Legislature(1999 - 2000)

04/05/2000 01:19 PM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SB 123 - ATTY FEES:APPORTIONMT/PUBLIC INT.LITIGANT                                                                              
Number 2146                                                                                                                     
CHAIRMAN KOTT announced that the final item of business would be CS                                                             
FOR SENATE BILL NO. 123(FIN), "An Act relating to public interest                                                               
litigants and to attorney fees; and amending Rule 82, Alaska Rules                                                              
of Civil Procedure."  He informed listeners that it was not his                                                                 
intent to move the bill that day, but several testifiers had been                                                               
waiting on teleconference to testify.  [Before the committee was                                                                
CSSB 123(FIN).]                                                                                                                 
Number 2166                                                                                                                     
DARWIN PETERSON, Staff to Senator Torgerson and the Senate Finance                                                              
Committee, Alaska State Legislature, offered an abbreviated                                                                     
overview of the bill on behalf of the Senate Finance Committee,                                                                 
sponsor of the bill.  He informed members that SB 123 would                                                                     
recognized public interest litigants by codifying them in Rule 82                                                               
[of the Alaska Rules of Civil Procedure].  It also would require                                                                
the court to "apportion enhanced attorney's fees by prevailing                                                                  
CHAIRMAN KOTT asked whether there were questions, then opened                                                                   
public testimony.                                                                                                               
Number 2275                                                                                                                     
JOSEPH CIZEK testified via teleconference from Anchorage.  He                                                                   
informed members that he and his wife are being sued by two                                                                     
individuals, a husband and wife, who claim to be public interest                                                                
litigants, having formed a nonprofit organization in which the                                                                  
husband is president and the wife is vice president.  The Cizeks                                                                
were threatened with this suit a year and a half ago, for more than                                                             
$500,000 in damages plus attorney fees.  The case now is being                                                                  
appealed.  However, the attorney fees alone have bankrupted his                                                                 
small business as a general contractor.  He and his wife are out at                                                             
least $100,000 in attorney fees, and the plaintiffs are seeking                                                                 
approximately $150,000 in attorney fees.                                                                                        
MR. CIZEK said he and his wife are forced to defend their position,                                                             
based upon what the city has said on a grandfather rights issue                                                                 
relating to [a nonconforming] airstrip at the end of the Eagle                                                                  
River Valley.  During this legal battle, they were informed from                                                                
the start that there would be no hope of getting any attorney fees                                                              
back, even if they prevailed, because of the [plaintiffs'] claim to                                                             
be a public interest litigant group.  "Something is not right                                                                   
here," he emphasized, noting that the college fund for his daughter                                                             
is gone.                                                                                                                        
TAPE 00-49, SIDE A                                                                                                              
REPRESENTATIVE MURKOWSKI asked whether the court has determined                                                                 
that the plaintiffs in that case are, in fact, public interest                                                                  
MR. CIZEK said no, that it is before the superior court at this                                                                 
time, and Judge Shortell has yet to make that ruling.                                                                           
REPRESENTATIVE MURKOWSKI noted that there are some pretty specific                                                              
standards that must be met in order to be declared a public                                                                     
interest litigant, and, from Mr. Cizek's brief description, it                                                                  
sounds as if the plaintiffs aren't true public interest litigants,                                                              
although she doesn't have the facts.                                                                                            
MR. CIZEK said it appears that they will be granted that status.                                                                
CHAIRMAN KOTT noted that Mr. Cizek is a constituent of his, and he                                                              
has been directly involved in trying to settle that issue.                                                                      
Number 0226                                                                                                                     
WEV SHEA, Attorney at Law, testified via teleconference from                                                                    
Anchorage.  He offered some personal background, noting that he has                                                             
been involved in the legal profession since 1966 and has practiced                                                              
law in Alaska since 1977, doing civil litigation almost solely.  He                                                             
also noted that he has done criminal prosecution in both Hawaii and                                                             
Alaska, and was U.S. Attorney for the District of Alaska.  He                                                                   
cautioned about not getting too tied up in emotion on this.  There                                                              
are very strict criteria for public interest litigant status, he                                                                
told members, citing as an example an Alaska Supreme Court case                                                                 
involving Tim Cook (ph) that he himself had handled; in that case,                                                              
Mr. Cook (ph) had been fired as a commissioner on the Alaska Public                                                             
Utilities Commission (APUC) but eventually got his job back.                                                                    
Public interest litigant status was not granted.                                                                                
MR. SHEA noted that his position in that case was that because Mr.                                                              
Cook (ph) was a public servant, he shouldn't have to pay all of his                                                             
attorney fees, and should have been granted 100 percent of his                                                                  
attorney fees.  That issue was ruled upon, on remand, by Judge                                                                  
Michalski, who accurately found, under the law - although Mr. Shea                                                              
disagrees with  it - that Tim Cook (ph) had a monetary interest in                                                              
being on the commission because he was paid and therefore wasn't                                                                
entitled to public interest litigant status.                                                                                    
MR. SHEA said he is sure there is good reason to bring this                                                                     
legislation.  However, he would address the problem with not having                                                             
public interest litigation in voting contests and the right to                                                                  
vote; that was primarily what he himself was concerned with when he                                                             
brought the first Dansereau case, which got an [Alaska] Supreme                                                                 
Court decision in 1995, and then the second Dansereau case, for                                                                 
attorney fees, on which he got an [Alaska] Supreme Court decision                                                               
in 1998.  Mr. Shea pointed out that in election contest cases, the                                                              
litigants not only have to show that there is a violation of the                                                                
law with regard to the election itself but also must show that                                                                  
there was a violation of the law which could have changed the                                                                   
results of the election.  Suggesting Representative Green had                                                                   
spoken out on this, Mr. Shea mentioned breaking this out on various                                                             
causes of action, then said he would point out the fallacy of that                                                              
MR. SHEA reported that in the 1994 election, Governor Knowles won                                                               
by 536 votes; if 278 votes had gone the other way, or if it could                                                               
have been shown that those voters could have been influenced to                                                                 
vote the other day, the election would have been a tie.  With more                                                              
votes than that, Jim Campbell would have won.  Ten gallons of                                                                   
gasoline were given to everyone in the North Slope Borough who                                                                  
voted in that district, about 1,500 people.  However, the farthest                                                              
anybody went to vote in that borough was 12 miles, which he said                                                                
was ridiculous, being paid to vote.  However, the Alaska Supreme                                                                
Court had ruled that there was not a valid state cause of action.                                                               
Mr. Shea noted that he had alleged that [cause of action] because                                                               
of having to choose between bringing the case in federal or state                                                               
court, and he had believed it was a federal violation because                                                                   
[Congressman] Don Young was in the election.  Mr. Shea said it is                                                               
in the statute that if there is a state senator or representative                                                               
running, then it is a federal election.  However, the supreme court                                                             
didn't look to that.  So that is one cause of action that is "out"                                                              
but which affected at least 1,500 votes.                                                                                        
Number 0643                                                                                                                     
MR. SHEA continued.  He noted that the supreme court did say that                                                               
it was a violation of state law to mail a postcard to 7,000 to                                                                  
8,000 voters that said "Vote for Tony Knowles - you have a chance                                                               
to win $1,000"; that was done by Doyon Drilling (ph), Tanana Chiefs                                                             
Conference and Fairbanks Native Association, and Mr. Shea said he                                                               
had prevailed on that case.  He indicated there was a third case,                                                               
for irregularities in the North Slope voting process and not                                                                    
keeping the voting polls open.                                                                                                  
MR. SHEA expressed concern about the way this bill is written, and                                                              
the way it affects voters' rights.  He stated:                                                                                  
     I'll tell you, if I didn't bring that litigation,                                                                          
     [Representative] Con Bunde never would have brought his                                                                    
     bill, and you never would have passed the bill ... that                                                                    
     Tony Knowles signed on June 22, 1996, changing the law.                                                                    
     And the problem that I had was that Jim Campbell was                                                                       
     scared to death to bring a litigation.  He was really                                                                      
     scared when I told him I'd already written a three-page                                                                    
     letter to the FBI [Federal Bureau of Investigation] with                                                                   
     regard to the federal violation.                                                                                           
     Well, the U.S. Attorney wouldn't touch it because he's                                                                     
     [President] Bill Clinton's appointee.  And in civil                                                                        
     rights and voting rights violations, the FBI will not                                                                      
     investigate the violations and pursue it unless the U.S.                                                                   
     Attorney, prior to the investigation, said that he will                                                                    
     prosecute the litigation.  [Representative] Bunde refused                                                                  
     to do that.  Your attorney general, Bruce Botelho, wasn't                                                                  
     going to take any action, and he didn't take any action;                                                                   
     he fought all the way on two cases that I took to the                                                                      
     supreme court.                                                                                                             
     And what is the problem with the way the bill is written,                                                                  
     as it affects voting rights, is that because Jim Campbell                                                                  
     was scared to take the case because it ... was so                                                                          
     controversial and somewhat confrontational, and the                                                                        
     legislature sure wasn't jumping in and taking a stand at                                                                   
     that time - none of you were, those of you that were                                                                       
     there - was that I had to get ten citizens to step                                                                         
     forward to be the plaintiffs.  ...                                                                                         
     Under the statute, if the candidate won't do it - which                                                                    
     Campbell wouldn't, naturally, because the wrongdoers had                                                                   
     to do with the North Slope Borough, Tanana Chiefs,                                                                         
     Fairbanks Native Association and Doyon, all of which he's                                                                  
     done business or was continuing to do business with, in                                                                    
     various corporations and other businesses he had - could                                                                   
     I ever have asked, or would ten people ever have agreed,                                                                   
     to take on litigation of that magnitude, if they knew                                                                      
     they had a chance of being faced with attorney fees and                                                                    
     costs against them?  This was not some fly-by-night                                                                        
     lawsuit that went up to the supreme court twice.  This                                                                     
     was a lawsuit that went up twice and we prevailed both                                                                     
     times, and the public acted as the attorney general for                                                                    
     the State of Alaska because the attorney general for the                                                                   
     State of Alaska refused to act for the people. ...                                                                         
     Everybody seems to jump on the fact that the second                                                                        
     Dansereau case delineates the attorney fees and somehow                                                                    
     indicates - and the Daily News indicated - that Wev Shea                                                                   
     received $250,000, approximately, in attorney's fee.  Let                                                                  
     me break that down for you. ... I advanced out-of-pocket                                                                   
     costs of approximately $25,000.  I advanced fees in that                                                                   
     case of approximately $225,000, which was 1,500 hours,                                                                     
     approximately, at $150 an hour.  The amount of time, that                                                                  
     was me and one attorney that assisted me for about a                                                                       
     hundred hours.                                                                                                             
     The amount of time expended by the attorney general to                                                                     
     fight that case:  he had 14 attorneys that billed on the                                                                   
     case, 4 or 5 paralegals, and they billed well in excess                                                                    
     of what I bill, ... the number of hours.  I find that                                                                      
     very peculiar since in both cases I had the burden [and]                                                                   
     ... had to carry both cases, since we lost both cases at                                                                   
     the trial court level.                                                                                                     
     I can't really tell you how to approach this, other than                                                                   
     I think you're doing the state a real disservice if you                                                                    
     change this law with regard to voting and public interest                                                                  
     litigation, from that standpoint, when it comes to                                                                         
     election contests.  I really don't know who you're going                                                                   
     to get to bring litigation that is this controversial,                                                                     
     like these two Dansereau cases or the Tim Cook (ph) case,                                                                  
     because I know when I called down, ... when Tim Cook (ph)                                                                  
     was terminated, and talked and approached a number of                                                                      
     legislators and a number of people in the leadership,                                                                      
     they themselves were not going to challenge Governor                                                                       
     Knowles' position.  And that's why I did it.                                                                               
     And if any of you think that Wev Shea took these cases to                                                                  
     make money, I think you're sadly mistaken.  I received,                                                                    
     from the State of Alaska, after those two appeals, ...                                                                     
     about $101,000, and I received it four years after I took                                                                  
     the case.  And I took the case, ladies and gentlemen,                                                                      
     solely because I felt that the rights of the citizens of                                                                   
     the State of Alaska were grossly being abuse.  And I'll                                                                    
     tell you, if I didn't do it, nobody was going to do it.                                                                    
     I guess you can ... do what you want with the public                                                                       
     interest litigation, and there's no question that there's                                                                  
     problems.  But I'd be very, very leery of it in the                                                                        
     voting rights area, because what you're doing is, in this                                                                  
     state, without an [elected] attorney general, you've got                                                                   
     a clone for Tony Knowles sitting in the AG's [attorney                                                                     
     general's] office.                                                                                                         
Number 1117                                                                                                                     
REPRESENTATIVE ROKEBERG stated his understanding that Mr. Shea had                                                              
prevailed in one portion of the case.                                                                                           
MR. SHEA affirmed that.                                                                                                         
REPRESENTATIVE ROKEBERG asked Mr. Shea what the end result of the                                                               
case was.                                                                                                                       
MR. SHEA responded that he had advanced so much money, and it was                                                               
a year and a half after they had prevailed.  Although there should                                                              
have been a new election, he couldn't go in, right off the bat, and                                                             
get an injunction because it was cost-prohibitive.  These election                                                              
contest suits take 100 percent of [an attorney's] time, all of the                                                              
time.  Basically, before the statute was changed, the supreme court                                                             
came out with the first Dansereau decision, "and we prevailed."                                                                 
However, this decision came out in September of 1996, so Governor                                                               
Knowles had been in office two years.  Although the court basically                                                             
said that approximately 7,000 to 8,000 votes were affected, at that                                                             
stage Mr. Shea said he couldn't open it up and press forward for a                                                              
new election.                                                                                                                   
MR. SHEA commented, "Try advancing $225,000."  Noting that new                                                                  
associates at law firms may be expected to bill 1,600 hours a year,                                                             
he said he had essentially given away time for a year.  He proposed                                                             
the need to be sensitive and for somebody to be able to step in, in                                                             
this state, the way the law is now, when the attorney general isn't                                                             
willing to do so, especially regarding voting rights or when an                                                                 
issue is very controversial, because a whole section of legislators                                                             
will have various conflicts.  Mr. Shea added that when he had taken                                                             
that litigation, he didn't know he would be awarded attorney fees                                                               
because he had thought it was under Civil Rule 82; he was just                                                                  
thinking about the wrong that had been done, and he had seen clear                                                              
violations, because of his familiarity with it, of state and                                                                    
federal election law.  Because neither the federal nor state                                                                    
government was acting on it, he had stepped in.                                                                                 
MR. SHEA said he wouldn't take a similar case now unless he knew he                                                             
would be paid 100 percent of the attorney fees.  Furthermore, in                                                                
election contest litigation where somebody won't step forward, how                                                              
could anyone ask ten voters to step forward and do it, when those                                                               
people could be subject to actual costs and attorney fees?  He said                                                             
he couldn't address the situation in Eagle River [testified about                                                               
earlier], but setting up a nonprofit organization has nothing to do                                                             
with being a public interest litigant.                                                                                          
Number 1393                                                                                                                     
ROBIN SMITH testified via teleconference from Anchorage as follows:                                                             
     A fundamental tenet ... of the American democratic system                                                                  
     is that the executive and legislative branches of                                                                          
     government must act lawfully and constitutionally,                                                                         
     subject to review and restraint by an independent                                                                          
     judiciary.  This bill, I believe, would support                                                                            
     government [tyranny] by stripping the common citizens'                                                                     
     right to challenge the state.                                                                                              
     We need to be realists.  It takes a lot of money to bring                                                                  
     a suit against the state.  And this bill would limit all                                                                   
     but the rich ... in coming forward ... to sue the state.                                                                   
     A citizen would not only have to incur 80 percent of the                                                                   
     cost if he or she won but also the state cost if they                                                                      
     lost. ... It would be as if the legislators were asked to                                                                  
     defend bills that the citizenry challenged and said were                                                                   
     unconstitutional.  And I have to ask how many of you                                                                       
     would be willing to put up your own money and say, "Yes,                                                                   
     ... we have to countersue, we have to respond to this                                                                      
     suit that's brought by the citizens."  I fear that few of                                                                  
     you would be willing to put your own money forward on                                                                      
     So I ask you ... to please stop this bill now.  It really                                                                  
     undermines the right of the individual citizen to                                                                          
     challenge the state, and I think that's one of the                                                                         
     beauties of ... our American system.                                                                                       
Number 1488                                                                                                                     
DALE BONDURANT testified via teleconference from Kenai in                                                                       
opposition to SB 123, suggesting he has a well-known history as a                                                               
public interest litigant.  He spoke in support of the public                                                                    
interest litigant process, which has a commendable history of                                                                   
promoting the ability of the smallest common public interest to be                                                              
heard as well as those special personal interests of the more rich                                                              
and powerful.  This process has allowed the public to participate                                                               
and actually make a valuable difference in the protection of the                                                                
benefits of the law for the public, he told members.  In a free                                                                 
constitutional democracy, one may not agree with another's position                                                             
and yet agree with others' rights to hold and expound upon their                                                                
positions; the opportunity to be heard on the merit of that                                                                     
position is what makes the freedom so valued.                                                                                   
MR. BONDURANT said that those who support SB 123 would handcuff the                                                             
operation of the public interest litigant process when more                                                                     
powerful interests take advantage of and knowingly abuse the                                                                    
process.  However, the voices of the latter will not be muted                                                                   
because of having the financial resources to continue their special                                                             
interests.  Eliminated will be the small players who have a                                                                     
legitimate, common public concern.  Because there no longer will be                                                             
an organized, responsible and affordable avenue to pursue the                                                                   
public interest in these cases, they will fail.  As is popularly                                                                
stated, "Don't throw the baby out with the wash water."                                                                         
MR. BONDURANT said some believe this bill will stop abuse of the                                                                
process.  However, it will not.  More powerful parties, even if                                                                 
they lose in adjudication of their purpose, have a large cadre of                                                               
supporting advocates that can financially remit up to $100,000 in                                                               
tax-exempt contributions.  But SB 123 will destroy the general                                                                  
public's ability to participate in a process on the merits of the                                                               
public interest issue.  Mr. Bondurant urged members to please                                                                   
defend the right of the general public to be heard above the clamor                                                             
of the politically powerful.  He concluded:                                                                                     
     We have been very active in the public interest issues                                                                     
     such as access to Alaska's public waters, fish, wildlife                                                                   
     and equal public access to these common-property                                                                           
     resources.  And we're now involved financially and                                                                         
     dedicated to try to win back the state's sovereignty over                                                                  
     these navigable waters and ... the public resources.  So                                                                   
     ... don't cut out "us."  Our donations are $10 or less,                                                                    
     and we're fighting this battle for the entire public.                                                                      
     So, I think this bill is very bad, and I ask you to vote                                                                   
     "no" on it.  Thank you very much.                                                                                          
Number 1656                                                                                                                     
REPRESENTATIVE CROFT asked Mr. Bondurant whether he was one of the                                                              
appellees on the McDowell lawsuit.                                                                                              
MR. BONDURANT specified that he is one of the named appellees on                                                                
that lawsuit.                                                                                                                   
REPRESENTATIVE CROFT said he understands that Sam McDowell got                                                                  
about $100,000, perhaps a little more, to pay for his attorney fees                                                             
in that.  Furthermore, he also understands that Mr. McDowell                                                                    
doesn't think he could have done that suit without the public                                                                   
interest litigant status.  He asked whether that is Mr. Bondurant's                                                             
opinion too.                                                                                                                    
MR. BONDURANT replied:                                                                                                          
     Very much so.  And we sure didn't get back all of our                                                                      
     fees, and, like the one gentleman said, we didn't get                                                                      
     ours back for quite a long time.  But maybe a more                                                                         
     pertinent case right now is one that I was a named                                                                         
     plaintiff in that, and that was the Alaska Public                                                                          
     Easement Defense Fund, back in 1977, when we fought so                                                                     
     the public will have reasonable access to all public                                                                       
     waters in the state of Alaska.  And we're very proud of                                                                    
     that thing, and it's, ... again, for the public's use.                                                                     
REPRESENTATIVE CROFT asked Mr. Bondurant whether he was a public                                                                
interest litigant in that case.                                                                                                 
MR. BONDURANT answered:                                                                                                         
     Yes, sir, there were three of us, and I was one of the                                                                     
     named litigants in that one.  And that was in 1977.  And                                                                   
     we also fought in the Gulkana (ph) case; we weren't a                                                                      
     named litigant, but me and Sam McDowell were the only                                                                      
     people there representing the state.                                                                                       
Number 1729                                                                                                                     
CHAIRMAN KOTT asked whether anyone else wished to testify, then                                                                 
closed public testimony.  He announced his intention of sending the                                                             
bill to a subcommittee consisting of Representatives Murkowski,                                                                 
Croft and Kerttula, with Representative Murkowski chairing.  [SB
123 was held over.]                                                                                                             

Document Name Date/Time Subjects