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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+ teleconferenced
= bill was previously heard/scheduled
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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