Legislature(2011 - 2012)CAPITOL 120

04/04/2011 01:00 PM House JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 161 CERTAIN CANDIDATE INFO IS PUBLIC RECORD TELECONFERENCED
<Bill Hearing Canceled>
+= HB 168 INJUNCTION SECURITY: INDUSTRIAL OPERATION TELECONFERENCED
Moved CSHB 168(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 1 POLICY FOR SECURING HEALTH CARE SERVICES TELECONFERENCED
Heard & Held
+= HB 6 REMOVING A REGENT TELECONFERENCED
Moved CSHB 6(JUD) Out of Committee
       HB 168 - INJUNCTION SECURITY: INDUSTRIAL OPERATION                                                                   
                                                                                                                                
1:09:45 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  THOMPSON announced that  the first order  of business                                                               
would be HOUSE BILL NO. 168,  "An Act requiring the amount of the                                                               
security  given  by  a  party  seeking  an  injunction  or  order                                                               
vacating  or  staying the  operation  of  a permit  affecting  an                                                               
industrial  operation to  include an  amount for  the payment  of                                                               
wages and benefits for employees  and payments to contractors and                                                               
subcontractors that  may be lost  if the industrial  operation is                                                               
wrongfully enjoined."                                                                                                           
                                                                                                                                
1:11:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ERIC FEIGE, Alaska  State Legislature, sponsor, to                                                               
briefly recap, indicated  that HB 168 would  establish in statute                                                               
language similar  to that of  Rule 65(c)  of the Alaska  Rules of                                                               
Civil Procedure  in order to address  lawsuits involving resource                                                               
development projects, specifically those  wherein a party seeks a                                                               
restraining order,  preliminary injunction, or order  vacating or                                                               
staying  the operation  of a  permit that  affects an  industrial                                                               
operation,  [thereby  essentially]   requiring  the  court,  when                                                               
setting the  amount of  the required  security bond,  to consider                                                               
the  costs associated  with that  restraining order,  preliminary                                                               
injunction,  or order  vacating  or staying  the  operation of  a                                                               
permit.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  HOLMES  noted  that   a  memorandum  in  members'                                                               
packets  dated  March  21,  2011,   from  Legislative  Legal  and                                                               
Research  Services indicates  that if  HB 168  is interpreted  as                                                               
requiring  the security  bond  to include  an  amount for  wages,                                                               
benefits,  and contract  payments, then  the bill  might also  be                                                               
interpreted  as  changing a  court  rule  [because currently  the                                                               
court  may  consider  including  amounts for  those  items  in  a                                                               
security bond  but isn't  required to].   She asked  whether it's                                                               
the  sponsor's  intention  to  require  that  the  security  bond                                                               
include amounts for wages and benefits and contract payments.                                                                   
                                                                                                                                
REPRESENTATIVE FEIGE said,  "[The] intent of the bill  is to make                                                               
sure   that  the   court  at   least  includes   that  in   their                                                               
consideration for  the security  amount; ...  I don't  believe it                                                               
directs ...  them to impose  that, particularly, but it  does ...                                                               
ask that they consider that in the ...."                                                                                        
                                                                                                                                
REPRESENTATIVE HOLMES  sought clarification  that the  bill would                                                               
not require the court to include those amounts.                                                                                 
                                                                                                                                
REPRESENTATIVE FEIGE said, "Correct."                                                                                           
                                                                                                                                
REPRESENTATIVE  GRUENBERG said,  "With  that clarification,  that                                                               
there's not  to be  any change  in the court  rule but  simply an                                                               
admonition, in the judge's discretion,  that we'd like that to be                                                               
considered,  then I  don't think  a  court rule  [change] is  ...                                                               
required, and I feel much more comfortable with the bill."                                                                      
                                                                                                                                
REPRESENTATIVE  FEIGE concurred  with Representative  Gruenberg's                                                               
interpretation.                                                                                                                 
                                                                                                                                
REPRESENTATIVE GRUENBERG  characterized HB  168 as being  in line                                                               
with Rule 65(c).                                                                                                                
                                                                                                                                
1:16:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG made  a  motion to  adopt Amendment  1,                                                               
labeled 27-LS0395\B.2, Bailey, 3/29/11, which read:                                                                             
                                                                                                                                
     Page 1, line 10:                                                                                                           
          Delete "determined by the court"                                                                                      
          Insert "the court considers proper"                                                                                   
                                                                                                                                
REPRESENTATIVE KELLER objected.                                                                                                 
                                                                                                                                
REPRESENTATIVE GRUENBERG explained that  Amendment 1 provides for                                                               
language  tracking  that of  Rule  65(c),  and so  could  further                                                               
clarify that  the bill is intended  to do exactly the  same thing                                                               
as that court rule.                                                                                                             
                                                                                                                                
REPRESENTATIVE FEIGE concurred.                                                                                                 
                                                                                                                                
REPRESENTATIVE  KELLER offered  his  understanding, though,  that                                                               
the  term,  "determination"  constitutes a  final  judgment,  and                                                               
expressed a  preference for retaining the  phrase, "determined by                                                               
the court", considering it to be "tighter."                                                                                     
                                                                                                                                
REPRESENTATIVE HOLMES  explained that that  term, as used  in the                                                               
bill, doesn't  in any way  refer to  any sort of  final judgment,                                                               
and instead simply means that  the court shall decide what amount                                                               
the security  bond should be for.   Amendment 1 would  not change                                                               
the  meaning  of the  bill,  does  not constitute  a  substantive                                                               
change,  and would  instead simply  allow the  bill to  track the                                                               
aforementioned court  rule.  Adoption  of Amendment 1  would also                                                               
clarify that the  legislature is not trying to  change that court                                                               
rule, she ventured.                                                                                                             
                                                                                                                                
REPRESENTATIVE  KELLER predicted  that  adoption  of Amendment  1                                                               
would then allow people to make  the argument that the bill isn't                                                               
necessary  because [the  situations that  are of  concern to  the                                                               
sponsor] would be  covered under the court rule.   He then sought                                                               
clarification  from  the Department  of  Law  regarding what  the                                                               
effect of adopting Amendment 1 would be.                                                                                        
                                                                                                                                
1:22:55 PM                                                                                                                    
                                                                                                                                
TINA  KOBAYASHI, Chief  Assistant  Attorney  General -  Statewide                                                               
Section  Supervisor, Oil,  Gas &  Mining Section,  Civil Division                                                               
(Juneau),  Department   of  Law  (DOL),  said   she  agrees  with                                                               
Representative Holmes's  summation that  because the  language of                                                               
Amendment 1 more  closely tracks the language of  the court rule,                                                               
its adoption  would clarify that  the proposed statute  would not                                                               
change  the  court  rule,  that  the  discretion  would  be  left                                                               
entirely  up to  the  court.   In  response  to  a question,  she                                                               
offered  her  belief  that  under   Amendment  1's  proposed  new                                                               
language - "the court considers  proper" - the court would simply                                                               
continue following its current procedure.                                                                                       
                                                                                                                                
REPRESENTATIVE GRUENBERG observed that  the dictionary, which the                                                               
courts normally  look to, in  part defines the  term, "determine"                                                               
as meaning to find out or  come to a decision about something via                                                               
investigation, reasoning, or calculation.                                                                                       
                                                                                                                                
REPRESENTATIVE FEIGE,  in response to a  question, concurred that                                                               
that was  the meaning  he intended  when initially  including the                                                               
phrase, "determined by the court" in HB 168.                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG posited that  Amendment 1's proposed new                                                               
language  merely  restates  that  intent,  thereby  removing  all                                                               
question regarding what the bill does.                                                                                          
                                                                                                                                
REPRESENTATIVE KELLER indicated that  he still has concerns about                                                               
the meaning of Amendment 1's proposed new language.                                                                             
                                                                                                                                
1:25:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOLMES  reiterated   that  she  doesn't  consider                                                               
Amendment 1 to  be effecting a substantive change.   Instead, she                                                               
ventured,  Amendment 1's  proposed new  language is  just another                                                               
way of  saying what the bill  already says, and pointed  out that                                                               
the  bill's sponsor  is  in  agreement.   It  is seemingly  being                                                               
argued that  the language  currently in the  bill should  be kept                                                               
because it means something different  than Amendment 1's proposed                                                               
new language and  that which is currently in the  court rule, but                                                               
if  that's really  the case,  and it  really does  mean something                                                               
different, then  by not adopting  Amendment 1, it means  that the                                                               
bill would  indeed be changing  a court rule -  thereby requiring                                                               
an affirmative two-thirds  vote.  The closer the  language of the                                                               
court rule  is tracked, she  opined, then  the more likely  it is                                                               
that  the  bill  isn't  going   to  get  struck  down  as  having                                                               
inappropriately  effected a  court rule  change.   In conclusion,                                                               
she urged adoption of Amendment 1.                                                                                              
                                                                                                                                
REPRESENTATIVE  KELLER mentioned  that he  simply didn't  want to                                                               
change the  bill contrary  to what  the sponsor  wants.   He then                                                               
removed his objection to the motion to adopt Amendment 1.                                                                       
                                                                                                                                
VICE  CHAIR   THOMPSON,  noting   that  there  were   no  further                                                               
objections, announced that Amendment 1 was adopted.                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked the  sponsor to consider,  as the                                                               
bill moves forward, possibly changing  it in order to ensure that                                                               
its proposed AS  09.40.230(c) would apply fairly  to both parties                                                               
in a lawsuit; proposed subsection (c) currently reads:                                                                          
                                                                                                                                
        (c)  The existence of security under (b) of this                                                                        
     section does not                                                                                                           
        (1) prohibit a person who is wrongly enjoined or                                                                        
     restrained from obtaining relief that may be available                                                                     
     to that person; or                                                                                                         
        (2) limit the amount that a party may recover in                                                                        
     the action.                                                                                                                
                                                                                                                                
VICE  CHAIR THOMPSON  questioned how  the portion  of a  security                                                               
bond that reflects  lost wages and benefits  would be distributed                                                               
to employees.                                                                                                                   
                                                                                                                                
1:31:09 PM                                                                                                                    
                                                                                                                                
DOUG  WOOLIVER,  Administrative Attorney,  Administrative  Staff,                                                               
Office  of  the  Administrative  Director,  Alaska  Court  System                                                               
(ACS), explained  that if  a security bond  is posted  to protect                                                               
the interests of a company  that's alleging potential lost wages,                                                               
and if that security bond is  then forfeited, the court would pay                                                               
that bond  amount to the party  that was enjoined, but  the court                                                               
wouldn't  have any  way  of  knowing who  the  company should  be                                                               
reimbursing for  lost wages  - the decision  of who  to reimburse                                                               
would  be left  up to  the  company that  received the  forfeited                                                               
bond.                                                                                                                           
                                                                                                                                
VICE  CHAIR THOMPSON  questioned whether  a company  could simply                                                               
pocket that money and not reimburse its employees for wages.                                                                    
                                                                                                                                
MR. WOOLIVER acknowledged  that a company could do  that.  Again,                                                               
the court  isn't going to  have any of the  information necessary                                                               
to address the  distribution of funds, and so it  must be left up                                                               
to the  receiving party to appropriately  reimburse its employees                                                               
and subcontractors.                                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG  ventured that  certain types  of trusts                                                               
and  specific  court  actions  could   probably  be  utilized  to                                                               
mitigate  the  potential  for an  enjoined/restrained  industrial                                                               
operation to abuse the system.                                                                                                  
                                                                                                                                
MR.  WOOLIVER  mentioned that  the  apportioning  of a  forfeited                                                               
security  bond  could  get  somewhat   complicated  and  has  the                                                               
potential of engendering further litigation.                                                                                    
                                                                                                                                
VICE CHAIR THOMPSON,  after ascertaining that no  one else wished                                                               
to testify, closed public testimony on HB 168.                                                                                  
                                                                                                                                
1:36:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER moved to report  HB 168, as amended, out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There  being  no  objection, CSHB  168(JUD)  was                                                               
reported from the House Judiciary Standing Committee.                                                                           

Document Name Date/Time Subjects
HB168 Proposed Amendment B.2 03-29-11.pdf HJUD 4/4/2011 1:00:00 PM
HB 168
HB1 CS Version B 04-01-11.pdf HJUD 4/4/2011 1:00:00 PM
HB 1
HB6 CS Version R WORK DRAFT 03-25-11.pdf HJUD 4/4/2011 1:00:00 PM
HB 6
HB6 Draft Amendment Keller 1 03-21-11.pdf HJUD 4/4/2011 1:00:00 PM
HB 6
HB6 Draft Amendment Keller 2 04-04-11.pdf HJUD 4/4/2011 1:00:00 PM
HB 6
HB6 Draft Amendment Keller 3 04-04-11.pdf HJUD 4/4/2011 1:00:00 PM
HB 6
HB6 Explanation of Changes Version T to R 04-04-11.pdf HJUD 4/4/2011 1:00:00 PM
HB 6