00 HOUSE BILL NO. 349 01 "An Act relating to an award of attorney fees in frivolous, groundless, or vexatious 02 actions, appeals, and cross-appeals; and amending Rule 82, Alaska Rules of Civil 03 Procedure and Rule 508(e), Alaska Rules of Appellate Procedure." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05  * Section 1. AS 09.60 is amended by adding a new section to read: 06 Sec. 09.60.012. Attorney fees in frivolous, groundless, or vexatious actions.  07 (a) In a civil action and in an appeal or cross-appeal of a civil action, the court shall 08 award, by judgment or order, reasonable attorney fees against an attorney or party who 09 brings or defends the civil action, appeal, or cross-appeal if the court finds 10 (1) all or part of the action or defense of the civil action, appeal, or 11 cross-appeal lacks substantial justification; 12 (2) all or part of the action or defense of the civil action, appeal, or 13 cross-appeal was interposed for delay or harassment; or 14 (3) an attorney or party unnecessarily expanded the proceeding by 01 improper conduct, including an abuse of discovery procedures available under the 02 Alaska Rules of Civil Procedure. 03 (b) When a court determines that reasonable attorney fees should be assessed 04 under this section, the court shall apportion the payment among the offending attorney 05 or party jointly and severally, as the court considers just, and may charge an attorney 06 or a party all or part of the fees assessed. 07 (c) The court may not assess attorney fees under this section 08 (1) if a claim or defense is voluntarily dismissed within a reasonable 09 time after the attorney or party filing the dismissal knew or reasonably should have 10 known that the party would not prevail on the claim or defense; 11 (2) against a party who appears without an attorney unless the court 12 finds that the party clearly knew or reasonably should have known that all or part of 13 the action or defense lacked substantial justification; however, when an attorney 14 licensed to practice law in this state appears without an attorney, the attorney shall be 15 held to the standards set out in this section; 16 (3) against an attorney or a party if the court determines that a claim or 17 defense was asserted in a good faith attempt to establish a new theory of law. 18 (d) In this section, "lacks substantial justification" means substantially 19 frivolous, substantially groundless, or substantially vexatious. 20  * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 DIRECT COURT RULE AMENDMENT. Rule 82(b), Alaska Rules of Civil 23 Procedure, is amended by adding a new subparagraph to read: 24 (5) In a civil action, the court shall award, by judgment or order, 25 reasonable attorney's fees against an attorney or party who brings or defends a civil 26 action, appeal, or cross-appeal. 27 (A) The court shall make an award of attorney's fees under this 28 subparagraph only if the court finds 29 (i) all or part of the action or defense of the civil action, 30 appeal, or cross-appeal lacks substantial justification; 31 (ii) all or part of the action or defense of the civil action, 01 appeal, or cross-appeal was interposed for delay or harassment; or 02 (iii) an attorney or party unnecessarily expanded the 03 proceeding by improper conduct, including an abuse of discovery 04 procedures available under the Alaska Rules of Civil Procedure. 05 (B) When a court determines that reasonable attorney's fees 06 should be assessed under this subparagraph, it shall apportion the payment 07 among the offending attorney or party jointly and severally, as it considers just, 08 and may charge an attorney or a party all or part of the fees assessed. 09 (C) The court may not assess attorney's fees under this 10 subparagraph 11 (i) if a claim or defense is voluntarily dismissed within 12 a reasonable time after the attorney or party filing the dismissal knew 13 or reasonably should have known that the party would not prevail on 14 the claim or defense; 15 (ii) against a party who appears without an attorney 16 unless the court finds that the party clearly knew or reasonably should 17 have known that all or part of the action or defense lacked substantial 18 justification; however, when an attorney licensed to practice law in this 19 state appears without an attorney, the attorney shall be held to the 20 standards set out in this subparagraph; 21 (iii) against an attorney or a party if the court 22 determines that a claim or defense was asserted in a good faith attempt 23 to establish a new theory of law. 24 (D) In this subparagraph, "lacks substantial justification" means 25 substantially frivolous, substantially groundless, or substantially vexatious. 26  * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 DIRECT COURT RULE AMENDMENT. Rule 82(b)(3)(G), Alaska Rules of 29 Civil Procedure, is repealed. 30  * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 31 read: 01 DIRECT COURT RULE AMENDMENT. Rule 508(e), Alaska Rules of 02 Appellate Procedure, is amended to read: 03 (e) Attorney's Fees. Attorney's fees may be allowed in an amount to be 04 determined by the court. If such an allowance is made, the clerk shall issue an 05 appropriate order awarding fees at the same time that an opinion or an order under 06 Rule 214 is filed subject to the following: 07 (1) In an appeal or cross-appeal, the court shall award, by  08 judgment or order, reasonable attorney's fees against an attorney or party who  09 brings or defends an appeal or cross-appeal if the court finds  10 (A) all or part of the appeal or cross-appeal lacks  11 substantial justification;  12 (B) all or part of the appeal or cross-appeal was interposed  13 for delay or harassment; or  14 (C) an attorney or party unnecessarily expanded the  15 proceeding by improper conduct.  16 (2) When a court determines that reasonable attorney's fees should  17 be assessed under (1) of this subsection, the court shall apportion the payment  18 among the offending attorney or party jointly and severally, as the court  19 considers just, and may charge an attorney or a party all or part of the fees  20 assessed.  21 (3) The court may not assess attorney's fees under (1) of this  22 subsection  23 (A) if, after filing an appeal or cross-appeal, the appeal or  24 cross-appeal is voluntarily dismissed as to any claim or defense within a  25 reasonable time after the attorney or party filing the dismissal knew or  26 reasonably should have known that the party would not prevail on the  27 claim or defense;  28 (B) against a party who appears without an attorney unless  29 the court finds that the party clearly knew or reasonably should have  30 known that all or part of the claim or defense lacked substantial  31 justification; however, when an attorney licensed to practice law in this  01 state appears without an attorney, the attorney shall be held to the  02 standards set out in (1) of this subsection;  03 (C) against an attorney or a party if the court determines  04 that a claim or defense was asserted in a good faith attempt to establish a  05 new theory of law.  06 (4) In this subsection, "lacks substantial justification" means  07 substantially frivolous, substantially groundless, or substantially vexatious [IF 08 THE COURT DETERMINES THAT AN APPEAL OR CROSS-APPEAL IS OR 09 THAT IT HAS BEEN BROUGHT SIMPLY FOR PURPOSES OF DELAY, 10 ACTUAL ATTORNEY'S FEES MAY BE AWARDED TO THE APPELLEE OR 11 CROSS-APPELLEE]. 12  * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 APPLICABILITY. This Act applies to causes of action commenced on or after the 15 effective date of this Act. 16  * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 CONDITIONAL EFFECT. AS 09.60.012, enacted by sec. 1 of this Act, takes effect 19 only if secs. 2 - 4 of this Act receive the two-thirds majority vote of each house required by 20 art. IV, sec. 15, Constitution of the State of Alaska.