Legislature(2003 - 2004)
05/15/2003 08:45 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 225 "An Act relating to certain civil actions brought by the attorney general under monopoly and restraint of trade statutes; relating to the award of damages in actions brought under those statutes; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. Senator Taylor offered a motion to report the bill from Committee with individual recommendations and accompanying fiscal note. Co-Chair Wilken explained this bill sponsored by the House Rules Committee as the request of the Governor, "updates Alaska's anti- trust statutes in response to a recent United States Supreme Court precedent. This legislation will allow the Attorney General to bring an action on behalf of consumers for violation of the State's anti-trust laws and to recover damages." DAVID MARQUEZ, Assistant Attorney General, Office of the Attorney General, Department of Law deferred to Mr. Sniffen. ED SNIFFEN, Assistant Attorney General, Fair Business Practices Section, Civil Division, Department of Law, testified via teleconference from an off net location that this bill allows the Attorney General to represent consumers in actions involving indirect purchases. He referenced a flow chart distributed by the Department of Law [copy on file, that details a situation in which a conspiracy or other illegal anti-trust behavior might occur between two companies resulting in an artificially inflated price passed along through an importer, a distributor, a wholesaler, a retailer and ultimately to consumers. He informed that in this instance, the consumer is considered an indirect purchaser because the product was not purchased directly from the "anti-trust wrong- doers". Mr. Sniffen pointed out that under current State anti-trust law, the consumer has no ability to bring an anti-trust action in this situation and therefore has no remedy to recover. Instead, he stated the consumer must rely on entities "further up the chain" i.e. importer, distributor, wholesaler or retailer, to bring action. Mr. Sniffen assured this matter is not a "theoretical exercise" stressing that this occurs in Alaska at a cost of hundreds of thousands of dollars. He told of one case involving vitamin manufacturers conspiring to keep the cost of their products high that was eventually settled as a result of a multi-state litigation. He informed that States with similar anti-trust statutes to this legislation were able to recover approximately $1 million each in fines and penalties and that states without such statutes received nothing, although Alaska was able to negotiate with the settlement committee to receive approximately $100,000. He pointed out that Alaska, as a participant in this litigation, could have collected an additional $900,000 if this legislation was in place. He furthered that other situations exist involving women's shoes and pharmaceuticals; however the State has not taken action due to lack of authority. Mr. Sniffen told of the US Supreme Court case Illinois Brick Company versus Illinois, which established the current rules. Senator Taylor commented it was "fascinating" that the Committee would move a bill relating to collecting damages. He did not object to the passage of this bill from Committee. Without objection HB 225 MOVED from Committee with accompanying fiscal note #1 in an indeterminate amount from the Department of Law.
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