Legislature(1993 - 1994)

01/26/1994 01:15 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  SCR 4 - REQUEST CHANGE IN RULE 82 FEES                                       
                                                                               
  Number 053                                                                   
                                                                               
  KEVIN SULLIVAN, legislative aide to Senator Robin Taylor,                    
  Prime Sponsor of SCR 4, testified on behalf of the sponsor.                  
  He read from a prepared sponsor statement, which stated the                  
  purpose of this resolution is to petition the supreme court                  
  to review the special status afforded public interest groups                 
  in the award of attorney fees under Rule 82 of the Alaska                    
  Rules of Civil Procedure.  Mr. Sullivan said that for all                    
  Alaskans, except special interest groups, Rule 82 provides                   
  partial repayment of attorney fees to the prevailing party                   
  by the losing party, and the rule is designed to discourage                  
  frivolous litigation and tends to reduce the judicial                        
  caseload as a result.  He continued, saying the exception to                 
  this rule is public interest litigation; and based on the                    
  supreme court's exception for public interest litigants,                     
  Rule 82 provides an economic incentive to various groups to                  
  sue because full attorney fees are paid to the public                        
  interest group if they prevail, and no attorney fees are                     
  charged if it loses.                                                         
                                                                               
  MR. SULLIVAN explained this raises a number of public policy                 
  issues.  He noted point number one:  What is a public                        
  interest that the court is protecting with this rule 82                      
  exception?  He gave an example and asked if it was really in                 
  the public interest for environmental groups to sue to close                 
  down businesses in Alaska.  He continued with point number                   
  two:  How much of a legal subsidy is realized by these                       
  groups and who pays for it?  His third point asked if it was                 
  good public policy to encourage litigation by groups the                     
  supreme court has decided to favor, and how much does the                    
  supreme court's policy cost the state of Alaska.                             
                                                                               
  MR. SULLIVAN said certain groups are being encouraged to                     
  litigate because the state is compelled by the court to                      
  partially fund those groups with money from other Alaskans,                  
  including appropriated funds from the state.                                 
                                                                               
  MR. SULLIVAN summarized, saying as Rule 82 is currently                      
  interpreted by the court, certain parties are encouraged                     
  with significant economic incentives to bring litigation                     
  against the state.  He asked whether the interest of the                     
  public is truly being served by these public interest                        
  parties, which is also at issue.  He concluded, saying the                   
  state is being directed to subsidize these questionable                      
  public interest litigants at great expense to the public                     
  itself, and SCR 4 encourages the supreme court to review                     
  these issues.                                                                
                                                                               
  Number 137                                                                   
                                                                               
  REP. NORDLUND said that SCR 4, in the resolves, seems to be                  
  targeting those groups that somehow deal with or oppose mass                 
  resource development in the state.  He asked if it was                       
  constitutional to target specific public interest groups.                    
                                                                               
  Number 160                                                                   
                                                                               
  MR. SULLIVAN replied that "targeting" was perhaps a                          
  different way of describing it, and the legislation lists a                  
  name of a group as an example; and from a constitution                       
  perspective it doesn't seem to particularly impact it.                       
                                                                               
  MR. SULLIVAN went on to say that the court, through case                     
  law, has come up with a determination on what is public                      
  interest litigation, and SCR 4 is simply a resolution asking                 
  the supreme court to review Rule 82 as it currently applies                  
  to public interest litigants.                                                
                                                                               
  Number 192                                                                   
                                                                               
  REP. NORDLUND told the committee that it seems ridiculous to                 
  state "groups founded to oppose natural resource                             
  development" and ask if there are any environmental groups                   
  that would state that as their mission.                                      
                                                                               
  Number 199                                                                   
                                                                               
  MR. SULLIVAN said he wasn't in a position to speak for what                  
  environmental groups may say in their mission statements,                    
  but that particular portion of the resolution is speaking to                 
  historically what has been presented in the courts by                        
  parties that were litigating specific situations in terms of                 
  trying to impede or inhibit further resource development.                    
                                                                               
  Number 208                                                                   
                                                                               
  REP. GREEN asked if an amendment might help Rep. Nordlund's                  
  concerns and suggested different wording.                                    
                                                                               
  Number 218                                                                   
                                                                               
  REP. PORTER suggested it would be in the committee's best                    
  interest to hear all the testimony before proposing                          
  amendments.                                                                  
                                                                               
  Number 217                                                                   
                                                                               
  REP. DAVIDSON asked Mr. Sullivan if he could expand on which                 
  litigant groups have gained significantly economic advantage                 
  as a result of bringing public interest litigation.                          
                                                                               
  Number 220                                                                   
                                                                               
  MR. SULLIVAN responded that the significant economic                         
  incentive is the fact that as Rule 82 currently stands,                      
  should the party lose they would not be obligated to pay for                 
  the reasonable attorney costs of the defendant because they                  
  are determined to be public interest litigants, so it is a                   
  net savings in retrospect instead as opposed to up-front.                    
                                                                               
  Number 254                                                                   
                                                                               
  REP. DAVIDSON asked Mr. Sullivan if from his perspective it                  
  is an economic gain for the group.                                           
                                                                               
  Number 255                                                                   
                                                                               
  MR. SULLIVAN stated that should a case be brought, and it's                  
  determined that the case is without merit, under current law                 
  if the plaintiff was not determined to be a public interest                  
  litigant, then that entity would be responsible for a                        
  portion of the reasonable attorney fees of the defendant.                    
  He said by being classified by the court as a public                         
  interest litigant, they are not responsible for the payment                  
  of those fees to the other party.                                            
                                                                               
  Number 279                                                                   
                                                                               
  REP. DAVIDSON said according to Mr. Sullivan's                               
  interpretation, people bring litigation because they know                    
  they can't win, but it will cost the people they are                         
  bringing the litigation against.                                             
                                                                               
  Number 286                                                                   
                                                                               
  MR. SULLIVAN replied no, and said he is not asserting that                   
  any litigant is bringing a claim which they know they can't                  
  win; he's simply saying that public interest litigants, if                   
  they lose, are not responsible for the fees of the other                     
  party; therefore, that would enter into a decision on what                   
  claims to pursue.                                                            
                                                                               
  Number 303                                                                   
                                                                               
  RUSSELL HEATH, Executive Director, Alaska Environmental                      
  Lobby, testified against SCR 4.  He said the Alaska                          
  Environmental Lobby is a coalition of twenty Alaskan                         
  environmental groups, and his organization represents their                  
  interests in the Alaska State Legislature.  Mr. Heath                        
  described the differences between a public interest lawsuit                  
  and a private lawsuit, and said the vast majority of public                  
  interest lawsuits are against state and local governments,                   
  not against private individuals or corporations.  He said                    
  this is because there is no citizen suit provision in Alaska                 
  statutes.                                                                    
                                                                               
  Number 509                                                                   
                                                                               
  TROY REINHART, Executive Director, Alaska Forest Association                 
  (AFA), testified in favor of SCR 4.  He said AFA believes                    
  the current exception to Rule 82, which allows public                        
  interest groups to file litigation without risk of paying                    
  legal bills of those being sued, if they lose, only promotes                 
  frivolous lawsuits.  Mr. Reinhart said the current exception                 
  to Rule 82 is bad public policy and must change, and if Rule                 
  82 was changed, it would level the litigation playing field,                 
  although it would still provide public access to the courts                  
  for those seeking to settle disagreements and would also                     
  ensure that so-called public interest groups cannot file                     
  lawsuits against companies or individuals without at least                   
  being confident of prevailing or being assessed court costs.                 
                                                                               
  REP. DAVIDSON asked Mr. Reinhart if AFA subscribes to the                    
  statement that was made in the sponsor's comments that the                   
  supreme court favors a certain group over another.                           
                                                                               
  Number 550                                                                   
                                                                               
  MR. REINHART answered that his concern is particularly with                  
  environmental litigation that has been filed against his                     
  industry, and AFA believes that the way the current                          
  situation is set up, it's an unlevel playing field where                     
  environmental groups have all of an upside and no downside,                  
  and it actually does promote litigation.                                     
                                                                               
  Number 577                                                                   
                                                                               
  REP. NORDLUND reiterated that most of these lawsuits are                     
  filed against government, and certainly they have an effect                  
  on the timber industry.  He asked Mr. Reinhart if by                         
  supporting this resolution he realized that he is asking the                 
  court to take away this exemption for all public interest                    
  groups, including the League of Women Voters, National Rifle                 
  Association, and so on.                                                      
                                                                               
  Number 591                                                                   
                                                                               
  MR. REINHART responded that his interest in this bill, and                   
  that of his organization, is on the environmental side and                   
  that's why he was there to testify.                                          
                                                                               
  Number 595                                                                   
                                                                               
  EMILY BARNETT, Trustees for Alaska, testified against SCR 4,                 
  saying that the resolution has nothing to do with attorneys                  
  and everything to do with public rights and the integrity of                 
  our nation's democratic processes.                                           
                                                                               
  Number 689                                                                   
                                                                               
  REP. PHILLIPS said it appears that Ms. Barnett questioned                    
  the validity of the statement that the supreme court has                     
  interpreted the Alaska Rule of Civil Procedure to allow                      
  litigation organizations to recover full attorney fees.                      
                                                                               
  Number 696                                                                   
                                                                               
  MS. BARNETT replied that she's not questioning that                          
  statement, she's questioning language that would have you                    
  believe it is solely environmental litigation firms that are                 
  getting this privilege under Rule 82.                                        
                                                                               
  Number 713                                                                   
                                                                               
  MARY A. NORDALE, an attorney in private practice in Juneau                   
  and President of the Alaska Miner's Association, testified                   
  in support of SCR 4, saying SCR 4 requests the Alaska                        
  Supreme Court to grant equity among litigants regardless of                  
  which segment of the economy they represent when the                         
  litigation challenges activities for which the state is                      
  granted permits, that is permanent activities.  Ms. Nordale                  
  continued by saying that at the present time the Alaska                      
  Supreme Court casts a protective cloak over those litigants                  
  representing recreation and fishing interests against                        
  litigants who represent other resource related interests.                    
  Ms. Nordale stressed that this apparent preference of some                   
  users over others is contrary to their concepts of equal                     
  protection.                                                                  
                                                                               
  MS. NORDALE said the Alaska Miner's Association believes                     
  that under Article 8, Section 1, all litigants involved in                   
  the development of the state's resources, supporting or                      
  opposing, have equal and constitutionally protected                          
  interests and they should be treated equally.                                
                                                                               
  Number 755                                                                   
                                                                               
  REP. DAVIDSON asked Ms. Nordale how many companies or                        
  individuals in the mining community have had to suffer those                 
  kinds of losses as a result of being up against this unequal                 
  playing field.                                                               
                                                                               
  Number 765                                                                   
                                                                               
  MS. NORDALE replied that there have been several hundred                     
  miners injured substantially because of litigation.  She                     
  said one thing that is important to remember in a lot of                     
  litigation relating to natural resources is that the law                     
  firms that represent the so-called public interest groups                    
  are law firms that are in the business of litigation and                     
  solicit their own clients, and when they can find an                         
  appropriate target client to act as a plaintiff in the case,                 
  then they move forward with the case.  Ms. Nordale said they                 
  also use any victories they achieve as fundraising                           
  mechanisms.                                                                  
                                                                               
  Number 785                                                                   
                                                                               
  REP. DAVIDSON asked if it was the court that determined if                   
  litigation was public interest litigation.                                   
                                                                               
  Number 792                                                                   
                                                                               
  MS. NORDALE responded yes, and she thinks the court has so                   
  narrowly construed the language public interest that SCR 4                   
  can send a very powerful message to the court that it's time                 
  it looked more broadly at the definition.                                    
                                                                               
  Number 797                                                                   
                                                                               
  REP. DAVIDSON asked Ms. Nordale to expand on "narrowly                       
  construed."                                                                  
                                                                               
  Number 798                                                                   
                                                                               
  MS. NORDALE replied that primarily the groups that the                       
  courts designate as public interest are those primarily                      
  involved in recreation and occasionally fishing.                             
                                                                               
  Number 801                                                                   
                                                                               
  REP. PHILLIPS observed that special interest groups run                      
  massive, nationwide campaigns for membership based on the                    
  sole fact that they are litigating this case against an                      
  entity, and this is a significant financial impact, and this                 
  is a significant judicial point the committee should be                      
  considering.                                                                 
                                                                               
  REP. NORDLUND asked Ms. Nordale to clarify the point she was                 
  making about comparing mining or timber companies, and the                   
  interest of that company versus the interest of recreation                   
  and fishing interests.                                                       
                                                                               
  Number 814                                                                   
                                                                               
  MS. NORDALE said she's hoping she's making the case for                      
  allowing mining, recreation, fishing, timber, and so on, all                 
  to be treated equally as being in the public interest under                  
  our constitution.                                                            
                                                                               
  MS. NORDALE continued, saying often a litigation firm will                   
  find a target plaintiff they can represent, a private entity                 
  that would be put to the expense of defending themselves,                    
  not so much to target that particular entity, but to test a                  
  matter of public policy.                                                     
                                                                               
  Number 830                                                                   
                                                                               
  REP. NORDLUND said that a vast majority of the cases are                     
  environmental firms against the state or federal government.                 
                                                                               
  Number 833                                                                   
                                                                               
  MS. NORDALE responded that it always involves a private                      
  business as well, so it doesn't level the playing field.                     
                                                                               
  Number 842                                                                   
                                                                               
  REP. PORTER asked what was the wish of the committee.                        
                                                                               
  Number 850                                                                   
                                                                               
  REP. PHILLIPS moved to move SCR 4 out of committee with                      
  individual recommendations.                                                  
                                                                               
  Number 850                                                                   
                                                                               
  REP. NORDLUND cited his opposition to the bill, primarily                    
  because of the way it was drafted in the "Whereas's."                        
                                                                               
  Number 866                                                                   
                                                                               
  REP. DAVIDSON cited his opposition to SCR 4, and asked to                    
  hear from the supreme court on this issue.                                   
                                                                               
  TAPE 94-9, SIDE B                                                            
  Number 003                                                                   
                                                                               
  REP. PORTER indicated his support for SCR 4, and said he                     
  believes the resolution is intended to be a reflection of                    
  the result of the supreme court's actions and decisions                      
  they've made.  Rep. Porter said he intends to support the                    
  measure because most of the testimony seems to presume that                  
  the only access the public has is through costly litigation,                 
  and that's just not the case.  He cited several avenues                      
  available to interested parties prior to having to litigate.                 
                                                                               
  REP. PORTER also said he believes the advantage flows to                     
  someone of a particular philosophy over someone else of a                    
  particular philosophy, and equity-wise he doesn't believe                    
  that's fair.  He cited one of the unfairnesses as being that                 
  public litigants do receive full compensation for attorney's                 
  fees if they prevail, as opposed to any other litigant under                 
  Rule 82 that would get something between twenty and thirty                   
  percent.                                                                     
                                                                               
  REP. PORTER concluded by saying that responsible development                 
  is in the public interest and this speaks against it, which                  
  is why he is going to vote for SCR 4.                                        
                                                                               
  REP. PHILLIPS pointed out that not only is responsible                       
  development of our natural resources in the best public                      
  interest, it is also mandated in the constitution.                           
                                                                               
  Number 084                                                                   
                                                                               
  REP. PORTER called for a roll call vote on the motion.                       
                                                                               
  Rep. Green     yes       Rep. Kott      yes                                  
  Rep. Nordlund  no        Rep. Phillips  yes                                  
  Rep. Davidson  no        Rep. Porter    yes                                  
                                                                               
  SCR 4 WAS MOVED FROM COMMITTEE WITH INDIVIDUAL                               
  RECOMMENDATIONS.                                                             

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