESENTATIVE PORTER said, since Alaska is not a state that                  
 requires professionals to have liability insurance, you could argue           
 that the hospital should check the qualifications of those doctors            
 to make sure that they have the basic qualifications, be diligent             
 in allowing them to have privileges in your hospital and require              
 the doctors to have liability insurance even though there is a                
 notice that you would or wouldn't understand and a notice                     
 requirement published in the paper once a year.  He said these                
 requirements would be a fair accommodation for the situation that             
 exists.                                                                       
                                                                               
 Number 1292                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said the judicial process can be thorough.           
 He disputed the assertion that those who disagree with Jackson v.            
 Powers wouldn't have had the ability to weigh in with the court              
 because just as the committee did last week, they could have filed            
 an amicus brief and made their position known.  He said he is sure            
 they had that opportunity to do it.  Therefore Jackson v. Powers is         
 a fairly well considered decision.                                            
                                                                               
 Number 1329                                                                   
                                                                               
 REPRESENTATIVE CROFT said the hospital did not teach them medical             
 procedures, but the hospital does have an opportunity and an                  
 obligation to see that they are supervised and to see to it that              
 training as well as the other two areas mentioned by Representative           
 Porter are done.  He said it is a circular argument that because we           
 can rely on them as independent professionals, who the hospital has           
 no supervision over, we don't have to supervise them and people               
 shouldn't expect that we are.  People rationally expect that there            
 are procedures, training and supervision in an emergency room as              
 there are other parts of the hospital.  If the hospital is not                
 doing these things, they should be.                                           
                                                                               
 REPRESENTATIVE CROFT said, the argument that emergency rooms are              
 required by law, is a trade off that we made.  We required                    
 hospitals to provide emergency rooms because we need them and to              
 the extent that there is a cost to do it, that cost is recovered by           
 the other operations of the hospital.  There are many other                   
 situations where we require businesses to do certain additional               
 things and they can allocate the cost in other areas.  He did not             
 think we would seriously argue with the legal requirement to run an           
 emergency room and that when you run it you should be responsible             
 for the conduct of the people you are employing.                              
                                                                               
 Number 1404                                                                   
                                                                               
 REPRESENTATIVE CROFT said this fracturization has happened before,            
 will happen again and has rarely been attempted in so dangerous a             
 situation.  For many years cabs tried to do this.  When you sued a            
 cab company, you found out that there were individual, independent            
 drivers.  He said when enough egregious examples occurred, we had             
 to go an fix the system because people were trying legal tricks on            
 the public.  He said this bill spotlights the risk, rather than               
 spreading it across the enterprise which is the reasonable                    
 approach.  The hospital is not going to be liable in all of the               
 cases, they are going to be negligent in very few cases.                      
                                                                               
 Number 1450                                                                   
                                                                               
 A roll call vote was taken on Amendment 11.  Representatives Croft            
 and Berkowitz voted yea.  Representatives Bunde, Porter, James and            
 Green voted nay.  Representative Rokeberg was absent for the vote.            
 Amendment 11 was failed to be adopted.                                        
                                                                               
 CHAIRMAN GREEN said the committee would reconvene tomorrow at the             
 call of the chair.                                                            
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to conduct, CHAIRMAN GREEN                    
 adjourned the meeting of the House Judiciary Standing Committee at            
 5:10 p.m.                                                                     
                                                                               

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