Legislature(1999 - 2000)

04/27/1999 01:55 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE BILL NO. 176                                                                                                              
                                                                                                                                
"An Act relating to attorney fees and costs and the                                                                             
granting of public interest litigant status in                                                                                  
proceedings related to administrative actions and                                                                               
inaction; and amending Rules 79 and 82, Alaska Rules of                                                                         
Civil Procedure, and Rule 508, Alaska Rules of                                                                                  
Appellate Procedure."                                                                                                           
                                                                                                                                
JEFF LOGAN, STAFF, REPRESENTATIVE GREEN testified in support                                                                    
of HB 176. He maintained that the legislation is designed to                                                                    
take the "kick me sign of our backs." Alaska has a resource                                                                     
development economy. Resources are disposed for payment to                                                                      
fund government services. The legislature has developed a                                                                       
process to protect the public. He maintained that there is a                                                                    
competent group of people to carry out the administration of                                                                    
this process. He observed that if a member of the public                                                                        
finds themselves in opposition to an agency action or in                                                                        
action then they can challenge the action through the                                                                           
administrative appeals process. He maintained that people                                                                       
are being paid by the state to sue the state. He observed                                                                       
that the court has ruled that some litigation is so                                                                             
important to the public at large that the public at large                                                                       
should pay for the litigation. He acknowledged the merit of                                                                     
the court's assumption, but stressed that the court has let                                                                     
the people of Alaska pay for specific questions. The                                                                            
legislation would change state policy to require plaintiffs                                                                     
against the state to pay for their own lawyers.                                                                                 
                                                                                                                                
Representative J. Davies asked the criteria for establishing                                                                    
public interest status.                                                                                                         
                                                                                                                                
KEVIN JARDELL, STAFF, REPRESENTATIVE GREEN noted that there                                                                     
is a four part test used by the courts to decide if a party                                                                     
qualifies qualify as a public interest litigant under rule                                                                      
82:                                                                                                                             
1) Is the case designed to effectuate strong public                                                                             
policies?                                                                                                                       
2) If the plaintiff succeeds will numerous people                                                                               
receive benefits from the lawsuit?                                                                                              
3) Can only a private party have been expected to bring                                                                         
the suit?                                                                                                                       
4) Would the purported public interest litigant have                                                                            
sufficient economic incentive to file suit even if the                                                                          
action involved only narrow issues lacking general                                                                              
importance?                                                                                                                     
                                                                                                                                
In response to a question by Co-Chair Therriault, Mr.                                                                           
Jardell clarified that rule 82 governs the allocation of                                                                        
attorney fees for the prevailing party. He explained that                                                                       
the judge makes a determination after a case is settled. The                                                                    
attorney of the prevailing party then fills a motion to                                                                         
recover the cost of attorney fees under rule 82. The judge                                                                      
under general cases would apply rule 82 and apportion a                                                                         
portion of the attorney fees to the prevailing party. This                                                                      
is generally around 30 percent of the cost incurred.                                                                            
                                                                                                                                
Representative J. Davies questioned how statutes regarding                                                                      
frivolous lawsuits would factor into the process. He                                                                            
expressed concern that the legislation would take away                                                                          
lawsuits that would affect public policy and benefit                                                                            
numerous persons.                                                                                                               
                                                                                                                                
Co-Chair Therriault maintained that the current                                                                                 
administrative system is adequate to address Representative                                                                     
J. Davies' concerns. Representative J. Davies stressed that                                                                     
there are checks and balances between the three branches. He                                                                    
emphasized that the Court System allows a final check to                                                                        
executive and legislative branches. He maintained that                                                                          
public litigant lawsuits are non-frivolous and have the                                                                         
ability to affect a large number of citizens.                                                                                   
                                                                                                                                
Mr. Jardell stated that the state of Alaska is the only                                                                         
state that has a public litigant provision. He noted that                                                                       
most states have adopted the federal procedure of                                                                               
identifying specific causes of actions and getting specific                                                                     
protections for the cause of action. Under this method the                                                                      
state can control the cause of action that is being                                                                             
litigated. He asserted that lobbying costs have been                                                                            
included in attorney fees. He emphasized that rule 82 lists                                                                     
a number of factors that the court can use to assess                                                                            
rewards. He maintained that the Court can award full                                                                            
attorney fees under Rule 82. He added that there is a high                                                                      
threshold for establishing frivolous lawsuits.                                                                                  
                                                                                                                                
Co-Chair Therriault questioned if the legislation only                                                                          
affects Rule 82. Mr. Jardell noted that it amends statutory                                                                     
language that directs the court in setting attorney fees. It                                                                    
also amends court rules as a preventative measure to prevent                                                                    
the adoption of a court rule that would supersede a                                                                             
legislative direction. The legislation reinforces the rule                                                                      
by amending AS 44,62,300, which deals with actions against                                                                      
the state and regulations and the process of administrative                                                                     
appeals.                                                                                                                        
                                                                                                                                
Co-Chair Therriault asked if public interest litigant status                                                                    
would remain. Mr. Jardell noted that public interest                                                                            
litigant status would not be allowed if the party was                                                                           
litigating an action of the executive branch. It would                                                                          
remain for actions against municipalities, or the                                                                               
legislature.                                                                                                                    
                                                                                                                                
Representative J. Davies questioned why it would not be                                                                         
granted against a municipality or the legislature. He                                                                           
observed that the legislature is the policy making body. He                                                                     
noted that the policy of administrative review has to do                                                                        
with the inappropriate execution of executive power. It is                                                                      
the ultimate power the citizens have against an over weaning                                                                    
government.                                                                                                                     
                                                                                                                                
Mr. Jardell stated that the reason it has been removed from                                                                     
the executive branch is because that is where the problem                                                                       
has occurred.                                                                                                                   
                                                                                                                                
Representative J. Davies objected to the characterization                                                                       
that the legislation would remove the "kick me sign".                                                                           
                                                                                                                                
LAUREE HUGONIN, EXECUTIVE DIRECTOR, ALASKAN NETWORK ON                                                                          
DOMESTIC VIOLENCE AND SEXUAL ASSAULT testified against the                                                                      
legislation. She recounted a case that the Network brought                                                                      
against the Alaska Court System. The Network won the case                                                                       
and was awarded two-thirds of their attorney fees. She                                                                          
acknowledged that the legislation would prevent a similar                                                                       
case. She expressed concern that the legislation would                                                                          
prevent future cases against the executive branch. She also                                                                     
expressed concern with the affect of the legislation on SB
123, which amends rule 82. She noted that SB 123 would limit                                                                    
public interest litigants to 30 percent of their fees on                                                                        
issues in which they prevailed. She concluded that the                                                                          
legislation would have adverse affects on smaller public                                                                        
interest groups. She expressed doubt that groups are making                                                                     
money on the award of attorney fees.                                                                                            
                                                                                                                                
Co-Chair Therriault questioned how long it took the Council                                                                     
to decide that their only course of action was through the                                                                      
court system. Ms. Hugonin replied that it was only a few                                                                        
months. Co-Chair Therriault questioned if the legislature                                                                       
had time to consider the actions of the administration and                                                                      
court system to implement the law that was passed. Ms.                                                                          
Hugonin noted that the action took placed during the                                                                            
legislative interim.                                                                                                            
                                                                                                                                
PAM LABOLLE, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE,                                                                       
JUNEAU testified in support of HB 176. She maintained that                                                                      
if public interest litigants would pursue frivolous cases if                                                                    
they do not have anything to lose. She observed that they do                                                                    
not have to pay the other party's fees. She noted that                                                                          
businesses that lose must pay the prevailing party's fees.                                                                      
She referred to a current suit regarding Beluga whales. She                                                                     
noted that if a public interest litigants win any part of                                                                       
their suit they are awarded attorney fees.                                                                                      
                                                                                                                                
Representative J. Davies pointed out that the legislation                                                                       
does not pertain to businesses. He added that attorney fees                                                                     
are not awarded at 100 percent.                                                                                                 
                                                                                                                                
(Tape Change, HFC 99 - 106, Side 2)                                                                                             
                                                                                                                                
Ms. LaBolle reiterated objections to the public interest                                                                        
litigant status.                                                                                                                
                                                                                                                                
Representative J. Davies stated the legislature should look                                                                     
at if the courts are awarding costs that should not be                                                                          
awarded, if that is the problem.                                                                                                
                                                                                                                                
In response to a question by Co-Chair Therriault, Mr.                                                                           
Jardell explained that Alaska is the only state that has fee                                                                    
shifting. He did not know of any other state that has the                                                                       
American rule as opposed to the English rule, where parties                                                                     
bare their own cost except in individual causes of action.                                                                      
The public interest litigant doctrine is a creation of the                                                                      
state of Alaska.                                                                                                                
                                                                                                                                
Co-Chair Therriault questioned how public interest litigants                                                                    
bill for attorney fees. Mr. Jardell discussed the Weiss                                                                         
case. He observed that the public interest litigants were                                                                       
awarded 100 percent of their attorney fees even though the                                                                      
court did not grant any of their points. He noted that a                                                                        
third party won based on challenges on a different argument.                                                                    
The Supreme Court ruled that the public interest litigants'                                                                     
goal was achieved through the award of the third party. They                                                                    
were awarded $454 thousand dollars.                                                                                             
                                                                                                                                
JENNIFER RUDINGER, EXECUTIVE DIRECTOR, ALASKA CIVIL                                                                             
LIBERTIES UNION (ACLU) testified via teleconference in                                                                          
opposition to HB 176. She maintained that it would                                                                              
jeopardize the public's participation in government and                                                                         
their ability to question government's decisions in court.                                                                      
She pointed out that current law recognizes that the normal                                                                     
attorney fee provisions in Alaska would create a significant                                                                    
impediment to litigation in the public's interest. The court                                                                    
attempted to remove this impediment as a matter of justice                                                                      
and fairness. Long standing judicial practice has exempted                                                                      
litigants acting in the public interest from paying the                                                                         
prevailing parties cost. She noted that litigants that fit                                                                      
this category includes individuals, nonprofit groups, Native                                                                    
tribes, and political organizations. Issues that may result                                                                     
in a granting of public interest litigant status includes:                                                                      
civil rights, discrimination, equal protection issues,                                                                          
tribal rights, political reinforcements, patients rights,                                                                       
and open government cases where individuals are seeking                                                                         
access to state government decisions. There have been cases                                                                     
on fish and game regulations, reapportionment, and anticrime                                                                    
issues. She maintained that the rhetoric from proponents of                                                                     
HB 176 seems to be anti-environmental. She pointed out that                                                                     
HB 176 throws the "baby out with the bath water." She noted                                                                     
that current law awards public interest litigants, who                                                                          
prevail, full and reasonable attorney fees. She acknowledged                                                                    
that public interest litigant that lose do not have to pay                                                                      
the state's attorney fees, but emphasized that there are                                                                        
many litigants that would not be able to bring litigation                                                                       
due to a lack of economic incentive. She maintained that                                                                        
citizens should be able to challenge governmental decisions                                                                     
in court. Public interest litigants are only reimbursed if                                                                      
they prevail. She maintained that the legislation punishes                                                                      
small public interest litigants. She expressed concern that                                                                     
the legislation will result in the elimination of public                                                                        
interest litigation. She stressed that it is in everyone's                                                                      
interest to encourage challenges in the public interest.                                                                        
                                                                                                                                
Discussion Vice-Chair Bunde referred to the ACLU's lawsuit                                                                      
regarding campaign financing. He questioned if it improved                                                                      
the campaign financing law.  Ms Rudinger discussed the                                                                          
ACLU's case.                                                                                                                    
                                                                                                                                
TOM LAKOSH, ANCHORAGE testified via teleconference in                                                                           
opposition to HB 176. He maintained that the legislation                                                                        
violates five sections of the Alaska Constitution, Article                                                                      
I, Sections 1, 2, 6 and 7, and Article 8, Section 17. He                                                                        
stressed that there is an equal protection issue. He                                                                            
referred to Article I, Section 2. - SOURCE OF GOVERNMENT:                                                                       
                                                                                                                                
All political power is inherent in the people. All                                                                              
government originates with the people, is founded upon                                                                          
their will only, and is instituted solely for the good                                                                          
of the people as a whole.                                                                                                       
                                                                                                                                
Mr. Lakosh asserted that the will of the executive branch is                                                                    
being placed above the will of the people. He added that the                                                                    
people's right of petition under Article I, Section 6 would                                                                     
be abrogated. He reiterated arguments that the legislation                                                                      
would be unconstitutional.                                                                                                      
                                                                                                                                
In response to a question by Representative J. Davies, Mr.                                                                      
Logan observed that the Department of Law did not testify on                                                                    
the legislation in Judiciary.                                                                                                   
                                                                                                                                
Representative Kohring MOVED to report HB 76 out of                                                                             
Committee with the accompanying fiscal note.                                                                                    
                                                                                                                                
Representative J. Davies OBJECTED.  He argued that the                                                                          
legislation would take away a status that would advance                                                                         
cases, that are not frivolous, which could effectuate strong                                                                    
public policy and benefit numerous people. He asserted that                                                                     
the legislation is a reaction to a small class of lawsuits.                                                                     
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: G. Davis, Foster, Grussendorf, Kohring, Williams,                                                                     
Austerman, Bunde, Mulder, Therriault                                                                                            
OPPOSED: J. Davies                                                                                                              
                                                                                                                                
Representative Moses was not present for the vote.                                                                              
                                                                                                                                
The MOTION PASSED (9-1).                                                                                                        
                                                                                                                                
HB 176 was REPORTED out of Committee with "no recommendation                                                                    
and a zero fiscal note by the House Judiciary Committee,                                                                        
dated 4/22/99.                                                                                                                  

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