Legislature(1997 - 1998)
05/05/1997 03:28 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 203 - ACTIONS FOR UNLAWFUL TRADE PRACTICES Number 1190 CHAIRMAN ROKEBERG said the next order of business would be HB 203 "An Act relating to actions for unlawful trade practices." REPRESENTATIVE FRED DYSON, sponsor of HB 203, indicated he has supplied the committee members with a committee substitute dated April 24, 1997. He said he introduced the bill because of concerns from people he has spoken with who are struggling because of consumer business fraud. The Office of the Attorney General isn't currently a part of this business and the Better Business Bureau has limited capacity. He stated when the bill was previously heard, several concerns came up. He referred the committee to page 2 of the committee substitute. CHAIRMAN ROKEBERG asked if the committee substitute is Version L. REPRESENTATIVE DYSON indicated that was correct. Number 1300 REPRESENTATIVE HUDSON moved to adopt CSHB 203(L&C), dated 4/24/97, Version L, for the purpose of discussion. CHAIRMAN ROKEBERG asked if there was an objection. Hearing none, CSHB 203(L&C) was before the committee. Number 1320 REPRESENTATIVE DYSON referred the committee to page 2, lines 29 through 31, and said he believes this wording takes care of concerns brought up by Chairman Rokeberg. CHAIRMAN ROKEBERG said a subsection (b) was added to correspond with the award that would be made to the plaintiff in subsection (a). REPRESENTATIVE DYSON said that is correct. He said it levels the playing field in that if the cause of action isn't justified, then the defendant has a recovery mechanism. Mr. Dyson said he has thought about how someone could use this kind of an action in a competitive advantage. He said he added subparagraph (c) on page 3, "In an action brought under AS 45.50.471 - 45.50.561, if the court finds that the action was brought by the plaintiff to obtain a competitive business advantage and the plaintiff is not the prevailing party, the court shall award the defendant costs as provided by court rule, full reasonable attorney fees at the prevailing reasonable rate, and any damages suffered by the defendant as a result of the plaintiff's allegations." Representative Dyson noted he doesn't remember anybody on the committee directing him to do something with this paragraph. He said it seems reasonable to him. CHAIRMAN ROKEBERG referred to the term "by court rule" and asked if this is rule 82 or if there is another court rule that would apply. Number 1475 REPRESENTATIVE ERIC CROFT came before the committee. He referred to full cost and said it is understanding from the drafter of the bill that there is a question about whether that requires changing a court rule. There is a difference of opinion as to whether the court rule on cost needed to be changed. He said rather than getting into the area, they just said you are due costs as defined by the applicable court rule to avoid conflict. Representative Croft stated, "I read the court rules as saying anytime you are entitle to them, this is what we mean by costs, but not really getting into the area of when you are or not entitled to them. But it's a little ambiguous, so they thought that wording would avoid us getting conflict...." Number 1546 CATE REMME, Consumer Advocate, Alaska Public Interest Research Group, testified via teleconference from Anchorage. She said she was asked by her membership to come and testify in support of the legislation which would put consumer protection language back in the state of Alaska. She said she would like to compliment Daveed Schwartz for his hard work and also for HB 142. Ms. Remme stated consumers crime is a serious crime and affects people's lives. There is a tendency to treat this crime as white collar crime and not as seriously as people who are victimized by violence. MS. REMME indicated earlier in the week, she met with some high school students and their consensus is that the state of Alaska does not prosecute white collar crime in the same way that they prosecute crimes that are committed with weapons or where violence was involved. The students do realize that in many cases that people's lives are seriously affected and, in some cases, destroyed by being conned. She said she receives many calls asking what people can do, if there is a law or is there consumer protection in the attorney generals office. Ms. Remme said she thinks that because of the (indisc.) laws, regardless of their profession or their class of economic status, we should recognize the presence of a legal force from the Attorney General's office. That is absolutely mandatory in deterring this type of crime. Ms. Remme said her organization has produced a report on consumer protection titled "The Alaska Perspective," written by Dr. Jammie Campbell and indicated she would be happy to send a copy of it to the committee. She noted it contains statistics gathered from other states that have consumer protection. Number 1756 REPRESENTATIVE HUDSON asked Representative Dyson if the CS includes the amendments the committee members have. REPRESENTATIVE DYSON indicated the CS doesn't include the amendments. He noted the amendments are in response to a concern Representative Ryan brought up. CHAIRMAN ROKEBERG said the committee would continue with testimony and then address the amendments. Number 1798 PEGGY MULLIGAN, Capital City Task Force of the American Association of Retired Persons, came before the committee to testify. She stated she testified a couple of weeks ago in support of the measure and she also supports the committee substitute. REPRESENTATIVE DYSON asked Ms. Mulligan if it is her sense with the seniors that they are being approached and preyed upon by predators. MS. MULLIGAN indicated she believes this is taking place. She said her organization's priority for the summer is to put out knowledge about telemarketing fraud. She said they feel they can educate the public about consumer fraud. Ms. Mulligan stated she definitely believes there is a problem. Number 1876 VERA GAZAWAY, Older Person's Action Group, testified from Juneau. She said her organization also supports the committee substitute. CHAIRMAN ROKEBERG suggested moving the proposed amendment for the purpose of discussion. Number 1918 REPRESENTATIVE COWDERY made a motion to move the following Amendment 1 for the purpose of discussion: Page 1, lines 9 - 10: Delete ",or who is otherwise aggrieved," Page 2, lines 3 - 7: Delete all material. Renumber the following bill sections accordingly. CHAIRMAN ROKEBERG clarified the amendment would delete subsection (f) of AS 45.50.531. REPRESENTATIVE DYSON informed the committee members this was a concern that was raised. The amendment deletes the wording "or who is otherwise aggrieved." It takes out any award of damages for anything subjective. He said, "It is not a material damage, quantifiable, then it's eliminated." Representative said page 2 lines 3 through 7 would delete Section 3. It eliminates the subparagraph (f) to make it consistent. Number 2116 DAVEED SCHWARTZ, Assistant Attorney General, Commercial Section, Civil Division, Department of Law, was next to testify via teleconference from Anchorage. He noted he doesn't have a copy of the committee substitute and said he is at a loss to give specific feedback. He said with respect to what has been discussed regarding the attorney fees, it sounds like the section addresses the concerns that were brought up previously. CHAIRMAN ROKEBERG referred to Section 45.50.537 and said a subsection (b) has been added. He continued to read the section, "In an action brought under AS 45.50.471 - 45.50.561, the court shall award the defendant costs as provided by court rule and full reasonable attorney fees at the prevailing reasonable rate if the action is found to be frivolous." Chairman Rokeberg referred to there being no vexatious litigation statute, he asked if there is a common law definition of frivolous. MR. SCHWARTZ explained rule 82, in the Alaska Rules of Civil Procedure, does contain a subsection dealing with vexatious and frivolous litigation. Judges make this kind of determination all the time under rule 82. He said he believes case law discusses numerous instances in which litigation has been found to be vexatious or frivolous. Mr. Schwartz said he thinks there is common understanding in the superior, district and supreme court of Alaska as to what constitutes vexatious or frivolous litigation. He said he thinks it is a determination the courts make on a routine basis whether or not the litigation is frivolous in order to assess rule 82 fees at this time. He stated he doesn't believe it will be a new concept at all. Number 2207 CHAIRMAN ROKEBERG said, "In regard to the terms used in what you have in the original bill the under attorney fees, costs and damages, the terms `by court rule,' which is used as it relates to the defendant also now, would that be rule 82 or are we talking about the full costs? We've got the court rule and `for reasonable attorney fees.' Now what are we talking about here?" Number 2291 MR. SCHWARTZ said he believes under rule 82, a court could rule for reasonable attorney fees. CHAIRMAN ROKEBERG asked if it wouldn't be a percentage of the fees. MR. SCHWARTZ said that is a routine award under rule 82. It is generally 20 percent of attorney fees, but rule 82 also allows a court to adjust the attorney fees depending on the circumstances. CHAIRMAN ROKEBERG asked Representative Dyson if that was his intent. REPRESENTATIVE DYSON said, "Our intent was, Mr. Chair, that the defendant who prevails in a course of action..." TAPE 97-57, SIDE A Number 001 REPRESENTATIVE DYSON asked Mr. Schwartz if there is any way the language could be strengthened to accomplish their purpose. MR. SCHWARTZ responded he thinks the existing language does provide the level paying field that he understood the committee wanted in the bill from the discussion at the prior hearing on the bill. Number 061 REPRESENTATIVE CROFT said there was a concern about the wording "costs by court rule." He said what the drafter told him was that was necessary to invoke and not contradict rule 68 defining what court costs are. MR. SCHWARTZ indicated he was confused earlier. He apologized and said he believes that appraised by court rule actually applies to the award of costs and the award of costs is addressed in Alaska Civil Rules of Procedure number 79. Full costs are routinely awarded regardless of whether you've got a rule 82 attorney fee situation or a full reasonable attorney fee situation. He said the "by court rule" phrase refers to the award of costs under rule 79 and does not relate to the award of full attorney fees. Number 170 CHAIRMAN ROKEBERG said there was no further witnesses to testify and closed the public hearing. He asked if the sponsor agrees with the intent of Amendment 1. REPRESENTATIVE DYSON indicated he does agree. Number 187 REPRESENTATIVE HUDSON moved to adopt Amendment 1. CHAIRMAN ROKEBERG asked if there was an objection. Hearing none, Amendment 1 was adopted. Number 209 REPRESENTATIVE HUDSON moved and asked unanimous consent to move CSHB 203, Version L, as amended, out of committee with individual recommendations and a zero fiscal note. CHAIRMAN ROKEBERG asked if there was an objection. Hearing none, CSHB 203(L&C) moved out of the House Labor and Commerce Standing Committee. Number 257 CHAIRMAN ROKEBERG called for a brief at-ease at 5:11 p.m. He called the meeting back to order at 5:13 p.m.
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