01/30/2013 01:00 PM House JUDICIARY

       HB 47 - INJUNCTION SECURITY:  INDUSTRIAL OPERATION                                                                   
                                                                                                                                
2:14:25 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER announced that the  final order of business would be                                                               
HOUSE  BILL  NO.  47,  "An   Act  requiring  a  party  seeking  a                                                               
restraining order,  preliminary injunction, or order  vacating or                                                               
staying  the  operation  of  a  permit  affecting  an  industrial                                                               
operation  to give  security in  the amount  the court  considers                                                               
proper for costs incurred and  damages suffered if the industrial                                                               
operation is wrongfully enjoined or restrained."                                                                                
                                                                                                                                
REPRESENTATIVE LYNN moved to adopt  the original version of HB 47                                                               
as the working document.                                                                                                        
                                                                                                                                
REPRESENTATIVE LYNN then objected.                                                                                              
                                                                                                                                
2:15:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ERIC  FEIGE, Alaska  State Legislature, as  one of                                                               
the joint prime sponsors of HB  47, offered his beliefs that over                                                               
the  past   several  years  there   have  been  cases   in  which                                                               
preliminary  injunctions or  orders  staying the  operation of  a                                                               
permit  have  been  issued  against   companies  engaged  in  the                                                               
development of  resource extraction or in  other large industrial                                                               
operations that had already been  granted a permit, and that such                                                               
companies had to endure uncertainty  and delay.  [Litigating such                                                               
cases] can  cost hundreds of  thousands of dollars, and  thus the                                                               
threat of having  a preliminary injunction issued could  act as a                                                               
deterrent  to  investing  in such  projects.    When  preliminary                                                               
injunctions  or orders  staying  the operation  of  a permit  are                                                               
issued,  it is  the  subsequently-laid-off workers  who feel  the                                                               
most  immediate impact.   He  assured  the committee  that HB  47                                                               
would not  be applied  in situations  involving wrongfully-issued                                                               
or poorly-written  permits, or when permittees  are violating the                                                               
terms of  their permits - in  those situations it would  still be                                                               
up to the permitting agency to [rectify the situation].                                                                         
                                                                                                                                
REPRESENTATIVE  FEIGE said  HB 47  parallels the  requirements of                                                               
Rule 65(c)  of the  Alaska Rules of  Civil Procedure;  Rule 65(c)                                                               
reads:                                                                                                                          
                                                                                                                                
     (c)  Security.   No  restraining  order or  preliminary                                                                  
     injunction  shall  issue  except  upon  the  giving  of                                                                    
     security by  the applicant,  in such  sum as  the court                                                                    
     deems  proper,  for  the  payment  of  such  costs  and                                                                    
     damages as  may be  incurred or  suffered by  any party                                                                    
     who  is  found  to  have been  wrongfully  enjoined  or                                                                    
     restrained.  No such security  shall be required of the                                                                    
     state  or a  municipality or  of an  officer or  agency                                                                    
     thereof, or  unless otherwise ordered by  the court, in                                                                    
     domestic relations actions or proceedings.                                                                                 
                                                                                                                                
REPRESENTATIVE FEIGE said  HB 47 doesn't set  a specific security                                                               
amount, and was  written to work with Rule 65(c),  not change it.                                                               
He offered  his beliefs that  although the court already  has the                                                               
authority  to   require  that  security  be   given,  this  isn't                                                               
occurring  in  most  cases,  and that  the  bill  itself  doesn't                                                               
mandate  that  the  court  require that  security  be  given  but                                                               
instead simply  directs the court,  when determining  what amount                                                               
of  security  to require,  to  consider  the  costs that  may  be                                                               
incurred, the  damages that  may be suffered,  and an  amount for                                                               
the  payment of  wages and  benefits for  employers, contractors,                                                               
and  subcontractors.   As used  in HB  47, the  term, "industrial                                                               
operation"  is defined  as including  a construction,  energy, or                                                               
timber  activity,   and  oil,   gas,  and   mineral  exploration,                                                               
development, and  production.  He offered  his understanding that                                                               
most  preliminary injunctions  involve  federal  permits and  are                                                               
settled out  of court  to avoid costs  and [project]  delays, and                                                               
that in one  instance wherein a federal court  recently issued an                                                               
injunction that  was later  lifted, 200 people  were out  of work                                                               
for about a  month and half.  In that  instance, he surmised, the                                                               
lost  wages and  lost [project]  time had  an impact  on Alaska's                                                               
citizens  and on  the companies  and employees  involved in  that                                                               
project, a railroad spur-line.                                                                                                  
                                                                                                                                
2:21:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX questioned  the need  for the  bill, given                                                               
that [under Rule  65(c),] the court already has  the authority to                                                               
require that security be given.                                                                                                 
                                                                                                                                
REPRESENTATIVE FEIGE  offered his hope  that as an  expression of                                                               
legislative  intent,  passage of  HB  47  would influence  future                                                               
court decisions.   In response to another  question, he confirmed                                                               
that a direct  change to the Alaska Rules of  Court would require                                                               
an affirmative two-thirds vote.                                                                                                 
                                                                                                                                
REPRESENTATIVE  FOSTER pointed  out  that  as currently  written,                                                               
HB 47 does mandate that the  court shall require that security be                                                               
given:   language on  page 1,  lines 1-3, says  in part,  "An Act                                                             
requiring  a  party  ...  to give  security"[;  and  language  on                                                             
page 1,  lines  7-9,  says  in  part, "A  party  ...  shall  give                                                               
security"].                                                                                                                     
                                                                                                                                
REPRESENTATIVE  FEIGE  referred  to   the  language  on  page  1,                                                               
lines 8-9, of  HB 47 that says  in part, "shall give  security in                                                               
an amount  the court considers  proper"; offered his  belief that                                                               
the court would  have the discretion to simply  choose a security                                                               
amount of zero;  and reiterated that the bill is  not intended to                                                               
change Rule 65(c)  - the bill simply adds a  stipulation that the                                                               
amount the  court considers  proper could  include an  amount for                                                               
the  payment of  wages and  benefits for  employers, contractors,                                                               
and subcontractors.   "We  would, as a  legislature, ...  like to                                                               
see judges  ... require actual  cash bonds more often,"  he added                                                               
in conclusion.                                                                                                                  
                                                                                                                                
CHAIR KELLER  ascertained that no  one else wished to  testify on                                                               
HB 47.                                                                                                                          
                                                                                                                                
[HB 47  was held  over, with  the motion  to adopt  HB 47  as the                                                               
working document left pending.]