Legislature(2005 - 2006)BELTZ 211

02/09/2005 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

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Audio Topic
01:34:44 PM Start
01:36:10 PM SB86
01:54:51 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Bills Previously Heard/Scheduled
         SB  86-STATE/MUNI LIABILITY FOR ATTORNEY FEES                                                                      
CHAIR GARY  STEVENS announced SB  86 to be up  for consideration.                                                               
He noted that  HB 117 is the companion bill  and it had referrals                                                               
to the  House Community  and Regional  Affairs and  State Affairs                                                               
CHAIR  GARY  STEVENS  asked  Mr.  Brandt-Erichsen  to  begin  his                                                               
1:36:10 PM                                                                                                                    
SCOTT  BRANDT-ERICHSEN,   Ketchikan  Gateway   Borough  attorney,                                                               
stated that  SB 86 addresses a  subject that he has  commented on                                                               
previously  and  the  current version  is  superior  to  previous                                                               
efforts.  The question  of  public  interest litigant  attorney's                                                               
fees or the possibility of  full award of attorney's fees against                                                               
public entities can  be problematic because a  community could be                                                               
caught in middle, he said.                                                                                                      
He cited a case when he  worked for the Municipality of Anchorage                                                               
and was  defending a decision  the city  clerk had made.  In that                                                               
case there  were public interest  litigants on both  sides, which                                                               
assured that the city wouldn't recover  any fees if they won, and                                                               
if they  lost they were  likely to have to  pay one party  or the                                                               
other.  They  did win the case  and didn't have to  pay fees, but                                                               
were unsuccessful when  they tried to recover  incurred fees. The                                                               
city  argued  for  a  change  in the  law,  but  the  effort  was                                                               
1:37:56 PM                                                                                                                    
Currently,  he  said, there  is  disparity  in the  incentive  to                                                               
settle a case.  If a party has  more than one claim and one might                                                               
be  successful, if  it  would otherwise  qualify  for the  public                                                               
interest litigant status there is  little incentive to keep costs                                                               
to  a minimum  and resolve  the case.  If full  cost recovery  is                                                               
likely it could be used as a money making proposition.                                                                          
1:38:44 PM                                                                                                                    
MR. BRANDT-ERICHSEN  referenced page  2, line  5 and  suggested a                                                               
wording  change; delete  "cost  or" and  insert "attorney's".  He                                                               
made the point that the  bill doesn't address costs; it addresses                                                               
attorney's  fees  so  the change  would  provide  continuity  and                                                               
maintain clarity.  "The distinction  between awards of  costs and                                                               
attorney's fees  is appropriate  so the awards  of costs  are not                                                               
affected, but awards of attorney's  fees would be limited by this                                                               
section except  where there's an  explicit authorization  for the                                                               
award of  attorney's fees in  the amount greater than  that which                                                               
would be provided in this section," he explained.                                                                               
1:41:04 PM                                                                                                                    
CHAIR GARY STEVENS asked what "costs or fees" would include.                                                                    
1:41:25 PM                                                                                                                    
MR. BRANDT-ERICHSEN said  the court has applied  the term "costs"                                                               
several ways in statutes. Sometimes  it includes attorney's fees,                                                               
but  not always.  Under Rule  79, parties  generally recover  the                                                               
full amount of  money expended for filing fees,  process fees and                                                               
depositions while attorney's  fees would be the  time an attorney                                                               
bills for providing the service.  He suggested the change because                                                               
the statute addresses limiting attorney's fees and not costs.                                                                   
1:42:33 PM                                                                                                                    
CHAIR  GARY STEVENS  said the  committee might  want to  consider                                                               
amending the bill.                                                                                                              
Finding no  further questions for  Mr. Brandt-Erichsen,  he asked                                                               
Mr. Kennedy to comment.                                                                                                         
1:42:56 PM                                                                                                                    
CHRIS   KENNEDY,   assistant    attorney   general,   spoke   via                                                               
teleconference and apologized  for missing the first  part of the                                                               
meeting. He asked if anyone had formally introduced the bill.                                                                   
CHAIR GARY STEVENS asked him to present the legislation.                                                                        
1:43:41 PM                                                                                                                    
MR.  KENNEDY  said  in  Alaska  civil  suits,  the  losing  party                                                               
traditionally  pays  at  least  part  of  the  winning  litigants                                                               
attorney's fees. The award usually  isn't more than 20 percent of                                                               
a money  judgment and  for non-money  judgments it's  usually not                                                               
more than 30 percent of the winning party's fees.                                                                               
1:44:43 PM                                                                                                                    
SB  86 addresses  enhanced  fee awards  against  state and  local                                                               
governments, which  are the  fees over  and above  normal partial                                                               
compensation.  Enhanced  fees  occur  in the  context  of  public                                                               
interest  litigation   where  the  court  determines   a  lawsuit                                                               
advances  what the  court  views as  strong  public policies.  "A                                                               
government can  be ordered to pay  full fees to a  plaintiff even                                                               
when  the government  prevails on  most issues  in the  case," he                                                               
said. For  example even though  his office  successfully defended                                                               
all but two  provisions of the 1999 case,  Alaska Civil Liberties                                                               
Union  (ACLU) versus  State, the  Alaska court  awarded the  ACLU                                                               
full attorney's fees.                                                                                                           
1:45:42 PM                                                                                                                    
SB 86 provides  that for civil actions or appeals,  the state and                                                               
municipalities are not liable to pay  more than 20 percent of the                                                               
money judgment  as attorney's  fee to the  other side.  For civil                                                               
actions in  which no  money judgment  is recovered,  liability is                                                               
capped  at  30  percent  of  reasonable  actual  attorney's  fees                                                               
incurred  by  the winning  party  on  the  issues on  which  they                                                               
prevailed.  If the  case  doesn't  go to  trial,  the  cap is  20                                                               
percent of the same amount.                                                                                                     
For appeals  in which no  money judgment is recovered,  state and                                                               
municipality  liability  for  attorney's  fees is  capped  at  20                                                               
percent of the reasonable actual  attorney's fees incurred by the                                                               
prevailing side on the issues on which they prevailed                                                                           
These limitations  don't apply: when statutes  apply differently;                                                               
when  the  court  awards  attorney's   fees  as  a  sanction  for                                                               
misconduct by the  government or its attorney; and  in cases that                                                               
involve eminent domain or condemnation.                                                                                         
SB 86  was introduced to protect  the state treasury and  to give                                                               
the Legislature  policy choices regarding  subsidizing litigation                                                               
against the state with public funds, he said.                                                                                   
1:47:58 PM                                                                                                                    
The unfair  competition statute cited  in the bill is  an example                                                               
in which  immunity is waived  and another is the  public interest                                                               
litigant  statute enacted  in  2003. The  latter  is under  legal                                                               
challenge, but would be an exception to SB 86 if it survives.                                                                   
1:48:44 PM                                                                                                                    
"Because  this  bill  relates to  the  Legislature's  fundamental                                                               
control over  the state's fiscal  matters and over  suits against                                                               
municipalities, it's not a change  of rules and doesn't require a                                                               
2/3  vote.  It's  similar  to   the  other  immunities  that  are                                                               
contained in chapter 65 of Title 9," he concluded.                                                                              
1:49:08 PM                                                                                                                    
CHAIR GARY  STEVENS asked  whether he  had any  comment regarding                                                               
Mr. Brandt-Erichsen's suggestion to amend.                                                                                      
MR.  KENNEDY  replied   his  office  had  no   objection  to  the                                                               
suggestion  and the  explanation  made sense.  However, he  would                                                               
suggest inserting  the word, "attorney"  in the  singular because                                                               
the bill refers to the fees in that way.                                                                                        
CHAIR GARY STEVENS noted there  were no questions and thanked Mr.                                                               
Kennedy for  his comments. He  then called Mr. Bondurant  to give                                                               
1:50:27 PM                                                                                                                    
DALE BONDURANT, Soldotna  resident, testified via teleconference.                                                               
He said he has placed  his property under a conservation easement                                                               
and he opposes SB 86.                                                                                                           
1:51:04 PM                                                                                                                    
MR. BONDURANT  read his remarks  into the record citing  both the                                                               
Alaska and the U.S. Constitutions.                                                                                              
1:53:51 PM                                                                                                                    
CHAIR  GARY  STEVENS thanked  Mr.  Bondurant  for expressing  his                                                               
views and  reminded him  that he  might want to  track HB  117 as                                                               
There were no questions and no further testimony.                                                                               
He announced that  he didn't intend to move the  bill, but he was                                                               
willing to  address the suggested  amendment if the  committee so                                                               
1:54:32 PM                                                                                                                    
SENATOR BERT STEDMAN  motioned to delete the words  "costs or" on                                                               
page 2,  line 5 and  insert the  word "attorney". There  being no                                                               
objection, it was so ordered.                                                                                                   
CHAIR GARY STEVENS  announced he would hold the amended  SB 86 in                                                               
committee and that a committee substitute would be prepared.                                                                    

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