Legislature(2003 - 2004)
05/08/2003 08:05 AM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE SENATE JUDICIARY STANDING COMMITTEE May 8, 2003 8:05 a.m. MEMBERS PRESENT Senator Ralph Seekins, Chair Senator Scott Ogan, Vice Chair Senator Gene Therriault Senator Johnny Ellis Senator Hollis French MEMBERS ABSENT All members present COMMITTEE CALENDAR CS FOR HOUSE BILL NO. 1(JUD) "An Act relating to stalking and to violating a protective order; and amending Rules 4 and 65, Alaska Rules of Civil Procedure, and Rule 9, Alaska Rules of Administration." MOVED CSHB 1(JUD) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 214(JUD) "An Act relating to the recovery of punitive damages against an employer who is determined to be vicariously liable for the act or omission of an employee; and providing for an effective date." HEARD AND HELD HOUSE BILL NO. 224 "An Act relating to a tobacco product manufacturer's compliance with certain statutory requirements regarding cigarette sales; and providing for an effective date." ITEM REMOVED FROM AGENDA CS FOR HOUSE BILL NO. 46(STA) "An Act relating to printing of ballot titles and propositions on primary election ballots." MOVED CSHB 46(STA) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 49(JUD) "An Act relating to the deoxyribonucleic acid (DNA) identification registration system and testing; and providing for an effective date." MOVED SCS CSHB 49(JUD) OUT OF COMMITTEE SENATE BILL NO. 175 "An Act relating to civil liability for commercial recreational activities and for guest passengers on an aircraft or watercraft; and providing for an effective date." MOVED CSSB 175(JUD) OUT OF COMMITTEE PREVIOUS ACTION HB 1 - See State Affairs minutes dated 4/24/03 and Judiciary minutes dated 5/3/03 and 5/7/03. HB 214 - See Labor and Commerce minutes dated 4/29/03 and 5/1/03. See Judiciary minutes dated 5/6/03. HB 46 - See State Affairs minutes dated 3/18/03 and Judiciary minutes dated 4/9/03. HB 49 - See Judiciary minutes dated 5/2/03. SB 175 - See Labor and Commerce minutes dated 4/29/03. See Judiciary minutes dated 5/5/03. WITNESS REGISTER Representative Cheryll Heinze Alaska State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Sponsor of HB 1. Representative Ralph Samuels Alaska State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Sponsor of HB 214. Ms. Sara Nielson Staff to Representative Samuels Alaska State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Commented on HB 214. Ms. Marsha Davis, General Council ERA Aviation POSITION STATEMENT: Commented on HB 214. Mr. Mike Ford, Attorney Division of Legal and Research Services Division Legislative Affairs Agency Alaska State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Commented on HB 214 and SB 175. Representative Tom Anderson Alaska State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Sponsor of HB 49. Ms. Annie Carpeneti Criminal Division Department of Law PO Box 110300 Juneau, AK 99811-0300 POSITION STATEMENT: Supported HB 49. Mr. Mike Winded Alaska Travel Adventures Alaska Travel Industry Association 9085 Glacier Hwy Juneau, AK 99801 POSITION STATEMENT: Supported SB 175. Ms. Linda Anderson Alaska Travel Industry Association 9085 Glacier Hwy Juneau AK 99801 POSITION STATEMENT: Commented on SB 175. ACTION NARRATIVE TAPE 03-41, SIDE HB 1-STALKING & PROTECTIVE ORDERS CHAIR RALPH SEEKINS called the Senate Judiciary Standing Committee meeting to order at 8:05 a.m. Present were Senators Ellis and French. The first order of business to come before the committee was HB 1. CHAIR SEEKINS recapped that Senator Therriault's motion to amend HB 1 was before the committee in the last meeting and now he wanted to withdraw that motion. He announced that they would hold the bill until Senator Therriault arrived. SB 175-LIABILITY:RECREATIONAL ACTIVITY/BOATS CHAIR SEEKINS announced SB 175, version \S, to be up for consideration. SENATOR FRENCH noted that bungee jumpers were added to the list in the S version. He asked what spectrum of activities they would cover and if dude ranches were added. SENATOR ELLIS asked if there were dude ranches in Alaska. CHAIR SEEKINS said he heard there were several dude ranch organizations around Denali Park. SENATOR FRENCH asked if the liability of his son's Solid Rock Camp would be affected. CHAIR SEEKINS said he didn't know if that would qualify as a dude ranch, but most of those activities were covered under HB 176, livestock activities, on the floor today. He said they would put SB 175 aside temporarily. SENATOR THERRIAULT arrived at 8:17 a.m. HB 1-STALKING & PROTECTIVE ORDERS CHAIR SEEKINS announced HB 1 to be back before the committee. SENATOR THERRIAULT motioned to withdraw amendment 1. There was no objection and it was so ordered. SENATOR FRENCH asked if this parallels domestic violence restraining order statutes for stalking victims and if there was an emergency provision. REPRESENTATIVE HEINZE, sponsor of HB 1, replied yes, although domestic violence does not have to be a component of the stalking. CHAIR SEEKINS added there is an emergency provision. SENATOR THERRIAULT motioned to pass CSHB 1 (JUD) from committee with individual recommendations and attached fiscal notes. There were no objections and it was so ordered. HB 214-PUNITIVE DAMAGES AGAINST EMPLOYERS CHAIR SEEKINS announced HB 214 to be up for consideration. REPRESENTATIVE SAMUELS, sponsor of HB 214, explained that there had been discussions of the definitions of management and management agent in a previous meeting and that had been incorporated into a committee substitute. SENATOR THERRIAULT motioned to adopt SCS CSHB 214(JUD), version \Q. There was no objection and it was so ordered. REPRESENTATIVE SAMUELS said the substance of the bill didn't change, but the definitions were put in. He said the language in the bill is from restatements of the national standard, but it's even closer with this version. The definitions out of the VECO v. Rosemont case concerned sexual harassment outside the workplace. SENATOR FRENCH said the Alaska State Supreme Court reversed that saying that you couldn't give punitive damages for harassment outside the workplace. REPRESENTATIVE SAMUELS replied that in this bill "punitive damages may not be awarded unless the employee was employed in a managerial capacity and was acting within the scope of employment", which should include Senator French's concerns. MS. SARA NIELSON, Staff to Representative Samuels, said she talked with the drafter who said it was better to leave the definition broad, which would leave it up to the court. SENATOR FRENCH said he was more concerned with language on line 14 that says, "...was employed in a managerial capacity and was acting within the scope of employment." He thought the previous clause had to do with a renegade employee. CHAIR SEEKINS responded that if they are acting within their scope of employment their employer can be vicariously liable, but any foreman acting outside the scope of his employment and authority should not subject his employer to vicarious liability. SENATOR FRENCH said he thought the committee should keep in mind "that if we think we're adopting one rule when in fact the rule has consistently been interpreted the other way, we'd be wasting our time." In the Laidlaw case where the bus driver was smoking marijuana while she was on the job, you would believe intuitively that that was completely outside the scope of her employment. No one would believe that smoking marijuana would be part of a person's job. Yet, in the Laidlaw case, the court said, and I'll quote it, 'Moreover, the fact that Laidlaw policy explicitly prohibits smoking marijuana does not insulate the company from liability. A wrongful act committed by an employee while acting in his employer's business does not take the employee out of the scope of employment even if the employer has expressly forbidden the act.' That is partly why we are being very careful to limit the liability in this bill to someone other than the lowest level employee - I believe because of that result. And so, what we're doing, we're exempting the burger flipper, we're exempting the bus driver, we're exempting the people from the very lowest rungs of the business from making the employer liable. So, for that reason, within the scope of employment, is part of the battle, but managerial capacity is the other part. No one in their wildest imagination is going to say that the bus driver is a managerial employee, because he or she doesn't direct policy, doesn't make the call, doesn't direct a crew, isn't fulfilling or shaping how the company does business. For that reason I'm concerned about where we set the line in this managerial capacity definition. CHAIR SEEKINS said that the bus driver wasn't even legal to drive at the time and although he didn't want to reargue that case, he thought it was fair to say that in the future, employers should be held responsible for decisions that were made within the scope of authority, not of employment. REPRESENTATIVE SAMUELS said that they have to draw the line somewhere and if they draw it too low, the bill becomes worthless and that puts the entire company at risk again. "That's just not fair, first of all." SENATOR FRENCH said he still had a problem with the definition of managerial agent and wanted to know where in the VECO case this definition came from, because page 10 of the decision, footnote 12, says: A management level employee has been defined as one who has the 'stature and authority of the agent to exercise control, discretion and independent judgment for a certain area of business with some power to set policy for the company.' MS. NIELSON said that language could be used. "It wouldn't change it that much." CHAIR SEEKINS said that "agent" has a totally different definition than "employee." An agent would indicate someone who is not a regular employee, but is under contract or something like that. MS. MARSHA DAVIS, General Council, ERA Aviation, said the agent is a very broad concept in law. Using the term here does not restrict it from applying to employees. She said they didn't want the perception that they were trying to deviate from the restatement in terms of how the clause would be applied. This version uses the structure of section 909 of the restatement almost verbatim. The only difference is they inserted "employer" for "principal" - the only substantive difference with the attempt to define the concept of what is a manager agent. She also noted where the restatement sets out the general principal of law, there is a section called "comments" that adds examples for clarification. She said the fourth category is the one that hangs the employer out the most. It says if the employee who did the wrongdoing was at a high enough level, they are liable no matter how innocent the employer may be. For that reason in the comment section it says it's to deter an employer from hiring [questionable characters] for important positions. You assume the employer is acting within the scope and that the employer is vicarious. "That is a strict liability for the employers." But, when you step back to the next level, do they want to allow the punitive damages to be hooked to the employer? The Alaska Supreme Court has said no and it would only impose punitive damages on the employer if they met one of the four criteria. The restatement sets the standard quite high for strict liability for punitive damages. SENATOR FRENCH asked if she thought the VECO definition of a management level employee was adequate. MS. DAVIS replied it didn't give her too much heartburn. The independent judgment is the critical piece in the definition. CHAIR SEEKINS asked her, as an attorney who represents an employer, if she was comfortable with the CS. MS. DAVIS replied that she was extremely comfortable. SENATOR FRENCH said he would be interested in drafting a definition of managerial agent and management level employee to comport with what they just discussed coming out of the VECO decision. CHAIR SEEKINS noted that Senator Ogan had some concerns and he would hold the bill for him to comment. REPRESENTATIVE SAMUELS suggested after "employee" on page 2, line 1, inserting the definition that is in VECO and eliminate the rest of the sentence. It would read: ...means a management level employee with the stature and authority of the agent to exercise control, discretion and independent judgment over a certain area of the business with some power to set policy of the company. He said that language comes straight out of the footnote. SENATOR FRENCH and Ms. Davis agreed with that. CHAIR SEEKINS said they would hold that in abeyance until Senator Ogan could ask his questions. HB 46-PRIMARY ELECTION BALLOTS CHAIR SEEKINS announced CSHB 46(STA), version \H, to be up for consideration. REPRESENTATIVE MIKE HAWKER, sponsor of HB 46, said it relates to primary elections and offers voters a ballot option of having just ballot propositions and not any candidates on the ballot. SENATOR OGAN arrived at 8:43 a.m. SENATOR ELLIS applauded the sponsor because he stated this bill does not change the closed primary election system created by HB 193 in the last legislature. SENATOR THERRIAULT moved CSHB 46 (STA) from committee with individual recommendations and fiscal note. There was no objection and it was so ordered. HB 214-PUNITIVE DAMAGES AGAINST EMPLOYERS CHAIR SEEKINS announced that HB 214 was back before the committee. SENATOR OGAN said he was concerned with the vicarious liability issue and that past tort reform limited liability so juries couldn't award ridiculously high amounts in punitive damages. TAPE 03-41, SIDE B SENATOR OGAN asked for the liability to the employer to be explained using an experience he had this morning where a restaurant employee wasn't dressed appropriately and it raised a question in his mind about whether or not the employee washed his hands. MS. DAVIS responded that under this bill: ...the employer is strictly liable for the medical bills for all damages that flow from a patron because he's sick. This does not change any of the underlying [indisc.] of damages. Essentially, the public is protected from harm and the employer is the deep pocket no matter what those employees do - unless that employee were outside the scope of employment - that is not in a restaurant.... CHAIR SEEKINS said that in effect this isolates the company from having to pay the punitive damages for the outrageous behavior that was not authorized by the company of the employee who performed the outrageous behavior. MS. DAVIS added you would never see punitive damages come out of the type of situation Senator Ogan described, but, if the person was sick with typhoid and had intent to spread it, if the employer saw the employee not washing his hands and didn't do anything about it, he would be liable for punitive damages as well. SENATOR OGAN wanted to know the definition for managerial agent. MS. DAVIS replied it matches the restatement section 909 of tort. They are trying to capture someone who sets policy. She explained the use of comments in the law. MR. MIKE FORD, Attorney, Division of Legal Services, said he thought the important thing was to be clear on how precisely they want to define this and using the VECO definition would be fine. SENATOR OGAN referred to an incident where a helicopter pilot employee didn't follow company training policy and got in an accident to ask whether the company would be held harmless for anything other than the strict liability under this bill. MR. FORD replied that he wasn't sure that it would change anything, because they are trying to draw a line between someone who has the actual authority to create or modify the employer's policies and he didn't think the pilot did have that authority. CHAIR SEEKINS said the pilot didn't have the authority to change company policy and they are strictly liable for the actions, but they would not have to pay punitive damages against the pilot. MR. FORD added that's assuming the pilot is just the pilot. CHAIR SEEKINS said he likes to make the employee responsible for his own bad behavior. SENATOR OGAN said he struggles with that, because it relieves some of the employer's responsibility to monitor what goes on. CHAIR SEEKINS interrupted to say that they are strictly liable, but not for the punitive damages. SENATOR OGAN replied they have insurance for strict liability and they don't always have insurance for punitive damages. CHAIR SEEKINS said you couldn't insure against punitive damages. SENATOR THERRIAULT asked Mr. Ford whether an employer could be responsible for punitive damages if they had a set of procedures but training was inadequate. MR. FORD replied that the question would be whether this person has the power to set policy. If not, he would not be a managerial agent. SENATOR OGAN asked if, under this bill, the only way they could be sued for punitive damages is if their policies are not right. MR. FORD replied no, the question would be who did the wrongdoing and what kind of employee were they. Did they carry out policy or did they set policy? Every case rests on a specific set of facts and trying to come up with a rule that addresses all the cases is hard to understand. This reduces the facts to answer that. CHAIR SEEKINS asked if they were plowing new ground here as far as restatement of torts and other state laws. MR. FORD replied Alaska has some case law that is out of the main stream and by adopting the restatement of torts; we're not setting new law. CHAIR SEEKINS thought that they were bringing Alaska into the main stream of law with this bill and wanted to know if they were eviscerating anyone's rights. MR. FORD replied this bill does not set out in a bold new direction. SENATOR OGAN asked how many other states deal with vicarious liability. MR. FORD said he didn't know off hand, but he would find out. He understands that 25 - 26 states do follow the restatements point on this issue. REPRESENTATIVE SAMUELS commented this doesn't deal with just strict liability for compensatory damages, but if a company is found directly liable, you're still on the hook for everything, including punitive damages. This is only for vicarious liability where you're not found directly liable. SENATOR THERRIAULT asked if there had been an attempt to make the employer strictly liable and the court made a ruling that they are not. REPRESENTATIVE SAMUELS nodded yes. SENATOR FRENCH thanked Representative Samuels for saying "vicarious liability" as that is the correct term. SENATOR OGAN said he was worried that this change in law would cause an employer to be less than judicious about making sure their employees are behaving within the scope of their responsibilities. CHAIR SEEKINS pointed out that it only concerned punitive damages for an employee outside the scope of employment. He said he would hold the bill as a courtesy to Senator Ogan. HB 49-EXPAND DNA DATABASE CHAIR SEEKINS announced SCS CSHB 49(JUD), version \S, to be up for consideration. REPRESENTATIVE ANDERSON, sponsor of HB 49, said there were some concerns about what law enforcement can use DNA for in investigations and about destruction of the samples after exoneration or once someone has been convicted and how those are retained. He heard discussions about the latitude of inclusions of all felonies and misdemeanors. SENATOR OGAN said several years ago, burglary was added to the list of offenses for which DNA could be collected. This bill would require DNA samples from a couple of high school kids and lots of new offenses. DNA is not like fingerprints; it identifies your genetic makeup and propensity for you and members of your family for having certain diseases. He wanted to know why it was important to expand this capability to so many other crimes including some misdemeanors. MS. ANNIE CARPENETI, Department of Law, supported HB 49 and said they dealt with some of the privacy issues Senator Ellis raised yesterday. Mr. Chris Beheim, Director, Scientific Crime Detection Laboratory, Department of Public Safety, testified that he has data that shows how having the information in the bank from crimes you would not expect are necessarily related to one another really helps solve serious crimes that are committed after the initial one. MS. CARPENETI said the privacy concerns were good ones, but this bill answers those concerns. It's a limited purpose DNA bank - only for criminal investigation and identification. It's also limited to convicted offenders and volunteers. The information in the data bank and the samples are confidential and it is a Class C felony to misuse the samples or the data resulting from them. She recapped that the crime lab tests 13 sites on a DNA molecule. It's identification information that doesn't provide information about propensity for disease or family characteristics. It's true that the samples are saved, but that's to be able to double-check if a match is made. The only other time they would be used would be if another serious crime were committed where blood or semen is left. SENATOR OGAN said DNA is collected from many different things - urine, saliva and hair to mention a few. His concern is that this is good as long as the government is good and doesn't violate the Bill of Rights. But, there are people in jail now who have not had due process and no one has access to who they are; it's not public record and the trials are in secret. He carried his concern further saying DNA information could be very dangerous to a person like Saddam Hussein who might track down families of people he didn't like. SENATOR FRENCH said that no one would have their DNA taken until a jury has said they are guilty of a felony or they plead to it. So, he felt there was fairly significant protection in the bill for collection of DNA. Statistics from Mr. Beheim indicate that if you take DNA from people convicted of just drug crimes, of the next crimes solved, 18 percent are sex offenses and 23 percent are homicides. So, people who have a drug conviction frequently do a different and more serious type of crime and the same for forgery. He felt that just taking samples from felony criminals is a good balance. On page 3, line 27, the bill allows DNA analysis to be used for law enforcement purposes including criminal investigations and prosecutions and he thought deleting "law enforcement purposes including" would give some people comfort that you wouldn't have renegade usage of the DNA. He added that this bill allows DNA to be taken from a body part at a crime scene or something like that. CHAIR SEEKINS said they were thinking about inserting "deceased" in front of "unidentified person". SENATOR FRENCH approved of that. SENATOR OGAN supported deleting "law enforcement purposes including" and was concerned also with language on page 3, line 7, that said "or tissue sample from a crime scene as evidence or from an unidentified person or body part". The "or" creates a separate category. MS. CARPENETI suggested saying either "law enforcement identification purposes for identifying people and body parts", because that's not necessarily included in a crime scene investigation. SENATOR FRENCH felt that identifying a lost person was a separate issue from this bill. MS. CARPENETI said on page 3, line 7 they could delete "and" and on line 8, delete "person or body part" and insert "human remains". SENATOR THERRIAULT moved to adopt that as amendment 1. There was no objection and it was so ordered. SENATOR OGAN motioned to delete from page 3, line 27... TAPE 03-42, SIDE A "law enforcement purposes including". MS. CARPENETI said she was concerned about identification purposes. There was general discussion of wording. CHAIR SEEKINS asked if there was an objection to doing a conceptual amendment to use DNA for identifying unidentified human remains. There was no objection and amendment 2 was adopted. MS. CARPENETI suggested adding "or child kidnapper" - after "sex offender" on page 2, line 14 because that is a term the federal government uses. SENATOR THERRIAULT motioned adopting that as amendment 3. There was no objection and it was so ordered. SENATOR OGAN said he understood the connection, but he thought it would be a better bill if DNA were collected for felonies only. He said he was willing to make some sacrifices to live in a free society where he could keep and bear arms and he was willing to take the risk and delete DNA collection for misdemeanors. He announced his support for the bill would be contingent on that issue. SENATOR THERRIAULT moved to pass SCS CSHB 49(JUD) from committee with individual recommendations and the attached fiscal notes. SENATOR OGAN objected. Chair Seekins called for a roll call vote and the motion passed with Senators French, Therriault and Seekins voting yeah and Senator Ogan voting nay. SB 175-LIABILITY:RECREATIONAL ACTIVITY/BOATS CHAIR SEEKINS announced CSSB 175(JUD) to be up for consideration. He noted that bungee jumping and parasailing were now in the bill. MR. MIKE WINDRED, Alaska Travel Industry Association and Alaska Travel Adventures, supported SB 175. He said he was speaking on behalf of the industry and one of the larger companies. About 90 percent of the companies in the industry have five or fewer employees, which means they have much less ability to absorb increases in insurance costs. As nuisance suits go up and insurance rates climb (theirs went from 10 percent of pretax profits to 13 percent of pretax profits), it means that most of their employees won't get a substantial pay raise. Most of their company costs are fairly fixed and this bill would definitely help them give their employees some of the money they had planned on getting - for profit sharing and retirement and to pay raises. SENATOR OGAN asked if they provide those kinds of recreational services. MR. WINDRED replied they do everything - from lake canoeing, hiking tours, the salmon bake, etc. SENATOR OGAN asked if he thinks he has any responsibility to inform people who are using their services that they are using them at their own risk if this law is passed. MR. WINDRED replied yes, they do have a responsibility to inform participants of the inherent risks associated with the activity. They have people sign a sheet of paper saying they are aware of the risks and keep them for quite a while. SENATOR OGAN said those sheets of paper are more like a waiver, which is more like a psychological contract than a binding contract, because at the end of the day, a person can still sue. MR. WINDRED replied their sheets are not waivers; they are risk assumption sheets. They explain both verbally and in writing what the inherent risks are for that activity. They acknowledge what those risks are and have the opportunity not to go at that point. They are not waiving any rights to be able to sue. CHAIR SEEKINS said he thought this bill limited any liability of the providers of the sports events to negligence that is not associated with the inherent risk of the activity. MR. FORD said there is a provision on page 3, (c)(1), that specifies negligence of a provider that was not the result of the inherent risk. SENATOR OGAN asked if it was an inherent risk if someone incorrectly instructed you to put a piton in wrong for rock climbing. MR. FORD responded that is one of the key issues. Opinions can differ on what would be an inherent risk. The court or another reasonable person could agree with him or not. This kind of legislation is hard to craft because the rules we have occur in real fact situations where real people exist.... but, to come up with a rule that applies to all situations, you run into what I call the generic language... SENATOR THERRIAULT asked if language on page 2, line 29, saying that a person assumes inherent risk in a sport or recreation activity whether those risks are known or unknown is in there. MR. FORD replied that he thought they were trying to say they are not going to depend on the knowledge of the person who participates. This was not his language and he was a little confused about its meaning. He felt that an inherent risk would have to be known by the participant. SENATOR THERRIAULT asked where the language came from. MR. FORD said it came from a woman in Anchorage and she came up with a rewrite of the original bill. MS. LINDA ANDERSON, Alaska Travel Industry Association, said this language came from an attorney in Anchorage who has tried a number of these cases. CHAIR SEEKINS said there might some inherent risks someone might not know about and they were trying to get to what is common sense, although that differs from one person to another. SENATOR THERRIAULT asked Mr. Ford what would be lost if that sentence fragment were deleted. MR. FORD replied he didn't think it would greatly affect the bill. It raises the issue of whether those risks are unknown or known, but the question is to whom. He assumed it meant the person who participates, but he felt if it was unknown to the person, how could it be inherent. SENATOR THERRIAULT moved on page 2, line 29, to delete ", whether risks are known or unknown,". There was no objection and it was so ordered. SENATOR OGAN motioned to pass CSSB 175(JUD), version \S, from committee with attached zero fiscal note and asked for unanimous consent. There was no objection and it was so ordered. CHAIR SEEKINS adjourned the meeting at 10:15 p.m.