Legislature(2011 - 2012)BELTZ 105 (TSBldg)
04/11/2012 01:30 PM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB224 | |
| HB55 | |
| HB343 | |
| HB168 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 224 | ||
| = | HB 55 | ||
| + | HB 343 | TELECONFERENCED | |
| + | HB 168 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 168-INJUNCTION SECURITY: INDUSTRIAL OPERATION
2:05:40 PM
CHAIR FRENCH announced the consideration of HB 168, and noted
the committee had lost its quorum.
2:06:12 PM
REPRESENTATIVE ERIC FEIGE, sponsor of HB 168, introduced HB 168
speaking to the following sponsor statement:
Under current law the cost to bring a public litigant
lawsuit against a legally permitted project is in
effect zero. There is very little risk in bringing a
suit. All the risk is borne by the defendants. These
actions do shut down projects at significant costs to
working Alaskans, businesses and the state treasury.
CSHB 168(JUD) seeks to remedy the situation by
leveling the playing field.
CSHB 168(JUD) parallels the requirements of Alaska
Civil Rule 65(c). As written, 65(c) states: "no
restraining order or preliminary injunction shall
issue except upon the giving of security by the
applicant, in such sum as the court deems proper, for
the payment of such costs and damages as may be
incurred or suffered by any party who is found to have
been wrongfully enjoined or restrained."
At the request of the Department of Law, HB 168 was
amended to more closely mirror the language of Alaska
Civil Rule 65(c) in order to clarify that the proposed
statute would not change the court rule. The court
already has the ability to require security. CSHB
168(JUD) simply requests that part of the court's
deliberation process should include payment of wages
and benefits for employees, payments to contractors
and sub-contractors of the industrial operation that
is shut down. The amount of security and how it is
calculated is totally within the hands of the court.
2:09:32 PM
CHAIR FRENCH recapped an earlier conversation with the sponsor
regarding primacy and relayed that he subsequently asked
Legislative Legal to address that question and whether the
current version of the bill may raise issues for the EPA similar
to those it expressed in a 2006 letter about a bill passed by
the Utah Legislature. Legislative Counsel, Dennis C. Bailey,
said the short answer is "Yes." He asked Representative Feige if
he had had an opportunity to read the memo.
REPRESENTATIVE FEIGE confirmed that he was familiar with the
Utah case.
CHAIR FRENCH explained the issue is whether or not Alaska law is
the same as federal law with respect to injunctions. Too much
separation jeopardizes the state's position of primacy on
several areas of permitting. He asked the sponsor if his office
sought any legal advice regarding the primacy issue.
REPRESENTATIVE FEIGE replied they asked for verification on
several question.
CHAIR FRENCH asked if the responses were in memo form or verbal
conversations with attorneys.
REPRESENTATIVE FEIGE said both.
CHAIR FRENCH asked if he cared to share any of those memos with
the committee.
REPRESENTATIVE FEIGE said he didn't bring that information, but
he did not believe the bill raised a significant primacy issue
and he was prepared to add intent language to clarify that
point.
2:12:12 PM
CHAIR FRENCH asked if an unjust result in any case in Alaska
illustrates the need for the bill.
REPRESENTATIVE FEIGE cited the May 2004 Pogo Mine case as one
example that put some people out of work for about two weeks. In
another example Shell Oil's projects on the Chukchi and Beaufort
seas were stopped for several years. About 700 jobs were
affected the summer he was involved. He opined that the concept
of enjoining a resource project was not unusual and the bill was
being proactive.
2:13:39 PM
CHAIR FRENCH asked if bonds were posted in the Shell cases.
REPRESENTATIVE FEIGE said he didn't know; those were federal
cases.
CHAIR FRENCH reminded the committee that primacy is whether or
not Alaska law tracks federal law.
SENATOR PASKVAN asked about the federal legal standard for
posting a bond that is similar to or different than what is
proposed in the bill.
REPRESENTATIVE FEIGE deferred the question to Mike Jungreis.
2:15:08 PM
MIKE JUNGREIS, member, Resource Development Council of Alaska,
Inc., (RDC), testified in support of HB 168. He spoke of the
awesome power of judges to grant injunctions and highlighted
that the bill is aimed only at preliminary adjudications, before
a judge knows whether a permit, for example, was properly or
improperly granted. It gives the court guidance on what factors
to consider in deciding whether or not to grant an injunction,
including the potential damage to employees, contractors, and
small businesses. He emphasized that the decision does not
restrict any access to the court or the ability of the court to
issue a final injunction.
He reported that the Ninth Circuit Court of Appeals has
occasionally issued injunctions to stop projects with only a
minimum bond requirement. The Kensington Mine case is an
example. Also, the U.S. Supreme Court held that there must be a
determination as to whether a bond should be required and the
amount. He emphasized that it is certainly consistent with
federal law and has been Alaska's long-standing law that a bond
be issued. The bill neither extends nor restricts the powers of
the court; it gives guidelines.
MR. JUNGREIS opined that the current situation is out of balance
because the applicants have no skin in the game. They are not
required to come up with any way to protect the project,
employees, and contractors for the damage that can be done with
a preliminary injunction. The bill tries to redress that balance
and place things on an even keel. Finally, it does not restrict
the state's power to grant permits; it only applies to third
parties.
CHAIR FRENCH asked if he was familiar with the Pogo Mine case.
MR. JUNGREIS said yes, but he couldn't say that this statute
would have come into play. He reiterated that it would have been
invoked in the Kensington case, and opined that it would have
been helpful to all concerned if the courts had specific
guidelines for evaluating damage.
2:21:40 PM
SENATOR PASKVAN asked if the state has the ability to file an
injunction.
MR. JUNGREIS said this proposal would not affect the state; the
state is excused from posting a bond for injunctions.
REPRESENTATIVE FEIGE added that the state could simply withdraw
or suspend the permit if it wanted to stop a project.
SENATOR PASKVAN asked if the state has the ability to seek an
immediate injunction during the operational phase.
REPRESENTATIVE FEIGE offered his understanding that the
department can shut down a project based on the permitting.
2:24:17 PM
RACHEL PETRO, President and CEO, Alaska State Chamber of
Commerce, testified in support of HB 168, version D. She
reported that the Alaska Chamber set litigation reform related
to resource development in Alaska as a top legislative priority
this year. She said under current law it costs virtually nothing
to challenge a legally permitted project in Alaska. The risk and
cost of litigation is borne by the defendants and Alaskans are
put out of work. HB 168 seeks to level the legal playing field
without infringing on any party's right to bring a legitimate
issue to court. The bill does not attempt to change court rules;
it simply articulates a request that wages of working Alaskans
be considered. She expressed hope that the bill would gain the
same bipartisan support it enjoyed in the House.
CHAIR FRENCH asked if she had any examples where the bill might
have prevented a wrongful injunction that shut down a project if
the party seeking the injunction had to post a bond.
MS. PETRO offered to follow up with specific examples.
CHAIR FRENCH said the question he was trying to answer was, "Are
we doing something wrong we need to fix?"
2:28:11 PM
ANDREW KELLER, representing himself, Fairbanks, AK, testified in
opposition to HB 168. He stated that the bill will discourage
parties from questioning permits granted to corporations for
industrial projects and effectively prohibit whistle-blowing. It
will seriously reduce the ability to protect the air, water,
wildlife, and safety from corporate irresponsibility. He noted
rd
the recent 23 year anniversary of the Exxon Valdez spill, and
warned against making it harder to prevent errors that result in
disaster.
2:29:49 PM
BOB DICKSON, representing himself, Anchorage, AK, summarized his
legal career and said he was testifying in support of HB 168. He
said the first point is that the bill does not deter access to
the court; it simply requires the court to follow the existing
Court Rule 65(c). He read subsection (c) and relayed that in all
his experience he has yet to see a bond required.
He addressed the primacy question saying it's an argument
without merit because the primacy issue deals with the process
for issuing permits and the bill does not involve that process
at all. He also pointed out that Alaska Civil Rule 65(c) is the
same as the federal rule 65(c). It says the court may issue a
preliminary injunction or a temporary restraining order only if
the movement gives security in the amount the court considers
proper. The problem, he said, is that courts grant injunctions
without following the rule and requiring a bond.
He noted that the Legal Services memorandum talked about the
legal grounds for getting a preliminary injunction, and pointed
out that the standard is A.J. Industries v. Alaska Public
Service Commission. That standard allows courts to issue
injunctions even when the defendant cannot be adequately
protected. The problem is that it actually takes very little to
challenge a development project. This bill would remedy that
situation and help the wage earners and subcontractors on a
project. Addressing the question of where this has been a
problem, he said no one can come up with a specific example
because those cases are typically settled so there is no
determination of a prevailing party.
SENATOR PASKVAN asked if maintaining primacy requires compliance
with a standard that is no less than the same opportunity for
judicial review under federal law.
MR. DICKSON offered his understanding that it relates to the
permitting process. To the extent that it addresses equivalent
judicial law, both the state and federal 65(c) rules are the
same.
SENATOR PASKVAN again asked if maintaining primacy requires the
state to provide access to judicial review that is no less than
the federal standard.
MR. DICKSON said the access goes to the ability to appeal to the
court the issuance of a permit and the bill doesn't affect that.
Anyone can go into court and try to explain how the permitting
process is flawed and that would be the same in both the state
and federal court systems.
SENATOR PASKVAN asked if it could be argued that the state
system is more restrictive than the federal system with respect
to parties before the court.
MR. DICKSON offered his understanding that federal law does not
have an equivalent to HB 168, but the test for getting a
preliminary injunction in federal court is basically the same as
in state court. A lot of federal courts are entering injunctions
without requiring any bonds, he said.
2:38:45 PM
TERRY SEVY, representing himself, Anchorage, AK, stated firm
opposition to HB 168. He said the bill will favor large
corporations and strip individuals of their right to take action
against such corporations by making it economically impossible.
He spoke to the importance of developing resources prudently to
ensure clean air and water for future generations. HB 168 lacks
such wisdom and invites disaster, he said.
2:41:04 PM
BONNIE ZIRCLE, representing herself, Palmer, AK, testified in
opposition to HB 168. She displayed photos showing damage to her
West Virginia family home, farmland, and nearby streams. She
explained the family home and farm was near an open pit mine
that blasted once a day, and that her Palmer home and hundreds
of others were located within a mile of the proposed Wishbone
Hill Mine in Palmer. She said it will have the same blasting
schedule. Because her experience in West Virginia was a damaged
home, slurry pond residue on farmland and contaminated wells and
streams, she questioned how it would be possible to protect
homes and families in the MatSu Valley if HB 168 were to pass.
2:44:53 PM
ANDY MODEROW, Executive Director, Alaska Conservation Alliance,
noted that he submitted written testimony. He stated that ACA
has concern that HB 168 is unconstitutional, punitive, and does
nothing to stop frivolous litigants. The bill would require
Alaskans to bond for the costs of delay if a judge issues
temporary relief after initial review of a case. He explained
that temporary relief is only granted if a case is likely to
succeed and if irreparable harm will occur if it is not granted.
If a case is frivolous, the judge will throw it out. This
punishes Alaskans that bring the strongest cases and does
nothing to punish the frivolous litigant. He emphasized that it
runs contrary to the American tradition of protecting whistle-
blowers to require a citizen to pay for a governmental error or
a corporation not following the terms of a permit. He concluded
stating that communities, tribal organizations, municipalities,
and individual Alaskans ought to have the right to stand up for
clean air, land, and water.
2:46:30 PM
TOM WALDO, Attorney, Earth Justice, Juneau, AK, stated that HB
168 impermissibly prevents citizens from making effective use of
the courts to protect resources by requiring the posting of
unaffordable bonds. He emphasized that it is very difficult to
get a preliminary injunction. The applicant has to show the case
is very strong and that irreparable harm will result absent the
stay. These requests aren't made very often, but can be very
important. He said his experience is that bonds for injunctions
for industrial operations would often be in the millions of
dollars. This means the bill effectively prevents people from
getting preliminary injunctions or stays in any circumstance,
even to prevent irreparable harm.
He listed three reasons that the bill would be unconstitutional.
First, it changes court rules adopted by the Alaska Supreme
Court that already govern injunctions, stays, and bonds. The
court would have no discretion. Second, it violates equal
protection because it singles out a particular class of citizens
for particularly discriminatory treatment. Third, it violates
due process, because it deprives citizens of meaningful access
to the courts to get interim relief.
MR. WALDO stated that Earth Justice represented the appellants
in the Pogo Mine litigation, and that is a particularly
inappropriate example to illustrate any reason for HB 168. There
was never an injunction and the case never went to court. He
explained that the EPA issued a permit under the Clean Water Act
and Earth Justice filed an appeal to establish a legal point
about jurisdiction under the Act. The Pogo Mine responded by
stopping construction and laying off workers. Although people
attribute that to an injunction, the parties to the case did not
intend to shut down the mine.
He concluded that the effect of the bill will be to prevent
citizens from getting needed relief in cases where it is
appropriate in order to avoid a hypothetical problem that no one
has been able to establish exists in the real world.
2:51:28 PM
EMILY BREEZE, representing herself, Healy, AK, said she was
testifying against HB 168 because it works to erode cherished
and vital constitutional rights: the right to have one's voice
heard and access to the courts. She spoke of the option to bring
forth local grievances and issues, the ability to ask questions,
and voice concerns or support, and described these as treasured
actions. She relayed that she lives in a town that feels the
effects of resource development, and that fracking will
potentially occur beneath her house. If HB 168 were to pass she
couldn't ask for a second look on these projects because she
couldn't afford the bond. She stated that it was the job of the
court system to weed out frivolous lawsuits, and the people
should listen if the court finds reason for an injunction.
MS. BREEZE concluded that by opposing the bill she was
supporting the creation of future jobs, the responsible
cultivation of natural resources, the health and safety of her
family and community members, and the right to have an equal
opportunity to have her voice heard.
2:53:47 PM
MIKE SATRY, Executive Director, Council of Alaska Producers,
Juneau, AK, testified in support of HB 168. He stated that the
council supports a rigorous science-based permitting system that
allows responsible development of Alaska's resources. The
council also respects the established public process used to
manage these resources. However, when a permitted project is
inappropriately enjoined it can harm Alaskan workers and
families due to lost wages and opportunities. HB 168 seeks to
mitigate this issue by requiring parties seeking an injunction
or stay to post a bond to cover lost wages and benefits if the
project is found to be wrongfully enjoined. It appropriately
directs the court to consider the potential for lost wages and
benefits when addressing industrial operations. He said the
council is respectful of an individual's rights to seek relief
through the courts if they believe a permit has been granted in
error. By giving the courts broad discretion in the calculation
of the bond, the bill protects the rights of both parties.
The bill does not affect federal permits appeals or litigation;
it does not prevent appeals or litigation of state permits; and
it does not impair the state's regulatory responsibilities or
permit enforcement activities. It does encourage involvement in
the early stages of public participation in the permitting
process and it requires litigants of state permits to recognize
the financial risk of their actions.
2:56:35 PM
KATHY WASSERMAN, Executive Director, Alaska Municipal League
(AML), stated that AML is very concerned about HB 168 because it
does not make the municipal exemption clear. The current court
rule says that municipalities are exempt from securities and
injunctions and it is important to maintain that exemption.
CHAIR FRENCH said he heard testimony that the state might be
exempt from the rule but he didn't hear municipalities
mentioned.
2:58:37 PM
SHIRLEY MARQUART, Mayor, City of Unalaska, AK and President,
Alaska Municipal League, made two points on the topic of HB 168.
The first related to maintaining the exemption for
municipalities. She said occasions do exist when a municipality
decides to speak on an issue or effect a change by going through
the court system. This wouldn't be possible if the municipality
had to set aside what may be millions of dollars to post a bond.
This would endanger municipal operating funds.
The second point was that the bill did not include fisheries as
an "industrial organization." She discussed the federal
injunction granted in 2000 to protect Steller sea lions that
shut down cod and pollock fisheries in the western Aleutians.
Although there is no link between those fisheries and the low
pup count, Adak, Unalaska, Akutan, Sand Point, King Cove,
Kodiak, and 63 CDQ villages in western Alaska have been living
under an injunction for 12 years.
3:01:54 PM
BARBARA HUFF-TUCKNESS, Director, Governmental and Legislative
Affairs, Teamsters Local 959, testified in support of HB 168.
She said she didn't believe the bill changed any court rules.
The union doesn't have deep pockets and potential injunctions
are taken very seriously. She spoke to what the union supports
with regard to clean air, land, water and safe working
conditions on projects. She maintained there was nothing wrong
with asking people to put a little skin in the process if it
encouraged people to be more proactive at the beginning of the
environmental process. Both sides of the issue definitely need
to be heard, and HB 168 doesn't close that door. Individuals and
groups will continue to be able to voice their concerns in
court, but the bill provides some relief for workers that are
inappropriately impacted.
REPRESENTATIVE FEIGE addressed the concerns that were raised in
testimony. He said existing state law covers AML's concern
regarding whether or not municipalities would be exempt from
posting bonds. He directed attention to AS 09.68.040 Parties
exempt from giving bond and read subsection (a):
(a) In an action or proceeding in a court in which the
state or a municipality is a party or in which the
state or a municipality is interested, a bond or
undertaking is not required of the state, a
municipality, or an officer of the state or
municipality.
Referring to the pictures Ms. Zircle distributed, he suggested
that the permitting process in Alaska is significantly different
than in West Virginia. The fact that no permits have been
rejected in the last five years speaks to the strength of the
system. He continued that Court Rule 65(c) already requires a
bond and the bill simply asks the court to consider the wages of
affected employees and contractors in any bond that is posted.
It does not give specific direction to the judges or
significantly change that rule. Citizens will continue to have
the ability to bring suit.
To address the primacy issue he offered suggested language for a
letter of intent that would accompany the bill:
It is the intent of the legislature that when deciding
what security to require of a party seeking an
injunction or stay of a permit affecting an industrial
operation, a court can consider the effect that the
injunction or stay could have on the employees and
contractors of the permittee. It is also the intent of
the legislature not to constrain the court's authority
or discretion under governing court rules, but to
direct the court's attention to that category of
potential harm to the permittee, its employees and
contractors that the requirement of surety should
protect against. It is the further intent of the
legislature that this legislation operating in
conjunction with AS 09.68.040(c) will assure the
court's consideration of the potential impacts to
permittees, employees, and contractors facing
suspension of the permitted operations.
CHAIR FRENCH said the primacy issue was his biggest concern
about the bill. Similar legislation passed in Utah and Governor
Huntsman vetoed it based on the primacy issue. The Department of
Natural Resources brought up primacy concerns last year in
testimony before the House Judiciary Committee. The court system
also expressed concerns about managing these bonds. He said he
would continue to research the issue.
CHAIR FRENCH held HB 168 in committee.
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