Legislature(1997 - 1998)

02/27/1997 09:38 AM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                HOUSE JUDICIARY STANDING COMMITTEE                             
                         February 27, 1997                                     
                             9:38 a.m.                                         
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Joe Green, Chairman                                            
 Representative Con Bunde, Vice Chairman                                       
 Representative Brian Porter                                                   
 Representative Jeannette James                                                
 Representative Norman Rokeberg                                                
 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.                                      
                                                                               
       - ADOPTED A ZERO FISCAL NOTE FOR CSHCR 11(JUD), WHICH MOVED             
         OUT OF COMMITTEE 2/26/97                                              
                                                                               
 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."                                             
                                                                               
      - MOVED CSSSHB 58(JUD) OUT OF COMMITTEE                                  
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HCR 11                                                                 
 SHORT TITLE: NORTHSTAR AGREEMENT LITIGATION                                   
 SPONSOR(S): REPRESENTATIVE(S) PHILLIPS                                        
                                                                               
 JRN-DATE      JRN-PG               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                       
 02/26/97              (H)   MINUTE(JUD)                                       
                                                                               
 BILL:  SSHB 58                                                                
 SHORT TITLE: CIVIL ACTIONS & ATTY PROVIDED BY INS CO.                         
 SPONSOR(S): REPRESENTATIVE(S) PORTER, Cowdery, Bunde                          
                                                                               
 JRN-DATE      JRN-PG               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                       
 02/26/97              (H)   MINUTE(JUD)                                       
 02/27/97              (H)   JUD AT 10:00 AM CAPITOL 120                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 No testimony was given                                                        
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-29, SIDE A                                                            
 Number 001                                                                    
                                                                               
 CHAIRMAN JOE GREEN called the House Judiciary Standing Committee              
 meeting to order at 9:38 a.m.  Members present at the call to order           
 were Representatives Berkowitz, Bunde, James, Green, Porter and               
 Croft.  Representative Rokeberg arrived at 9:42 a.m.                          
                                                                               
 HCR 11 - NORTHSTAR AGREEMENT LITIGATION                                       
                                                                               
 Number 022                                                                    
                                                                               
 CHAIRMAN GREEN announced the first item of business, 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."                                     
                                                                               
 CHAIRMAN GREEN indicated the resolution would be before the                   
 committee again, as the committee did not move the zero fiscal with           
 the resolution at the previous meeting.                                       
                                                                               
 Number 043                                                                    
                                                                               
 REPRESENTATIVE BRIAN PORTER made a motion to incorporate the zero             
 fiscal note to CSHCR 11(JUD) (which moved from committee on                   
 2/26/97).                                                                     
                                                                               
 CHAIRMAN GREEN asked if there was an objection.  Hearing none, the            
 zero fiscal note was adopted.                                                 
                                                                               
 SSHB 58 - CIVIL ACTIONS & ATTY PROVIDED BY INS CO.                            
                                                                               
 Number 072                                                                    
                                                                               
 CHAIRMAN GREEN announced the committee would hear 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 said the committee has                  
 already addressed the first 11 amendments.  He said the committee             
 would address Amendment 12, which was by Representative Croft/#6.             
                                                                               
 REPRESENTATIVE ERIC CROFT said, If there is no objection,                     
 Representative Berkowitz would offer Amendment 12.  Amendment 12              
 reads as follows:                                                             
                                                                               
 Page 25, line 18, following "be affected":                                    
      Insert "Sec. 64.  This Act sunsets if, on July 1, 2000, the              
 director of the Division of Insurance certifies to the lieutenant             
 governor and the revisor of statutes that the liability insurance             
 rates filed with the Division of Insurance have not been reduced by           
 at least 10 percent from those filed on January 1, 1997.  In this             
 section, "liability insurance" means insurance described under AS             
 21.12.070(a)(2).                                                              
                                                                               
 Number 093                                                                    
                                                                               
 REPRESENTATIVE ETHAN BERKOWITZ moved that Amendment 12 be adopted.            
                                                                               
 REPRESENTATIVE PORTER objected to the adoption of Amendment 12.               
                                                                               
 REPRESENTATIVE BERKOWITZ explained the reason for moving forward              
 with tort reform is to encourage the business climate in the state,           
 which he fully agrees with.  One of the prerequisites is that                 
 insurance rates decline as a result of the reform in tort.  He said           
 he misspoke at the previous committee meeting when he informed the            
 committee that in seven of the last nine years insurance rates have           
 declined.  He explained that decline was for workers compensation             
 insurance and not all types of insurance.  As a consequence for his           
 misspeaking, he would offer Amendment 12 in the hopes that the                
 insurance industry will have an incentive to reduce their rates               
 and, therefore, encourage business in the state.                              
                                                                               
 Number 196                                                                    
                                                                               
 REPRESENTATIVE PORTER said he wishes the civil justice system could           
 respond quickly, but it is an impossibility for insurance companies           
 to be able to lower rates immediately with the passage of one piece           
 of legislation.  That problem exists for a couple of reasons.                 
 First, the cases that currently exist and the ones that would be              
 filed up to the effective date of the bill must, by law, operate              
 under the existing laws.  Those cases could drag on for years and             
 an insurance company's exposure, as it currently exists with                  
 unlimited opportunity for damages in the noneconomic and punitive             
 damage areas, would remain on these cases for the next several                
 years while they wind their way through the litigation process                
 making it impossible to reduce rates immediately.                             
                                                                               
 REPRESENTATIVE PORTER said the secondly, the experience of other              
 states is that when comprehensive tort reform is passed, the                  
 challenges to virtually every provision are brought before the                
 courts over the succeeding, up to ten years, which was California's           
 experience.  Insurance companies also cannot make policy decisions            
 on policies until that kind of litigation has been settled.                   
 Representative Porter explained the California experience is                  
 probably one of the best indications of the fact that tort reform             
 can have a positive impact on rates, but it isn't necessarily going           
 to reduce rates.  As normal inflation and costs of services                   
 increase, so will rates to compensate people for wages, medical               
 costs and those kinds of things.  Tort reform is an ingredient, not           
 the single factor that affects liability insurance rates.  He gave            
 an example, on the national scale, relating to a Cessna airplane.             
                                                                               
 Number 469                                                                    
                                                                               
 REPRESENTATIVE BERKOWITZ said this tort reform package requires               
 sacrifice from plaintiffs and plaintiff's attorneys.  He said if we           
 are going to hold people's feet to fire, the insurance companies              
 should also be held to the fire.  He stated, "If we're really going           
 to promote reform, we've got to have some stick as well as a carrot           
 and I think this provides the necessary stick."                               
                                                                               
 Number 531                                                                    
                                                                               
 REPRESENTATIVE JEANNETTE JAMES referred to the issues of insurance            
 and tort reform and said the insurance that people need to do                 
 business, isn't available in many cases.  If there is any kind of             
 an advantage after tort reform, she believes some policies will be            
 written.                                                                      
                                                                               
 Number 561                                                                    
                                                                               
 REPRESENTATIVE PORTER noted he failed to mention that the                     
 amendment's provision was also discussed by the Governor's task               
 force.  There was testimony from the Division of Insurance that               
 they very adamantly opposed this kind of a provision.  Their                  
 rationale was that one of the problems with Alaska is our small               
 population and multitude of high risk occupations is that it is               
 difficult to get people to write insurance here at all.  He said              
 the division felt that with this kind of a provision, we would run            
 the risk of reducing the amount of insurance companies that would             
 even consider writing in Alaska.                                              
                                                                               
 Number 630                                                                    
                                                                               
 REPRESENTATIVE BERKOWITZ said he looks forward to working with his            
 colleagues on some kind of insurance reform because that is what              
 the tort reform question aims at.  He said he hopes that the                  
 insurance companies needs the warning shots being fired, because              
 they're next in the legislature's sights.                                     
                                                                               
 Number 666                                                                    
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG noted he is the chairman of the                
 House Labor and Commerce Committee with the purview of insurance.             
 He said he would be happy to work with Representative Berkowitz if            
 he wants to do some kind of a measuring criteria.                             
                                                                               
 CHAIRMAN GREEN asked if the objection to the adoption of Amendment            
 12 is still maintained.                                                       
                                                                               
 REPRESENTATIVE PORTER said the objection is still maintained.                 
                                                                               
 A roll call vote was taken Representatives Croft and Berkowitz                
 voted in favor of the adoption of Amendment 12.  Representatives              
 Bunde, Porter, Rokeberg, James and Green voted against the adoption           
 of Amendment 12.  Amendment 12 failed to be adopted.                          
                                                                               
 Number 730                                                                    
                                                                               
 REPRESENTATIVE CROFT moved Amendment 13 which follows:                        
                                                                               
 Page 6, lines 3 through 20:                                                   
      Delete all material.                                                     
      Insert new subsections to read:                                          
            "(b) Except as provided in (c) of this section, the                
      court shall require deposit into the general fund of 50                  
      percent of that portion of punitive damages award that is                
      equal to or less than the greater of three times the amount of           
      compensatory damages or $300,000.                                        
            (c) The court shall require deposit into the general               
      fund of 50 percent of that portion of punitive damages award             
      that is equal to or less than the greater of four times the              
      amount of compensatory damages or $600,000, if                           
                (1) the wrongful conduct or omission arose in                  
      connection with a commercial activity motivated by financial             
      gain; and                                                                
                (2) the likelihood of death or serious bodily injury           
      from the commercial activity was previously known by the                 
      person responsible for making policy decisions relating to the           
      commercial activity and the knowledge was gained from previous           
      instances of death or serious bodily injury arising from the             
      same wrongful conduct or omission, regardless of where the               
      previous wrongful conduct or omission occurred.                          
            (d) If a court or jury awards punitive damages under (a)           
      of this section, the court shall require that 100 percent of             
      the punitive damages award that exceeds the maximum amounts              
      described under (b) or (c) of this section, as applicable, be            
      deposited into the general fund or the Alaska permanent fund             
      under AS 37.13.010.  The party paying the punitive damages               
      shall elect which fund shall receive the money required to be            
      paid under this subsection.                                              
            (e) The provisions of this section do not grant the                
      state the right to file or join a civil action to recover                
      punitive damages."                                                       
                                                                               
 Page 16, line 4:                                                              
      Delete "due the statue under AS 09.17.020(d)"                            
      Insert "required to be deposited under AS 09.17.020                      
                                                                               
 Page 23, line 31, after "fund":                                               
      Insert "or the Alaska permanent fund"                                    
                                                                               
 Number 732                                                                    
                                                                               
 REPRESENTATIVE PORTER objected.                                               
                                                                               
 REPRESENTATIVE CROFT explained Amendment 13 addresses what happens            
 to the money over the cap.  He said he would remind the committee             
 that they are talking about people who have been found by a jury of           
 Alaskans, by clear and convincing evidence, which is the higher               
 standard that we have in the general portion of the civil area, of            
 malicious or conscious action and deliberate disregard for another            
 person.  Included in that would be intentional acts.                          
 Representative Croft said punishment is the root of punitive                  
 damages.  We have to have punishment sufficient to deter the                  
 conduct and to make sure that others, similarly situated, won't               
 have an incentive to do it.  As a mater of public policy, the                 
 courts have for some time not allowed punitive damages to be                  
 covered by insurance because they didn't want people buying                   
 insurance before committing horrible acts.  They don't want O. J.             
 Simpson to go out and buy punitive damage insurance before                    
 murdering.  Representative Croft explained the courts have held               
 that it is against public policy to buy punitive damage insurance.            
 He said his concern with this portion of the bill is that we're not           
 punishing appropriately to the defendants.  He said he would be               
 heavily punished by a $10,000 or $20,000 fine, but a $10,000 or               
 $20,000 fine to Exxon is not an effective punishment.                         
 Representative Croft said what the amendment says is anything                 
 awarded above Representative Porter's current cap structure would             
 go into the permanent fund.  Representative Croft said there are              
 certain constitutional concerns with dedicated funds.  The way the            
 bill is current written, it says that the plaintiff can take that             
 and put it in the general fund or the permanent fund as they wish.            
 He noted he had discussions with legislative legal, they have said            
 that may very well solve the constitutional problem as it isn't               
 being forced in to any other fund.  They are given the option and,            
 if so, they don't have to pay twice.  He urged that there be one              
 section that says let the punishment fit the crime and let the                
 people, rather than the wrong-doer, keep the money.                           
                                                                               
 Number 1071                                                                   
                                                                               
 REPRESENTATIVE PORTER responded that the amendment eliminates the             
 caps on punitive damages with the added inducement to inspire the             
 profit motivations of the state and all of the residents by saying,           
 "Maybe we should get this money."  He explained that the 1,500                
 cases that are filed that allege punitive damages are not against             
 Ford Motor Company or Exxon, they're against mom and pop businesses           
 that end up having to settle higher than they should because of               
 that unlimited exposure that would exist if Amendment 13 was                  
 adopted.                                                                      
                                                                               
 Number 1171                                                                   
                                                                               
 REPRESENTATIVE PORTER questioned what would have happened if the O.           
 J. Simpson dilemma happen in Alaska.  He said it happened in                  
 California, and notwithstanding what the jury awarded, the punitive           
 damage award is going to be reduced significantly because there is            
 a California law that says you cannot attach more than 25 percent             
 of anybody's future earnings, even with the kind of decision that             
 resulted in the Simpson case.  Sometime down the road that will be            
 reduced significantly.                                                        
                                                                               
 Number 1204                                                                   
                                                                               
 REPRESENTATIVE PORTER referred to the Exxon Valdez case and said              
 under the current version of the bill, the punitive damages would             
 have been in the area of several billion dollars and not $600,000.            
 He urged the committee members not to adopt Amendment 13.                     
                                                                               
 Number 1224                                                                   
                                                                               
 REPRESENTATIVE BUNDE referred to the profit motives of the state              
 and said if the cap is removed, then it would also appeal to the              
 profit motives of the personal injury attorneys whose contingency             
 fee would go up with the increase or lack of a cap.                           
                                                                               
 Number 1260                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ informed the committee there are a lot of            
 attorneys who live in his district.  Some are plaintiff attorneys             
 and some are defense attorneys.  He said he would note that the               
 defense attorneys seem to live in nicer houses and drive nicer                
 cars.  He said he thinks that what Representative Croft is pointing           
 out is that punitive damages are really awarded when harm has been            
 done, not just to the individual as it would be compensatory harm,            
 but to the community at large.  By putting the punitive damage                
 amounts in to the community's coffers, the community in a sense is            
 being made whole.  What this does is bring punitives back into a              
 form of compensatories for the community in total.  Representative            
 Croft said there aren't a lot of Ford Motor cases in Alaska, but              
 there are a lot of cases involving insurance bad faith and perhaps            
 aircraft malfunction.  We shouldn't write a law that prevents                 
 people who have been injured by large companies from seeking                  
 adequate redress.  The bulk of cases fall well within the caps, but           
 for those exceptions the bill would prevent people who have been              
 injured by large corporations or wealthy individuals from getting             
 adequate redress.  The people are of Alaska would be prevented from           
 being made whole in the form of punitive damages.                             
                                                                               
 Number 1353                                                                   
                                                                               
 CHAIRMAN GREEN said, "That is true statistically, but a vast                  
 majority of the cases would fall below these caps, but it's the               
 perception that what happens to a mom and pop operation that when             
 insurance rates are so high to protect that one or two that aren't            
 Ford Motor company.  And I think that's where we've got a problem.            
 How do we adequately serve those people to allow them to continue             
 to exist with a reasonable policy or a roll of the die saying, `I             
 won't take insurance that I can't afford, so I'll just take a risk            
 that nothing will happen and if it does, I'm dead meat,' and we               
 don't want that to happen to the entrepreneur."                               
                                                                               
 Number 1392                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said he grew up in a mom and pop type of             
 an operation.  He said he is sympathetic to the pitfalls of                   
 frivolous lawsuits and unsubstantiated punitive damage claims.  He            
 said we don't cure the problem after damages have been awarded.  We           
 cure the problem by preventing damage claims from being initiated             
 in the beginning and that the bar is set high enough so that people           
 can't even seek punitive damages unless prerequisites are met.                
 Representative Berkowitz said we set the bar high by allowing for             
 some sort of mediation or alternative dispute resolution at the               
 beginning.  The mom and pop operations can't afford to hire an                
 attorney every time someone comes around.                                     
                                                                               
 Number 1475                                                                   
                                                                               
 REPRESENTATIVE CROFT said currently juries are instructed that they           
 need to consider how outrageous the conduct was and what does it              
 take to deter this plaintiff.  Though we may differ sometimes with            
 an individual jury's determinations, that is what the jury is being           
 asked to find, and when the jury doesn't consider these factors,              
 that is usually the reason they are overturned.  He stated we know            
 how important proportionality is in the system and we will lose               
 that on the highest earning defendants and lose the ability to                
 effectively deter them.  He referred to the Simpson verdict and               
 said he has concerns that the Simpson verdict would be very much              
 lower under the bill.  He stated it was the noneconomic damage                
 rather than the wage earning potential of Nicole that got the                 
 compensatory up to a level where they can get it three times.  That           
 would be capped under the bill.  He referred to Representative                
 Bunde's comment and said there have been cases that determined                
 whether a judge could consider issues on the permanent fund given             
 that he would receive permanent fund dividends.  What they held was           
 there is a attenuated benefit from a $500,000 deposit now that goes           
 into the principal that might or might not come out as dividends.             
 He said we're really talking about pennies.  What's true for the              
 judges would be true for the juries.  Juries would want to                    
 effectively punish that defendant.  Because these cannot be covered           
 by insurance, it's a similarly attenuated loop that links punitive            
 damages to insurance rates because they are the only category of              
 damages that cannot be insured for.                                           
                                                                               
 Number 1608                                                                   
                                                                               
 REPRESENTATIVE PORTER referred to punitive damages and said there             
 was an adequate amount of testimony that indicates that punitive              
 damages has a great impact on the cost of settlement.  In 95                  
 percent of the cases that settle, in those cases where there are              
 claims made for punitive or noneconomic damages, the punitive                 
 damages has to be on the mind of the defendant and influences their           
 decision on how high to settle based on that exposure that is not             
 covered by rates.  If the settlement then results in an amount                
 higher than what it should have been, that is definitely going to             
 affect rates.                                                                 
                                                                               
 Number 1651                                                                   
                                                                               
 CHAIRMAN GREEN said the objection is maintained and asked for a               
 roll call vote.  Representatives Croft and Berkowitz voted in favor           
 of the adoption of Amendment 13.  Representatives Porter, Rokeberg,           
 James, Bunde and Green voted against the adoption of Amendment 13.            
 Amendment 13 failed to be adopted.                                            
                                                                               
 Number 1679                                                                   
                                                                               
 CHAIRMAN GREEN said the committee would address Amendment 14,                 
 Porter, H.5, which follows:                                                   
                                                                               
 Page 20, line 2, following "allocating":                                      
      Insert "fees and".                                                       
                                                                               
 REPRESENTATIVE PORTER said he has been advised that there would               
 probably be no objection to Amendment 14, which adds "fees and" so            
 it is consistent with two other references to fees and costs.  He             
 moved that Amendment 14 be adopted.                                           
                                                                               
 CHAIRMAN GREEN asked if there was an objection.  Hearing none,                
 Amendment 14 was adopted.                                                     
                                                                               
 Number 1717                                                                   
                                                                               
 REPRESENTATIVE PORTER said he has also been informed that there               
 wouldn't be an objection to Amendment 16 which follows:                       
                                                                               
 Page 7, line 8:                                                               
      Delete "[Future]"                                                        
      Insert "future"                                                          
                                                                               
 Page 8, line 1:                                                               
      Delete "[Future]"                                                        
      Insert "future".                                                         
                                                                               
 REPRESENTATIVE PORTER said a with the insertion of the term                   
 "future" that had previously been deleted, when they talk about               
 what portion of a judgment may be considered for periodic payments,           
 they are talking about future damages and not a current medical               
 bills.  He moved Amendment 16, H.7, Porter.                                   
                                                                               
 CHAIRMAN GREEN asked if there was an objection to Amendment 16.               
 Hearing none, Amendment 16 was adopted.                                       
                                                                               
 CHAIRMAN GREEN announced the committee would address Amendment 15,            
 H.6, Porter.                                                                  
                                                                               
 Number 1739                                                                   
                                                                               
 REPRESENTATIVE PORTER moved that Amendment 15 be adopted which                
 follows:                                                                      
                                                                               
 Page 10, lines 1 - 4                                                          
      Delete "The trier of fact may assign a percentage of fault to            
 [DETERMINE THAT] two or more persons [ARE TO BE TREATED AS A SINGLE           
 PARTY] if their conduct was a cause of the damages claimed and the            
 separate act or omission of each person cannot be distinguished."             
      Insert "[THE TRIER OF FACT MAY DETERMINE THAT TWO OR MORE                
 PERSONS ARE TO BE TREATED AS A SINGLE PARTY IF THEIR CONDUCT WAS A            
 CAUSE OF THE DAMAGES CLAIMED AND THE SEPARATE ACT OR OMISSION OF              
 EACH PERSON CANNOT BE DISTINGUISHED.]"                                        
                                                                               
 CHAIRMAN GREEN asked if there was an objection to the adoption of             
 Amendment 15.                                                                 
                                                                               
 Number 1743                                                                   
                                                                               
 REPRESENTATIVE CROFT objected.                                                
                                                                               
 REPRESENTATIVE PORTER said the amendment would make the provision             
 of this particular area of the law totally consistent with the                
 principle of apportionment of fault.  He said a section would be              
 deleted that was involved in the area of apportionment of fault.              
 He said he couldn't find a situation that this was trying to fix.             
 Representative Porter explained, "It is inconsistent with basically           
 saying that we think that a jury is very capable of apportioning              
 fault and that it somehow, if you had the ability to say that a               
 jury didn't want to try to make that choice, but thought that they            
 could combine the damage of two defendants into 1 percentage of               
 fault, it begs the question, `Well then who pays it?  Is that a               
 50/50 division between those two?  Does the deep pocket get nailed            
 again or what is it?'  So considering all of that, I think that it            
 is appropriate to leave the consistency of what it is we're trying            
 to get at - in place.  Have the jury apportion fault to any person            
 that is responsible and not try to mitigate that by saying `But if            
 you can't make up your mind between two, you can combine them.'               
 That doesn't seem consistent with apportionment of fault.                     
                                                                               
 Number 1829                                                                   
                                                                               
 REPRESENTATIVE CROFT said, "We're asking the jury to assign                   
 separate negligence to claims that, by definition, where the                  
 conduct was the cause of damage and the separate act or omission of           
 each person cannot be distinguished.  So we're telling them in this           
 very rare area where you cannot distinguish them, distinguish them.           
 It's logically flawed."  Representative Croft explained there are             
 situations where two people cooperate to cause a damage.  He said             
 if the fault is identical and the damage is identical, he doesn't             
 know on what basis a jury is going to divide.  He indicated it                
 would complicate the law.  Don't ask the jury to distinguish things           
 that, by definition, cannot be distinguished.                                 
                                                                               
 Number 1904                                                                   
                                                                               
 REPRESENTATIVE PORTER said that is part of the problem in that if             
 he can't find a reason for something, then he wonders why it                  
 exists.  He said the only fact situation he could come up with is             
 that if someone were to cross the street and simultaneously one car           
 hit him from one side and the other hit him on the other side,                
 although he doesn't think that kind of thing will happen.                     
 Representative Porter said it could be used as a device to get at             
 a deep pocket again.                                                          
                                                                               
 Number 1961                                                                   
                                                                               
 REPRESENTATIVE CROFT discussed a law school case, Summers v. Tice.            
                                                                               
 Number 2011                                                                   
                                                                               
 REPRESENTATIVE PORTER explained the other reason is it would be               
 totally inconsistent with existing law.  Section 09.17.080(d) says,           
 "The court shall enter judgment against each party liable on a                
 basis of severable liability in accordance with that parties                  
 percentage of fault."                                                         
                                                                               
 CHAIRMAN GREEN asked if the objection is maintained.                          
                                                                               
 REPRESENTATIVE CROFT indicated he still objects to the adoption of            
 Amendment 15.                                                                 
                                                                               
 Number 1739                                                                   
                                                                               
 A roll call vote was taken.  Representatives Rokeberg, James,                 
 Bunde, Porter and Green voted in favor of the adoption of Amendment           
 15.  Representative Croft and Berkowitz voted against the adoption            
 of Amendment 15.  Amendment 15 was adopted.                                   
                                                                               
 Number 2050                                                                   
                                                                               
 REPRESENTATIVE CROFT said, "Mr. Chairman, can I just put for the              
 record our prior conflicts back on.  I'm still not sure of the                
 procedure, but as stated before, Representative Berkowitz and my              
 prior conflicts on the record.                                                
                                                                               
 CHAIRMAN GREEN said he appreciates that and indicated it would be             
 noted.                                                                        
                                                                               
 Number 2096                                                                   
                                                                               
 REPRESENTATIVE PORTER explained there were a lot of questions                 
 during testimony, that could have deserved answers, but most have             
 been cleared up during the debate on the amendments.  He said he              
 would ask the committee members to consider that the task force               
 report is now a proposed piece of legislation that has been                   
 introduced by the Governor.  He asked the question of why does SSHB
 58 include many more ingredients than what the task force's bill              
 does.  He said his opinion is that it is because of the required              
 structure of the voting that the task force had.  Representative              
 Porter said he doesn't have any doubt that there was an attempt to            
 balance the task force with 50 percent pro and 50 percent anti.               
 Consumers or insurance companies weren't there.  He said a                    
 requirement to get an item included in the task force report was              
 super majority.  Representative Porter said if you're pro tort                
 reform, you would  look at proposing a new provision in law or to             
 propose a change in an existing area of law.  If there is a two-              
 thirds requirement to get something into the report, it will fail.            
 He said it is a benefit that 50 percent thought it was a good idea.           
                                                                               
 Number 2198                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said there has been some deliberation on             
 Representative Porter's bill.  In his opinion, it has been                    
 inadequate considering the sweeping changes that would be enacted             
 as a result of the bill.  The Governor's task force went through              
 their proposed bill in great detail.  He said clearly, there has to           
 be some vehicle for tort reform.  Representative Berkowitz                    
 explained the Governor's bill draws on the wisdom of people who               
 spent a lot of time contemplating what is going on.  He explained             
 he looks at it as buying a vehicle, either the Governor's vehicle             
 or Representative Porter's vehicle.  The Governor's vehicle has               
 been road tested as people have examined it, it runs, it works, it            
 services all our needs.  Some people aren't happy with the                    
 acceleration, some don't like the cargo space, but it works.                  
 Representative Berkowitz referred to Representative Porter's                  
 vehicle, and said it doesn't start or do what it's supposed to do.            
 It doesn't do anything to address frivolous lawsuits, it doesn't do           
 anything to advance the cause of plaintiff justice and it doesn't             
 really help business to any great degree.  He said in enacting any            
 sort of tort reform, we have to remember what the function is of              
 the judiciary.                                                                
                                                                               
 Number 2291                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said we live in a situation where when               
 there are adversarial impulses or conflict, we want to resolve                
 those conflicts in a structured environment because that promotes             
 the interest of justice.  We will never get to a perfectly fair or            
 just world, but procedures can be established that enable us to               
 reach out and get closer to that fairness and justice.  He said he            
 doesn't believe that Representative Porter's bill moves us closer             
 to fairness and justice.  He said he would be happy to work with              
 Representative Porter and anyone else who is involved to produce              
 civil justice reform that serves the interest of all Alaskans,                
 including plaintiffs, defendants, businesses and individuals.  He             
 said he would like to see the bill mature into a car that can                 
 drive.                                                                        
                                                                               
 Number 2337                                                                   
                                                                               
 REPRESENTATIVE JAMES explained the reason she supports tort reform            
 is because there is a cloud hanging over us and it is a threat                
 people feel when they go into business.  That threat makes people             
 do things differently or maybe not do them at all.  That pressure             
 needs to be relieved.  The benefits only remain to be seen over               
 time, but if another person is willing to put his investment into             
 creating an economic activity, the net receipts will more than make           
 up for any single individual who may be deprived of their ability             
 to get fair treatment.  Representative James said she supports the            
 bill.                                                                         
                                                                               
 Number 2393                                                                   
                                                                               
 REPRESENTATIVE BUNDE made a motion to move CSSSHB 58, with the                
 attached fiscal notes, out of committee.                                      
                                                                               
 CHAIRMAN GREEN asked if there was an objection.  Representative               
 Berkowitz objected.                                                           
                                                                               
 Number 2409                                                                   
                                                                               
 A roll call vote was taken.  Representatives James, Bunde, Porter,            
 Rokeberg and Green voted in favor of moving the bill.                         
 Representatives Croft and Berkowitz voted against moving the bill.            
                                                                               
 CHAIRMAN GREEN announced CSSSHB 58(JUD) moved out of the House                
 Judiciary Committee.  He thanked the committee for their                      
 participation.                                                                
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 Number 2459                                                                   
                                                                               
 CHAIRMAN GREEN adjourned the House Judiciary Committee meeting at             
 10:23 a.m.                                                                    
                                                                               

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