Legislature(2003 - 2004)
05/09/2003 02:10 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 145
"An Act relating to public interest litigants and
to attorney fees; and amending Rule 82, Alaska
Rules of Civil Procedure."
SENATOR GENE THERRIAULT, SPONSOR discussed the changes
contained in the Committee Substitute. He noted that his
staff worked to change language in response to testimony
heard in the Senate Resources Committee. The testimony
indicated that in some cases, the reforms suggested by the
bill were too broad. The Committee Substitute effectively
nullifies current doctrine, and recreates it in statute in
areas supported by public testimony.
Co-Chair Harris MOVED to ADOPT Committee Substitute 23-
GH1064\H, Luckhaupt, 5/8/03 as the version of the bill
before the Committee. Representative Berkowitz OBJECTED for
the purpose of discussion.
Senator Therriault referred to Section 1, pertaining to
Alaska court cases, which had lead to the establishment of a
doctrine. He noted that Section 2, (b) amends the language,
not allowing the court to discriminate in the awarding of
attorney fees "except as otherwise provided by statute".
Subsection (c) allows for some differentiation to be made,
allowing the doctrine to remain in force, in cases
"concerning the establishment, protection, or enforcement of
a right under the United State Constitution or the
Constitution of the state of Alaska". He explained that
Subsections (d) and (e) outline the award process.
Senator Therriault added that Section 3 (c) clarified that
litigants may not be excused for stays or interlocutory
relief. He observed that the language in Subsection (h)
clearly delineated what issue can and cannot be placed in
public interest litigant status. He noted that public
interest doctrine was not listed anywhere in adopted,
printed court rulings. He stated that the Administration
supports the language changes.
Representative Berkowitz emphasized that the new Committee
Substitute had been brought forward late [in the legislative
session] and wondered why there had not been prior notice,
since the new version contained such substantive changes.
Senator Therriault responded that the work had been
finalized in the early morning hours and that time was
limited.
Representative Berkowitz WITHDREW his OBJECTION. There
being NO OBJECTION, Committee Substitute 23-GH1064\H,
Luckhaupt, 5/8/03, was ADOPTED.
Co-Chair Harris asked if a public interest litigant would
liable for the legal fees on both sides of the case should
they lose a case. Senator Therriault observed that currently
litigants could enter suit in the hope that even a portion
of the suit would be found valid, and have the potential of
having attorneys fees paid. He maintained that there was no
"down side". He asserted that people use the court system
as a potential means of raising revenue. He stated that
other types of cases bore other risks.
Representative Berkowitz referred to legislative research on
public interest litigation in Alaska. He emphasized that
there was no personal gain to be arrived at by a public
interest litigant. He asked for the Sponsor's definition of
public interest litigant. Senator Therriault responded that
it was a class of litigants recognized by the court as
receiving special provisions that provide for the
possibility of having attorney fees covered if the case is
successful.
Representative Berkowitz observed that in order to achieve
that status, a litigant must satisfy certain requirements.
Senator Therriault noted that the bill proposed to restrict
those criteria to constitutional issues.
Representative Kerttula asked for clarification on which
cases would no longer be considered public interest
litigation. Senator Therriault observed that any cases
involving the denial of due process could apply for and
receive public interest litigant status, since this was a
constitutional right. In response to a question by
Representative Kerttula, Senator Therriault explained that
cases that made no constitutional claim could no longer be
considered for public interest litigant status.
Representative Berkowitz asked about the types of cases that
would be disallowed. Senator Therriault stated that a list
of specific cases had not been compiled.
TAPE HFC 03 - 86, Side B
Representative Berkowitz asked for a list of the kinds of
cases that might be included or disallowed under the bill.
CS HB 145 (FIN) was heard and HELD in Committee for further
consideration.
HOUSE BILL NO. 145
"An Act relating to public interest litigants and
to attorney fees; and amending Rule 82, Alaska
Rules of Civil Procedure."
TADD OWENS, RESOURCE DEVELOPMENT COUNCIL, testified via
teleconference in support of the bill. He explained that
his group is a non-profit trade association representing
individuals and companies from the oil and gas, timber,
mining, tourism and fisheries industries. He pointed out
that Alaska must provide a business environment that
encourages investment and suggested that the bill addressed
the risk associated with potential litigation against
companies. He maintained that Alaska did not currently
provide a level playing field in this area as compared to
other states. He suggested that the bill prevents
discrimination in awarding fees, and prevents courts from
waiving the bond requirements when an individual seeks to
stop a development project. He noted that the bill still
supports public interest litigation in constitutional
matters.
Representative Berkowitz cited changing circumstances as the
reason for enacting lasting court rules. He suggested that
the ability to change rules was actually more supportive of
development, and asked if the bill inhibits the ability of
groups to try to change public rules. Mr. Owens maintained
that the legislation does not amend a court rule, and
suggested that the legislature was the proper place to enact
public policy changes.
Representative Berkowitz proposed that the true problem from
the private perspective was the prohibitive costs of delays
in litigation. He asked if expedited hearings might better
serve both parties. Mr. Owens concurred that there may be
additional ways to continue reform of the process, but
reiterated that the legislation drew what they viewed as
appropriate distinctions.
Representative Berkowitz persisted that it was the delays
resulting from court cases that were prohibitive. He
reiterated that the best approach was an expedited hearing
process. Mr. Owens observed that the bill did not prevent
litigants from bringing suits, but only changed the economic
circumstances and possibility of state support.
DORIN HAWXHURST, ANCHORAGE testified via teleconference in
opposition to the bill. She described a situation that
occurred during her experience with Cordova District
Fisherman United (CDFU), during which she participated with
public interest litigants in the Prince Williams Sound
Tanker Plan appeal. She stated that the issue was whether
the Department of Environmental Conservation had implemented
the law that the legislature enacted after the Exxon Valdez
oil spill. She noted that the law required oil shippers to
have additional equipment to ensure that oil spills like the
Exxon Valdez spill would not occur again. She maintained
that CDFU entered the process since the Department of
Environmental Conservation ignored HB 567 under pressure
from the oil shippers. She discussed the difficult nature of
these proceedings, and noted that the administrative appeal
was prohibitively expensive to continue. She stated that
the city of Cordova could no longer participate in what they
termed "an unbearably expensive process", and that later the
Department of Environmental Conservation held hearings that
were heavily attended by fishers. She urged the Committee
to closely examine the case as a reason to continue public
litigant proceedings in the state of Alaska. She explained
that the individuals who brought these litigations could not
afford lengthy legal processes. She asked the Committee not
to pass the bill in protection of individuals.
TAPE HFC 03 - 87, Side A
STEVE BORRELL, ALASKA MINERS ASSOCIATION, ANCHORAGE
testified in support of the bill. He stated that the bill
provided needed streamlining of the permitting process. He
maintained that it was essential to ensure that when permits
were issued, there was no longer a financial incentive for
third parties to challenge permits.
Representative Berkowitz asked how much attention had been
given to find a way to expedite the process in order to cut
costs incurred while waiting for disputes to be resolved.
Mr. Borrell maintained that Alaska had a reputation as a bad
place to do business and suggested that this legislation
made the state more attractive to investors.
Representative Berkowitz contended that private suit
litigation was not really the culprit in discouraging
business, but rather the length of the hearing process. He
suggested that the best thing to attract business to Alaska
was to streamline the litigation process.
KARL HANNEMAN, FAIRBANKS CHAMBER OF COMMERCE, FAIRBANKS
testified via teleconference in support of the bill. He
noted that many organizations had helped craft the language
of the bill. He pointed out that the language was
supported by the Administration. He noted the significance
of the legislation to the Northern Interior, where projects
had been delayed due to litigation, affecting the overall
economy of Fairbanks.
CHRIS KENNEDY, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW
testified via teleconference and provided information about
the bill. He explained that the current Committee
Substitute was an integral part of the Governor's
legislative package to streamline the permitting process for
resource development. He noted that it limits the
application of a court doctrine in areas where it has
encouraged exceptive and speculative litigation. He stated
that the bill addressed public interest litigants, as
defined by the Supreme Court, as one who: 1) defined public
policy; 2) effect numerous people; 3) could only be brought
by a private party; and 4) could not be a self appointed
public advocate. He pointed out that currently litigants
could have their attorney's fees paid even if they lost
their case, if the changes they advocate are adopted by some
other means. He maintained that a public interest law firm
could make money if they won and gave such an example. He
contended that the current statute provided an unintended
subsidy for public interest litigants. He stated that those
seeking to challenge or obstruct tort development were
different from ordinary litigants, since they have an
incentive to take the chance on doubtful claims as the
downside risk is removed and the potential reward enhanced.
Mr. Kennedy gave an example of misuse of public interest
litigation in a five-year suit against the Department of
Environmental Conservation regarding the 1995 Prince
Williams Sound Tanker Contingency plan. He recounted the
story from earlier testimony from a different perspective,
and noted that changes occurred during the lengthy hearing
process to address fishers' concerns. He emphasized that
CDFU was accommodated without litigation. However,
following the process, an individual from Washington who was
not satisfied led a massive court challenge containing 85
separate issues. Ultimately 54 issues were abandoned, 31
were briefed, and none prevailed. The case cost the State
$154 thousand dollars, with a possibly greater cost to
private parties. The individual who brought the 85
unsuccessful challenges was immune from paying any Rule 82
fee awards to either the State or shippers. He conceded
that HB 145 would not do away with that type of litigation
entirely. However, it will abolish public interest litigant
doctrine in certain areas and, by evening out the risks and
benefits of bringing claims, will force people opposed to
permits or plans to more carefully evaluate whether they
pursue more speculative challenges.
BEN BROWN, ALASKA STATE CHAMBER OF COMMERCE, testified in
support of the legislation. He stated that their members
want to promote Alaska's healthy economy by preventing
misuse of the State's instrumentalities to impede resource
development. He recommended the approach contained in the
th
Committee Substitute. He clarified that the 4 party of the
existing doctrine did not require that the public interest
litigant have no economic incentive, but only that the
economic incentive be less than the non-economic incentive.
He also speculated that, regarding the Cordova case, given
the requirement in the current doctrine for a non-
governmental entity, the litigants might have actually
benefited from the city of Cordova withdrawing from the
case. He explained that the previous version of the bill
addressed three specific State Departments, whereas the
current bill version examines the nature of the claim being
brought. He suggested that this was the most germane issue,
given the importance of the claims. He suggested that under
the legislation, important claims would still be brought, as
well as lesser claims. He pointed out that Alaska still has
Rule 82 that allows for parties to recover some, but not
all, of their legal fees from another party when they
prevail. He referred members to a study of the Alaska
Judicial Council from 1995 giving the history of this Rule.
He maintained that, because of Rule 82, the courthouse doors
would not be "closed", but pointed out that litigants will
still have to face the risk of having to pay the other
party's fees if they do not prevail. He concluded that this
creates a "level playing field" in the area of public
interest litigation.
LARRY HOULE, THE SUPPORT INDUSTRY ALLIANCE, JUNEAU,
testified in support of the bill. He read from prepared
testimony (copy on file). He explained that they are a
statewide trade association of union and non-union
contractors. He read from prepared testimony, discussing
the history of Alaska Civil Procedure allowances to allow a
prevailing party in a civil lawsuit to recover a portion of
their attorney's fees. He differentiated this from the
Alaska Supreme Court Public Interest Litigant Doctrine
enacted in 1968, which allows a prevailing public interest
litigant to recover all of its attorney's fees. He
contrasted this to oil, logging or trucking companies or
labor unions that are consistently denied public interest
litigation status on the ground that they had "sufficient
economic incentive to bring a lawsuit". He concluded that
the current doctrine results in certain groups receiving
preferential treatment in the courts, which he claimed
reflected a "very marked and distinct anti-development, pro-
preservationist political slant". He maintained that the
bill would eliminate special treatment, and noted that Rule
82 of the civil rules of procedure would still permit a
trial judge to adjust awards of attorney's fees based on a
variety of factors for all litigants.
RICH HEIG, GREENS CREEK, AND COUNCIL OF ALASKA PRODUCERS
testified in support of the Committee Substitute. He noted
that the Council was an organization representing mining
companies in Alaska. He noted that his industry underwent
extensive permitting processes with the state, federal and
local governments. He noted that the process included
public hearing and comment opportunities and an
administrative review process. He noted that the process
could take several years to complete and pointed out that
the process could be extended by legal challenges against
the permits. He confirmed that a large part of the issue
was the delay in the process. He stated that challenges
could come from well-funded organizations, which were well
versed in the permitting processes. He maintained that fees
could be recovered from the organizations, especially if the
litigation was successful. He acknowledged that
Representative Berkowitz's comments regarding the length of
the hearing process were correct, but pointed out that these
issues were already being addressed by the resource
industry.
ROBERT BRIGGS, STAFF ATTORNEY, DISABILITY LAW CENTER, JUNEAU
testified in opposition to the Committee Substitute. He
noted that every state receives federal monies in order to
set up advocacy programs for the disabled that are
independent from the State. He pointed out that many states
followed the Alaskan model, which uses a non-profit
organization to address litigation for the disabled. He
explained that his organization served exclusively the
disabled in Alaska. He noted that many of these individuals
had suffered a range of abuses and neglect, and explained
that the ultimate way for a citizen to address these
complaints was to file suit. He stated that many of these
individuals were very impoverished due to their conditions
and thus were not able to pay for litigation. He described
his history of law practice both in private and public
practice and observed the power of the State.
Mr. Briggs stated that the Committee Substitute greatly
expanded the impact of the bill, and pointed out that he did
not testify against the original bill. He emphasized that
any challenge brought by a citizen against any government
action was now contained in this bill, and stated that the
bill prevented the State from applying public interest
litigation doctrine to any of these cases. He urged the
Committee not to pass the bill, and to consider its broad
impact on public interest doctrine and on the applicable
Court Rule.
Mr. Briggs expressed his opinion that the Supreme Court
could issue a decision by any of three means: a codified
rule, a Supreme Court Order, or announcing a rule through
judicial opinion. He explained that public interest
doctrine is comprised of a series of court rulings. He
noted his successful experience in representing the disabled
in litigation, and noted that the rates of disability in
Alaska was high due to the nature of Alaskan industries. He
speculated that the bill would drive plaintiffs in public
interest litigation into federal court. He emphasized the
negative effect on private individuals who stand to lose
their entire life savings if they lose public interest
suits. He noted that the Juneau School District employed
the most expensive attorneys available, putting families at
a disadvantage. He maintained that the legislation would
prevent individuals from filing suit in state courts.
Mr. Briggs referred to Senate Concurrent Resolution #4,
th
passed during the 18 Legislature, urging the Alaska Supreme
Court to reexamine the wisdom of Civil Rule 82. He noted
that the Alaska Supreme Court issued a ruling, which
included an extensive study of the Rule. He noted that
nowhere in the study was the conclusion that the Rule had an
unfair effect. He pointed out that the majority of those
benefiting from public interest litigations were not from
environmental groups. He noted that the past testimony
would indicate otherwise, in its emphasis on the effects of
public interest doctrine on development of natural resources
in the State. He clarified that roughly 16 percent of
awards in state litigation have gone to environmental
groups. He suggested that there was not a basis to overturn
the Rule, which he maintained was the net effect of the
bill. He noted that this was in relation to awarded monies,
which were legitimate claims. He suggested that an entire
doctrine should not be thrown out as a result of 16 percent
of the litigation. He proposed that the original bill was a
more defendable doctrine and suggested that the legislature
consider this as an interpretation of a court rule.
Mr. Briggs read from a United States Supreme Court Case,
Legal Services Corporation vs. Velaskes, "Interpretation of
the law and the Constitution is the primary mission of the
judiciary when it acts within the sphere of its authority to
resolve a case of controversy. An informed, independent
judiciary presumes an informed independent bar. Simply to
prohibit the analysis of certain legal issues, and to
truncate presentation to the courts, prohibits speech, an
expression upon which the courts must depend for the proper
exercise of judicial power. Congress cannot wrest the law
from the Constitution which is its source." He urged
Members to adopt the original form of the bill as having
fewer legal defects than the Committee Substitute.
Vice Chair Meyer clarified that the Disability Law Center
preferred the Senate Judiciary version of the Bill.
Public Testimony on HB 145 was concluded.
CSHB 145 (FIN) was heard and HELD in Committee for further
consideration.
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