Legislature(1995 - 1996)
04/21/1995 01:15 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 161 - AIRCRAFT/WATERCRAFT GUEST PASSENGER LAW Number 218 CHAIRMAN DAVIS announced the next order of business was to hear testimony on CSHB 161 and asked the prime sponsor's legislative assistant, Ms. Patty Swenson to present her testimony on the committee substitute (CS) for HB 161. PATTY SWENSON, Legislative Assistant to Representative Con Bunde, indicated the only change they have made to the committee substitute before the committee is on page 2, Section (B). This includes the addition of limiting aircraft or watercraft owners' liability, if they posted notice that they did not have insurance. People would then have some warning before they rode with the pilot of the boat or plane. This was the only change Representative Bunde made to the bill. CHAIRMAN DAVIS reminded the committee that a second version added the wording "simple negligence" and this was then deleted, because it would have made the whole bill unnecessary. He said the effect of the new wording... MS. SWENSON interjected that it would just limit the aircraft or watercraft owner's liability, when they posted notice. She explained it would then be similar to a person not having insurance and that it would compensate a person being transported, as is described in the first section of the bill under Section (a). They would have the same lack of liability in cases other than gross negligence acts. Number 234 CHAIRMAN DAVIS asked for confirmation that this was just a notice to the passengers. REPRESENTATIVE JERRY SANDERS asked if the form of notice was verbal or written? MS. SWENSON said it stated it was to provide notice to the person being transported. It does not specify the type of notice. REPRESENTATIVE SANDERS asked if it was a verbal notification and not some kind of label on the door or display on the aircraft, couldn't we get into a situation of "I said, he said, or you didn't tell me" situation. MS. SWENSON explained it was her understanding that if something were to happen and a notice was posted, then something happened to the notice, there would still be the same problems. REPRESENTATIVE SANDERS said this situation would occur more frequently if the notice was not posted. He said he supported the amendment to this bill and encouraged it from the beginning, but it did not seem to be definitive enough. Number 269 REPRESENTATIVE JAMES responded to Representative Sanders' comment that she has experienced similar situations. She presented an example of entering a mining area, where the people in charge require their guests to sign a piece of paper stating that the guest understands any risks that might be involved. She thought that people will want to insure themselves, so they will put it in writing that they are not responsible. CHAIRMAN DAVIS presented a scenario where a pilot took someone for a ride in their airplane, they crashed, and the passenger was killed. Previous to the flight, the passenger was notified that the pilot did not have insurance. Chairman Davis indicated "he can't give his word, I told him" so this type of situation seemed to be a problem. REPRESENTATIVE SANDERS concurred with Chairman Davis and stated if it was incorporated in this bill that there had to be in writing, the terms of liability, he would then feel more comfortable with it. However, at this time it does not state this and he has no reason to assume this would be carried out by the pilots. CHAIRMAN DAVIS indicated he would take testimony from Mr. Ray Brown via teleconference from Anchorage. Number 293 RAY BROWN, Attorney, Alaska's Academy of Trial Lawyers indicated he did not hear the first part of the presentation and didn't know who the speaker was who was talking about the amendments to the bill. He said he didn't know if they added back language, but he knew from the last time he testified on this bill, Mr. Bunde included under Section B, the wording "negligent conduct." He asked if that had been taken out. CHAIRMAN DAVIS said yes. MR. BROWN continued to explain that HB 161 is creating a litigation nightmare. He referred to the issue of a notice requirement as being problematic in and of itself. He inquired as to who will make the determination of whether or not notice was given as well as determining whether or not someone was negligent, grossly negligent or reckless or intentional, after an aircraft has crashed. He remarked this type of bill seems to carve out a special class of people that are being immunized from exposure, based upon their conduct. He said he was not aware of any other class, other than attempting to do this in the medical field, where there is an elite group of people, basically immunizing them from negligent conduct. He explained HB 161 when read in its entirety, and without some sort of clarification, would probably immunize people to some extent from reckless or grossly negligent conduct. It potentially leaves the care of victims, their families and their children, who if in the event both parents were killed without an income provider, the state of Alaska and the federal government could be responsible for covering the negligent acts of the pilots. If a person is catastrophically injured, it leaves their health care to the state and federal government because of the negligent or reckless conduct of another person. He said not only from an attorney's standpoint, but from a citizen's standpoint, and in a state where we have the highest per capita number of pilot error- type crashes, he was amazed that a bill such as this would be passed, to immunize those persons. He referred to Representative Bunde's explanation that this bill was designed to protect pilots from acts of God. Mr. Brown stated if this was really the purpose of the bill, there would be no need to pass it because under the torte liability law, if there is no negligence and it is an act of God, then there is no breach in the duty of care and no resulting liability to begin with. He indicated this is not the intent of this bill, particularly with the deletion of the negligence wording and it is not for the acts of God, but actually to protect negligent people for their conduct. He referred to Section 2(b) and said it was difficult for him to figure out from the bill itself, whether or not the language in subsection 2 (a) also applies to subsection 1(a). If it does, then there are some obvious problems. He mentioned it would encourage the property owner to purchase the minimum of coverage. MR. BROWN presented an example where someone with $3 million or $4 million in assets could engage in grossly negligent or reckless or intentional misconduct and only be liable for the minimum amount of coverage. He stated he would assume that people would elect to purchase the minimal amount of coverage, because for any amount over that they would be immunized for regardless of their conduct. He concluded it has the potential to work a great injustice on innocent victims. He felt that based on the wording of the statute, a person would be better off to be involved in an accident with people who would be grossly negligent or intentional with no insurance, so long as they had sufficient assets to cover an injury or death. He felt the statute discouraged adequate insurance and is a boondoggle for a select few people who are pilots and aircraft owners. He added it will work a great injustice on innocent victims who happen to ride in an aircraft. Number 363 REPRESENTATIVE BILL WILLIAMS asked Mr. Brown if he is an attorney. MR. BROWN responded, yes. REPRESENTATIVE WILLIAMS said he was under the impression that this bill catered to private parties who wanted to take their friends along for a ride. The way he viewed it and from what the attorney said, is that we would be providing for an open season in the court system. That may be true if the operator of the boat or plane was not going to take his friend for a ride. He presented an example where a friend of his goes for a ride with him in his boat and he tells the passenger that he does not have insurance and he can ride at his own risk. The passenger has the choice to stay or go. He felt that was the intent of this bill. MS. SWENSON stated Representative Williams is correct. The purpose of the bill was to be able to take friends and acquaintances on a boat or plane... REPRESENTATIVE WILLIAMS interjected and stated the pilots are not looking to make money... MS. SWENSON interjected that was specifically excluded, if it's a nonpaying passenger, common carriers are excluded as well. Currently the majority of aircraft owners do not have passenger insurance because of the high costs. The friends that ride with the pilots are traveling at their own risk. REPRESENTATIVE WILLIAMS said he had a friend who occasionally would take him for a ride in his airplane, and he was under the impression the pilot had insurance. Representative Williams said this would bring to his attention, the concern that the pilot could say I do not have any insurance and it is the passenger's choice to ride along and the pilot would be covered. He reiterated his comments on the fact the passenger has the choice to go or stay. MS. SWENSON said this was correct. Number 409 REPRESENTATIVE SANDERS stated there was more to this than just the friends going along for rides. He presented a scenario where Representative Williams was a pilot and took him flying. Representative Williams told Representative Sanders that he did not have insurance. He said he understood this and agreed not to sue him in the event of a crash. They then go flying, the plane crashes and Representative Sanders is killed, and his wife is left without an income. She would look to sue someone and deserves to. REPRESENTATIVE JAMES disagreed with Representative Sanders' statement. If a person was paying for a ride, that person would expect that the beneficiary would receive compensation for the incident. She felt if it was a commercial flight, the company would be required to cover all passengers. This bill addresses the issue of people going for rides for the fun of it and do not pay for the rides. She felt that the pilots would get someone to sign. She proposed the situation where a waiver was signed, but both family members were killed in a plane crash and everyone dies and other people are not a party to that. She felt that if someone did sign the waiver, this would be seen as evidence of the fact the passenger was informed. She said the issue is taking passengers for a free ride and of the passenger's will. She explained the insurance was expensive and it is a toy in many cases. She indicated she did not have a problem with people having toys even though they kill themselves with toys. She commented anytime someone is negligent, they should be held responsible. Number 434 MR. BROWN stated the problem, as he understood it, was that we are immunizing people for negligence. He stated when he gets into an airplane, car or boat, he hopes that the operator will not act in a negligent manner. He understands that he has no control over the operator of the boat, plane or car. He questioned why we would want to isolate one pocket of society. Whether it is called a toy or not, he did not understand why someone would want to protect a person from negligent conduct? He remarked this is exactly what this bill would be doing just by the mere recitation of a person stating they do not have insurance. He questioned who would be responsible for the negligent conduct of an uninsured pilot even if they gave notice, and added more than likely it would be the state of Alaska. He said fortunately we are in a state that does not have a large tax base, but someone will pay for the negligent acts. He commented on Representative Sanders' astute observations that there will be family members that will suffer because of this conduct. He reiterated his concerns for people wanting to immunize a person that caused the negligent act at the expense of everyone else. He added he did not understand what the problem was with requiring people to carry insurance to operate these toys. REPRESENTATIVE WILLIAMS stated the way he saw it, people can protect themselves to the hilt. He said the subject of torte reform had come up and said this sounds similar. He made the analogy of pedestrians crossing the street and assuming everyone in a car has liability insurance. He said the pedestrians are not aware of who has insurance and who does not, but if they cross the street, and are hit by a car...maybe this bill should include motor vehicles as well. CHAIRMAN DAVIS said he had neglected to adopt the Committee Substitute, and asked if he could have a motion to adopt the Version /F, CSHB 161. REPRESENTATIVE JAMES motioned to adopt CSHB 161, Version /F. CHAIRMAN DAVIS asked if there was any objection. Hearing none, CSHB 161, Version /F was adopted. REPRESENTATIVE SANDERS commented on the distinction between cars and boats, and said with cars there is no law saying you do not need insurance and the same applies to boats. Representative Sanders said he did not see why airplanes should be different. He felt a person should have insurance. He was not going to be party to making a law that states that insurance is not needed. Number 499 REPRESENTATIVE TOM BRICE added to Representative Sanders' comments that this was the intent of HB 161. It does not imply "my good friend, Jerry, come on my boat with me and we'll have fun," rather HB 161 indicates a person won't buy insurance because, if they do, they will be held liable, but if they don't buy the insurance, then they are off the hook. This was his concern with the fact it is a negative incentive to obtain insurance to help out in the situation where simple negligence is a factor. A person is still liable if they commit a grossly negligent act, but a person is not liable if they commit a negligent act. He suggested the possibility of lowering the standard to ease some of the concerns among members of the committee. As the bill is written, it says "don't buy insurance because it is a waste of time and money. The people that get hurt will be taken care of by the state." Representative Brice said that was his concern. REPRESENTATIVE EILEEN MACLEAN stated she had similar concerns, but added this should not be exclusive to air and watercraft guest passengers. She asked to make it all inclusive of other modes of transportation. Number 522 CHAIRMAN DAVIS stated it was his intent to address a motion on the CS for HB 161 to move it out of the House Transportation Committee. REPRESENTATIVE JAMES made a motion to move CSHB 161(TRA) out of Committee. CHAIRMAN DAVIS asked if there was objection. REPRESENTATIVE MACLEAN objected for discussion on CSHB 161(TRA). REPRESENTATIVE BRICE proposed an amendment on page 1, line 13, delete the word "gross" and negligence or reckless or intentional misconduct are not exempt under this. REPRESENTATIVE JAMES objected to Representative Brice's proposed amendment. CHAIRMAN DAVIS questioned the legal definition of the wording "reckless misconduct." He expressed concern for the legal interpretation of this. He would interpret this as being similar to simple negligence, but was not sure. He then announced there was a motion to delete the word "gross" on page 1, line 13, that had been objected to for the purpose of discussion. REPRESENTATIVE JAMES explained her objection was with the wording "negligence." She stated it was not possible for anyone to live without it. She said we are not perfect and any time someone does something that injures someone else, it can be construed as negligent. If someone does do something and nothing happens, it is not negligent. She explained there has to be some admittance to the fact that there is an inherent risk of living and people cannot be held responsible for everything people do that can be addressed as negligent. If people could place negligence in terms of degrees of a negligent act that a person did something intentionally.... She then presented an example of someone driving into a ditch and saying "I could have avoided that by doing this or this or this" and the person admits that they were negligent. It is not possible to go through life without having some sort of negligent accidents. She stated she would feel very vulnerable if every negligent action that she has is subject to a lawsuit. She reiterated her concerns on addressing the issue of an inherent risk of living. This is why she objected to the term negligent. Number 558 REPRESENTATIVE BRICE disagreed and explained that before this would happen there should be testimony from attorneys who understand the term negligence. He felt the immediate discussions were stretching the term way beyond its intent. He presented an example where he was just involved in a car accident on March 1, 1995. The driver crossed the yellow line and ran into him. As far as he is concerned, the other driver was negligent. Unfortunately, the lawyers are blaming the icy roads so she was found not to be negligent. He suggested that before every mishap that occurs is deemed a negligent act, there should be an understanding of a legally recognized and defined term for negligence. He reiterated his concerns on having someone from Legislative Legal Services confront this issue. He concluded by saying it would ease the concerns of a lot of people because unlike driving, snow mobiling or unlike any other type of activity, the operation of aircraft and watercraft are probably the two most unforgiving forms of transportation. Not only unforgiving in case of accidents, but also unforgiving in terms of various conditions of the outdoor elements. The potential for serious injuries is much higher than driving or walking. MS. SWENSON asked the maker of the amendment if his intent was to delete the term gross negligence and add negligence? REPRESENTATIVE BRICE said yes. MS. SWENSON asked for confirmation on adding the word negligence to the bill and not holding people liable for gross negligence acts... REPRESENTATIVE BRICE interjected that it would be lowering the standard to "negligence." CHAIRMAN DAVIS said he would speak in favor of the motion and suggested to move the bill to the Judiciary Committee, where further legal action could be discussed. REPRESENTATIVE JAMES reminded the committee that these passengers are riding for free and for the fun of it. The passengers in this case should assume some portion of the responsibility. Number 612 REPRESENTATIVE MACLEAN said she viewed it differently and presented an example of someone needing to be transported out of a village for medical reasons. The pilot is not being paid to transport the person out of the village. She asked how would this impact the passenger. CHAIRMAN DAVIS said the pilot would be contracted to transport the passenger. This would be seen as a business transaction through whatever company the pilot is affiliated with. He questioned whether a private pilot using his own plane to medivac someone out, would not be covered and the passenger may not be covered. REPRESENTATIVE MACLEAN stated she was referring to a situation where someone from Hoonah or Petersburg ws going to be transported in an emergency situation and they were not paying, how would this legislation impact this particular situation. Number 617 MS. SWENSON explained if there was an accident while transporting this person, the pilot would not be held liable. Many people would not be able to be transported if a pilot did not have passenger insurance. Pilots would be afraid that something might happen to them in flight that was beyond their control. As a result, the pilot may choose not to transport the person that needed to be transported. CHAIRMAN DAVIS asked to vote on the motion. He reminded the committee the motion was to move the amendment to delete the word "gross" on page 1, line 13. He then asked for a roll call on Representative Brice's amendment. Representatives Brice, Masek, Davis, Sanders, Williams and MacLean voted in favor of the amendment. Representative James opposed the amendment. Chairman Davis asked if there was further discussion. Hearing none, the amendment passed. REPRESENTATIVE WILLIAMS made a motion to move CSHB 161(TRA) as amended out of the House Transportation Committee with zero fiscal notes. REPRESENTATIVE SANDERS objected. CHAIRMAN DAVIS asked for a roll call vote. Representatives Brice, James, Davis, Masek and Williams voted in favor. Representatives Sanders and MacLean voted no. Chairman Davis announced that CSHB 161(TRA), as amended was moved out of the House Transportation Committee.