02/09/2004 01:50 PM House FIN

HOUSE BILL NO. 56                                                                                                             
                                                                                                                                
     An Act relating  to the attorney fees and  costs awarded                                                                   
     in  certain  court  actions  relating  to  unfair  trade                                                                   
     practices;  and,  if  considered   court  rule  changes,                                                                   
     amending Rules 54(d), 79,  and 82, Alaska Rules of Civil                                                                   
     Procedure.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  LES  GARA  explained   that  the  bill  would                                                                   
provide the State with a needed  tool to fight consumer fraud                                                                   
more  effectively and  efficiently  without any  cost to  the                                                                   
State.    The   bill  strengthens  the  State's   ability  to                                                                   
represent  Alaskans who  have been  victimized by  fraudulent                                                                   
business practices whether by  used car dealers or others who                                                                   
prey on  Alaska's consumers.   He added that  the legislation                                                                   
would save money for the State of Alaska.                                                                                       
                                                                                                                                
HB 56  would change  law allowing  the State  to recover  its                                                                   
full  enforcement,  investigation   and  court  costs  if  it                                                                   
prevails against a party that  has violated Alaska's consumer                                                                   
protection laws.   The bill  is modeled after  legislation in                                                                   
other areas  that allow state  and federal investigators  and                                                                   
enforcement authorities to recover their enforcement costs.                                                                     
                                                                                                                                
Representative  Gara  continued, highlighting  public  policy                                                                   
behind the bill:                                                                                                                
                                                                                                                                
     ·         Those who engage in unfair business practices                                                                    
               should not force the State to bear the cost                                                                      
               of their misconduct; and that                                                                                    
     ·         By allowing the State to recover not only the                                                                    
               existing  penalties that  are available  under                                                                   
               the State law,  but enforcement costs, the law                                                                   
               would   help   fund  a   more   cost-effective                                                                   
               consumer protection presence in Alaska.                                                                          
                                                                                                                                
Co-Chair  Harris  questioned  what  "reasonable  fees"  would                                                                   
consist   of.       Representative   Gara    explained   that                                                                   
historically, the  Courts have had  laws that allow  the case                                                                   
winner to also receive the attorney  fees.  The attorney fees                                                                   
assessed  in the  prevailing  market rate  would  have to  be                                                                   
indicated.     The  legislation  stipulates  what   would  be                                                                   
required to be reasonable in community and not excessive.                                                                       
                                                                                                                                
Co-Chair  Harris  ascertained  that  "reasonable"  in  Valdez                                                                   
could be different than in Anchorage.   He asked if there was                                                                   
an  "across  the  board reasonable  cost  for  an  attorney".                                                                   
Representative Gara thought that  the Court's would determine                                                                   
that  the prevailing  rate  in  Alaska should  range  between                                                                   
$100-$180/per hour.                                                                                                             
                                                                                                                                
Co-Chair Harris acknowledged that  the Courts would be making                                                                   
the decision.   Representative  Gara interjected that  such a                                                                   
hearing  would be  a short, most  likely not  needing a  jury                                                                   
trial.                                                                                                                          
                                                                                                                                
Co-Chair  Harris  asked  if the  Court's  decision  could  be                                                                   
appealed.   Representative  Gara  responded  it  could.   The                                                                   
process would move no further  forward than the State Supreme                                                                   
Court.                                                                                                                          
                                                                                                                                
Representative  Gara pointed  out support  from the  Attorney                                                                   
General's office in the Department of Law.                                                                                      
                                                                                                                                
Co-Chair Harris  referenced the fiscal note.   Representative                                                                   
Gara noted that  it was a zero  note as there is no  need for                                                                   
the Department to hire new people.    Co-Chair Harris pointed                                                                   
out  that the  major change  to the  fiscal note  would be  a                                                                   
change in revenues.   Representative Gara reiterated  that it                                                                   
will bring in additional revenues.                                                                                              
                                                                                                                                
CLYDE  (ED)  SNIFFEN, JR.,  (TESTIFIED  VIA  TELECONFERENCE),                                                                   
ASSISTANT  ATTORNEY GENERAL,  DEPARTMENT  OF LAW,  ANCHORAGE,                                                                   
commented  that the Department  does support  the bill  as it                                                                   
provides  a   potential  source  of  revenue   in  protection                                                                   
efforts.  He offered to answer questions of the Committee.                                                                      
                                                                                                                                
Representative  Stoltze  commented on  legislation  resulting                                                                   
from last year  regarding consumer protection,  which allowed                                                                   
the Legislature to  look into motor fuel price  gouging.  Mr.                                                                   
Sniffen   did   not   know   the   scenario   referenced   by                                                                   
Representative  Stoltze and  noted that  HB 56 would  require                                                                   
that there  be an investigation  conducted with  legal action                                                                   
taken.   If  found  fraudulent that  action  would allow  the                                                                   
Department  to  recover  the   fees.    The  only  anti-trust                                                                   
legislation  that  passed  last  session was  a  bill,  which                                                                   
eliminated the  source of funds  for a prevailing party  in a                                                                   
class action lawsuit.                                                                                                           
                                                                                                                                
STEVE  CLEARY,  (TESTIFIED  VIA   TELECONFERENCE),  DIRECTOR,                                                                   
ALASKA PUBLIC  INTEREST RESEARCH  GROUP (AKPIRG),  ANCHORAGE,                                                                   
testified  in  support  of  the  legislation  and  urged  the                                                                   
Committee's  support.   He reiterated  that it would  provide                                                                   
more protection  for consumers  while  not costing the  State                                                                   
anything.                                                                                                                       
                                                                                                                                
Co-Chair  Williams  advised  that  HB  56 would  be  HELD  in                                                                   
Committee for further consideration.