Legislature(2003 - 2004)
05/13/2003 08:07 AM Senate JUD
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
May 13, 2003
8:07 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. 151(JUD) am
"An Act relating to claims and court actions for defects in the
design, construction, and remodeling of certain dwellings;
limiting when certain court actions may be brought; and amending
Rules 79 and 82, Alaska Rules of Civil Procedure."
MOVED SCS CSHB 151(L&C) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 6
Proposing an amendment to the Constitution of the State of
Alaska relating to the duration of a regular session.
HEARD AND HELD
SENATE JOINT RESOLUTION NO. 18
Proposing amendments to the Constitution of the State of Alaska
relating to limiting appropriations from and inflation-proofing
the Alaska permanent fund by establishing a percent of market
value spending limit.
SCHEDULED BUT NOT HEARD
CS FOR HOUSE BILL NO. 102(STA)
"An Act relating to concealed deadly weapons."
MOVED CSHB 102(STA) OUT OF COMMITTEE
SENATE BILL NO. 198
"An Act relating to recovery of civil damages by a peace officer
or firefighter; and providing for an effective date."
MOVED CSSB 198(STA) OUT OF COMMITTEE
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 86(JUD) am
"An Act relating to state permitted projects; and providing for
an effective date."
HEARD AND HELD
PREVIOUS ACTION
SB 198 - See State Affairs minutes dated 5/8/03 and Judiciary
minutes dated 5/12/03.
HB 151 - See Labor and Commerce minutes dated 5/8/03.
SJR 6 - See State Affairs minutes dated 2/11/03 and 5/8/03.
HB 102 - See Judiciary minutes dated 5/12/03.
HB 86 - See Judiciary minutes dated 5/7/03.
WITNESS REGISTER
Representative Kevin Meyer
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 151
Mr. Richard Tilly
Interior Alaska Builders Association
Fairbanks, AK
POSITION STATEMENT: Supports HB 151
Senator Gretchen Guess
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SJR 6
Representative Hugh Fate
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 86
Mr. Jim Pound
Staff to Representative Fate
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions about HB 86
ACTION NARRATIVE
TAPE 03-46, SIDE A
CHAIR RALPH SEEKINS called the Senate Judiciary Standing
Committee meeting to order at 8:07 a.m. Senators Ogan, French
and Seekins were present. He announced the committee would first
take up SB 198, which the committee heard the previous day.
SB 198-DAMAGES RECOVERED BY POLICE/FIREFIGHTER
SENATOR OGAN moved CSSB 198(STA) from committee with individual
recommendations and the zero fiscal note.
CHAIR SEEKINS announced that without objection, the motion
carried. He then called a brief at-ease.
HB 151-DWELLING DESIGN/CONSTRUCTION CLAIMS
REPRESENTATIVE KEVIN MEYER, sponsor of HB 151, told members that
the bill provides homeowners and construction professionals with
a process to solve construction issues on new homes or major
remodels. It requires homeowners to provide written notice to
the construction professional at least 90 days prior to
litigation. If a homeowner's complaints have not been resolved
in a timely manner, the homeowner may proceed to litigation. He
pointed out that most complaints are handled verbally, but, for
those situations that are not easily resolved, this formal
process is being created. Both parties will sign a contract that
explains the process before any work begins.
REPRESENTATIVE MEYER said that under HB 151, the homeowner would
have one year from the date of the discovery of a defect to
proceed with a complaint. However, a homeowner cannot exceed the
current 10-year statute of limitations. He said this legislation
is important for several reasons. In Alaska, contractors and
homebuilders are required to carry general liability insurance.
Many insurance companies no longer provide general liability
insurance and the insurance that is available is very expensive.
The rising cost of insurance is often passed on in the price of
new homes. This problem is not unique to Alaska. Six other
states that are experiencing a housing boom have passed similar
legislation. He said this bill creates a win-win situation for
the homeowner and the homebuilder. He has heard no negative
comments about the bill. He said three conforming amendments
were made on the House floor. Because of those amendments, the
Senate Labor and Commerce Committee adopted a committee
substitute to make necessary changes. He recommended the Senate
Labor and Commerce committee substitute be considered as the
working document before the committee. He offered to answer
questions.
CHAIR SEEKINS affirmed that committee members were considering
the Senate Labor and Commerce committee substitute, labeled
Version B.
SENATOR ELLIS asked how a consumer would receive notice of the
one-year time limit in which to take action.
REPRESENTATIVE MEYER provided an example of a contract and an
attached explanation that informs the homeowner of the process.
SENATOR ELLIS asked if the explanation is clear and obvious.
REPRESENTATIVE MEYER said it is and that one of the amendments
made on the House floor required that the explanation of the
process be put on a separate page.
SENATOR OGAN referred to the language on page 6, line 16, of SCS
CSHB 151(L&C) that reads, "Within one year of the discovery of a
design, construction, or remodeling defect,..." and asked if
that essentially provides a one-year warranty on a house.
REPRESENTATIVE MEYER said the ten-year statute of limitation on
a home would still be in effect. The language Senator Ogan
referred to says that once a homeowner detects a problem, the
homeowner has up to one year to notify the builder of the
problem and then the process starts. He said more than likely, a
homeowner will notify the builder right away and will not wait
up to one year.
SENATOR OGAN said that proving a homeowner knew of a problem for
less than a year would be difficult. He asked what this law does
to change the current system.
REPRESENTATIVE MEYER said currently, if a homeowner detects a
problem, the homeowner could go directly to litigation and, to
avoid court costs, the parties often settle out of court.
SENATOR OGAN asked if the objective of this bill is to force the
homeowner to try to remedy the situation before going to court.
REPRESENTATIVE MEYER said, "Exactly." He said he believes the
homebuilder merely wants the opportunity to fix the problem. He
said he would characterize SCS CSHB 151(L&C) as a consumer
protection bill because it contains a formal process so that if
a homeowner is forced to litigate, the homeowner can show what
steps he or she took to address the problem. In addition, the
homebuilder will be highly motivated to correct the problem to
avoid litigation.
SENATOR ELLIS said one of the driving concerns of homebuilders
is the rising cost of insurance. He asked what representations
the insurance carriers in the state have made about their future
plans to reduce rates or maintain rates to justify the changes
that SCS CSHB 151(L&C) will make.
REPRESENTATIVE MEYER said that homebuilders say this bill "will
stop the bleeding." Their insurance rates are out of control.
Insurance companies have indicated that if some process is put
in place to try to control the costs, the rates will not
continue to accelerate as they have. He said he does not know
for sure whether it will stop any increase, but it will stop the
accelerated increase.
SENATOR ELLIS said he plans to support the legislation and hopes
for the best. He asked Representative Meyer to follow insurance
rates over the next few years to see if the increases slow down.
REPRESENTATIVE MEYER said he would do so and that the
homebuilders believe this bill will keep costs down.
VICE-CHAIR OGAN took public testimony.
MS. ROBIN WARD told members that nationwide insurance companies
and not Alaska companies write insurance policies. Those
companies have said that an indication of a stabilized market
will be legislation in the majority of states across the nation.
She just returned from Washington, D.C., where she worked with
representatives of the other 49 states to achieve some
legislation in each state.
VICE-CHAIR OGAN asked Ms. Ward whom she represents.
MS. WARD said she is the co-chair for legislative affairs for
the Alaska State Homebuilders' Association (ASHA). She then told
members that ASHA is trying to make itself more attractive to
nationwide insurers. ASHA is also working on better warranties,
better contracts, and safety programs. She said this legislation
is one very important component and Alaska is one "cog in the
wheel" in the nation. She said this legislation would help;
there are examples in other states where builders and buyers
have gone to court in which the buyer was more interested in
money than having the repairs done. When a homeowner submits an
insurance claim, the insurance company usually pays it without
managing it. She appreciated members' support of this
legislation and offered to answer questions.
VICE-CHAIR OGAN asked Ms. Ward if the problem is due to an
insurance crisis in general or if insurance carriers are pulling
out of Alaska.
MS. WARD said the problem is a combination of both. In addition,
the problem is partially due to timing. Insurance companies
never realized the claims in this business because they were
making a lot of money on investments. Now, they are going back
to their actuarial [tables] to look at their business profit
centers. Homebuilders' insurance policies are not one of those
profit centers because of a lot of construction litigation. She
said that only two carriers would write liability insurance
policies for homebuilders. One of the major carriers, State
Farm, is completely pulling out of homebuilder insurance in
Alaska. She said for homebuilders who can find a carrier, a
policy costs from two to ten times more.
VICE-CHAIR OGAN asked Ms. Ward if she believes this legislation
would help mitigate the decline in the number of insurance
carriers.
8:25 a.m.
MS. WARD said she does. She said ASHA is working with
representatives in Montana, Idaho, Wyoming and Washington State
to attract more carriers to the region. Those states have less
litigation than California, Arizona and other areas.
VICE-CHAIR OGAN asked the average insurance cost for a general
contractor.
MS. WARD said about $500 per house. She said the latest quotes
she received from two carriers in Alaska would increase that
amount to $3,000 per house.
VICE-CHAIR OGAN asked if an owner-builder would be required to
have insurance.
MS. WARD stated, "This will be mandated by a licensed
contractor. We're hoping that everyone will do it, including the
owner-builder." She said the reality is that owner-builders
often turn around and sell their homes to make extra money
because they are allowed to build one per year without a
license.
MR. RICHARD TILLY, representing the Interior Alaska Building
Association, a group of 190 builders, vendors, and suppliers in
Fairbanks, stated support for SCS CSHB 151(L&C). He said
securing liability insurance for homebuilders has become a very
expensive proposition. His company of 22 years requested quotes
from seven nationwide companies and found only one that was
willing to offer a quote. The insurance industry has claimed
that homebuilders are a risk and has been pulling out of the
state. He said this legislation creates a win-win situation for
the consumer, builder and the insurance industry. He pointed out
his insurance rates rose 20 percent last year and 22 percent
this year and he has never filed a single claim in 22 years.
MR. ALAN WILSON, a Juneau builder and the second co-chair of
ASHA's legislative affairs committee, told members that ASHA has
been working on this bill for over one year. ASHA met with
representatives of other states to hear their experiences with
similar legislation. Early reports from builders in Arizona show
the process is working well there. Homeowners are more
comfortable using the process to resolve issues. Builders are
responding to issues that are usually small but that could
become major. He said he believes this approach will be a breath
of fresh air from the consumers' perspective. He said that
insurance companies are in the business to make money so it is
not worthwhile to fight claims for up to $60,000. Homebuilders
have found that fraudulent individuals file claims for high
amounts when the cost of repair might be $5,000. They hope this
legislation will bring those activities to an end.
With no further participants, VICE-CHAIR OGAN closed public
testimony.
SENATOR FRENCH said his concern was addressed at the last
hearing, that being that this legislation effectively places a
roadblock between the consumer and the court. He said it appears
as though the roadblock is minimal and he believes it is a
reasonable compromise and should provide a better method to
resolve disputes.
SENATOR FRENCH then moved SCS CSHB 151(L&C) from committee with
individual recommendations and attached fiscal notes.
VICE-CHAIR OGAN announced without objection, the motion carried.
He then announced a brief at-ease.
SJR 6-CONST AM: 90 DAY LEGISLATIVE SESSION
SENATOR GRETCHEN GUESS, sponsor of SJR 6, explained to members
that SJR 6 proposes an amendment to the Alaska Constitution to
limit the legislative session to 90 days. She believes the
legislature can complete its work in 90 days, but doing so would
require some structural and operational changes. She said after
three-years in the legislature, she has seen a 60-day gestation
period, and then the policy work is done during the second 60
days. She said shortening the gestation period to 30 days
is reasonable. She said that prior to 1984, legislative session
time period was unlimited. After that time, the sessions were
limited to 120 days. The same number of laws has passed during
the shorter sessions. She believes the public process can be
accomplished and business completed in 90 days.
SENATOR FRENCH noted that this year, legislators were "hung up"
waiting for the Governor's budget. He said that is when the real
work begins. He said he believes 90 days is plenty of time to
get the work done but he is interested in tying the beginning of
the legislative session to receipt of the Governor's budget.
SENATOR GUESS said this year was an anomaly. Normally the budget
is prepared by December 15. She said the question of tying the
session to the budget dates is appropriate. She asked Ms.
Neilsen to address whether the House has discussed that
question.
MS. SARA NEILSEN, staff to Representative Samuels, told members
that question did not come up in House committees but they have
discussed starting the legislative session later, possibly in
March.
SENATOR GUESS said a big trigger mechanism to the legislature's
work is the budget forecast and it needs to be a driving force.
VICE-CHAIR OGAN announced that Senator Therriault had joined the
committee.
VICE-CHAIR OGAN pointed out that he co-sponsored this
legislation. He said the legislature has the ability, under
existing constitutional language, to change the month and date
of the beginning of the legislative session by law. He would
object to starting as late as March but he would agree to begin
at the end of January. He said he hopes that a shorter session
will result in fewer laws being passed.
VICE-CHAIR OGAN noted that no one had signed up to testify. He
then asked Senator Therriault, as a former Finance Committee
chair, how he envisions a 90-day session working.
SENATOR THERRIAULT said a 90-day limit could be a problem. He
asked members to keep in mind the balance of power between the
legislative and executive branches. This legislature is working
better with this Administration than it did with the previous
administration but, even now, the legislature must often wait
for information and legal opinions. He said that members of the
House get elected every two years and new members have a steep
learning curve. They need a certain amount of time to understand
the budget process and play a meaningful role. He said he does
not oppose a 90-day session but believes the consequences must
be studied in depth. He pointed out that a piece of legislation
on the floor today was introduced at the beginning of the
session and people are saying it was rushed through the process.
He asked what people will think if legislation gets passed in
90-day sessions.
SENATOR GUESS commented that Senator Therriault brought up some
good points that need to be thought through. She said the
legislature will have to think through when its organization and
orientation will take place, as well as the budget and election
year issues. She said she feels, as a public servant, she would
have to do more preparation work prior to the start of the
session. She said in her mind, shortening the session to 90 days
is a policy call as to whether legislators believe they can do
the work in 90 days and what kind of structure will be necessary
to ensure a good public process.
8:49 a.m.
SENATOR THERRIAULT noted that he recently had a conversation
with a freshman legislator who said it was difficult to start
the first day of session with no staff. A discussion about
swearing in newly elected legislators earlier has been taking
place. Perhaps consideration should be given to swearing in
legislators on the same day the Governor is sworn in. He said a
shorter session would also require that more work be done during
the interim. He said in his experience, half of the legislators
have full-time jobs so committees with specific interim
requirements would need members with flexible employment
situations. In addition, that would drive up the cost during the
interim.
SENATOR GUESS said the cost of work done during the interim is
less than the cost of work done during session. She said from
her personal experience as a citizen legislator with a full-time
job, if there is predictability in the schedule, she could work
around it.
VICE-CHAIR OGAN said he has spent a lot of time in the
contracting business; his philosophy is that a job takes as long
as one is given to do it. He felt that Senator Therriault's
concerns are legitimate and the legislature might need to look
at providing committees with authority to take action on
legislation during the interim. He said his phone rang
constantly when he was first elected. He had no staff and
constant demands on him although he was not sworn in for two
months. He said another consideration is that right before
session begins, many people take vacations during the holidays.
CHAIR SEEKINS said his main concern was that after he was
elected, he felt handcuffed by not having any staff. He said
that problem should be addressed if the legislature wants to
shorten the session. He said he would look favorably upon this
legislation with a few modifications.
SENATOR GUESS stated that the concerns that have been raised are
good ones. She agreed that orientation needs improvement,
regardless of whether this legislation moves forward.
SENATOR ELLIS asked the date of the spring revenue forecast.
SENATOR SEEKINS said it is usually released in the first part of
April.
SENATOR ELLIS asked if the Governor's budget was released on
March 5.
SENATOR GUESS said she believes that is correct. She then asked
that the committee hold this bill for further work on the
structure of a 90-day session.
CHAIR SEEKINS announced he would hold the bill in committee.
TAPE 03-46, SIDE B
HB 102-CONCEALED DEADLY WEAPONS
OFFICER MIKE COUTURIER, representing the Anchorage Police
Employees Association, stated support for the proposed changes
[in Version Q]. Peace officers support anything that provides
them with a better tool to ensure everyone's safety through more
detailed instruction about what to do when contacted by peace
officers.
SENATOR FRENCH asked Officer Couturier who would be educating
the public about the bill requirements regarding notification
before entering a home with a concealed handgun or notifying
police officers that one is carrying a concealed handgun.
OFFICER COUTURIER said the trainer would inform anyone obtaining
a concealed carry permit if this bill passes. The majority of
people handling concealed weapons receive their training [during
the permit process]. He said he believes once a person has a
concealed carry permit, that person would be on a mailing list
for updates to any changes to the state law. He said:
As far as a person that owns a residence that happens
to have a guest that happens to be carrying a weapon,
and the homeowner, knowing that the person is supposed
to provide them with that information, that's part of
the onus that we all share in educating the public on
current law and changes to the law. And partially as a
responsible citizen of the state we all have a
responsibility, of course, to know what the laws are
and to obey them. Certainly some public forum of TV or
municipal channels would assist in educating the
public and those are the options that I see.
SENATOR FRENCH said it sounds like Officer Couturier is assuming
the instructional courses under the current system would
continue and it is through those courses that people would learn
the provisions of the law. He said he is skeptical because he
believes this bill will repeal the need for a permit and make it
less likely that someone will spend the money to take a class.
CHAIR SEEKINS remarked that a person would still need a permit
if he or she wants to carry a concealed weapon outside of the
state because a person will not have reciprocity without a
permit. In addition, a person with a permit can buy a handgun
without the waiting period because the necessary background
check has already been done. Therefore, it is still beneficial
to take the training classes to get the actual carry permit.
This bill will not make criminals out of people who wear a
jacket over a weapon when they are carrying it legally. He said
he would imagine that gun shops, the NRA, and outdoor
organizations will do everything they can to educate the general
public. It will not be required by statute, but if this law is
to work, those organizations know it is incumbent upon them to
educate the public.
OFFICER COUTURIER said he needed to back up because when he read
the bill he did not read anything that said permits would no
longer be required.
CHAIR SEEKINS replied, "You can carry concealed now without a
permit - if you do so in a lawful manner."
SENATOR FRENCH read, to clarify the nature of the bill for
Officer Couturier, the following excerpt from the sponsor
statement:
HB 102 repeals the concealed carry laws that require
permits to carry deadly weapons, including handguns,
knives and other legal-to-own deadly weapons. It does
not repeal any of the restrictions on where a person
can carry a concealed weapon, such as on school
grounds, in courthouses or on private property, where
the owner may prohibit such weapons.
CHAIR SEEKINS noted the third paragraph reads:
It does not eliminate the state's concealed carry
permit program for two reasons.
OFFICER COUTURIER apologized and said he did not have the
sponsor statement. He said the support of his organization might
not be as strong because the Anchorage Police Department
Employees Association certainly feels the need, prior to
contacting someone - whether that be on a traffic stop or just
contacting them on the street, to know ahead of time or upon
recontact that the person has a concealed carry permit. He said
if there were no system that allows the peace officer to know a
person has a concealed carry permit, he would not know whether
or not the carrier is violating. The Association feels the
concealed carry program provides a valuable tool that the police
department uses daily.
SENATOR FRENCH said he believes one valid reason for this bill
is that it is difficult for people who live in the Bush to
qualify for a concealed carry permit because the courses are
only taught in metropolitan areas. He suggested it might be
possible to offer the information that the peace officers want
conveyed to people before they are allowed to carry a concealed
weapon through either an Internet session or a correspondence
course.
OFFICER COUTURIER said his organization feels it is very
important to have this tool as it makes contact safer; they
would hate to lose this tool.
SENATOR FRENCH commented there may be some way to lower the
level of qualification to get a concealed carry weapon permit,
still convey the information, and allow law enforcement to have
some knowledge of who has a concealed carry weapon permit.
CHAIR SEEKINS indicated the State of Vermont has this law; that
state has one of the lowest crime rates in the nation.
SENATOR OGAN said the police officers he spoke with were
supportive of the concealed carry law because they felt, "Well,
the bad guys are all packing, we might as well let the good guys
pack too." He noted when a person is stopped the police officer
runs their identification through the APSIN system, which
contains criminal records. He said it seems if a police officer
runs a check on a person and finds they have a clean record, the
police officer would feel there is some reasonable amount of
certainty the person is not going to be a threat.
OFFICER COUTURIER said that is a reasonable assumption but we
live in a world of exceptions. He said it is just a matter of
having another tool in the peace officer's tool bag to approach
each situation in the safest way possible.
CHAIR SEEKINS thanked Officer Couturier.
9:15 a.m.
SERGEANT DAVE PARKER, Anchorage Police Department, told members
he was contacted the previous day about this legislation. One of
his concerns is that this bill will put honorable gun owning
citizens in a higher risk situation. He understands there will
be an effort to provide education on the concealed carry laws,
particularly about when a person can use lethal force. However,
having trained concealed carry permit applicants for three
years, he has found [the police department] is able to do a much
more thorough job of teaching about when lethal force can be
used and about the laws surrounding the use of force. If this
concealed carry bill is enacted, he is concerned that people
will be acting in ignorance. He would hate to see gun owners get
into trouble because they do not know the law. He said the
police department has no problems with concealed carry permit
gun owners because they have undergone the necessary education
to get the permit. He likened the process to getting a driver's
license.
MR. PARKER said carrying a concealed weapon in the Bush is not
the problem; problems occur in the high-density urban areas. He
said the current law is a good one. If the law is changed, the
good citizens will be the ones who have problems.
CHAIR SEEKINS asked Mr. Judy to inform committee members about
the State of Vermont's experience with this law.
MR. BRIAN JUDY, National Rifle Association, said the State of
Vermont is the one state without a prohibition on concealed
carry of weapons. According to FBI statistics, the State of
Vermont consistently falls near the bottom of the list of states
in terms of crime. Last year, Vermont ranked 49th out of the 50
states in violent crime. He said the law is working well; law-
abiding citizens are not causing problems. He pointed out in
Alaska, one does not need a permit to carry a firearm openly,
nor is a permit required if a concealed firearm is being carried
for a lawful outdoor activity. Therefore, a fairly wide segment
of people are already carrying firearms without undergoing
training. Under existing law, a person who is dressed in a
manner that is not compatible with open carry is required to go
through the government program, pay fees, be fingerprinted, and
get on a government database merely to cover the firearm.
Regarding the training issue, he told members in the large
number of states with concealed carry permit laws, the required
training runs the gamut; Vermont is one extreme. Washington has
a concealed carry permit law with no training requirement for
law-abiding citizens. Washington has approximately 250,000
licensed permit holders. Washington has no problems with those
permit holders. The empirical evidence in all states shows that
concealed weapons permit holders are not causing problems. He
pointed out that Alaska experienced a significant reduction in
violent crime after its concealed weapons permit law was
enacted. He told members the NRA supports HB 102, as it believes
it is good public policy.
CHAIR SEEKINS said as a young man, he was a resident of the
State of Washington. At that time, he had a concealed carry
weapon permit to carry a 22 rifle for hunting. He said all he
needed was a good reason for the State of Washington to issue
the permit. He asked if that is still the case.
MR. JUDY said a person does not have to provide a reason in the
State of Washington, similar to the current law in Alaska.
Issuance of a permit is mandatory for law-abiding citizens who
can lawfully own a firearm.
CHAIR SEEKINS asked if he, as a permit holder, would be covered
if he puts a revolver in the console of his truck but his wife
would be breaking the law if she unknowingly borrowed his truck
with the gun in it.
SENATOR OGAN said the officer who last testified said it is
legal to carry a concealed weapon in one's automobile right now.
SENATOR FRENCH pointed out that in the April 4, 2003 letter Mr.
Brady sent to Representative Croft about the 1995 changes to the
concealed carry weapons law, he wrote, "Opponents screamed
hysterically that blood would run in the streets." He asked
whether that really happened or whether it was rhetorical
flourish.
MR. JUDY said that was not rhetorical flourish. In 1993 or 1994,
when HB 351 was initially introduced, people made hysterical
claims and predictions. He still has the white paper done by
certain members of the law enforcement community in which they
predicted traffic stops turning into shoot-outs. He said those
were the kinds of claims being made in other states in the 1980s
that were making the same public policy change. In every single
state, the empirical evidence showed that was not happening. He
said that "bad" guys are going to continue to cause problems
regardless of the level of training.
SENATOR OGAN said he believes Switzerland requires all citizens
to be in the military. After they get out of the military, they
take their weapons and uniforms with them and can be called back
at any time. He said that Switzerland has virtually no crime.
CHAIR SEEKINS said when he visited Switzerland he was told that
policy has kept Switzerland neutral for many years.
SENATOR OGAN moved CSHB 102(STA), \Q version, with individual
recommendations and attached zero fiscal note.
SENATOR FRENCH objected.
The motion carried with Senators Ellis, Ogan, Therriault, and
Seekins in favor, and Senator French opposed.
The committee took a brief at-ease.
HB 86-INJUNCTIONS AGAINST PERMITTED PROJECTS
REPRESENTATIVE HUGH FATE, prime sponsor of HB 86, told members
that for too long, properly permitted projects have been delayed
before ground is ever broken. Projects are often put on hold
because our current [legal] system allows individuals or
entities to stop projects without a legitimate reason and
without any serious consequences. Adding the language in HB 86
to the code of civil procedure means that those who file
malicious or bad faith claims in an attempt to stop a project
must realize that the economic effects of their actions will be
increased. This bill is written to give the defendant a cause of
action and to provide guidance to the court when determining
damages.
REPRESENTATIVE FATE said in most cases, when a project is
permitted, the contractor begins the process of purchasing
materials, hiring subcontractors and employees, and essentially
commits to go to work. The economic damage of even a temporary
forced work stoppage far exceeds attorney and court fees. This
bill requires the responsible party or plaintiffs to assume
economic responsibility for their actions if the court
determines the action was improper. He said this legislation has
been closely scrutinized and has been determined to be
constitutional, legally clear, and it contains no provisions
that will violate due process. He emphasized the court will
determine whether the cause or action was improper.
SENATOR THERRIAULT asked if a court would have to dismiss a case
and declare it to be malicious and ungrounded before the
permittee could initiate the civil action.
MR. JIM POUND, staff to Representative Fate, said this would
happen at the injunctive part of the process. If an injunction
were granted, which is an extensive process, the cause of action
would fall into place when the determination was made that the
case was based on unfounded, bad faith, or malicious claims.
SENATOR THERRIAULT asked if he was granted a permit through the
agency process and someone moved for an injunction, which the
court denied, whether he would then make a claim in civil court
that the filing for injunctive relief was a bad faith action or
whether the court would have to make a proclamation on the
request for injunctive relief before he could initiate a civil
action.
REPRESENTATIVE FATE said his understanding is that a plaintiff's
filing for injunctive relief will not be granted by the court if
the court finds the cause of action was filed in bad faith. If
injunctive relief is not granted, the project continues.
However, that does not stop the court from determining the
plaintiff had just cause in filing the cause of action for
injunctive relief. In that event, it is likely the court would
rule for injunctive relief, in which case there would either be
a delay or the project would be stopped. The beauty of this
piece of legislation is that it actually allows the court to
determine whether the cause of action was filed in bad faith or
was malicious.
CHAIR SEEKINS said under normal circumstances, if a court
determines that the plaintiff is liable under this law, the
court would initiate damages at a damages hearing. If not, it
would be incumbent upon the defendant's attorney to file a
motion for damages. He said he has observed that when lawsuits
are determined by the court to be frivolous, damages are
assessed at meetings with the clerk of the court.
REPRESENTATIVE FATE said this legislation should act as a
deterrent because the liability for filing a lawsuit in bad
faith will increase.
SENATOR FRENCH offered an amendment [Amendment 1] and told
members the U.S. Supreme Court has provided some good direction
in this area. His amendment is an attempt to comport with the
U.S. Supreme Court's position on these lawsuits. Second, he
believes the amendment will help shift the focus to the legal
merit of a claim and away from the subjective intentions of the
person filing it.
SENATOR FRENCH moved to adopt Amendment 1.
CHAIR SEEKINS objected.
SENATOR FRENCH said the amendment would make a small
modification to page 2, line 8, by changing the language to
read:
the person initiates or maintains an objectively
baseless legal or administrative claim.
He said that he and Representative Fate discussed the difficulty
of defining "objectively baseless" but the U.S. Supreme Court
has defined that term as a case in which no reasonable litigant
could reasonably expect success on the merits. He said if a
person brings a lawsuit on grounds with no legal merit, that
person should be held accountable. His amendment would clarify
that the court first looks at the legal merits of the case and
then look at the intention of the person who filed the case. He
noted that Amendment 1 comports with the U.S. Supreme Court
decision written by Justices Scalia, Thomas, Rehnquist, White,
Blackmun, Kennedy, and Souter.
CHAIR SEEKINS asked Senator French if he means that if Amendment
1 is not adopted, a person's rights would be violated under the
U.S. Constitution.
SENATOR FRENCH said his intent is to get the bill as close as
possible to what he sees as "the state of the law."
CHAIR SEEKINS continued, "The state of the law regarding that
particular case that is cited, in other words."
SENATOR FRENCH replied, "Exactly. The case where you sue - where
you assess damages against somebody who has gone to court under
a [indisc.] citizen."
CHAIR SEEKINS asked if the state could maintain these conditions
under paragraph (c) without running afoul of the U.S. Supreme
Court.
SENATOR FRENCH said he is just trying to make the bill a little
bit better.
SENATOR THERRIAULT questioned how the amendment would fit on
page 2, line 8.
SENATOR FRENCH said he was referring to CS SSHB 86(JUD) am,
version W.A.
CHAIR SEEKINS asked Representative Fate his opinion of the
amendment.
REPRESENTATIVE FATE told members his only concern is that he is
not aware of the U.S. Supreme Court case that Senator French
referred to. He expressed concern that using two adjectives,
"baseless" and "objectively," will add confusion.
CHAIR SEEKINS maintained his objection to adopting the
amendment.
SENATOR THERRIAULT asked Senator French if it is necessary to
include the word "objectively."
SENATOR FRENCH said he believes including the word "objectively"
will force the court to look at the legal arguments and stay one
step removed from the person filing the claim. He explained that
he is concerned about separating the legal argument from the
person who filed it. He said the person who files a lawsuit may
have an irrational hatred of asphalt but if that person has a
sound legal reason for his argument, that person should not be
forced to pay damages.
CHAIR SEEKINS said that person would not have to pay damages
according to paragraph (c)(4), because that person was not
acting with malice.
SENATOR FRENCH said he believes a person could argue the
contrary and wants to keep the focus on the strength of the
legal argument.
CHAIR SEEKINS called for the question. The motion to adopt
Amendment 1 failed with Senators French and Ellis voting in
favor and Senators Ogan, Therriault, and Seekins voting against.
SENATOR FRENCH moved an amendment to add the word "baseless" to
page 2, line 8, and said he believes that is a fair compromise.
SENATOR FRENCH explained the word "baseless" would be inserted
in front of the word "legal" on page 2, line 8.
CHAIR SEEKINS objected to the motion to adopt Amendment 2.
TAPE 03-47, SIDE A
9:40 a.m.
CHAIR SEEKINS noted that all claims are based on something so
that if a lawsuit were based on, for example, a hatred of oil
drill rigs, the claim would not be baseless.
SENATOR FRENCH replied:
I guess that is why the word 'objectively' was
important, because it gets you back to the legal
merits and not to the mind of the person who's
bringing it. Once you step into the mind of the person
who is bringing it, you're into a hall of mirrors and
I think you're somewhere where you just can't win. Any
judge can look at the quality of a legal argument and
say that's a joke. That's when it's objectively
baseless.
CHAIR SEEKINS said a judge would have to determine that the
plaintiff acted in bad faith.
REPRESENTATIVE FATE said he would prefer that "bad faith claim"
be used.
CHAIR SEEKINS noted that language is already included in
paragraph (c)(3).
SENATOR OGAN commented that determining malice is subjective;
therefore he feels that including the word "baseless" will help
to quantify the malice. He questioned how one would determine
the legal standard for the culpability of "malice."
CHAIR SEEKINS pointed out that legal precedence has been set for
"malice."
SENATOR THERRIAULT said he understands Senator French's argument
in that a person might have a "legal hook" to hang the claim on
but is filing the claim for the sole reason of delaying the
project. Senator French is trying to focus the liability on
cases in which there is no legal valid argument that is filed
with bad intentions.
CHAIR SEEKINS stated:
I think that - what we're trying to get to there is
that, Senator Therriault if I understand is, you could
still bring the action on a legally valid point or it
probably would be defeated in summary judgment right
up front, but the question is was that legally valid
complaint done in bad faith and I think that's what
the sponsor is trying to get to is that - am I not
correct?
REPRESENTATIVE FATE said that is correct.
CHAIR SEEKINS continued:
So, if it has no basis under the law, if it's baseless
under the law, more than likely it would be disposed
of in a very short period of time with summary
judgment because someone has not brought any basis to
bring the action. And I think what he's trying to get
to is the element of bad faith. He's not trying to
keep someone from bringing an action that would
otherwise be legally allowed.
SENATOR THERRIAULT said a person can bring an action to get an
injunction against a project and the court can refuse to grant
that injunction by saying if the project goes ahead, no one will
be harmed. The injunction was not dismissed because the claim
had no basis; it was dismissed because no one will suffer if the
project goes ahead. He questioned whether under (2) on page 2,
line 12, the claim would be considered to be the request for an
injunction.
CHAIR SEEKINS said the claim to get injunctive relief would be
rejected; he referred to the language on lines 6 and 7.
SENATOR FRENCH said he believes it could be either. A person
could get an injunction and later fail on the merits, when the
injunction would be lifted. That would be a far more expensive
hurdle for a company to get over because the company could
suffer a three-month project delay. He said the risk for the
plaintiff is that the plaintiff gets the injunction and then
loses the case three months later and is liable for $3 million
in damages. He said a person who may be considered an agitator
could be on the hook for millions of dollars of damages even
though that person had a valid legal reason for filing the
claim. That is the reason he preferred including the words
"objectively baseless."
CHAIR SEEKINS called for a roll call vote. The motion to adopt
Amendment 2 carried with Senators French, Ogan, Therriault and
Ellis in favor and Chair Seekins opposed.
CHAIR SEEKINS announced that he would hold CS SSHB 86(JUD) in
committee until the next hearing.
SENATOR THERRIAULT informed members that he might propose an
amendment to this legislation at the next meeting.
CHAIR SEEKINS adjourned the meeting at 10:02 a.m.
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