Legislature(2003 - 2004)
05/04/2004 08:28 AM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 97-ATTY FEES: PUBLIC INTEREST LITIGANTS
CHAIR SEEKINS called the meeting back to order at 5:38 p.m.
Present were Senators Ogan, Therriault and Chair Seekins. The
committee took up SB 97. He asked a representative from the
administration to address the committee.
MR. CRAIG TILLERY, Assistant Attorney General, Department of
Law, offered the following explanation of the proposed committee
substitute, labeled 23G-2.
The proposed CS is similar to HB 145, which was passed by the
legislature last year. HB 145 provided that the criteria that
forms the basis of the public interest litigant policy may not
be used to discriminate in the award of fees to or against a
party. That bill was challenged in Superior Court and found to
be unconstitutional on the following basis. First, it would
require a rule change, which requires a two-thirds vote of the
legislature. Second, the enhanced fees against the public
interest litigant would violate equal protection. The limits on
the awarded enhanced fees to the public interest litigant were
not challenged, according to the court. The most critical issue
was the two-thirds vote. The due process and equal protection
decisions were grounded on what the court saw as a disconnect
between the purpose of the statute, which is characterized as
intended to deal with natural resource cases due to the fact
that the bill was aimed at natural resource cases when
originally introduced. The disconnect was between that purpose
and the effect of that statute, which was to affect all cases
with very specific exceptions related to constitutional rights.
For those reasons, the court found HB 145 to be overly broad.
MR. TILLERY said the proposed committee substitute responds to
the court decision in several ways. First, it enacts the same
rule changes with a two-thirds vote of the legislature. Second,
it makes clear that the legislature recognizes the broader
application of change made by the bill and intended to do so to
carry out the fundamental purpose of providing fair and
consistent treatment using objective criteria. The proposed
committee substitute still contains provisions for special
treatment of cases based on certain constitutional rights. It
still allows special treatment in other instances where the
legislature has specified, namely consumer protection cases.
This bill differs from HB 145 by adding a new special situation
for award of attorneys' fees for actions that challenge
decisions by the Board of Fisheries and the Board of Game. In
this bill, the provision that deals with fees to and against a
party are split into two separate provisions and a severability
clause has been added, to clarify that these two conducts have
separate importance and can be severed if one is found to be
unconstitutional. The proposed committee substitute repeals HB
145 retroactively to its effective date, which will moot the
current litigation.
MR. TILLERY said a new provision in the CS addresses a separate
but related issue. Enhanced fee awards against the state - the
amount over the normal compensation awarded by the court, will
represent a serious impact on the state treasury. Over the last
10 years, that impact has averaged $600,000 per year above
normal compensation. Section 4 of the CS creates a new provision
in Title 9 devoted to immunity. It provides that, as a matter,
under the government's sovereign immunity for civil actions or
appeals in which money judgments are recovered, state and
municipalities are not liable to pay more than 20 percent of the
money judgment recovered for attorneys' fees. In a civil action
in which no money is recovered, the liability is capped at 30
percent for cases that go to trial and 20 percent for cases
resolved without trial. For appeals in which the prevailing
party recovers no money judgment, the liability is capped at 20
percent. These limits on liability are very similar to the
limits the courts have found to represent fair compensation to
prevailing parties. These limitations do not apply where
statutes differ, where the court finds awarding attorneys' fees
appropriate as a sanction to misconduct, or in cases involving
the condemnation of property under the power of eminent domain.
Immunity can be waived by specific statute; one such waiver
would be the constitutional rights provision; another would be
the new provision that relates to challenges to actions by the
Boards of Fish and Game. Immunity asserts legislative control
over state expenditures and provides protection of the state.
SENATOR THERRIAULT asked if, by repealing HB 145, any
possibility of appealing Judge Collins' decision will be
extinguished.
MR. TILLERY said that is correct.
SENATOR THERRIAULT asked why it is a foregone conclusion that
the legislature would want to forego that possibility.
MR. TILLERY explained if this bill passes by a two-thirds vote,
the only reason to go to the expense and trouble of litigating
HB 145 would be for public interest litigant cases that have
arisen in the meantime. He is only aware of one that has come
up; that case is very small and DOL does not believe the party
asserting it will prevail. Therefore, there is no reason to
continue the HB 145 litigation unless someone simply wants an
answer to the question of whether a two-thirds vote was
necessary.
SENATOR THERRIAULT said the legislature has to be guarded about
the erosion of its power and its assertion last year when
passing HB 145 was that it was a doctrine, not necessarily a
court rule, so it did not require a two-thirds vote. He noted
that Mr. Tillery is asking, with the language in SB 97, that the
legislature forego a decision on that matter by a higher court
and to leave the lower court ruling to stand.
MR. TILLERY agreed but said that is DOL's practical position. He
noted that although the legislature may have a different
position, the preamble of the bill says that the legislature
does not endorse that court decision. If the legislature deleted
the repeal provision, HB 145 would be left intact and the appeal
could continue.
SENATOR THERRIAULT said Legislative Legal and Research Services
raised the issue of the sovereign immunity clause and the
concern that approach will backfire because it is unsure that
the Supreme Court will look kindly at the threat of a
constitutional crisis or consider it to be abrasive. He asked if
there is an alternate route that the legislature can use.
MR. TILLERY said he is not aware of an alternate route that
would address this issue. He doesn't believe the court would
find this to be abrasive any more than the legislature finds the
court's creation of a policy that reaches into the state's
treasury to be abrasive. This is an area between the two
branches of government that needs to be explored and the court
would have the chance to review and resolve it. He said that DOL
does not believe it in anyway impedes the legislature's policy;
DOL believes it helps the legislature's position.
MR. JOE BALASH, staff to Senator Therriault, explained to
members that the sovereign immunity question is something that
has been a stumbling block in discussions with Jerry Luckhaupt
of Legislative Legal and Research Services. He furthered:
One question is...the question about the potential for
a constitutional crisis, if you will, as sort of being
an underlying threat to the court that, okay, you may
find this particular construction in Title 9 to be
infirm for one reason or another so we're just going
to go ahead and say that the state and a municipality
are not going to be liable in the future for any award
in excess of the Rule 82 schedule and there's some
question as to whether or not the court is going to
take that seriously. Currently the legislature already
has the power of appropriation. If the legislature
chose not to award or to appropriate the fees awarded
to a plaintiff that was successful in suing the state
that could be done. In fact, there've been a couple of
showdowns in the past, particularly related to former
Senator Donley and a particular case that he followed
very closely.
Now I haven't had the time to go back and research
whether, in fact, those fees were never awarded or
there was just a delay in the appropriation, but
that's something that folks who've been around here a
little while might remember and recall as having been
an issue. I wasn't able to determine the final outcome
of that.
SENATOR THERRIAULT said the possibility of a constitutional
showdown would occur if the court determines that the fees are
owed but the legislature refuses to pay them under its sovereign
status.
MR. BALASH agreed.
SENATOR THERRIAULT said that rather than force that showdown, an
alternative way to get there would be preferable, which is what
Mr. Luckhaupt is advising.
MR. BALASH added that the first issue about extinguishing the
legislature's ability to appeal Judge Collins' decision is
interesting because an argument can be made that the changes
made in HB 145 last year were changes to substantive law, which
is the legislature's place to decide under the Constitution. The
case law in this area is a bit gray so this may be an
opportunity to get some clarity from the Supreme Court. He noted
that whether to approach this particular Supreme Court would be
a policy call for the legislature to make.
SENATOR THERRIAULT reminded members that the legislature could
preserve the right to appeal by deleting the retroactive section
of the bill.
MR. BALASH noted that Sections 6 and 10 would have to be deleted
to do so. He said if that happened and DOL were to appeal the
case, Legislative Council may wish to move it to be recognized
in the appeal to the Supreme Court.
SENATOR THERRIAULT said since, at the very least, this is an
issue of the preservation of legislative power, the legislature
could participate in an amicus capacity.
MR. BALASH asked Mr. Tillery if his description was correct.
MR. TILLERY replied:
...we really do not think that there is any
constitutional show down that would be brought about
by use of sovereign immunity. That is a standard
clause in the statutes. The language that's in there
was essentially taken from the statute. The way that
would work is if this is passed and someone challenged
it, by likely doing a declaratory judgment, the courts
would either rule that the legislature could do this
or could not do this and you would - and then there
would be no fees. There is no challenge. The real
challenge would actually come - it's one of the
alternatives that you've mentioned, which is if there
is a court order and the legislature refuses to pay
it, then you have two branches of government - one of
[indisc.] legislature or something or the state does
nothing and the legislature refused to fund it. That's
the confrontation but the immunity provision itself -
there really is no confrontation. The confrontation is
going to be on the court's terms in the court. It's
going to decide whether it's valid or invalid....
CHAIR SEEKINS asked Mr. Balash if he is suggesting eliminating
Sections 6 and 10.
MR. BALASH said that is correct if the committee would like to
see Judge Collins' decision appealed to the Supreme Court for
further clarification on the question of substantive law
changes.
CHAIR SEEKINS asked if it basically comes down to two different
issues. What this bill attempts to accomplish may be totally
separate in some respects from what the legislature would be
looking at if appealing that ruling because it would be trying
to determine the extent of the authority of the legislature in
the appeal.
MR. BALASH said that is correct. He then asked Mr. Tillery to
comment on whether the court might view that appeal as being
moot if the law has since changed.
MR. TILLERY said it is possible the court could view it as moot.
He said he is aware of one case that was since filed by a public
interest litigant that is alive under that law so they could
plead a constitutional claim. He said he cannot answer as to
what the court will decide but there is an argument that it is
not moot because an active case exists. He added that particular
case was brought before Judge Collins one day before the law
became effective so it was filed under the old law.
CHAIR SEEKINS asked if that case in itself would not challenge
the law passed last year.
MR. TILLERY said it challenges the law but it was filed the day
before that law became effective so it would come under the old
policy. Therefore, if attorney fees were sought in that case,
they would come under the old law.
CHAIR SEEKINS announced he would hold SB 97 until the next day
and adjourned the meeting at 6:05 p.m.
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