Legislature(1993 - 1994)
02/01/1994 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE
STANDING COMMITTEE
February 1, 1994
3:00 p.m.
MEMBERS PRESENT
Rep. Bill Hudson, Chairman
Rep. Joe Green, Vice Chair
Rep. Brian Porter
Rep. Eldon Mulder
Rep. Joe Sitton
Rep. Jerry Mackie
MEMBERS ABSENT
Rep. Bill Williams
COMMITTEE CALENDAR
HB 292: "An Act relating to civil actions; amending Alaska
Rules of Civil Procedure 49 and 68; and providing
for an effective date."
HEARD AND HELD IN COMMITTEE
*HB 325: "An Act relating to motorcycle safety and to use
of helmets by operators of motorcycles."
NOT HEARD
(* First public hearing.)
WITNESS REGISTER
MICHAEL SCHNEIDER
880 N St., #202
Anchorage, Alaska 99501
277-9306
Position Statement: Opposed HB 292
(Spoke via teleconference)
ROGER HOLMES
Biss and Holmes Law Firm
705 Christensen Dr.
Anchorage, Alaska 99501
Phone: 277-8564
Position Statement: Supported HB 292
(Spoke via teleconference)
MIKE FORD, Attorney
Division of Legal Services
Legislative Affairs Agency
130 Seward St., Room 404
Juneau, Alaska 99801-2105
Phone: 465-2450
Position Statement: Commented on HB 292
KATJA KIRSH
Alaska Environmental Lobby
P.O. Box 22151
Juneau, Alaska 99802
463-3366
Position Statement: Opposed HB 292
SAM SKAGGS
Skaggs and Ingalls, Inc.
709 Gold St.
Juneau, Alaska 99801
463-4843
Position Statement: Supported HB 292
REGINA McCLELAND
Chugiak Senior Center
222 - 424 N. Brickwood
Chugiak, Alaska 99867
Position Statement: Opposed HB 292
(Spoke via teleconference)
DARYL NELSON
Chugiak Senior Center
222 - 424 N. Brickwood
Chugiak, Alaska 99867
Position Statement: Opposed HB 292
(Spoke via teleconference)
BONNIE NELSON
Chugiak Senior Center
222 - 424 N. Brickwood
Chugiak, Alaska 99867
Position Statement: Opposed HB 292
(Spoke via teleconference)
RUTH CALLAN
Chugiak Senior Center
222 - 424 N. Brickwood
Chugiak, Alaska 99867
Position Statement: Opposed HB 292
(Spoke via teleconference)
SHERRIE GOLL
Alaska Women's Lobby
P.O. Box 22156
Juneau, Alaska 99801
463-6744
Position Statement: Opposed HB 292
GLENDA STRAUBE
1318 N St.
Anchorage, Alaska 99501
278-0840
Position Statement: Opposed HB 292
(Spoke via teleconference)
DICK CATTANAGH
1318 N St.
Anchorage, Alaska 99501
379-9568
Position Statement: Supported HB 292
(Spoke via teleconference)
GRANT CALLOW
425 G St., Suite 610
Anchorage, Alaska 99501
276-1221
Position Statement: Opposed HB 292
(Spoke via teleconference)
TIM DOOLEY
733 West 4th Ave.
Anchorage, Alaska 99501
279-7327
Position Statement: Opposed HB 292
(Spoke via teleconference)
JOHN SUDDOCK
604 W. 2nd Ave.
Anchorage, Alaska 99501
274-0594
Position Statement: Opposed HB 292
(Spoke via teleconference)
RUSS WINNER
900 W. 5th Ave., #700
Anchorage, Alaska 99501
Position Statement: Opposed HB 292
(Spoke via teleconference)
ERIC SANDERS
500 L St., #400
Anchorage, Alaska 99501
272-3538
Position Statement: Opposed HB 292
(Spoke via teleconference)
CHARLES McKEE
1508 W. 43rd. #7
Anchorage, Alaska 99504
Position Statement: Opposed HB 292
(Spoke via teleconference)
PREVIOUS ACTION
BILL: HB 292
SHORT TITLE: CIVIL LIABILITY
SPONSOR(S): LABOR & COMMERCE
JRN-DATE JRN-PG ACTION
04/23/93 1459 (H) READ THE FIRST TIME/REFERRAL(S)
04/23/93 1459 (H) L&C, JUDICIARY, FINANCE
09/10/93 (H) L&C AT 09:00 AM CAPITOL 17
01/27/94 (H) L&C AT 03:00 PM CAPITOL 17
01/27/94 (H) MINUTE(L&C)
02/01/94 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 325
SHORT TITLE: MOTORCYCLE SAFETY
SPONSOR(S): REPRESENTATIVE(S) BRICE
JRN-DATE JRN-PG ACTION
01/03/94 2012 (H) PREFILE RELEASED
01/10/94 2012 (H) READ THE FIRST TIME/REFERRAL(S)
01/10/94 2012 (H) LABOR & COMMERCE, STATE AFFAIRS
02/01/94 (H) L&C AT 03:00 PM CAPITOL 17
ACTION NARRATIVE
TAPE 94-5, SIDE A
Number 001
CHAIRMAN HUDSON convened the meeting at 3:17 p.m. and
explained the procedure to be used at this committee
meeting.
CSHB 292(L&C) - "An Act relating to civil actions; amending
Alaska Rules of Civil Procedure 11, 49, 68, 82, and 95; and
providing for an effective date."
Number 230
REP. PORTER moved the adoption of the CS for HB 292(L&C) and
brought it before the committee for their consideration.
No objections were heard, it was so ordered.
Number 240
MIKE SCHNEIDER, Attorney, testified via teleconference from
Anchorage. Mr. Schneider stated he opposed Section 3, the
statute of repose, because this section limits a victim's
rights by stating that an action may not be brought more
than six years past the first use of any product in the
manner intended, or substantial completion or six years past
the last act upon which a liability claim for injury or
death may be based. He added that Section 3 is a radical
change and basically places Alaskans in the position of
being second class citizens compared to most of the rest of
the United States.
Number 365
ROGER HOLMES, Attorney, Biss and Holmes Law Firm, responded
that if someone or some business intentionally commits some
wrongful deed, then the six year statute of repose would not
apply. Mr. Holmes stated that the current unlimited product
liability statute limits the manufacture of new goods in
this state.
MR. HOLMES said that Mr. Schneider made some very valid
points; life is a trade off and basically it is a political
decision.
Number 435
REP. MACKIE expressed concern over this section of the bill.
He stated he has thought this particular problem had been
taken care of and now he hears testimony on both sides of
the issue.
Number 441
REP. PORTER stated that adjustments were made in this
section as a result of testimony taken. The adjustment
changed the language from "date of manufacture" to the date
the product was first used.
REP. MULDER stated that the statute of repose is an
arbitrary one. It all comes down to a policy question, or
should we or shouldn't we have a statute of limitation.
Number 539
REP. PORTER raised and answered the question of why we have
a statute of repose. He stated that it helps create a
healthy and fair climate in Alaska for business. Rep.
Porter asserted that the cost of doing business is guided by
the cost of insurance and that "life's a risk" and a
"balancing act."
Number 581
MIKE FORD, Attorney, Division of Legal Services, Legislative
Affairs Agency, reiterated that in the case of an
intentional act that causes damages, the clock does not
stop. In the case of negligence, the clock stops after six
years.
TAPE 94-5, SIDE B
Number 000
CHAIRMAN HUDSON offered Amendment 13 to CSHB 292, j version:
on page 4, line 10, after "intentionally" insert "or
resulted from gross negligence, fraud, fraudulent
misrepresentation, or breach of an express warranty or
guarantee."
CHAIRMAN HUDSON asked for the committee's response to this
proposed language.
Number 015
REP. SITTON voiced his support for Amendment 13.
Number 020
REP. MULDER asked Mr. Ford to define the difference between
gross negligence and intentional activity.
MR. FORD stated he thinks everyone knows what intentional
means and the difference between that and gross negligence
is a matter of degree.
MR. FORD gave the example of simply not inserting a part in
a product which ends up causing damage to being grossly
negligent by acting outrageously.
Number 040
CHAIRMAN HUDSON asked Mr. Ford if there had to be intent
behind fraud as appears in Amendment 13.
MR. FORD replied there is usually an intentional element to
fraud.
Number 050
REP. MACKIE asked if the committee knew if airliners had
warranties.
CHAIRMAN HUDSON viewed an airline ticket as an expressed
warranty that you are going to land at the desired location.
MR. FORD felt that the ticket was only an agreement between
the passenger and the airline that they would perform to the
standards that a reasonable person would in that situation.
He said, for example, if we presume that they do everything
correctly and a defective part causes the plane to crash,
then the language in Amendment 13 may change the results.
MR. FORD commented that the court would probably read into
Amendment 13 the language it currently holds regarding
express warranty or guarantee, but he felt it was important
to leave it in the bill to make the committee's intention
clear. Mr. Ford added that this language was taken from HB
160 passed by the House last year regarding architects and
engineers.
REP. GREEN moved Amendment 13. No objections were heard; it
was so ordered.
Number 120
KATJA KIRSH, Alaska Environmental Lobby, testified in
opposition to HB 292. Ms. Kirsh stated that HB 292 in
particular would close the courthouse doors to some
pollution victims. She said HB 292 would prevent some
victims of pollution from seeking compensation from
polluters before the victims even know about the pollution
or that they have been harmed. The bill would stop a person
from bringing a lawsuit against a wrongdoer more than six
years after the last act which caused personal injury,
death, or property damage.
MS. KIRSH remarked that HB 292 would have a harsh impact on
victims of toxic pollution. Pollution can move very slowly.
First, it may take years for groundwater or soils to become
contaminated after a release of pollution uphill. Second,
toxic pollution causes diseases such as cancer, which only
show up years or even decades later.
MS. KIRSH added some examples to her testimony and provided
the committee with a written copy of her remarks that are on
file with the committee.
Number 187
SAM SKAGGS, Skaggs and Ingalls, Inc., testified in support
of HB 292. Mr. Skaggs related his experience with the
marketing of his product - the stroller pack. Mr. Skaggs
stated that after introducing the product, a number of big
name companies expressed interest, LL Bean and REI to name
two. These companies required Skaggs and Ingalls to procure
product liability insurance before they could sell the
stroller pack to them. It took two years to obtain this
insurance because 1) Skaggs and Ingalls were a start up
company with little track record, and 2) because Alaska is
viewed as having a hostile environment for manufacturing.
Mr. Skaggs related that they finally got a $500,000 face
policy costing $12,000. Mr. Skaggs explained that in order
to pay $12,000, a company would have to produce and sell an
incredible volume of stroller packs, and no way was that
going to happen.
Number 230
MR. SKAGGS summarized that HB 292 should pass as an effort
to stimulate manufacturing in this state.
Number 228
REGINA McCELLUM, Chugiak Senior Center, testified via
teleconference from Anchorage. Ms. McCellum stated that
there were two things in HB 292 that concerned her: 1)
seniors that are retired and not currently working do not
have a lost wage claim if injured, and 2) HB 292 allows
professionals to be independent contractors and does not
require them to be insured, thus allowing hospitals a way to
avoid liability.
Number 250
REP. PORTER replied that seniors who are not working would
not have a claim for economic compensation for lost wages as
there are none. But this does not preclude awards for
noneconomic awards and certainly does not preclude awards
for actual expenses.
Number 300
DARYL NELSON, Chugiak Senior Center, via teleconference,
expressed the same concerns as Ms. McCellum.
CHAIRMAN HUDSON replied that those concerns were alleviated
in Section 4.
Number 315
BONNIE NELSON, Alaska Public Interest Group, testified in
opposition to HB 292 via teleconference. She stated that
the current jury system, while not perfect, is great and we
should not be tinkering with people's civil rights. She
dittoed Ms. McCellum's concerns regarding seniors and
children regarding economic damages.
Number 350
CHAIRMAN HUDSON replied that HB 292 does not discriminate
against seniors in his estimation. He said HB 292 simply
tries to take into account what the future lost earnings
would be if a person was no longer able to work. If a
senior is injured, there are no lost earnings, and therefore
no award is made under that category. But that does not
preclude a senior from being awarded money for the other
areas covered in the law.
Number 370
REP. PORTER recounted his theory that the whole idea of tort
law is to make people whole, not rich.
Number 407
RUTH CALLUM, Chugiak Senior Center, via teleconference,
dittoed the concern that Regina McCellum had said that
seniors were being discriminated against in HB 292 because
they were not receiving a wage when the injury occurred.
Number 425
REP. PORTER noted that the anecdote Ms. McCellum used was
wrong and again stated that tort law is in place to make
people whole again, not rich.
Number 450
SHERRIE GOLL, Alaska Women's Lobby, testified in opposition
to HB 292. Ms. Goll expressed her concern about those
victims who have never seen a conviction in their case;
victims whose perpetrators have never been convicted of a
crime in any of the degrees excepted in the bill. For
instance, a batterer who has perpetrated a series of
misdemeanor assaults upon a person until that person becomes
severely harmed, even incapacitated. She noted these
persons are not covered by HB 292.
Number 020
REP. PORTER responded that he would be offering an amendment
that the cap on economic damages not be applied to those who
are the victims of an attempt to commit a crime, the
commission of a crime, or fleeing from a Class A or
unclassified felony. This would expand the bill to
alleviate the problem of a victim not being able to see
redress through the courts because a person charged with a
crime doesn't get convicted due to a technicality.
Number 043
MS. GOLL expressed concern regarding the deletion of the
exceptions to the cap of $500,000, the severely impaired and
disfigured people. Ms. Goll stated that these victims may
have lost their legs, been severely brain damaged, etc., and
$500,000 may not be near enough to cover them.
MS. GOLL suggested that "domestic partner" be used instead
of "spouse" in Section 25 because it discriminates against
unmarried people and those who may have been counting on the
victim's income to help them financially; i.e., aging
parents. Ms. Goll said she felt a $10,000 cap in any
circumstance was too low currently and would certainly be
too low 15 years from now if this bill passes.
REP. PORTER stated that another way to look at this is that
this provides $10,000 to someone who otherwise wouldn't be
entitled to receive anything. A nondependent has no claim
for an economic loss from someone's death. Rep. Porter
added that consequently the person shouldn't receive an
award for an economic loss, and HB 292 gives it to them
anyway.
REP. PORTER commented that HB 292 does not preclude persons
from suing for noneconomic damages. Rep. Porter again
reiterated that we are trying to make people whole, not
rich.
MS. GOLL stated that she had serious concern regarding the
statute of repose. Ms. Goll cited the example of a child
taking a prescribed drug at age 9, then at 14 research shows
that it is possible the drug may cause infertility and at
age 22 the child is indeed infertile that person has no
recourse.
Number 200
REP. PORTER replied that the statute of limitations is two
years from the time of discovery, not injury, so the
child/adult now 22 would have two years from age 22 to sue.
REP. PORTER added that HB 292 calls for when the victim
should have reasonably known about the problem.
Number 289
MS. GOLL suggested that HB 292 should require that insurance
rates go down by 30 percent and accessibility increased or
the law be repealed.
Number 310
REP. SITTON asked Ms. Goll, given our free market economy,
didn't she feel that the insurance companies will charge
whatever the market will bear?
MS. GOLL agreed.
CHAIRMAN HUDSON pointed out that he felt good about
including the medical practice guidelines in HB 292 as a way
of protecting not only the public but the medical community
themselves.
Number 335
REP. MACKIE questioned whether there is a net effect of HB
292 on insurance rates.
Number 343
REP. PORTER replied that any kind of provision that would
tie passage of this bill to some stipulation that insurance
rates decrease by X amount is a "bill killer, period."
REP. PORTER asserted that at a previous hearing in Juneau on
HB 292 both John George, an insurance lobbyist, and Dave
Walsh, director of insurance, testified that if HB 292
passes and does not lose the provisions it was based on,
subsequent court challenges, insurance rates will come down.
Number 401
GLENDA STRAUBE testified via teleconference in opposition to
HB 292. Ms. Straube stated that she was morally and
intellectually opposed to most of HB 292. Ms. Straube
believes the legislature should be required to prove to the
public in both quantitative and qualitative terms why there
is any need for HB 292.
MS. STRAUBE stated that for every study that shows that
insurance rates would go down if HB 292 passes, she could
show one that shows the opposite.
MS. STRAUBE suggested that HB 292 merely protects persons
and corporations from answering for their negligent acts.
Ms. Straube believes the legislature is asserting itself as
being tough on crime and lax on white collar crime.
CHAIRMAN HUDSON responded that Ms. Straube made some very
good points regarding the reporting mechanism to determine
the effect of HB 292, but he added that this committee was
not in this to "lawyer bash."
Number 477
DICK CATTANAGH, contractor, testified that in his business
there was no statute of limitation, he could be sued at any
time. Mr. Cattanagh stated that in regards to insurance
rates going down, he would refer the committee to the State
Division of Insurance who have published information
suggesting that, since the last tort reform, the rates have
come down. Mr. Cattanagh also pointed to a Harvard study
that indicates a decrease in insurance rates.
REP. MACKIE inquired if the insurance industry has indicated
that rates will go down.
MR. CATTANAGH replied yes; the insurance companies have
indicated they will weigh in with some figures when the bill
gets closer to the end.
Number 533
GRANT CALLOW testified from Anchorage against HB 292. He
stated he is a commissioner on the Commission on Uniform
Laws and, as such, was appointed to serve on the drafting
committee of the model periodic payment of judgments act in
1987. Based on his work with this committee he has
developed serious concerns regarding the same. Mr. Callow
added that no states have adopted the model because of the
controversy surrounding it.
Number 550
MR. CALLOW suggested that at the very least periodic
payments will not make the court system more effective; it
will be just the opposite, it will delay the process.
TAPE 94-6, SIDE B
Number 001
MR. CALLOW stated he would like to see some evidence or
assurance that insurance rates will indeed go down if HB 292
passes. Mr. Callow suggested a sunset clause to the bill.
Number 068
TIM DOOLEY testified from Anchorage against the bill. Mr.
Dooley stated he would like to see our free market system
preserved. He believes punitive damages are the one check
and balance we have on the forces of the free market.
Number 207
JOHN SUDDOCK testified from Anchorage against HB 292. Mr.
Suddock had particular concerns regarding the caps HB 292
places on noneconomic losses. He believes a tiny number of
people would be affected by this, maybe 20 or so claims a
year. Mr. Suddock stated that the claims are for people who
are catastrophically hurt or maimed such that it affects the
rest of their lives. It is common for lawyers to make a
video of these victims of a typical day they endure. Mr.
Suddock suggested that if the committee saw one of these
films they would not be limiting these victims' rights to
recover whatever a jury may award.
MR. SUDDOCK commented that the $500,000 doesn't stretch
nearly far enough in the case of a man who becomes a
paraplegic with a wife and five children. He suggested that
what happens in most cases is that the family breaks up and
the money is thus divided into at least two households, thus
the victim is generally left with much less then the
original $500,000.
Number 333
REP. PORTER stated that all the necessities needed to take
care of the health of the victim are covered under award for
economic damages. For example, any kind of rehabilitative
equipment or anything to make the victim's home more
hospitable, etc. Rep. Porter also suggested that the
anecdote used showed the family to be insensitive.
Number 345
MR. SUDDOCK added that he was just talking about anything
that would add a little grace to the victim's life, maybe
travel that would require an attendant. These are the areas
that will be effected by the deletion of the exceptions to
noneconomic caps. Mr. Suddock reiterated that this would
apply to only 10 to 20 cases a year in Alaska. Mr. Suddock
asserted that these are not the cases that drive the
insurance industry.
Number 350
REP. PORTER disagreed with Mr. Suddock and stated that it
was these kinds of cases that drive the insurance rates up.
Number 355
MR. SUDDOCK advised that the effect of these cases are
dwarfed by the smaller claims.
Number 369
RUSS WINNER testified via teleconference from Anchorage.
Mr. Winner opposed Sections 16 and 17 and stated that HB 292
will not reduce attorney's fees, and if that's what the
committee was after, then it should look to ways to speed
trials.
MR. WINNER also asked the committee to get some assurances
from the insurance industry that rates will indeed come
down.
Number 484
ERIC SANDERS testified via teleconference from Anchorage in
opposition to HB 292. He stated it was his understanding
that HB 292 was written substantially by the Citizens for
Tort Reform. Mr. Sander stated he does not understand why
we are reaching out to victims in the criminal context by
making laws harsher and then turning around and limiting
rights of victims in the civil context. A clear example of
this is in the provision in which there is a $10,000 cap to
certain people in a wrongful death context.
Number 555
CHARLES McKEE testified via teleconference from Anchorage in
opposition of HB 292. Mr. McKee proposed some language to
the findings and purpose section of the bill regarding the
patenting of manufactured items.
Number 580
CHAIRMAN HUDSON asked Mr. McKee to send his written
testimony to the committee.
Number 600
GABRIELL LEDOUX testified via teleconference from Kodiak
regarding her personal experience with the civil justice
system. Ms. LeDoux stated that one and one-half years ago
her husband and nine year old son were lost in a horrendous
automobile accident as a result of the egregiousness of a
truck driver.
MS. LEDOUX stated she opposed HB 292 because as it takes
away the rights of the most vulnerable segment of the
Alaskan population, those people who have been devastated by
the negligent acts of others.
MS. LEDOUX stated that two years ago she never expected to
be in the position she is now. Ms. LeDoux expressed her
feeling that for most of the committee this issue was
probably a political, academic discussion. Ms. LeDoux knew
that when she hears people say things like, "life's a risk,
a balancing act" she can tell that they have never been
confronted with a policeman stopping by to tell them that
their entire family has been wiped out.
TAPE 94-7, SIDE A
Number 001
DONALD MURRAY testified from the Matsu regarding HB 292.
Mr. Murray stated he had been injured in 1990 and is a
paraplegic and is in much pain. Mr. Murray told the
committee that if they think $500,000 is enough to
compensate for the kind of pain he lives with constantly,
they are wrong.
MR. MURRAY stated that if HB 292 had been in effect when he
got hurt the court house doors would have been shut.
CHAIRMAN HUDSON stated he would hold HB 292 in the committee
until the next committee meeting.
CHAIRMAN HUDSON adjourned the meeting at 6:13 p.m.
HB 325 was not heard today.
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