Legislature(2017 - 2018)BELTZ 105 (TSBldg)
04/14/2017 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB8 | |
| SB29 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 8 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 29 | TELECONFERENCED | |
SB 29-REPEAL WORKERS' COMP APPEALS COMMISSION
2:01:19 PM
CHAIR COGHILL announced the consideration of SB 29 and stated
his intention to continue public testimony.
2:02:53 PM
STEVEN CONSTANTINO, representing himself, stated that he has
been a member of the Alaska bar for 36 years. He was a workers'
compensation hearing officer in the 1990s and for the past 18
years he has been in private practice representing injured
workers and litigating workers' compensation claims. He is also
the claimants' representative for the Alaska Bar Association
annual review of workers' compensation cases.
He said the legislature entered into two legal experiments in
2005. First, it changed the standard for causation in workers'
compensation from "a substantial factor" to "the substantial
cause." Second, it enacted the appeals commission to attain
speedier appellate decisions and to achieve consistency by
making board decisions binding legal precedent. He said
consistency has been achieved because of the precedent
provision, but half the substantive decisions that are appealed
and decided by the Alaska Supreme Court are overturned.
Regarding speeding up workers' compensation appeals, he said his
experience is that the timelines are about the same. When the
superior court had jurisdiction, it took about 6-9 months and it
takes about 6-9 months with the appeals commission. The superior
court has not had the opportunity to address the new substantial
cause standard, but in 2016 it did reverse the interpretation
that the appeals commission made about four years earlier
regarding the evidence necessary to rebut the presumption of
compensability. He also pointed out that the appeals
commission's published final decisions each cost between $30,000
and $40,000.
MR. CONSTANTINO recalled that the Court System indicated the
superior court could handle these appeals at no additional
fiscal impact to the state and that the cases would be assigned
such that the judges would develop expertise. He noted that that
was one of the rationales for creating the appeals commission.
He opined that the appeals commission has not achieved the goals
set out for it and his anecdotal observation is that it tends to
favor the interests of insurers over injured workers. [Audio
difficulties.]
2:09:57 PM
ERIC CROFT, representing himself, Anchorage, Alaska, noted that
he sent backup material to support his testimony. He made three
points regarding the Workers' Compensation Appeals Commission:
it is not a fair tribunal; it does very little work for the
$440,000 it costs each year; and the decisions are all too often
inconsistent or so unclear that the Alaska Supreme Court has to
step in and provide clarity.
He said the commission rules overwhelmingly in favor of
insurance companies, regardless of the facts. He agreed with
former Commissioner Andy Hemenway's analysis that the 39 cases
that had gone to the Alaska Supreme Court and resulted in a
decision were reversed 50 percent of the time.
Mr. Croft said he looked at which side the commission ruled in
favor of and which side was ultimately found correct by the
Alaska Supreme Court. He found that when the insurance company
should have won, the commission got it right 100 percent of the
time. But in the cases where the employee had the right legal
position and correct facts, the commission still ruled in the
insurance companies' favor 80 percent of the time. "Overall
those numbers are about 85 percent of the time the commission
rules in favor of the insurance company."
He compared the $440,000 annual cost of the commission to the
three-member court of appeals. He said that over its life, the
court of appeals has issued about two decisions per month,
whereas the appeals commission has issued less than one decision
per month since July 2016. "The three-member criminal court of
appeals in that time has issued 140 decisions or 15 a month."
MR. CROFT discussed the third point that the commission has
issued contradictory or unclear rulings. He noted that in the
backup material he submitted he cited a situation where in a
three-month span the commission issued contradictory rules
regarding the standard on stays.
He summarized, "It doesn't provide the clarity, it costs a lot
of money and doesn't do much work, and introduces a bias that
shouldn't be in our judiciary."
2:15:47 PM
COLBY SMITH, representing himself, Anchorage, Alaska, stated
that he is an attorney who primarily does workers' compensation
defense work. He also presents on the panel on behalf of the
Alaska Bar Association, representing the defense side and
employers presenting cases that have been in front of the
appeals commission and the Alaska Supreme Court. He mentioned
previous testimony about bias and opined that the conversation
should not be about changing because one side isn't winning
often enough. It should be about whether the current structure
is right.
Under the process prior to 2005, the cases went to different
superior courts depending on the jurisdiction. Those decisions
were unpredictable depending on the judge's experience with
workers' compensation. Also, the decisions did not have binding
precedent so the cases often went to the Alaska Supreme Court.
In an effort to address those perceived shortcomings, the
process was changed in 2005 and one entity was created. That is
the appeals commission that issues consistent, predictable
opinions that are binding. Everyone agrees, he said, that the
commission has greatly reduced the number of appeals.
MR. SMITH said he wasn't asked his opinion in 2005 but he has
always thought that designating one superior court judge to
handle workers' compensation issues would have been and still
could be a possible solution if those decisions were given
binding precedence.
2:20:54 PM
VICKI PADDOCK, Attorney, Anchorage, Alaska, stated that her firm
represents employers in workers' compensation matters and her
partner, David Floerchinger, submitted a letter summarizing
their opposition to SB 29. She pointed out that in 2005 the
legislature codified its specific intent regarding the Workers'
Compensation Act. It was to ensure quick, efficient, fair, and
predictable delivery of benefits to workers at a reasonable cost
to employers. Returning appeals to the superior court does not
achieve the legislature's codified intent and she has not heard
testimony that the legislature changed that intent.
Drawing on her experience as an attorney and a law clerk, she
offered her perspective of why returning to the superior court
will not be efficient or predictable in workers' compensation
cases. She said this is a unique body of law and superior court
judges do not have a day-in-and-out working knowledge of its
nuances and specific characteristics. As such, those judges will
rely on their law clerks to do the research in preparation of
hearing the appeals. Oftentimes law clerks are just out of
school and may only serve as a clerk for a year so it is likely
that the decisions will be neither efficient nor predictable.
And they will not have precedential value.
MS. PADDOCK offered her belief that the appeals commission
should remain in place in order for the legislature's intent to
be maintained. But if the legislature believes the commission is
not as effective as intended, it should consider alternatives
such as utilizing the Office of Administrative Hearings.
CHAIR COGHILL asked Commissioner Drygas to respond to the
testimony.
2:26:05 PM
HEIDI DRYGAS, Commissioner, Department of Labor and Workforce
Development (DOLWD) described SB 29 as a cost-cutting measure
and highlighted the conflicting testimony about whether the
commission serves its intended purpose. She said the commission
is a specialty tribunal that the state cannot afford, especially
given its poor track record at the Supreme Court. She reminded
members that the number of appeals that have made it to the
commission over the last 10 years has declined precipitously.
The anecdotal evidence indicates that workers do not believe
they are getting a fair shake at the commission so they are not
appealing board decisions.
She pointed out that the commission costs nearly $0.5 million
per year and the alternatives that have been proposed also
require funds that the state does not have. When the department
reviewed its statutes trying to find ones that hamper the work
of the department or are ineffective, the workers' compensation
statute stood out. "That is why the department and the
administration put forward this bill. ¼ We simply do not believe
the workers' comp appeals commission is living up to its
intended purpose." The state can no longer afford this specialty
tribunal.
SENATOR COSTELLO asked what will happen to the money that funds
the Workers' Compensation Appeals Commission.
2:29:56 PM
PALOMA HARBOUR, Administrative Services Director, Department of
Labor and Workforce Development (DOLWD), explained that the
Workers' Safety and Compensation Administration Account (WSCAA)
supports the workers' compensation program, the appeals
commission, and the workers' safety programs. Right now about
$7.2 million in revenue is generated into that account each year
and the governor's budgeted expenditures against that fund is
$9.1 million. The department is trying to address that
significant gap measure by measure and SB 29 is one of those.
Others include cuts to the workers' safety programs, $191,000
has been eliminated from the workers' compensation program this
fiscal year, and separate legislation has been introduced for
further workers' compensation efficiencies.
CHAIR COSTELLO observed that this is not a reduction.
CHAIR COGHILL summarized that the money will still be there but
the department cannot afford everything it is doing because of
the $2 million shortfall.
MS. HARBOUR agreed; eliminating the commission will not reduce
the revenue brought into the fund but it will reduce
expenditures by about $0.5 million.
2:32:02 PM
SENATOR COSTELLO asked if using those funds for something other
than the appeals commission will create a statutory problem.
MS. HARBOUR said there is no conflict with the statute, but it
would create a problem if the commission isn't repealed and
legislation passes to "unfund" the commission. The department
would then have cases it is statutorily required to handle, but
with no funding.
2:33:00 PM
CHAIR COGHILL stated that he would hold SB 29 in committee for
further review.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 8 - Sponsor Statement.pdf |
SJUD 4/14/2017 1:30:00 PM |
HB 8 |
| HB 8 - Supporting Document - 18 USCA Section 2265 Full Faith and Credit Given to Protection Orders.pdf |
SJUD 4/14/2017 1:30:00 PM |
HB 8 |
| HB 8 - Supporting Document - 2014 Repeal of Alaska Exemption to VAWA.pdf |
SJUD 4/14/2017 1:30:00 PM |
HB 8 |
| HB 8 - Supporting Document - Response to Tribal Court Funding Question.pdf |
SJUD 4/14/2017 1:30:00 PM |
HB 8 |
| HB 8 - Supporting Document - VAWA Enforcement Dept. of Law Opinion.pdf |
SJUD 4/14/2017 1:30:00 PM |
HB 8 |
| HB 8 - Explanation of Changes ver. J.pdf |
SJUD 4/14/2017 1:30:00 PM |
HB 8 |
| HB 8 - Sectional Analysis ver. J.pdf |
SJUD 4/14/2017 1:30:00 PM |
HB 8 |
| ANDVSA Feedback on Use of CourtView.pdf |
SJUD 4/14/2017 1:30:00 PM |
HB 8 |
| SB 29 - Letter of Support #2 - Croft Attachment.pdf |
SJUD 4/14/2017 1:30:00 PM |
SB 29 |
| SB 29 - Letter of Support - Croft.pdf |
SJUD 4/14/2017 1:30:00 PM |
SB 29 |
| SB 29 - Supporting Document - Savings Backup.PDF |
SJUD 4/14/2017 1:30:00 PM |
SB 29 |