Legislature(1993 - 1994)
04/12/1993 02:25 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
Chairman Robin Taylor called the Judiciary Committee meeting to order at 2:25 p.m. He stated the first order of business would be to take public testimony on SB 178 (CIVIL NUISANCE ACTIONS) and SCR 4 (REQUEST CHANGE IN RULE 82 FEES). Number 010 STEVE BORELL, Executive Director, Alaska Miners Association, testifying from Anchorage, stated their support for SB 178 for several reasons. First, SB 178 would remove one of the incentives for groups or individuals to file nuisance law suits by removing the financial incentive and this should decrease the number of suits that are filed to merely harass, to object to and to stall projects. Passage of the legislation will form one more tangible evidence to the international mining industry that Alaska truly wants mineral development and that the Alaska State Legislature is interested in removing the impediments to reasonable mining development. SB 178 is an incentive from the aspect of showing that Alaska wants to be considered as a place for people to invest their monies. Number 065 DAVE KATZ, representing the Tongass Conservation Society and testifying from Ketchikan, voiced their strong opposition to SB 178 and SCR 4. Mr. Katz said SB 178 deals with tort law and, in his view, represents very broad tort reform. He said he knows of no other state that is considering wiping "toxic torts" out of the legal lexicon. Under SB 178, an individual would be deprived of his right to defend his property from toxic hazardous wastes. Mr. Katz noted that relatively little of businesses or activities are actually regulated in spite of the fact that many businesses feel that they are over regulated. It's very possible for a business to operate within its normal permit and still create a nuisance. SB 178 would be an invitation to every irresponsible operator to come Alaska because they know that they can't be sued. Speaking to SCR 4, Mr. Katz said it does not target frivolous lawsuits, but, rather, it targets good public lawsuits. He said there are already rules in effect that deal with so- called frivolous lawsuits. Number 170 NANCY LETHCOE, President of the Alaska Wilderness, Recreation and Tourism Association testified from Valdez in opposition to SB 178 and SCR 4. She said their organization represents 300 members statewide whose businesses depend on the marketing of Alaska's natural resources. Most of these businesses employ 10 people or less, they are family owned, and their owners live in Alaska, usually in rural communities where they provide economic diversity. They believe Alaska can have a diversified economy if it has laws that protect its people and its resources. Number 200 ERNESTA BALLARD, representing the Ketchikan Chamber of Commerce, the State Chamber of Commerce and the Alaska Forest Association and testifying from Ketchikan, stated they believe that it is reasonable that a prevailing party is entitled to an award of attorney fees and cost in accordance with Alaska Civil Rule 82, notwithstanding any determination by the courts that the losing party be a public interest litigant. Ms. Ballard said the Alaska Supreme Court has effectively insulated public interest litigants from the expense of litigation if they meet the criteria adopted by the courts for public interest litigants. Ms. Ballard said under Rule 82, as generally applied, litigants have a great incentive either not to litigate doubtful claims or to settle litigation. Public interest litigants, on the other hand, have a great incentive to litigate even weak claims because they suffer no economic burden if they lose, and they are able to impose substantial economic burdens on private companies developing state-owned resources if they prevail. The cost of economic opportunity losses must be applied against the economic value of an investment in public resources development as litigation may cause developers to forego or substantially postpone development, even in situations where the plaintiff's claim is weak. Ms. Ballard said public interest litigation has been used with increasing frequency in the last several years with a measurable impact on economic vitality in the State of Alaska. Concluding, Ms. Ballard stated support for SB 178 and SCR 4. Number 250 TOM CRAWFORD, a minerals exploration geologist speaking on behalf of the North Pacific Mining Corporation and the Alaska State Chamber of Commerce testified from Anchorage in support of SB 178. Mr. Crawford said the existing nuisance standard that SB 178 proposes to revise allows for lawsuits if an individual's "personal enjoyment is lessened," and that standard is an open invitation to frivolous legal actions. Legal provisions like this are an additional disincentive to mining companies that already perceive Alaska to be a difficult place to work because of its remoteness, the climate, lack of transportation and infrastructure, etc. It unfairly jeopardizes the company that has played by all the rules and has made an investment of many thousands and millions of dollars in hopes of obtaining a reasonable return on that investment. Number 295 CLIFF TARO, President of Southeast Stevedoring Corporation testified from Ketchikan in support of SB 178. He said their members are dependent for their living on the tourist industry, the shipping industry, the mining industry, as well as the fishing industry. Mr. Taro said for the current law to allow a frivolous so- called nuisance to be able to stop or delay industry and commerce only enables preservationists to be able to stop any and all development without penalties on their part. The regulatory agencies have the duty and power to carry out the many requirements that industry must adhere to. To allow individuals whose concerns might be legitimate, but who do not understand the ramifications for those whose agenda is to stop all development no matter what the cost may be to industry, should not be allowed. Number 315 CHIP TOMA, testifying in Juneau, stated he has some concerns with SB 178. He spoke to a lawsuit against the Sitka Pulp Co. and said he believes SB 178 is to protect the Sitka Pulp Mill, even if their permit is violated. Mr. Toma also pointed out that no other state has a similar limitation on this kind of tort law, and he asserted that the bill is probably unconstitutional because it denies due process to property owners, it constitutes a taking of private property rights, and it may make the state liable for cost of injury to be properly caused by permitted activity. Number 365 KATYA KIRSCH, representing the Alaska Environmental Lobby, stated their opposition to SB 178. She said it not fair to prevent citizens of Alaska from having access to legal actions regarding permitted corporate activities. Alaskans citizens should always have the fundamental right to protect their property rights. Ms. Kirsch said passage of the legislation may stop certain legal actions this year, and it may be dangerous to set a precedent to create legislation that nullifies legal actions. It could pave the way for other legislation that may stop entirely different legal actions in a different political atmosphere in future years. Number 390 JAMIE PARSONS, President of the Alaska State Chamber of Commerce, stated the board's support for SB 178 and clarifying the definition of "nuisance." Mr. Parsons said it is logical that after the lengthy public scrutiny process any company or individual has to go through these days to secure permission to proceed, especially in resource development, those permits should be worth something. Passage of SB 178 would greatly reduce, once permits are issued, lawsuits simply filed to harass or to kill a project using delaying tactics. Concluding his comments, Mr. Parsons said the Alaska State Chamber of Commerce believes that by narrowing the definition of "nuisance" to mean a substantial and unreasonable interference with use and enjoyment of real property, including water, SB 178 will go a long way in reducing frivolous lawsuits and unnecessary litigation. Number 416 JOHN LITTEN, a small business person in Sitka directly involved in the tourism industry, stated his support for SB 178. He said there are a number of Alaska businesses that can be affected by either passage or non-passage of the legislation. Mr. Litten said as a small business person and as a person that has three quarters of a million dollars in busses, if someone doesn't like the fact that there is diesel smoke in the air or something like that, they can stop him from operating in a window that is very limited for the tourist season, and they should be held responsible for the damage that they could cause to his business. Number 445 BOB ENGLEBRECHT, Vice President, Temsco Helicopters, testifying in Juneau, said obtaining the necessary permits, certificates and approvals is a costly and time consuming business for them, and this is without the extra burden of potential lawsuits. Temsco concurs with the business community concern that these types of suits will spread even though they are operating within the regulations, and the cost of defending against frivolous lawsuits can be a real hardship on a company the size of Temsco. He stated Temsco's support for the passage of SB 178. Number 461 DAN KECK, testifying from Sitka, stated his support for SB 178 and SCR 4. He said frivolous and nuisance lawsuits have been a real concern of municipalities and local governments for many years. Frivolous lawsuits are an easy way for conservationists to keep projects., etc., tied up in the courts for years. He urged passage of the bill and resolution. Number 475 DON MULLER, a Sitka businessman testifying from Sitka, read into the record testimony he had submitted to the committee the previous week, which asserts that the legislation is being considered because the Sitka Pulp Mill doesn't like the existing rules. He asked that the committee members vote against SB 178 and SCR 4 in the interest of democracy and the rights of the citizens of Alaska. Number 495 ERNESTINE GRIFFIN, Executive Director, Greater Sitka Chamber of Commerce, testifying from Sitka, stated their board of directors voted in favor of supporting SB 178. There being no further testimony, SENATOR TAYLOR closed the public hearing on SB 178 and SCR 4. SENATOR TAYLOR brought SB 178 and SCR 4 back before the committee. SENATOR HALFORD moved and asked unanimous consent that CSSB 178(JUD) be adopted. Hearing no objection, the motion carried. SENATOR TAYLOR explained that the committee substitute adds the word "private" before the word "nuisance" on page 1, line 5 to clarify that this does not relate to public nuisance actions. On lines and 13 and 14, reference to AS 03.30.030 and AS 19.27 were removed because both of them are statutory public nuisances. Further, on page 2, line 3, subsection (d) has been deleted so as not to interfere with the ability of those entities to protect citizens from public nuisances. Number 100 SENATOR LITTLE stated she has concerns with the legislation and believes that it is too broad. Number 110 SENATOR HALFORD moved that SB 178 be passed out of committee with individual recommendations. SENATOR LITTLE objected. The roll was taken with the following result: Senators Halford, Jacko and Taylor voted "Yea," and Senator Little voted "Nay." The Chair stated the motion carried. Number 115 SENATOR HALFORD moved that SCR 4 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered.
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