Legislature(2005 - 2006)

2005-01-31 Senate Journal

Full Journal pdf

2005-01-31                     Senate Journal                      Page 0192
SB 86                                                                                             
SENATE BILL NO. 86 BY THE SENATE RULES COMMITTEE                                                    
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                    "An Act relating to the liability of the state and                             
                 municipalities for attorney fees in certain civil actions                         
             and appeals; and providing for an effective date."                                     
was read the first time and referred to the Community and Regional                                  
Affairs and Judiciary Committees.                                                                   
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Administration                                              
 Fiscal Note No. 2, zero, Department of Law                                                         
Governor's transmittal letter dated January 27:                                                     

2005-01-31                     Senate Journal                      Page 0193
Dear President Stevens:                                                                             
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am                          
transmitting a bill to, as a matter of sovereign immunity, limit the                                
award of attorney's fees against the state and municipalities.                                      
Since territorial days, Alaska has had a statutory policy of requiring                              
the losing party in most litigation to pay a portion of the prevailing                              
party's attorney fees.  In recent years, this policy has been embodied                              
primarily in Alaska Rule of Civil Procedure 82, which the Alaska                                    
Supreme Court adopted in response to a legislative delegation, made                                 
immediately following statehood, in AS 09.60.010.  In most cases, the                               
prevailing party receives a partial fee award, equal to no more than 20                             
percent of a money judgment or 20 percent of actual fees in a non-                                  
monetary case.                                                                                      
In cases brought against state or local governments, departures from                                
the general rule of partial fee reimbursement have occurred with some                               
regularity, with the governmental party required to reimburse all of the                            
prevailing party's fees.  Ordinarily, the basis for these enhanced fee                              
awards has been the judicially created public interest litigant policy,                             
wherein selected litigants bringing suits to advance ends deemed by                                 
the court to reflect strong public policies are granted full fees as a                              
subsidy from the state treasury.  The cost of this subsidy has been                                 
significant to the state in all recent fiscal years and, on a more irregular                        
basis, has been significant to the municipalities targeted by such                                  
There are instances where a Legislative policy sufficiently supports                                
full attorney fee awards and the legislature has chosen to provide for                              
them by statute.  Full reimbursement is also important for eminent                                  
domain proceedings.  Beyond these contexts, the Legislature has not                                 
identified a policy that would support a direct public subsidy to private                           
litigants that goes beyond the traditional norm of partial fee awards.                              
To ensure that public money is not disbursed as a subsidy to these                                  
litigants without an appropriate legislative authorization, this bill                               
would provide, as a matter of sovereign immunity, that the state or a                               
municipality would not be liable for an attorney fee award in excess of                             
certain percentages of a money judgment or, if a money judgment is                                  
not recovered, certain percentages of the reasonable actual attorney                                
fees the prevailing party incurred in litigating the issues upon which                              

2005-01-31                     Senate Journal                      Page 0194
the party prevailed.  This would prevent enhanced fee awards against                                
the state or municipalities that are not authorized by statute, but leave                           
those governments open to the standard partial fee awards called for in                             
the Civil Rule 82 fee schedule.                                                                     
Section 1 of the bill describes the purposes of the Legislation.  It notes                          
the fiscal impact of enhanced fee awards, and specifically relies on the                            
legislature's constitutional authorities in regulating this area.  Section                          
1 states clearly that this bill, if enacted into law, would neither                                 
preclude nor repeal specific statutes authorizing the award of costs or                             
fees in particular situations.                                                                      
Section 2 of the bill would create a new provision in the chapter of                                
AS 09 devoted to immunities.  It provides that for civil actions or                                 
appeals in which a money judgment is recovered, the state and                                       
municipalities are not liable to pay more than 20 percent of the money                              
judgment.  In civil actions in which no money judgment is recovered,                                
the liability of the state and municipalities for attorney fees for cases                           
that go to trial is capped at 30 percent of the reasonable actual attorney                          
fees that were necessarily incurred in litigating issues on which the                               
party prevailed, and 20 percent for cases that do not go to trial.  For                             
appeals in which no money judgment is recovered, the liability of the                               
state and municipalities for attorney fees is capped at 20 percent of                               
reasonable actual attorney fees that were necessarily incurred in                                   
litigating issues on which the party prevailed.  These limits on liability                          
are very similar to the limits that courts have found for years to                                  
represent fair partial compensation to a prevailing party.  These                                   
limitations do not apply if the statutes provide differently, if the courts                         
determine it is appropriate to award attorney fees as a sanction for                                
misconduct by a party or the party's counsel, or in cases involving the                             
condemnation of property under the power of eminent domain.                                         
Section 3 of the bill would make the bill, if enacted into law,                                     
applicable only to civil actions or appeals initiated after it takes effect.                        
I urge your prompt consideration and passage of this bill.                                          
Sincerely yours,                                                                                    
Frank H. Murkowski