Legislature(2001 - 2002)
03/13/2002 03:50 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 319-RECREATIONAL ACTIVITY LIABILITY CHAIR MURKOWSKI announced the final matter before the committee, HOUSE BILL NO. 319, "An Act relating to civil liability for commercial recreational activities; and providing for an effective date." Number 226 REPRESENTATIVE KOTT, sponsor of HB 319, told the committee the bill establishes responsibility for recreational [business] owners and makes provisions for what they must do to take care of individuals who participate in their activities. He said it also places requirements on individuals. Furthermore, it would protect business owners who provide for Alaska's tourists from excessive lawsuits. Number 254 REPRESENTATIVE MEYER moved to adopt the proposed committee substitute (CS), version 22-LS1260\C, Ford, 1/31/02, as the working document. There being no objection, Version C was before the committee. Number 261 LINDA SYLVESTER, Staff to Representative Pete Kott, Alaska State Legislature, testified before the committee. She told the committee that over the past 20 years, many recreation-oriented states have enacted statutes defining the "inherent risk doctrine" that pertains to commercial recreational activities. She said that doctrine is the common-law provision that generally says a recreation provider has no duty to protect participants from the inherent risks of recreation activities. She drew a distinction between inherent risks and a provider's negligence. MS. SYLVESTER told the committee that providers can be held responsible if a court or jury finds them negligent. The line between negligence and inherent risk is blurred. She defined negligence as a provider's failure to fulfill a duty owed to a participant - generally, the exercise of reasonable care under the circumstances. The inevitability of a certain level of danger is recognized in law by means of the concept of inherent risk. Ms. Sylvester said many providers must frequently fend off the threat of lawsuits; fighting these claims is often very expensive. Many states have enacted statutes as a result of courts' inconsistent decisions. She cited some examples of other states' legislation and referred to the Alaska Ski Safety Act. Number 310 MS. SYLVESTER noted that HB 319 seeks to decrease the uncertainties regarding the legal responsibilities for injury or loss. The bill establishes the responsibility for commercial recreation businesses and says if that responsibility is ignored, it is a case of negligence. The bill sets out the responsibilities of participants as well. Ms. Sylvester explained that commercial businesses are still responsible for providing safety standards, training, and competent personnel. The bill adds the presumption that a participant accepts the inherent risks of a commercial recreation activity, and as such, has played a part in any damages resulting from that inherent risk. MS. SYLVESTER reported that the addition to the bill addresses nonpaying aircraft and watercraft passengers: it gives certainty to owners of boats and planes who take guests out on the water or in the air, and it shields owners or operator from liability for the inherent risk. The bill defines a clear level of negligence. She said the intent is to provide clarity and set out the responsibilities of aircraft and watercraft owners. It would protect the family of a pilot from losses due to anything other than gross negligence. REPRESENTATIVE KOTT mentioned that even golf carries inherent risks. Number 347 REPRESENTATIVE HALCRO raised the scenario of a charter plane going to a fishing lodge where the plane trip is part of the price of staying at the lodge. He asked: If an accident were to occur, would the pilot and the person providing the air service be shielded? MS. SYLVESTER answered that if a person is going to a lodge with someone who has a plane, the person going along is the guest. If that person has a financial interest in the fishing lodge, then the person is an agent of the lodge and is not a guest. She said the section [she was recently referring to] is for nonpaying guests with no financial interests. Number 365 CHAIR MURKOWSKI followed up by giving the example of charter operations near Lake Hood. She said the flight is not paid for, since it is part of the price of staying at the lodge. She asked if a person on the plane would be construed as being a guest. REPRESENTATIVE KOTT responded that when a person flies out to a lodge, the lodge has entered into a contract; the flight cost is built into the cost of the lodge. He said he didn't believe a person in that situation should be classified as a guest. MS. SYLVESTER added that the pilot is paid by the lodge, not a guest. Number 389 REPRESENTATIVE ROKEBERG referred to page 3, line 26, and said compensation requires being paid a "substantial" amount of money, not a "token payment." He suggested the meanings of those words might need to be considered. MS. SYLVESTER said that was exactly the intent. She said the word "substantial" was added so that chipping in for gas would not be precluded. Number 412 REPRESENTATIVE MEYER asked if the bill would apply to [municipal entities like city-owned skateboard parks]. MS. SYLVESTER said no, it would only apply to commercial entities. Other statutes apply to skateboard parks and municipal immunities. REPRESENTATIVE MEYER asked if it would apply to the state fair and to amusement parks. Number 429 MS. SYLVESTER said it would apply to "outdoor recreational activity," and it seems to fit. She added that it doesn't apply to indoor recreational activities. REPRESENTATIVE MEYER revisited Representative Kott's reference to golfing and asked if the owner of a golf course has a responsibility to warn players of hazards. He also asked what has been changed to make it acceptable [to the Senate.] REPRESENTATIVE KOTT said he wasn't sure if anything had been change that would make the bill acceptable to the Senate, but added that Section 3 is what is new to the bill and may be more palatable for the other body. Number 451 CHAIR MURKOWSKI asked why bowling and other indoor sports weren't included in the legislation. MS. SYLVESTER answered that it was at the request of the outdoor recreational industry. There are other aspects of the statutes that discuss the risks and responsibilities of bowling. She said the attempt to keep the bill concerned with outdoor recreation was tied to unimproved land and the uncontrollable factors that take place on unimproved land. Number 465 REPRESENTATIVE HAYES asked what the argument had been against the legislation in the past. MS. SYLVESTER responded that there were arguments from trial lawyers that it is already in statute and therefore isn't needed. There is confusion from the courts, she said, and the bill would clarify the issue. She said there has been a general nervousness of trial lawyers to limit their levels of recovery. Number 476 REPRESENTATIVE KOTT concurred, adding that there was also an argument that individuals who participate in commercial recreational outdoor activities really thought they didn't need to assume any responsibility for their actions. Number 481 REPRESENTATIVE HALCRO said there is no mention of a need for a waiver that would specify the risks and require a signature of an acceptance of risk. He asked if there was any consideration of a provision to deal with that. MS. SYLVESTER replied that there are various ways of communicating the levels of risk. She said an additional level of security could be given [by a signed waiver] on file. Many businesses don't have such waivers because of the large volume of traffic. She said often signage is sufficient to warn large groups about inherent risks. Number 508 REPRESENTATIVE HALCRO said it isn't the prudent people who end up in court with multimillion-dollar settlements. He suggested there should be a standard in place whereby risks are stated and the customer signs a paper. Representative Halcro said he would support a requirement for a waiver stating inherent risks. MS. SYLVESTER said in the case of particularly dangerous operations, operators usually want something in writing. She added that in the case of a salmon bake, it would seem silly. Number 527 CHAIR MURKOWSKI pointed out that the bill provides that the participant's responsibility is to learn about and expressly accept the risk of the activity. She asked how "express acceptance" should be defined. Number 534 REPRESENTATIVE CRAWFORD asked Ms. Sylvester: In the case of a roller coaster operation that warned of inherent risk, if metal fatigue were to result in an accident, would the operator be off the hook because inherent risk was warned of? MS. SYLVESTER responded that flying off a roller coaster because of metal fatigue was not a foreseeable, normal event. An attorney would be employed to find the negligence in that event. Operators are required to maintain equipment, and they wouldn't be covered by the bill. She said metal fatigue is not an acceptable inherent risk. REPRESENTATIVE CRAWFORD suggested it might be hard to prove. MS. SYLVESTER disagreed, saying that metal fatigue can be proven by a laboratory test. CHAIR MURKOWSKI asked about a salmon bake scenario in which a 75-year-old person gets off a bus and trips on a rock. She asked if this could be defined as a commercial, recreational activity and, therefore, the person assumed the risk of walking across a parking lot. If that were the assumption, what would keep the statute from being used for anything that occurs outside? She expressed concern about unintended consequences. Number 571 REPRESENTATIVE KOTT agreed that Chair Murkowski had a point. He referred to page 3, lines 19-21, saying the definition of "recreational activity" is those activities undertaken outdoors for the purpose of exercise, education, relaxation, pleasure, sport, or as a hobby. He expressed his belief that a salmon bake doesn't fall under that definition unless, as a part of it, there is an excursion paid for in the price of the salmon bake that involves a walk through the park. Number 582 MS. SYLVESTER stressed, "It's the inherent risk of the event." She said a salmon bake is in a "nature setting," and part of that setting is unpaved, uneven ground. If one were to trip and fall on the uneven ground, it would be a result of the inherent risk of an outdoor event. TAPE 02-33, SIDE B Number 588 CHAIR MURKOWSKI remarked that there could be interesting complications. Number 582 BRUCE BARKER, Vice President and General Manager, Mount Roberts Tramway, testified before the committee. He stated his support of HB 319, which he said does an excellent job of identifying the responsibilities of operators and participants. He claimed he would like the bill to reduce the number of "ridiculous suits" where someone falls and twists an ankle and it is the fault of his business. He referred to Representative Crawford's question about mechanical failure and said it is always the responsibility of the operator. He added, "Whenever something breaks, you pay." CHAIR MURKOWSKI pointed out that skiers are provided with a great many warnings on their ski tickets. She asked if tram tickets come with any warnings. MR. BARKER replied that there is a disclaimer on the back of the tram tickets. CHAIR MURKOWSKI asked if there is any warning about walking off the trail on the mountainside. Number 550 MR. BARKER offered that there are so many things a person could do, his company cannot warn against every potential hazard. He showed the committee a sign used early in the season that warns of avalanche danger. He said it is hard to warn people of all the inherent hazards on the mountain. He expressed his support of the bill because it will prevent many frivolous lawsuits. Number 534 REPRESENTATIVE HAYES asked: If a person is skiing down a trail and hits a crater and then falls and breaks a leg, would the bill lay the liability on the person skiing? MR. BARKER said he doesn't believe the bill has anything to do with skiing. He pointed out that a separate statute addresses the inherent risks of skiing. Number 522 CHAIR MURKOWSKI raised the avalanche issue, asking Mr. Barker if his company would take an extra step to tell people where they should not go. She said a reservation could be held about HB 319 that companies might not "go that extra step" to ensure participant safety; people would be expected to proceed at their own risk because businesses aren't responsible for inherent risks. She asked if his company would close off areas due to avalanche danger. MR. BARKER replied that it is illegal in most states to deny access to public land. He gave an example from Jackson Hole, Wyoming, where a ski area and the [U.S.] Forest Service were sued for denying skiers access to public land. He said he couldn't prohibit people from accessing [the top of Mount Roberts] but could warn them of the inherent dangers. Number 498 REPRESENTATIVE KOTT asked what the impact would be on his business if signing a waiver were required. And if a waiver were signed and the signer were killed in a accident because of personal negligence, could the family of the signer sue the operator because [the family] didn't sign the waiver? MR. BARKER responded that it would be difficult to get 200,000 people to sign a waiver, and that a signed waiver "doesn't make much difference." Number 467 REPRESENTATIVE HALCRO asked what the inherent risks would be for taking a trip on the Mount Roberts Tramway. He said putting one foot in front of the other is the responsibility of the participant, not the operator. He said the bill seems to be painted with a broad brusher than its previous manifestations. MR. BARKER responded by saying people are testing the waters when an incident happens. REPRESENTATIVE KOTT said the first half of the bill was almost identical to what it was in the previous two years. He offered his belief that there are inherent risks in riding the tram, including high winds and earthquakes. He asked Mr. Barker what the company's reaction is when people are injured while on the trails at the top of the [Mount Roberts] tram, and those people come forward with claims. MR. BARKER answered that much care and time are given to training personnel in the area of risk management. He said risk management is the key - "making them feel that you really care about what their problem is." Number 413 REPRESENTATIVE KOTT asked Mr. Barker what his experience has been with people who don't have a command of the English language. He asked if those people get the same protection. MR. BARKER said efforts are made to use an interpreter. Number 394 MIKE WINDRED, Director of Operations, Alaska Travel Adventures, testified before the committee. He stated his support for HB 319, adding that he is president of the Juneau chapter of the Alaska Travel Industry Association, which also supports the bill. Mr. Windred said his synopsis of the bill is that it would pass a portion of the burden for participants to recreate within their own physical means and to be responsible for their actions. It would also outline the responsibilities of the commercial operators, while not absolving them of the duty to operate in a prudent, safe manner. The bill has effects for both operators and participants if they don't make prudent decisions and [take prudent] actions. MR. WINDRED said from the testimony in the previous years, he found common issues such as defining inherent risk for the broad range of activities. He called the current definition the proper one: inherent risks are, or should be, apparent to an ordinarily prudent person. Risks that fall into a gray area ultimately might be decided by a judge or jury, and he said legislation cannot cover all contingencies. He said the bulk of claims are obvious ones and will be covered by the bill. MR. WINDRED told members that negligence on the part of the operator is another common issue he had noticed. This bill has added the "Effects of violations clause" [AS 05.50.060], which specifies that an operator must maintain equipment, inform customers, train staff, and operate in a safe and competent manner - or face civil liabilities. MR. WINDRED offered that another common thread he has found is defining "outdoor" versus "indoor" activities. He said most outdoor activities deal with unimproved areas that preclude the control of all factors present. Indoor activities are in a more controlled environment. He added that participants often don't want a completely controlled environment for their "Alaskan experience." Number 327 MR. WINDRED told the committee the bulk of the claims fit very well within the legislation. Many people are looking to make a little money or to pay for part of their vacation as a result of poor choices on their own part. He said this drives up out-of- pocket expenses as well as insurance rates. Mr. Windred told the committee that presently, operators are bearing the full burden of clients' poor choices and actions. He gave several examples of incidents in which people made poor decisions and came to his company for money. MR. WINDRED stated that for most of his company's "riskier adventures," signed waivers are required for participation. He said salmon bakes and gold panning would not require a waiver. He characterized those activities' risks as being mostly inherent tripping risks. Requiring waivers for those types of activities would exclude them from this legislation. Number 254 REPRESENTATIVE ROKEBERG asked Mr. Windred if his company was able to affordably insure for all the risks his company deals with. MR. WINDRED said the risks are insurable but the insurance is expensive. He told the committee his company's current liability insurance costs approximately $250,000. REPRESENTATIVE ROKEBERG asked how much of a gross cost that is for his company. MR. WINDRED estimated it to be about 5 percent of gross receipts. Most claims aren't large enough to fit within the deductible and are taken care of directly. He said the bill would help with those small expenses because the larger claims will end up in court. REPRESENTATIVE ROKEBERG asked if his company had been to court in recent years. MR. WINDRED said his company had not been in court recently, but had in the past. Number 226 REPRESENTATIVE ROKEBERG raised a concern among trial lawyers that the bill would remove the public's rights to file suit. He stated his wish to weigh the balance between impact on business and the rare case of someone's being denied the right to sue. MR. WINDRED replied that as an operator and participant in commercial recreation in other areas, if he were involved in a situation wherein he felt he'd been injured [due to] the fault of an operator, this type of legislation wouldn't stop him from hiring an attorney and seeking damages. The bill takes smaller claims and makes people more accountable for their actions, but doesn't harm the real issues out there. REPRESENTATIVE ROKEBERG made reference to [President George W. Bush's] statement that Americans' "aptitude for lawsuits" is affecting the nation's economic recovery from recessions. Number 183 CHAIR MURKOWSKI asked Mr. Windred how his company deals with non-English-speaking participants. MR. WINDRED answered that in the case of whitewater rafting, guides can move people with a language barrier to the safest part of a raft. If a person cannot be made safer and an interpreter cannot be had, however, the operator would be responsible for deciding whether to allow that person to participate. Number 145 AL CLOUGH testified before the committee. A private aircraft owner and operator, he told the committee he often flies friends and acquaintances around the area, but isn't allowed to receive compensation, by federal regulation. He said the bill gives him a degree of comfort when taking guests flying or boating. Mr. Clough expressed support for the bill, which he characterized as a "good thing." CHAIR MURKOWSKI inquired if insurance companies ask pilots whether or not guests will be flown, and if rates vary for those who do fly guests. Number 078 MR. CLOUGH said he doesn't carry insurance on his aircraft. Most pilots find insurance prohibitively expensive. Rather, he tells people his qualifications and that he is uninsured. REPRESENTATIVE ROKEBERG requested an estimate of insurance rates for aircraft. MR. CLOUGH gave the example of his cousin's $100,000 airplane, which costs over $10,000 per year to insure. He said that when someone is flying from airport to airport, insurance can be reasonable in price, but as soon as the plane lands on water or unimproved landing areas, the insurance is no longer in place. TAPE 02-34, SIDE A Number 001 JOHN GEORGE, Lobbyist for National Association of Independent Insurers, testified before the committee. He characterized aircraft insurance as very different from auto or homeowner's insurance because there are several types. There is insurance for the airplane itself, liability, and "seat liability" for coverage of passengers. He told the committee the bill won't absolve the owner of damage done to a third party; it simply protects the owner against those riding in the airplane or boat. He said insurance for airplanes that land on mediums other than at airports will be extremely expensive. Number 076 REPRESENTATIVE ROKEBERG asked about boat insurance. MR. GEORGE said it depends on the boat and the desired level of coverage. REPRESENTATIVE ROKEBERG asked if the homeowner's insurance on a 25-foot boat would cover passenger liability. MR. GEORGE answered that he didn't believe so. He said he thought only very small boats would be covered under homeowner's insurance. REPRESENTATIVE HALCRO offered that he thought boats under 16 feet were covered by homeowner's insurance. Number 115 REPRESENTATIVE ROKEBERG asked about "umbrella liability" coverage. MR. GEORGE said it has to do with underinsured motorist coverage. REPRESENTATIVE ROKEBERG asked if the bill would be helpful to the average Alaskan involved in recreational flying or boating. MR. GEORGE answered that it would be helpful. He likened the bill to a "Good Samaritan" law and said it allows people to do people a favor and not be held liable for guests' mistakes. REPRESENTATIVE ROKEBERG noted that [AS 05.25.040] says "simple negligence" provides for liability, but that the bill specifies that liability would [arise] from "gross negligence." Number 183 REPRESENTATIVE HALCRO expressed support for the bill but said it was incredibly broad. People need to take responsibility, he offered, and business does not need to pay the price for those who don't pay attention or who decide to do their own thing. Representative Halcro said if the bill's intent is to cover low- risk activities like salmon bakes, it doesn't go far enough. Number 232 CHAIR MURKOWSKI cautioned that unintended consequences could come from the bill. It allows individuals or businesses to venture into areas of immunity that might not be prudent to allow. However, she posed the question of how to let companies do what they do; she gave glacier trekking as an example with all of its inherent dangers. She said she didn't know how to fix it. Number 259 REPRESENTATIVE KOTT said some immunity needs to be provided for these companies, especially from smaller claims like [those for] sprained ankles. Negligence of the operator is not going to be removed, but it will be reduced based on the amount of negligence on the part of the participant. He called it a balance, and said the years of work on the bill have led to a result that is "as close as we can get." Number 281 REPRESENTATIVE ROKEBERG asked about the balance between the right to sue and protection of business from frivolous lawsuit. REPRESENTATIVE KOTT agreed it is a big problem. REPRESENTATIVE ROKEBERG expressed concern about a reference to salmon bakes in the bill. REPRESENTATIVE KOTT replied that it isn't his intent to include a salmon bake unless there is some sort of trail walking as part of the recreational activity. Number 317 CHAIR MURKOWSKI asked how animals would be covered in the bill. For example, would a horse-riding company need to warn of a particularly mean animal? REPRESENTATIVE KOTT put forward that an activity in bear country would require a warning of that danger. Number 346 REPRESENTATIVE HAYES asked about other states' legislation. He said it might help in tightening the language. REPRESENTATIVE KOTT said other states' laws had been looked at, but Alaska is different from most states. He said there is no model legislation. Number 370 REPRESENTATIVE HALCRO remarked that no matter how many ways a situation is safeguarded, it is impossible to eliminate all possible risks. CHAIR MURKOWSKI suggested the bill is trying to legislate common sense and personal responsibility. REPRESENTATIVE ROKEBERG conveyed a personal example of tripping on uneven ground and sustaining an injury. He asked rhetorically whether uneven ground is a reason to sue. He said the elderly often end up with tripping injuries. Number 416 REPRESENTATIVE MEYER moved to report CSHB 319, version 22- LS1260\C, Ford, 1/31/02, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 319(L&C) was moved out of the House Labor and Commerce Standing Committee.
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