Legislature(2003 - 2004)

04/27/2004 08:15 AM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          CSHB 227(JUD)-DISTRICT COURTS & SMALL CLAIMS                                                                      
                                                                                                                                
MS.  VANESSA TONDINI,  staff to  the  House Judiciary  Committee,                                                               
explained  that  CSHB 227(JUD)  makes  necessary  changes to  the                                                               
current jurisdiction  of both small  claims and  district courts.                                                               
The jurisdictional limit  for district courts was  last raised in                                                               
1990  from $35,000  to  $50,000. CSHB  227(JUD)  will raise  that                                                               
limit  to   $100,000,  allowing   for  inflation   and  increased                                                               
flexibility  for litigants.  The  jurisdictional  limit on  small                                                               
claims court  and magistrate court  was last raised in  1997 from                                                               
$5,000 to $7,500. Small claims  court offers many advantages over                                                               
district  court to  litigants,  including  less formal  discovery                                                               
requirements, lower  filing fees  and relaxed  evidentiary rules.                                                               
CSHB  227(JUD)   raises  that  limit   to  $10,000   and  removes                                                               
prohibitions  against district  court  hearing  claims for  false                                                               
imprisonment,  libel, slander  and malicious  prosecution because                                                               
district court judges  are well qualified to hear  those kinds of                                                               
cases. Last, CSHB 227(JUD) will  expand small claims jurisdiction                                                               
over  out-of-state  defendants.  Current law  only  allows  small                                                               
claims   actions  against   out-of-state  defendants   under  the                                                               
landlord/tenant  act and  certain other  statutes that  authorize                                                               
service of process against owners  or operators of motor vehicles                                                               
involved in accidents  in Alaska. CSHB 227(JUD)  will allow small                                                               
claims   jurisdiction   over    out-of-state   defendants   under                                                               
traditional long-arm principles.                                                                                                
                                                                                                                                
CHAIR SEEKINS welcomed Representative McGuire.                                                                                  
                                                                                                                                
REPRESENTATIVE LESIL McGUIRE, sponsor of  HB 227, added that this                                                               
legislation is strongly supported  by the business community. The                                                               
Alaska State  Chamber of Commerce  has formally backed  this bill                                                               
as  this will  allow  businesses  to go  pro  se  and avoid  high                                                               
litigation costs for small cases.                                                                                               
                                                                                                                                
CHAIR  SEEKINS  stated  that  he would  prefer  to  increase  the                                                               
jurisdiction of the small claims courts to $20,000.                                                                             
                                                                                                                                
MR. DOUG WOOLIVER, Administrative  Attorney, Alaska Court System,                                                               
stated a neutral position on the  bill and noted pros and cons to                                                               
raising the jurisdictional limit of  the small claims courts. One                                                               
concern  of judges  is that  the informality  that allows  pro se                                                               
litigants to better access the  courts can lead to unjust results                                                               
because  of the  trade-off  between speed,  efficiency and  lower                                                               
costs,  and   thoroughness  and  due  process.   The  higher  the                                                               
jurisdictional limit  gets, the less  faith judges have  that the                                                               
process  leads to  just results,  especially when  an experienced                                                               
litigant faces an inexperienced litigant.                                                                                       
                                                                                                                                
MR. WOOLIVER  noted on  the other hand,  small claims  courts are                                                               
known  as  the  "people's  court" because  small  claims  can  be                                                               
disputed quickly and  with less expense. The  Alaska Court System                                                               
(ACS), like  court systems  nationwide, has  seen an  increase in                                                               
pro se litigants.   The ACS has  made a lot of  changes to better                                                               
accommodate  pro se  litigants;  CSHB 227(JUD)  will be  another.                                                               
Raising  the jurisdictional  limit  of small  claims courts  will                                                               
make  those  courts  more  accessible to  people  who  choose  to                                                               
represent  themselves.  He  repeated  that although  there  is  a                                                               
trade-off, the  ACS is comfortable  with that trade-off  with the                                                               
limits provided in CSHB 227(JUD).                                                                                               
                                                                                                                                
SENATOR  HOLLIS FRENCH  asked for  an estimate  of the  number of                                                               
cases that could fall in the upper jurisdictional limit.                                                                        
                                                                                                                                
MR.  WOOLIVER said  the ACS  hears about  10,000 to  12,000 small                                                               
claims cases per year statewide, but  it does not have a breakout                                                               
of the claims by dollar amount.  He noted that last two times the                                                               
jurisdictional limit was  raised, the ACS did not  see the number                                                               
of filings  increase, which suggests  that the bulk of  the cases                                                               
are not at the upper limit.                                                                                                     
                                                                                                                                
SENATOR   FRENCH  asked   if  CSHB   227(JUD)  will   change  the                                                               
jurisdictional limit of the superior court.                                                                                     
                                                                                                                                
MR.  WOOLIVER said  it  will  in the  sense  that  right now  the                                                               
jurisdictional  limit of  the superior  court begins  at $50,000;                                                               
that number would  begin at $100,000. He explained  that a person                                                               
who wants  to take a  case to superior  court will have  to plead                                                               
damages  in excess  of $100,000.  Currently, most  superior court                                                               
damage   awards   are  less   than   $50,000,   so  those   cases                                                               
theoretically  could have  been brought  in district  court. This                                                               
bill is unlikely  to affect pleading decisions but  it will allow                                                               
people to choose district court,  which has less formal discovery                                                               
requirements.                                                                                                                   
                                                                                                                                
CHAIR SEEKINS asked  if the judge in a small  claims action often                                                               
asks questions to get the facts.                                                                                                
                                                                                                                                
MR. WOOLIVER affirmed that is the case.                                                                                         
                                                                                                                                
CHAIR SEEKINS then  asked if that is not necessarily  the case in                                                               
a district court formal action.                                                                                                 
                                                                                                                                
MR. WOOLIVER said that is true  and that district court cases use                                                               
more formal discovery.                                                                                                          
                                                                                                                                
CHAIR  SEEKINS asked  about  the attitude  of  judges across  the                                                               
state toward having more informal  hearings during which they can                                                               
ask questions.                                                                                                                  
                                                                                                                                
MR. WOOLIVER said  he has not discussed that  specific issue with                                                               
them, but  when the idea  of raising the jurisdictional  limit to                                                               
$10,000 was  discussed, judges  were split  close to  50/50 about                                                               
whether  that amount  was too  high and  whether the  process and                                                               
their role in it was adequate for that amount.                                                                                  
                                                                                                                                
CHAIR  SEEKINS said  from personal  experience,  he learned  that                                                               
some judges  really like it  because they  feel they can  ask the                                                               
questions they want  to ask that they are  restrained from asking                                                               
during a more formal hearing.                                                                                                   
                                                                                                                                
There being  no further questions or  participants, CHAIR SEEKINS                                                               
closed public testimony.                                                                                                        
                                                                                                                                
SENATOR OGAN  moved CSHB 227(JUD) from  committee with individual                                                               
recommendations and its attached fiscal note.                                                                                   
                                                                                                                                
CHAIR  SEEKINS announced  that without  objection, CSHB  227(JUD)                                                               
moved from committee.                                                                                                           

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