03/31/2003 03:05 PM House JUD
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 31, 2003
3:05 p.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Jim Holm
Representative Dan Ogg
Representative Ralph Samuels
Representative Les Gara
MEMBERS ABSENT
Representative Tom Anderson, Vice Chair
Representative Max Gruenberg
COMMITTEE CALENDAR
HOUSE BILL NO. 25
"An Act relating to health care decisions, including do not
resuscitate orders and the donation of body parts, and to powers
of attorney relating to health care, including the donation of
body parts; and providing for an effective date."
- MOVED CSHB 25(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 18
"An Act relating to the liability of parents and legal guardians
of minors who destroy property."
- MOVED CSHB 18(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 214
"An Act relating to the recovery of punitive damages against an
employer who is determined to be vicariously liable for the act
or omission of an employee; and providing for an effective
date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 25
SHORT TITLE:HEALTH CARE SERVICES DIRECTIVES
SPONSOR(S): REPRESENTATIVE(S)WEYHRAUCH, Ogg
Jrn-Date Jrn-Page Action
01/21/03 0038 (H) PREFILE RELEASED (1/10/03)
01/21/03 0038 (H) READ THE FIRST TIME -
REFERRALS
01/21/03 0038 (H) HES, JUD, FIN
02/13/03 (H) HES AT 3:00 PM CAPITOL 106
02/13/03 (H) Heard & Held
02/13/03 (H) MINUTE(HES)
02/27/03 (H) HES AT 3:00 PM CAPITOL 106
02/27/03 (H) Heard & Held
02/27/03 (H) MINUTE(HES)
03/06/03 (H) HES AT 3:00 PM CAPITOL 106
03/06/03 (H) Moved CSHB 25(HES) Out of
Committee
03/06/03 (H) MINUTE(HES)
03/10/03 0488 (H) HES RPT CS(HES) NT 7DP
03/10/03 0488 (H) DP: GATTO, WOLF, HEINZE,
SEATON,
03/10/03 0488 (H) CISSNA, KAPSNER, WILSON
03/10/03 0488 (H) FN1: ZERO(HSS)
03/26/03 (H) JUD AT 1:00 PM CAPITOL 120
03/26/03 (H) <Bill Hearing Postponed to
3/28> -- Meeting Canceled --
03/28/03 (H) JUD AT 1:00 PM CAPITOL 120
03/28/03 (H) Heard & Held
MINUTE(JUD)
03/31/03 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 18
SHORT TITLE:PARENTAL LIABILITY FOR CHILD'S DAMAGE
SPONSOR(S): REPRESENTATIVE(S)MEYER
Jrn-Date Jrn-Page Action
01/21/03 0036 (H) PREFILE RELEASED (1/10/03)
01/21/03 0036 (H) READ THE FIRST TIME -
REFERRALS
01/21/03 0036 (H) STA, JUD
02/07/03 0153 (H) COSPONSOR(S): ANDERSON
02/20/03 (H) STA AT 8:00 AM CAPITOL 102
02/20/03 (H) Heard & Held
MINUTE(STA)
03/06/03 (H) STA AT 8:00 AM CAPITOL 102
03/06/03 (H) Moved CSHB 18(STA) Out of
Committee
MINUTE(STA)
03/10/03 0486 (H) STA RPT CS(STA) 2DP 4NR 1AM
03/10/03 0486 (H) DP: LYNN, DAHLSTROM; NR:
SEATON, HOLM,
03/10/03 0486 (H) BERKOWITZ, WEYHRAUCH; AM:
GRUENBERG
03/10/03 0487 (H) FN1: ZERO(CRT)
03/26/03 (H) JUD AT 1:00 PM CAPITOL 120
03/26/03 (H) -- Meeting Canceled --
03/28/03 (H) JUD AT 1:00 PM CAPITOL 120
03/28/03 (H) Scheduled But Not Heard
03/31/03 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 214
SHORT TITLE:PUNITIVE DAMAGES AGAINST EMPLOYERS
SPONSOR(S): REPRESENTATIVE(S)SAMUELS
Jrn-Date Jrn-Page Action
03/26/03 0640 (H) READ THE FIRST TIME -
REFERRALS
03/26/03 0640 (H) JUD
03/28/03 0689 (H) COSPONSOR(S): ROKEBERG, MEYER
03/31/03 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE BRUCE WEYHRAUCH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 25.
LINDA SYLVESTER, Staff
to Representative Bruce Weyhrauch
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained proposed amendments to CSHB
25(HES).
REPRESENTATIVE KEVIN MEYER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 18.
MICHAEL LESSMEIER, Attorney at Law
Lessmeier & Winters;
Lobbyist for State Farm Insurance
Juneau, Alaska
POSITION STATEMENT: Testified in support of [CSHB 18(STA)].
PAMELA LaBOLLE, President
Alaska State Chamber of Commerce (ASCC)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 214.
MARCIA R. DAVIS, Vice President and General Counsel
ERA Aviation, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 214.
MICHAEL J. SCHNEIDER, Attorney
Law Offices of Michael J. Schneider, PC
Anchorage, Alaska
POSITION STATEMENT: Testified that HB 214 does not meet the
goals of the sponsor statement.
RAY R. BROWN, Attorney at Law
Dillon & Findley, PC
Anchorage, Alaska
POSITION STATEMENT: Expressed concerns with HB 214.
KAREN CASANOVAS, Executive Director
Alaska Air Carrier's Association
Anchorage, Alaska
POSITION STATEMENT: Urged the committee's support [of HB 214].
MICHAEL R. WIRSCHEM, Attorney at Law
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 214.
ACTION NARRATIVE
TAPE 03-26, SIDE A
Number 0001
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting to order at 3:05 p.m. Representatives
McGuire, Holm, Ogg, Samuels, and Gara were present at the call
to order.
HB 25 - HEALTH CARE SERVICES DIRECTIVES
Number 0087
CHAIR McGUIRE announced that the first order of business would
be HOUSE BILL NO. 25, "An Act relating to health care decisions,
including do not resuscitate orders and the donation of body
parts, and to powers of attorney relating to health care,
including the donation of body parts; and providing for an
effective date." [Before the committee was CSHB 25(HES), which
had been amended on 3/28/03.]
Number 0150
REPRESENTATIVE BRUCE WEYHRAUCH, Alaska State Legislature,
sponsor, said that in response to some of the comments at the
last hearing, he has some amendments for the committee's
consideration.
The committee took a brief at-ease.
LINDA SYLVESTER, Staff to Representative Bruce Weyhrauch, Alaska
State Legislature, turned to [Amendment 5], which read [original
punctuation provided]:
Page 2, line 13, after "execute a"
Insert "durable"
Page 16, line 22, after "form is a"
Insert "durable"
Page 26, line 21,
Insert "durable" before "power of attorney"
MS. SYLVESTER explained that Amendment 5 makes it very clear
that the reference is to durable power of attorney. Once an
individual lacks capacity, the power of attorney [goes into
effect].
Number 0368
REPRESENTATIVE SAMUELS moved to adopt Amendment 5. There being
no objection, Amendment 5 was adopted.
MS. SYLVESTER turned to Amendment 6, which read [original
punctuation provided]:
Page 17, line 11, after "disapprove
Insert "proposed"
Page 28, line 13, after "disapproval of"
Insert "proposed"
MS. SYLVESTER explained that Amendment 6 arose from the
discussion revolving around subsection (c) on page 17, line 11,
regarding do-not-resuscitate [DNR] orders and the limitations of
an agent to approve or disapprove diagnostic tests, surgical
procedures, programs of medication, and DNR orders. She offered
that everyone in the [health care] profession agreed that the
language [in subsection (c) on page 17] refer to things that
would occur in the future, and that this language doesn't
address an individual wearing a DNR band.
Number 0527
REPRESENTATIVE SAMUELS moved to adopt Amendment 6 [text provided
previously]. There being no objection, Amendment 6 was adopted.
MS. SYLVESTER addressed Amendment 7, which read [original
punctuation provided]:
Page 25, line 26, after "facility"
Strike lines 26b, 27, 28, 29
MS. SYLVESTER informed the committee that Amendment 7 corrects
an inconsistency with the implementation of the durable power of
attorney, which was pointed out by a public health nurse from
Fairbanks. At least one of the witnesses cannot be related by
blood to the principal, but the witness statements for both
witnesses specifies that the witness is not related by blood.
Therefore, Amendment 7 eliminates the language requiring that
the witness not be related by blood to the principal in the
witness statement for the second witness.
Number 0611
REPRESENTATIVE HOLM moved to adopt Amendment 7. There being no
objection, Amendment 7 was adopted.
CHAIR McGUIRE closed public testimony on HB 25.
Number 0678
REPRESENTATIVE SAMUELS moved to report CSHB 25(HES), as amended,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
25(JUD) was reported from the House Judiciary Standing
Committee.
HB 18 - PARENTAL LIABILITY FOR CHILD'S DAMAGE
Number 0697
CHAIR McGUIRE announced that the next order of business would be
HOUSE BILL NO. 18, "An Act relating to the liability of parents
and legal guardians of minors who destroy property."
Number 0740
REPRESENTATIVE KEVIN MEYER, Alaska State Legislature, spoke as
the sponsor of HB 18, which he noted he was bringing forth on
behalf of the Anchorage School District. He explained that HB
18 establishes the limit for the recovery of property damaged by
a minor at $20,000. The original legislation specified no cap,
but that was changed in the House State Affairs Standing
Committee after hearing testimony expressing concerns. A woman
who adopts high-risk children testified that with an unlimited
liability she would be reluctant to adopt high-risk children.
Insurance companies expressed concern that an unlimited
liability could have an impact on homeowner's insurance, which
could result in an increase in the premium for homeowners
insurance.
REPRESENTATIVE MEYER informed the committee that the [Anchorage
School District] has testified that 90 percent of vandalism to
the school district's property is minor, such as graffiti and
breaking locks and windows. Therefore, the $20,000 cap should
cover 90 percent or more of the incidents. However, there have
been some isolated incidents in which there has been serious
damage and, thus, the school district doesn't want a cap because
the money that isn't recovered comes out of the classroom funds.
REPRESENTATIVE MEYER also informed the committee that almost all
states have a cap varying from $1,000 to $25,000, that only five
states didn't have a cap, and that no difference in vandalism
was seen in relation to not having a cap. In response to Chair
McGuire, Representative Meyer estimated that of those states
with a cap, Alaska would be in the group with the higher cap.
He noted that the cap hasn't been changed since 1995 and with a
$20,000 cap he hoped there won't be a need to address this for
some time.
Number 1000
MICHAEL J. LESSMEIER, Attorney at Law, Lessmeier & Winters;
Lobbyist for State Farm Insurance, began by saying that
Representative Meyer accurately expressed [State Farm's]
concerns with not having a cap. Mr. Lessmeier highlighted that
this is an area of law where there is liability without fault
and, thus, it doesn't seem to make good sense to have the
liability be unlimited. He commented that [CSHB 18(STA)] is a
fair balance and thus [State Farm Insurance] would support the
legislation as amended [in the House State Affairs Standing
Committee].
REPRESENTATIVE GARA opined that insurance companies are willing
to write off a child's conduct that relates to things outside of
schools without a cap. Therefore, he inquired as to why there
is a cap on an insurance company's liability when a child's
conduct damages a school.
MR. LESSMEIER said that Representative Gara is talking about
apples and oranges. He explained that this legislation makes a
parent liable without regard to whether the parent was
negligent. He said that in every other area of the law of which
he is aware, for there to be the aforementioned liability, the
parents themselves would have to be negligent. He pointed out
that most insurance policies don't cover intentional actions or
knowing actions. He informed the committee that when there is
legislation such as HB 18 and there is a parent who can't afford
to pay a judgment, there is an effort to find a deep pocket.
Although these claims aren't all covered, even under this
statute, there may be a question regarding whether the claim is
covered and, thus, the insurance company may pay some of the
claims. Mr. Lessmeier reiterated that the statute proposed in
CSHB 18(STA) is different because it imposes liability without
fault and doesn't impact those cases in which there is liability
with fault.
REPRESENTATIVE GARA relayed his belief that if a child did a
negligent act, the parent would automatically be liable.
However, he understood Mr. Lessmeier to mean that the parent has
to be negligent also.
MR. LESSMEIER answered that he didn't know that there is any
automatic liability on behalf of the parent. Furthermore, he
said he didn't know of any automatic liability on behalf of an
insurer. He said he believes it depends upon the circumstances
for which the insurer would be responsible.
Number 1233
REPRESENTATIVE GARA asked whether, under Alaska law, the parent
is automatically liable for the child's negligent conduct or
whether, instead, the parent has to be negligent.
MR. LESSMEIER offered his understanding that a parent wouldn't
automatically be liable for the negligence of a child. He posed
a situation in which a child who drives is in an automobile
accident. If the parent submits that the child has met
financial responsibility, then the parent isn't liable.
However, if the child hasn't met financial liability, the parent
would be liable. There are certain laws, such as those dealing
with driving, where there is liability; that liability is
created through statute. Furthermore, there are cases in which
the [insurance company] deals with "issues of negligent
entrustment of vehicles" for which it's purely a question of
negligence as to whether the parent is responsible. Mr.
Lessmeier said that he didn't think parents are strictly liable
for the actions of their child.
REPRESENTATIVE GARA expressed concern that numbers are being
picked out of the air. The original legislation specified that
parents would be liable for what their children do to schools.
Under [CSHB 18(STA)], the cap has been placed at $20,000 due to
the perception that without [the cap], homeowner's insurance
rates will be raised. He asked if there is an actuarial
analysis that supports the aforementioned notion.
MR. LESSMEIER said that the issue posed by CSHB 18(STA) is more
complicated because it has to do with the issue of insurance
coverage, which he urged the committee to set aside. It's bad
public policy, he said, to pass legislation such as this because
it may or may not be covered by insurance. The [committee]
should review this issue in terms of whether it sinks or swims
on its own merits. He relayed his belief that the intent of
CSHB 18(STA) is to create financial responsibility and perhaps
avoid the damage to begin with. With regard to how the cap
landed at $20,000, Mr. Lessmeier said that he didn't know that
he had input into that, although he viewed it as a reasonable
balance. Mr. Lessmeier suggested that this should be done
because it's right to do so regardless of whether it's covered
by insurance. He noted that in many instances, this
responsibility isn't going to be covered by insurance anyway;
coverage depends upon how the [homeowner's] policy is drafted.
In every instance where there is this kind of intentional,
knowing conduct, it is typically not covered by insurance.
MR. LESSMEIER highlighted the importance of realizing that when
one discusses insurance, it's not just the insurance company.
To the extent possible, most insurers in Alaska try to base
premiums on frequency and severity of loss. Ultimately, those
premiums get paid by individual policyholders. Therefore, Mr.
Lessmeier encouraged the committee to set the insurance issue
aside and determine whether having parents liable in an
unlimited way for the actions of their children is good public
policy, even when the parents aren't at fault. Mr. Lessmeier
said that he doesn't believe that to be a good idea; rather, it
makes better sense to impose some balance on that liability.
Number 1586
REPRESENTATIVE GARA agreed that this legislation shouldn't be
crafted based on whether an insurance company can be held
liable. However, he said he understood the sponsor's
explanation that the school district wanted unlimited liability
while some insurance company representatives expressed concerns,
which ultimately created the $20,000 cap. Although
Representative Gara agreed that there should be a liability
amount that's justified as a matter of public policy rather than
based on whether someone has insurance, he said he understood
that the $20,000 cap was driven by the concerns of the insurance
industry.
CHAIR McGUIRE recalled Representative Meyer's testimony in which
he relayed that a woman who [adopted] high-risk youth had
expressed concern that if she had a homeowner's policy and was
liable, her insurance costs might go up. She said she
understood such to be the reason the $20,000 cap was included.
She noted that she would be proposing an amendment to reduce the
cap to $15,000. She said she didn't know how many people would
be able to argue that their homeowner's policy would cover the
destruction of property by a minor due to the "intentional
element." Furthermore, she remarked, many people don't have a
homeowner's policy.
REPRESENTATIVE GARA asked if one of the reasons CSHB 18(STA) was
reduced from unlimited liability to a specified amount was
because some folks in the insurance industry thought doing so
would be necessary for actuarial reasons.
REPRESENTATIVE SAMUELS interjected to say that the school's
insurance company will pay and thus he couldn't imagine why the
industry would take a position on it. He further commented that
he couldn't imagine having one penalty for those who are insured
and one penalty for those who aren't insured.
REPRESENTATIVE GARA then inquired as to why the school district
is interested in this if it already has insurance.
REPRESENTATIVE MEYER answered that the school district has $1
million deductible, and therefore the district has to pay all
the damages until the deductible is reached. He said that the
main testimony was in the House State Affairs Standing
Committee, that the committee itself wanted a cap, and that he
opted for the $20,000 cap because of testimony from the woman
who adopts high-risk children.
Number 1691
REPRESENTATIVE HOLM questioned whether there is any interest in
solving the issue of the civil liability of the parents. He
related his understanding that this caps the amount of money
that can be guaranteed by state law. He asked if there is a
tort liability beyond this.
MR. LESSMEIER answered, "This would be the limit to the tort
liability with respect to how this statute applies for the
parents." Therefore, if the parents aren't negligent, then
[CSHB 18(STA)] would limit the liability of the parents to
$20,000 but it wouldn't limit the liability of the minor, or the
parents, if the parents were somehow at fault.
REPRESENTATIVE HOLM remarked that this is good legislation.
REPRESENTATIVE OGG asked if there is a correlation between the
higher cap and the insurance factor.
REPRESENTATIVE MEYER answered that there didn't seem to be any
correlation. For example, the five states without a cap didn't
illustrate any reduction in vandalism.
REPRESENTATIVE GARA remarked that there may be a need for a
clause specifying that this legislation shouldn't be interpreted
to interfere with existing causes of action.
REPRESENTATIVE HOLM agreed.
REPRESENTATIVE GARA pointed out that the courts are always faced
with the question of whether a particular legal remedy was meant
to eliminate all other legal remedies in the area. Sometimes
the courts aren't sure what was exactly intended. Therefore, he
reiterated his suggestion to include language to allow the other
two areas of law to continue.
REPRESENTATIVE OGG said he didn't believe the [such language]
was necessary because CSHB 18(STA) merely adjusts the monetary
amount [of an existing cap].
Number 1929
REPRESENTATIVE MEYER agreed. He mentioned that perhaps some
review should be given to the inflation clause, although he
didn't believe such would be necessary if the $20,000 cap is
maintained. Representative Meyer pointed out that under
criminal law, a juvenile can be held directly responsible and
monies can be levied against the juvenile and his/her permanent
fund dividend. He noted that such doesn't apply to civil law,
which is what this legislation addresses.
CHAIR McGUIRE asked if Representative Meyer had reviewed the
fact that Alaska has criminal statutes that allow for a youth
offender to be tried as an adult at the age of 16 in certain
egregious cases. If so, she inquired as to how he compared the
philosophical argument to this situation, where the parent is
held strictly liable for their child's acts up to the age of
majority.
REPRESENTATIVE MEYER responded that he hadn't reviewed that,
adding that CSHB 18(STA) addresses the civil side in existing
statute.
CHAIR McGUIRE announced that she is considering offering an
amendment to lower the age to 16 in order to make [CSHB 18(STA)]
consistent with other statutes [regarding emancipated minors].
She inquired as to the sponsor's opinion on such an amendment.
REPRESENTATIVE MEYER said that changing the age makes sense.
REPRESENTATIVE HOLM pointed out that an emancipated minor
wouldn't have causation.
CHAIR McGUIRE agreed.
REPRESENTATIVE MEYER reminded the committee that in civil
matters, a minor can't be sued. He said that although the chair
makes a very valid point, the school district couldn't take
action against a 17-year-old because he/she is underage.
REPRESENTATIVE SAMUELS surmised, then, that in a case against a
17-year-old, the school district wouldn't be able to obtain
$10,000 - the current cap.
REPRESENTATIVE MEYER answered that the school district would go
after the parents until the child is age 18.
CHAIR McGUIRE pointed out that there is a two-year statute of
limitations.
Number 2106
REPRESENTATIVE GARA returned to Representative Holm's earlier
point. Although Representative Gara said that [CSHB 18(STA)] is
fine with him, he wanted to ensure that Representative Holm
understood that the current language of the legislation would
still be interpreted to allow a separate action against the
child. With regard to the remaining question of whether the
$20,000 cap would apply in the circumstance where the parent is
negligent, he opined that it probably should.
REPRESENTATIVE OGG turned to the suggestion of changing the age
to 16 and pointed out that this [legislation] wouldn't apply to
someone between 16 and 18 years of age.
CHAIR McGUIRE acknowledged that.
REPRESENTATIVE GARA inquired as to the school district's opinion
of CSHB 18(STA).
REPRESENTATIVE MEYER said that the school district would still
prefer no cap. He informed the committee that Senator Dyson is
carrying this same legislation and it has no cap. However, if
it did come to the House, he predicted that the House State
Affairs Standing Committee would place a cap on it as well.
Representative Meyer said that he was convinced that a cap is
necessary, although he recognized that the amount of the cap is
a policy call.
Number 2269
CHAIR McGUIRE made a motion to adopt Amendment 1, which reads as
follows:
Page 1, line 7
Delete "$20,000"
Replace with "$15,000"
CHAIR McGUIRE remarked that everyone probably knows of a child
who doesn't turn out to be "a good egg" no matter what is done.
Chair McGuire said that she has concern for those children with
head injuries or behavioral problems. She recognized the need
to address the school district's concern, but suggested it be
done in a cautious manner. She reiterated that many people
don't have a homeowner's insurance policy to fall back on, much
less a policy that includes intentional acts. Although she
agreed that children and parents should be held responsible, she
expressed the need to take care with regard to the following:
The family that has done everything it can and the child has
still turned out poorly, and the family that has no financial
recourse.
TAPE 03-26, SIDE B
Number 2380
CHAIR McGUIRE directed attention to a document from the
Legislative Research Agency dated February 16, 1995. This
document lists the states with caps and without caps for
parental responsibility for delinquent acts of children. The
list shows a graduated scale. Of those states with caps, Alaska
[with the proposed cap of $20,000] would be the second highest
in the nation. Doubling the cap is simply too much, she said.
REPRESENTATIVE MEYER pointed out that the 1995 document uses
data that is current as of the end of 1993. Therefore, he
surmised that these cap amounts have increased. With regard to
a low-income family that couldn't come up with $20,000,
Representative Meyer questioned whether these low-income
families would even have $15,000. Therefore, one must keep in
mind the need for balance, he said. When the school district
can't sue for recoverable damages, the money comes out of the
classroom. The goal, he maintained, is to keep as much money in
the educational system - in the classroom - and not paying for
graffiti, broken windows, et cetera. Although he acknowledged
that the amount of the cap is a policy call, he related his
belief that $20,000 is appropriate. He also reiterated that
this amount hasn't been touched since 1995.
CHAIR McGUIRE remarked that she doesn't view a $20,000 cap as a
compromise. She said that she is trying to review the policy as
a whole while keeping in mind the balance between the school
district and the parent of a high-risk youth. She asked if the
sponsor had any updated figures with regard to the cap and where
Alaska stands nationwide were this $20,000 cap enacted.
The committee took an at-ease from 4:02 p.m. to 4:03 p.m.
REPRESENTATIVE MEYER confirmed that of the western states,
Alaska [would] be the second highest with the $20,000 cap.
Number 2240
CHAIR McGUIRE noted that the committee packet also includes a
chart entitled, "Table 1: Limits of Parental Liability for
Property Damage by Minors," which also shows Alaska would become
the second highest of the states and provinces listed.
REPRESENTATIVE OGG pointed out that in 2001, the cap was at
$10,000 for school property and $25,000 for other properties.
He said he was inclined to go with Chair McGuire's amendment
because the $10,000 cap didn't have much of an impact and, as
the sponsor stated earlier, having an unlimited cap wasn't a
deterrent. Furthermore, Representative Ogg expressed concern
that this $20,000 could deplete the income of an average family.
REPRESENTATIVE MEYER remarked that he didn't believe the amount
would act as a deterrent.
REPRESENTATIVE HOLM relayed that testimony in the House State
Affairs Standing Committee indicated that parents of adopted
children from foster care take on a tremendous responsibility.
Furthermore, the state has taken away many of the parental
rights with regard to discipline and other things. Since
parents aren't allowed to easily demonstrate control,
Representative Holm indicated that money is about the only thing
left as a deterrent. Although he said he wasn't sure [any
amount] would make an impact, he thought that as a policy
matter, [the intent] is to effect a [financial] solution for the
problem. Still, Representative Holm expressed reservations with
regard to taking away parental capabilities to discipline while
at the same time making the parents financially responsible.
REPRESENTATIVE SAMUELS inquired as to how often the $10,000 is
collected. Have there been any problems with driving families
to bankruptcy, and "how often do we go after the parents," he
asked.
REPRESENTATIVE MEYER said he could obtain that information. He
reiterated that the school district approached him saying that
$10,000 isn't enough. This came about due to some instances of
extensive vandalism in Anchorage. Those instances are the
exception, he noted; most of the incidents are minor.
Number 1979
REPRESENTATIVE GARA said that he didn't think the approach
presented in CSHB 18(STA) is going to work; the premise behind
the bill is that parents should help school districts pay for
damage to schools, adding that he believes everyone would agree
with that premise. However, he remarked, the committee can't,
in good conscious, impose a $20,000 liability on a low-income
family. Furthermore, he said he questions whether higher
penalties would deter children.
REPRESENTATIVE GARA surmised that the intent is twofold: to
develop a figure that fairly compensates the school district
without destroying a family by imposing that amount. The only
way to accommodate both, he remarked, would be to develop a fair
amount that would serve the school district's purposes and
stipulate that it wouldn't be imposed when it would destroy a
family. Therefore, he suggested a $30,000 cap with the caveat
that a family shall not be charged an amount more than 25
percent of its net federal taxable income. The aforementioned
would protect the families that would be hurt by the current
legislation and allow the school districts to recover money
related to damages. Without the aforementioned caveat,
Representative Gara said that he is uncomfortable with the
potential of destroying a family.
REPRESENTATIVE SAMUELS disagreed. He indicated that [this
legislation is about] personal responsibility. Whether the
parent is a bad parent is the crux, he said, rather than the
[parent's] income. He stressed that there is a difference
between a parent that did his/her best and the [child] still
didn't turn out [well], and a bad parent. "We'll wale on the
bad parent whether they have money or not," he said. The
[caveat suggested by Representative Gara] isn't fair, he opined,
because everyone ends up paying for some of the people, and the
wealthy families end up paying for their children.
REPRESENTATIVE OGG posited that Representative Gara's suggestion
might run up against the equal protection clause and, thus,
there may be problems. Therefore, he said he preferred sticking
with [the current language].
CHAIR McGUIRE announced that Amendment 1 [text provided
previously] is before the committee. She pointed out that even
with a cap of $15,000, Alaska would still be the highest because
California's $10,000 cap specifically addresses damage to school
property.
CHAIR McGUIRE asked if there were any objections to Amendment 1.
There being no objection, Amendment 1 was adopted.
Number 1730
REPRESENTATIVE GARA moved that the committee adopt Amendment 2,
which reads as follows:
p.2., after line 1, insert:
*Section 2. AS 34.50.020 is amended by adding a new
subsection (d):
(d) Liability for the conduct described in this
section shall not attach to the legal guardian of any
child who has been adopted after being in state
custody, including foster care.
REPRESENTATIVE GARA informed the committee that he has received
comments for those who work in the child protection and adoption
field. Those comments have indicated that if word gets out that
there is liability for parents of difficult-to-handle children,
then a bad message will be sent to those very few parents who
adopt children out of foster care. He said he didn't believe
those parents who take in foster children will be subject to
this provision because these people aren't the legal guardian -
the state is the legal guardian.
REPRESENTATIVE GARA pointed out that children are staying in
foster care far too long, although the Division of Family &
Youth Services (DFYS) is working very hard to place children in
adoptive families. The troublesome children and children with
the greatest problems are the most difficult to place in
adoptive homes. Therefore, Amendment 2 specifies that a parent
of an adoptive child formerly in state custody isn't subject to
this liability provision. Representative Gara noted that
Amendment 2 is a bit overbroad because it would also protect
adoptive parents when the foster child isn't a problem child.
CHAIR McGUIRE objected for discussion purposes. She inquired as
to the definition of state custody and asked whether it refers
to custody only in the State of Alaska, anywhere in the U.S., or
other countries.
REPRESENTATIVE GARA said that he had wanted to include foster
parents in order to ensure that foster parents wouldn't be held
liable for the active and unruly child. He relayed that it was
explained to him that foster parents are exempt from the statute
because foster children are in state custody. However, he said
he didn't know that all foster parents are parents of children
in state custody.
CHAIR McGUIRE returned to the definition of state custody and
asked if it should be defined.
REPRESENTATIVE GARA remarked that it would be a good idea. He
relayed that state custody might have to be defined as the
custody of any governmental state - any jurisdiction.
Number 1565
REPRESENTATIVE MEYER noted that he is the parent of an adopted
child. He questioned whether [Amendment 2] would exclude
children adopted through private adoptions. He said he didn't
think it was fair to exempt only those who adopt from state-run
foster care programs. If one adopts an infant from a state-run
foster care program, then that person has modeled and raised
that child and should take full responsibility for the child's
actions.
REPRESENTATIVE OGG said that he was persuaded by Representative
Meyer's comments. Furthermore, Representative Ogg said that he
didn't believe that one type of parents should be excluded. He
relayed his belief that people should be encouraged to be good
parents, which is the aim of CSHB 18(JUD). He noted his
opposition to Amendment 2.
REPRESENTATIVE HOLM questioned whether [the intent] is to limit
vicarious liability or to initiate a system whereby more
children are adopted. If the testimony from the House State
Affairs Standing Committee is true, by requiring such stringent
vicarious liability on adoptive parents, folks will choose not
to adopt. He acknowledged that Representative Gara is
attempting to have the best of both worlds. However,
Representative Holm said he wasn't sure whether CSHB 18(STA) is
the vehicle to accomplish that.
CHAIR McGUIRE relayed that one of her constituents has six high-
risk youth in her home and has chosen to adopt two. Despite
this constituent's best efforts, [this parent has faced
difficulties with these children]. Chair McGuire said that
although Representative Gara's point is important, she didn't
know the answer.
REPRESENTATIVE SAMUELS opined that if the desire is to overhaul
the entire system, that [would require] a different vehicle. He
asked if there is any statistical data with regard to foster
children and property damage as compared to the general
population.
REPRESENTATIVE MEYER reiterated that the main reason for the cap
is due to the testimony from an individual with adopted high-
risk children who was uncomfortable with unlimited liability.
Although this person was specifically asked about a cap other
than the $10,000, he said he assumed that this parent would be
amenable to a cap of $15,000 or $20,000, and would continue to
adopt high-risk children. He said there is no data showing that
high-risk children are causing problems.
Number 1275
REPRESENTATIVE GARA emphasized that people don't tend to read
statutes; thus changing a few words in the criminal law doesn't
deter people any more than before the language is changed. He
surmised that once this legislation receives media publicity,
the impression will be that the legislature is increasing the
liability of parents of children who do damage to school
property. And although this impression will eventually reach
those who are thinking of adopting high-risk children, they
won't have read the statutes. Furthermore, the foster care
system in Alaska is failing, like in many other states, he
noted, because social workers are given far too large caseloads
and, hence, the system fails.
REPRESENTATIVE GARA explained that the federal and state
government came together a number of years ago and said that the
best thing is to get children out of foster care and place them
in adoptive homes. The most attractive children for adoption
were shuttled to adoptive homes and now there are a high
proportion of children in foster care for which it's difficult
to find adoptive parents. Representative Gara said that he
didn't want to do anything that would prevent even one of those
children from being adopted. Therefore, he indicated that there
is a need to craft this legislation such that it doesn't deter
anyone from taking in these [high-risk] children. With regard
to the idea that parents should be responsible for their
children, Representative Gara suggested that those taking in
troubled children are probably fairly responsible. Therefore,
he didn't worry that adoption of Amendment 2 would foster
irresponsibility among parents. He noted that he did agree that
state custody does include custody of children from any other
state or jurisdiction.
REPRESENTATIVE SAMUELS agreed that most people don't read the
statutes. With regard to this coming out in the press,
Representative Samuels said that the exemption won't be in the
press either and the exemption won't be read either.
CHAIR McGUIRE withdrew her objection to Amendment 2.
REPRESENTATIVE SAMUELS objected.
A roll call vote was taken. Representatives Gara and McGuire
voted in favor of Amendment 2. Representatives Ogg, Holm, and
Samuels voted against it. Therefore, Amendment 2 failed by a
vote of 2-3.
Number 1056
REPRESENTATIVE SAMUELS moved to report CSHB 18(STA), as amended,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
18(JUD) was reported from the House Judiciary Standing
Committee.
HB 214 - PUNITIVE DAMAGES AGAINST EMPLOYERS
Number 1006
CHAIR McGUIRE announced that the final order of business would
be HOUSE BILL NO. 214, "An Act relating to the recovery of
punitive damages against an employer who is determined to be
vicariously liable for the act or omission of an employee; and
providing for an effective date."
Number 0964
REPRESENTATIVE SAMUELS, speaking as the sponsor, explained that
HB 214 adds a section to the punitive damage statutes in order
to create new guidelines for damages against the employer under
vicarious liability. The legislation stipulates that the
employer shall not be responsible for paying damages unless the
employer [authorized] the act, knew of the act later and
approved of it, or the employer knew that the employee was unfit
and employed the individual anyway. He highlighted that the
legislation doesn't apply unless the employer has been
determined to be vicariously liable anyway. Furthermore, the
legislation strictly involves punitive damages. Punitive
damages are meant to punish an entity, usually a company, for
bad behavior. Under HB 214, if no bad behavior occurred, the
company shouldn't be liable for punishment. He clarified that
the bill doesn't pertain to compensatory damages; only punitive
damages are addressed.
REPRESENTATIVE SAMUELS posed an example in which an owner of a
construction company with training programs, drug testing
programs, and hiring standards informs an employee that he can't
drive a truck because the employee hasn't been "checked out in
the truck." If the employee gets in the truck and breaks the
rules of the company, the company shouldn't be liable for
punitive damages because the employee went against the company's
policies.
CHAIR McGUIRE announced that she didn't intend to report HB 214
from committee today.
Number 0785
PAMELA LaBOLLE, President, Alaska State Chamber of Commerce
(ASCC), informed the committee that ASCC is in support of HB
214. She said it's unfair to hold employers [liable for
punitive damages] when the employers had no control in the
situation. She echoed Representative Samuels's point that [the
employers] would remain responsible under civil law for
compensatory damages.
CHAIR McGUIRE pointed out that [with passage of HB 214]
businesses would be placed in parity with the State of Alaska,
which, as an employer, is immune from punitive damages.
Number 0663
MARCIA R. DAVIS, Vice President and General Counsel, ERA
Aviation, Inc. ("ERA"), announced strong support HB 214, which
it views as a measured, limited correction to an earlier
position taken by the Alaska Supreme Court. She relayed the
belief that HB 214 impacts a broad range of constituents and,
thus, she characterized HB 214 as an employer's bill, adding,
however, that the bill isn't anti-employee legislation. She
stated that HB 214 will make a difference to ERA.
MS. DAVIS noted that ERA is closely regulated by the Federal
Aviation Administration (FAA), and performs extensive criminal
background checks and pre-employment drug and alcohol tests on
all employees. Furthermore, mandatory random drug and alcohol
tests are performed on all of the emergency medical technician
employees. Moreover, the company has a zero-tolerance policy
regarding drugs and alcohol at work, and reserves the right to
conduct, for cause, drug and alcohol testing. All of ERA's
supervisors undergo annual, mandatory drug-and-alcohol-detection
training. Still, several summers ago a seasonal summer-hire,
driving the company van between two "air locations," struck a
motorcycle. After the investigation it was determined that he
had consumed alcohol.
MS. DAVIS said she couldn't think of anything else, as a
responsible employer, that the company could've done to avoid
the situation. The plaintiff's attorney raised the specter of
the company facing many punitive damages and there was nothing
the company could do. Because the Alaska Supreme Court had
taken a strict liability [position] for punitive damages
assessed against an employee, the company had no recourse. Ms.
Davis concluded by noting that ERA doesn't object to paying
compensatory damages. She opined that punitive damages should
function as punishment of the wrongdoer, but added that this
isn't how the law is currently working. She strongly encouraged
the committee to pass HB 214.
Number 0451
MICHAEL J. SCHNEIDER, Attorney, Law Offices of Michael J.
Schneider, PC, began by saying that in his 28 years in practice
he has never obtained a punitive damage recovery by the way of
jury trial. He emphasized that punitive damages are rarely
awarded by Alaskan jurors. However, when that occurs, the
[Alaska Supreme Court] almost universally reverses those awards;
there are few exceptions. Under current law, at least half of
the benefit of the struggles to obtain those damages goes
directly to the State of Alaska. Therefore, he characterized HB
214 as a solution in search of a problem.
MR. SCHNEIDER suggested that the goals of the sponsor statement
are simply not met by the legislation. He inquired about the
employer who gives a wink and a nod to bad conduct - potentially
dangerous conduct. Unless the employer knew that the employee
was unfit when hired, the employer will be immune from vicarious
liability for punitive damages under HB 214. The employer would
be immune if the employer did nothing to train or supervise the
employee after the point of hiring. Even if the employer turned
a blind eye to information suggesting the very risk visited upon
the innocent by the employee, the employer would still enjoy the
immunity of HB 214. Therefore, HB 214 is entirely too broad, he
suggested. Mr. Schneider said that there are no real examples
of punitive damage awards sustained by the [Alaska Supreme
Court] that would cause anyone to rush to adopt this measure.
Furthermore, under the existing tort reform, proof [for]
punitive damages, as to the employee, has to be clear and
convincing, and, if the employer is vicariously liable, [the
employer] has to have a connection to the activity that brings
about the harm.
Number 0239
CHAIR McGUIRE asked Mr. Schneider how many times he has seen
settlements occur in response to the mere threat of a punitive
damages award by a jury.
MR. SCHNEIDER informed the committee that almost all of his
practice focuses on representing injured Alaskans or the
families of Alaskans who have been killed. He said he has never
obtained monies for punitive damage exposure because juries
rarely award those damages and when they do, those awards are
reversed. Mr. Schneider relayed that he has asserted punitive
damages or the possibility of obtaining punitive damages as part
of the settlement process, and specified that he does it every
time the conduct seems to support the aforementioned allegation.
The practical effect is that those people who have been injured
and have "a dime's worth" of compensatory damages have some
hope, when the company has legitimate punitive damage exposure,
of being fully compensated or getting closer to being fully
compensated.
CHAIR McGUIRE surmised, then, that while [punitive damages]
began as punishment, they have turned out to be more
compensatory in an effort to make the innocent victim whole.
MR. SCHNEIDER agreed. He emphasized, however, that there has to
be outrageous conduct and it has to be proven by clear and
convincing evidence.
CHAIR McGUIRE acknowledged that, but highlighted that punitive
damages were originally created to punish those entities that
willfully disregard information that is known - for example, in
the area of consumer protection - and proceed to act with full
knowledge and "foreseeability" about the potential harm to
victims.
TAPE 03-27, SIDE A
Number 0001
CHAIR McGUIRE highlighted that the legal system has evolved to
the point, particularly with regard to settlements, where the
philosophical distinction between compensatory damages, which
are to make a victim whole, and punitive damages, which are
intended to punish the tort feasor who might have known of a
foreseeable harm and consciously disregarded it, isn't
maintained.
MR. SCHNEIDER said that he couldn't agree with Chair McGuire's
assessment. He said that he doesn't see entities paying his
clients for punitive damages. He noted that occasionally, when
the punitive damage exposure is there and when there is talk of
a pre-trial settlement, clients may be compensated. However, he
pointed out that the clients are never really paid punitive
damages and, furthermore, sums that go beyond the actual losses
aren't paid.
CHAIR McGUIRE opined that monies awarded in a settlement simply
aren't being called punitive. She recalled Mr. Schneider saying
that he did believe that the mere threat or assertion of
punitive damages has led to greater compensation of victims.
MR. SCHNEIDER remarked, "I believe it has and I believe it
should."
REPRESENTATIVE GARA recalled earlier remarks regarding whether
the Alaska Supreme Court has indicated a willingness to adopt
the new Restatement (Second) of Agency ("Restatement") rule,
which is included in HB 214. In reviewing the Alaskan Village,
Inc. v. Smalley, 720 P.2d 945, 948-49 (Alaska 1986), he said
that he didn't necessarily agree that the Alaska Supreme Court
is stating such a willingness. He requested that Mr. Schneider
comment on what the Alaska Supreme Court has said about the
Restatement (Second) of Agency. Representative Gara inquired as
to whether Mr. Schneider had any sense that the rule Alaska
currently follows for punitive damages remains a majority rule.
MR. SCHNEIDER said that he had no information on the latter.
However, he offered that he has a strong impression that the
Alaska Supreme Court hasn't abandoned the ruling in the Smalley
case, because if such were the case, there have been subsequent
opportunities.
MS. DAVIS turned to Representative Gara's first question. She
informed the committee that the last case in which the Alaska
Supreme Court was presented with this issue was with Laidlaw
Transit, Inc. v. Crouse, on August 30, 2002. She directed
attention to footnote 9 of the Laidlaw decision, which
references that the U.S. Supreme Court [is] cutting back on
punitive damages under the due process clause, the Alaska State
Legislature's narrowing of circumstances under which punitive
damages can be awarded, and the [statutory] caps. The footnote
ends with the following statement: "In light of these
developments, the Alaskan Village rule may be anachronistic. If
and when the point is properly preserved and raised, this court
may consider adopting the narrower complicity rule."
MS. DAVIS said that the "narrower complicity rule" essentially
is HB 214. Therefore, she said she understood such to be a
clear indication from the [Alaska] Supreme Court that it's
uncomfortable with the position that it has taken. The problem
in the Laidlaw case was that the issue wasn't raised at the
trial level, and therefore when it was raised at the supreme
court level, the [Alaska] Supreme Court felt that it hadn't been
preserved.
REPRESENTATIVE OGG recalled remarks indicating that the language
in HB 214 won't cover an employer operating by a wink and nod.
He asked what is meant by the phrase, "a wink and nod."
Number 0455
RAY R. BROWN, Attorney at Law, Dillon & Findley, PC, informed
the committee that he is a trial lawyer. In response to
Representative Ogg, Mr. Brown said he read the statute such that
an employer can escape vicarious liability for punitive damage
by establishing that the employer didn't authorize the act or
omission. No one is going to ratify or approve an act once
vicarious liability has been established. Therefore, it would
be virtually impossible to get around the "wink and nod"
defense, which most of these cases are. He said that this
[proposed] statute basically encourages people to put their head
in the sand.
MR. BROWN informed the committee that he'd had a case in which
punitive damages were awarded, although the case is going to the
supreme court. This case was one in which the employer would've
been immunized under HB 214. He explained that the case was one
in which a shock-jock radio host in California, who broadcasts
nationwide, verbally sexually assaulted a woman in Juneau,
Alaska. This radio host gave out this woman's home phone number
and fax number and encouraged his listeners, young males under
the age of 40, [to contact her]. As a result, this woman was
harassed, and consequently experienced a significant amount of
stress.
MR. BROWN said that if this radio host was held liable for
intentional misconduct against the woman, the employer would be
immune under [HB 214] because the employer could say that it
didn't authorize the act or omission and doesn't ratify or
approve of the radio host's actions. The case is before the
supreme court because [the employer] was held directly liable on
a theory of intentional spoliation of evidence. He added that
under the theory of the employer acting in misconduct, that
issue is before the supreme court on alleged erroneous jury
instructions. Therefore, Mr. Brown said he was concerned that
one would never be able to establish vicarious liability and
[the employer] merely has to "wink and nod" to escape it.
Number 0652
MR. BROWN specified that his main problem with HB 214 is that he
didn't know what "unfit" means in Section 1 (k)(2)(A) and (B).
Furthermore, requiring the employer to act recklessly in
employing the employee is problematic. He proffered an example
in which an employer opens a private school and pays lower
salaries for teachers and the minimum qualification is a four-
year degree. If that [applicant] had a sordid history of sexual
harassment and predatory conduct toward women and children and
the employer is negligent or grossly negligent in following up
on the applicant's employment history, the employer is off the
hook. Furthermore, if the employer is deemed not to be reckless
in employing the applicant, the employer can turn its back,
acting negligent and grossly negligent in supervising and
training the employee, and the person can run rampant. The
employer would remain off the hook for punitive damages.
MR. BROWN said that if the committee is inclined to pass HB 214,
he hoped that the committee would review Section 1 (k)(2)(A) and
(B) and at least change the language to refer to "negligent",
explain the meaning of "unfit", and expand "employing" to
include "supervising and training".
CHAIR McGUIRE pointed out that the language [in Section 1
(k)(2)(A) and (B)] comes from subsection (b) of the Restatement,
which reads "(b) the agent was unfit and the principal or a
managerial agent was reckless in employing or retaining him".
REPRESENTATIVE OGG inquired as to the language Mr. Brown would
recommend to correct the "wink and nod" situation.
MR. BROWN said that he would like to submit suggested language
to the committee in writing. With regard to Chair McGuire's
point that the language comes from subsection (b) of the
Restatement, Mr. Brown commented that sometimes taking language
directly from the Restatement is often difficult, especially
when the terms aren't defined. He offered to provide proposed
language that could satisfy the concerns of Ms. Davis.
Number 1018
KAREN CASANOVAS, Executive Director, Alaska Air Carrier's
Association, informed the committee that the Alaska Air
Carrier's Association is a member of several national and
statewide organizations, many of which work toward economic
growth and occasionally propose recommendations for legislative
changes. The association's interest is in regard to the
punitive damages discussion. She pointed out that in 1994 the
National Conference of Commissioners on Uniform State Law
(NCCUSL) established a drafting committee on the subject of
punitive damages and developed a model act. Punitive damages
were thought to be an appropriate candidate for this model.
MS. CASANOVAS said she agreed with Chair McGuire's earlier
comment that the direction [of the legal system with regard to
punitive damages] has changed over the years. The mounting
concern with regard to the role of punitive damage awards in the
civil justice system in the U.S. stems from the perceived
increase in size and frequency of the awards. Often, it was
argued, the size of the awards had no correlation with
deterrence, but merely reflected a jury's dissatisfaction with a
defendant and a desire to punish the defendant without regard
for the actual conduct in the particular situation. She noted
that over the years, some of the petitioners have taken cases to
the supreme court when some constitutionality limits were in
question, for example, in the case of excessive punitive damages
under the Eighth Amendment in the 1988 case of Bankers Life &
Casualty Company v. Crenshaw, 486 U.S. 71 (1988). She pointed
out another example, the 1991 decision of Pacific Mutual Life
Insurance Company v. Haslip, which falls under due process of
the Fourteenth Amendment.
MS. CASANOVAS said that the American Law Institute Restatements
regarding vicarious responsibility for punitive awards support
that an employer is not liable for punitive damages just because
an employee was acting within the course and scope of
employment. Since punitive damages serve solely to deter or
punish, the law requires that there be some wrongdoing and
consideration of whether the party would be deterred or punished
by the award. She relayed the Alaska Air Carrier's
Association's belief that HB 214 would bar an employer from
being held vicariously liable for the punitive damages assessed
against the employee, except when there was some degree of
culpability on the part of the employer.
MS. CASANOVAS said that the association holds the belief that HB
214 won't impact or limit an employer's direct liability for
punitive damages due to its own conduct. This legislation
would, she said, provide certainty and an appropriate scope of
vicarious liability to all employers and industries throughout
the state. Based on the [Alaska] Supreme Court's strong
suggestion, in the Laidlaw case, that it would change the law in
the future, the committee could, with HB 214, solve this
problem. Therefore, she added, the Alaska Air Carrier's
Association requests the committee's support in this matter.
Number 1215
MICHAEL R. WIRSCHEM, Attorney at Law, began by noting that he
has been practicing in Anchorage for about eight years. He,
too, mentioned that his experience has been that jurors rarely
award punitive damages in this jurisdiction; they [do so] only
upon clear and convincing evidence against the offender. He
understood the question today to be in regard to the future of
vicarious liability - holding employers liable for the
offender's misdeeds.
Mr. Wirschem said that there seems to be some disagreement as to
the current status of punitive damage awards. He argued that
punitive damage awards seem to be few in Alaska, and that this
would seem to be a statement in opposition to meddling with the
system. The history under common law is that vicarious
liability is the rule for employers being held liable for the
misdeeds of their employees. Therefore, without a specific
problem, he didn't see the need for change. He acknowledged
that employers such as ERA probably feel it would be better if
they don't have to pay punitive damage awards. However, as a
broad policy decision, Mr. Wirschem requested that the
legislature think carefully before making a change in this area
of law.
CHAIR McGUIRE returned to the notion that jury's never award
punitive damage claims, and emphasized that most cases are
settled. Therefore, she asked if the potential exposure to
punitive damages is a factor in the settlement negotiations.
MR. WIRSCHEM said that according to his experience, he didn't
believe so. Moreover, other aspects such as changes in tort
reform have made even bringing such a claim risky.
Number 1409
REPRESENTATIVE GARA asked if someone could review whether the
Alaska Judicial Council has produced statistics on average
verdicts and on punitive damage verdicts.
MS. DAVIS said that she would try to find that information.
MR. WIRSCHEM agreed to do so as well.
CHAIR McGUIRE announced that public testimony would be left open
and that HB 214 would be held over.
ADJOURNMENT
Number 1423
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 5:10 p.m.
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