Legislature(1999 - 2000)
04/05/2000 01:19 PM House JUD
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
April 5, 2000
1:19 p.m.
MEMBERS PRESENT
Representative Pete Kott, Chairman
Representative Joe Green
Representative Norman Rokeberg
Representative Jeannette James
Representative Lisa Murkowski
Representative Eric Croft
Representative Beth Kerttula
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CONFIRMATION HEARINGS
Commission on Judicial Conduct
Sharon Nahorney - Anchorage
- CONFIRMATION ADVANCED
Alaska Judicial Council
Gigi Pilcher - Ketchikan
- CONFIRMATION ADVANCED
Board of Governors of the Alaska Bar
Anastasia Cooke Hoffman - Bethel
- CONFIRMATION ADVANCED
Select Committee on Legislative Ethics
Shirley McCoy - Juneau
- CONFIRMATION ADVANCED
CS FOR SENATE BILL NO. 193(FIN)
"An Act relating to the payment of wages and claims for the payment
of wages."
- HEARD AND HELD
HOUSE BILL NO. 182
"An Act relating to charitable gaming and to gaming on state
ferries; and providing for an effective date."
- ASSIGNED TO SUBCOMMITTEE
CS FOR SENATE BILL NO. 123(FIN)
"An Act relating to public interest litigants and to attorney fees;
and amending Rule 82, Alaska Rules of Civil Procedure."
- HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE
HOUSE BILL NO. 425
"An Act relating to misrepresentation and false claims made against
the state or a municipality; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: SB 193
SHORT TITLE: COLLECTION OF UNPAID WAGES/WAGE PAYMENTS
Jrn-Date Jrn-Page Action
1/14/00 1977 (S) READ THE FIRST TIME - REFERRALS
1/14/00 1977 (S) L&C, FIN
2/08/00 (S) L&C AT 1:30 PM BELTZ 211
2/08/00 (S) -- Rescheduled to 2/10/00 --
2/10/00 (S) L&C AT 1:30 PM BELTZ 211
2/10/00 (S) Moved CS(L&C) Out of Committee
2/10/00 (S) MINUTE(L&C)
2/11/00 2272 (S) L&C RPT CS 4DP SAME TITLE
2/11/00 2272 (S) DP: MACKIE, TIM KELLY, DONLEY, LEMAN
2/11/00 2272 (S) ZERO FISCAL NOTE (LABOR)
2/22/00 (S) FIN AT 9:00 AM SENATE FINANCE 532
2/22/00 (S) Heard & Held
3/06/00 (S) FIN AT 9:00 AM SENATE FINANCE 532
3/06/00 (S) Moved CS(Fin) Out of Committee
3/06/00 2529 (S) FIN RPT CS 7DP 1NR SAME TITLE
3/06/00 2530 (S) DP: TORGERSON, PARNELL, PHILLIPS,
3/06/00 2530 (S) GREEN, PETE KELLY, LEMAN, WILKEN,
3/06/00 2530 (S) NR: ADAMS
3/06/00 2530 (S) PREVIOUS ZERO FN (LABOR)
3/07/00 (S) RLS AT 12:00 PM FAHRENKAMP 203
3/07/00 (S) MINUTE(RLS)
3/08/00 2562 (S) RLS TO CALENDAR 03/08/00
3/08/00 2567 (S) READ THE SECOND TIME
3/08/00 2567 (S) MOVE TO BOTTOM OF CALENDAR
3/08/00 2576 (S) FIN CS ADOPTED UNAN CONSENT
3/08/00 2576 (S) ADVANCED TO THIRD READING
UNAN CONSENT
3/08/00 2576 (S) READ THE THIRD TIME CSSB 193(FIN)
3/08/00 2577 (S) PASSED Y19 N- E1
3/08/00 2577 (S) TORGERSON NOTICE OF RECONSIDERATION
3/15/00 2614 (S) RECONSIDERATION NOT TAKEN UP
3/15/00 2615 (S) TRANSMITTED TO (H)
3/15/00 2481 (H) READ THE FIRST TIME - REFERRALS
3/15/00 2481 (H) L&C, JUD
3/29/00 (H) L&C AT 3:15 PM CAPITOL 17
3/29/00 (H) Moved CSSB 193(FIN) Out of Committee
3/29/00 (H) MINUTE(L&C)
3/30/00 2786 (H) L&C RPT 6DP 1NR
3/30/00 2786 (H) DP: HARRIS, CISSNA, BRICE, SANDERS,
3/30/00 2786 (H) HALCRO, ROKEBERG; NR: MURKOWSKI
3/30/00 2786 (H) SENATE ZERO FISCAL NOTE
(LABOR) 2/11/00
4/05/00 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 182
SHORT TITLE: CHARITABLE GAMING & GAMING ON FERRIES
Jrn-Date Jrn-Page Action
4/08/99 690 (H) READ THE FIRST TIME - REFERRAL(S)
4/08/99 690 (H) TRA, JUD, FIN
2/01/00 (H) TRA AT 1:00 PM CAPITOL 17
2/01/00 (H) Heard & Held
2/01/00 (H) MINUTE(TRA)
2/15/00 (H) TRA AT 1:00 PM CAPITOL 17
2/15/00 (H) Meeting Postponed to Thurs 2/17/00
2/17/00 (H) TRA AT 1:00 PM CAPITOL 17
2/17/00 (H) Failed To Move Out Of Committee
2/17/00 (H) MINUTE(TRA)
2/24/00 (H) TRA AT 1:00 PM CAPITOL 17
2/24/00 (H) Heard & Held
2/24/00 (H) MINUTE(TRA)
3/02/00 (H) TRA AT 1:00 PM CAPITOL 17
3/02/00 (H) Moved CSHB 182(TRA) Out of Committee
3/02/00 (H) MINUTE(TRA)
BILL: SB 123
SHORT TITLE: ATTY FEES:APPORTIONMT/PUBLIC INT.LITIGANT
Jrn-Date Jrn-Page Action
3/26/99 700 (S) READ THE FIRST TIME - REFERRAL(S)
3/26/99 701 (S) JUD, FIN
4/09/99 (S) JUD AT 1:30 PM BELTZ 211
4/09/99 (S) MOVED OUT OF COMMITTEE
4/09/99 (S) MINUTE(JUD)
4/12/99 875 (S) JUD RPT 2DP 1NR
4/12/99 875 (S) NR: TAYLOR; DP: DONLEY, HALFORD
4/12/99 875 (S) ZERO FISCAL NOTE (COURT)
4/21/99 (S) FIN AT 8:00 AM SENATE FINANCE 532
4/21/99 (S) SCHEDULED BUT NOT HEARD
4/27/99 (S) FIN AT 9:00 AM SENATE FINANCE 532
4/27/99 (S) SCHEDULED BUT NOT HEARD
2/02/00 (S) FIN AT 9:00 AM SENATE FINANCE 532
2/02/00 (S) <Bill Postponed>
2/10/00 (S) FIN AT 9:00 AM SENATE FINANCE 532
2/10/00 (S) Scheduled But Not Heard
2/17/00 (S) FIN AT 9:00 AM SENATE FINANCE 532
2/17/00 (S) Heard & Held
2/22/00 (S) FIN AT 9:00 AM SENATE FINANCE 532
2/22/00 (S) Moved CS(Fin) Out of Committee
2/22/00 2376 (S) FIN RPT CS 6DP 2NR SAME TITLE
2/22/00 2377 (S) DP: TORGERSON, PARNELL, PHILLIPS,
GREEN
2/22/00 2377 (S) PETE KELLY, DONLEY; NR: ADAMS, WILKEN
2/22/00 2377 (S) ZERO FISCAL NOTE (COURT)
2/23/00 (S) RLS AT 12:00 PM FAHRENKAMP 203
2/23/00 (S) MINUTE(RLS)
2/25/00 2425 (S) RLS TO CALENDAR AND 1 OR 02/25/00
2/25/00 2426 (S) READ THE SECOND TIME
2/25/00 2426 (S) FIN CS ADOPTED UNAN CONSENT
2/25/00 2426 (S) ADVANCED TO THIRD READING
2/28 CALENDAR
2/28/00 2451 (S) READ THE THIRD TIME CSSB 123(FIN)
2/28/00 2451 (S) HELD IN THIRD READING TO
2/29 CALENDAR
2/29/00 2464 (S) BEFORE THE SENATE IN 3RD READING
2/29/00 2465 (S) PASSED Y15 N4 E1
2/29/00 2465 (S) COURT RULE(S) Y15 N4 E1
2/29/00 2465 (S) ELLIS NOTICE OF RECONSIDERATION
3/01/00 2478 (S) RECON TAKEN UP - IN THIRD READING
3/01/00 2479 (S) PASSED ON RECONSIDERATION Y14 N5 A1
3/01/00 2479 (S) COURT RULE(S) SAME AS PASSAGE
3/01/00 2480 (S) TRANSMITTED TO (H)
3/03/00 2382 (H) READ THE FIRST TIME - REFERRALS
3/03/00 2382 (H) JUD, FIN
3/03/00 2382 (H) REFERRED TO JUDICIARY
4/05/00 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
KRISTOPHER KNAUSS, Staff
to Senator Drue Pearce
Alaska State Legislature
Capitol Building, Room 111
Juneau, Alaska 99801
POSITION STATEMENT: Presented SB 193 on behalf of sponsor.
J.R. "RANDY" CARR, Chief/Labor Standards & Safety
Wage & Hour
Division of Labor Standards & Safety
Department of Labor & Workforce Development
P.O. Box 107021
Anchorage, Alaska 99510-7021
POSITION STATEMENT: Testified on SB 193.
AL DWYER, Director
Central Office
Division of Labor Standards & Safety
Department of Labor & Workforce Development
P.O. Box 21149
Juneau, Alaska 99802-1149
POSITION STATEMENT: Testified on SB 193.
MARGARET BAUMAN
8100 Lamplighter Court
Anchorage, Alaska 99502
POSITION STATEMENT: Testified in support of SB 193.
DARWIN PETERSON, Staff
to Senator John Torgerson
and the Senate Finance Committee
Alaska State Legislature
Capitol Building, Room 516
Juneau, Alaska 99801
POSITION STATEMENT: Presented SB 123 on behalf of the Senate
Finance Committee, sponsor.
JOSEPH CIZEK
30545 Eagle River Road
Anchorage, Alaska 99577
POSITION STATEMENT: Testified on SB 123.
WEV SHEA, Attorney at Law
329 F Street, Number 222
Anchorage, Alaska 99501
POSITION STATEMENT: Testified that SB 123 does the state a real
disservice if this law is changed with regard to public interest
litigation relating to voting rights.
ROBIN SMITH
14100 Jarvi
Anchorage, Alaska 99501
POSITION STATEMENT: Testified in opposition to SB 123.
DALE BONDURANT
31864 Moonshine Drive
Soldotna, Alaska 99669
POSITION STATEMENT: Testified in opposition to SB 123.
ACTION NARRATIVE
TAPE 00-48, SIDE A
Number 0001
CHAIRMAN PETE KOTT called the House Judiciary Standing Committee
meeting to order at 1:19 p.m. All members were present at the call
to order.
CONFIRMATION HEARINGS
Number 0054
CHAIRMAN KOTT announced that the committee would consider the
confirmations of three individuals appointed by the Governor to the
following: the Commission on Judicial Conduct, the Alaska Judicial
Council, and the Board of Governors of the Alaska Bar. [Also
addressed briefly, although not formally scheduled, was the
reappointment of Shirley McCoy to the Select Committee on
Legislative Ethics.]
CHAIRMAN KOTT indicated he would not try to reach these appointees
by teleconference. He reminded members that packets include a copy
of each person's resume. He stated his understanding that each
board, commission or council has six members, and each of these
appointees is filling a public member position, with no
prerequisites of specific educational background. Chairman Kott
announced that unless there were questions that the committee
wanted to field from these three appointees, he would like to move
their names forward. He added that if there were concerns or
questions, the committee could certainly hold the names over and
get those people on the teleconference line. In answer to a
question by Representative James, he specified that just one person
[Sharon Nahorney] is being reappointed.
Number 0170
REPRESENTATIVE GREEN asked whether there is any significance to the
fact that two appointees are "glamor queens." He noted that [Ms.
Hoffman] had held the titles of Miss World Eskimo Indian Olympics
and Miss National Congress of American Indians, and [Ms. Nahorney]
had held the title of Runner-Up, Miss Fur Rendezvous.
REPRESENTATIVE MURKOWSKI said she certainly wouldn't hold it
against them.
Number 0210
REPRESENTATIVE JAMES told the chairman that she isn't pleased to
not be able to talk to these people, although she wouldn't make a
big issue of it. She suggested the purpose of having these people
come before the legislature is to talk to them, at least, because
this is the only chance to hear from them at all. However, she
expressed willingness to move these names forward, at Chairman
Kott's request.
CHAIRMAN KOTT restated that if anyone wants to hold these in
committee to ask questions, he feels that the committee probably
should do so. However, he himself had looked over their resumes
and hadn't seen anything unusual.
REPRESENTATIVE GREEN asked whether there is a time constraint on
getting these through the committee.
CHAIRMAN KOTT said he isn't sure; it depends on when the
legislature adjourns.
Commission on Judicial Conduct
Number 0308
REPRESENTATIVE ROKEBERG moved that the committee take up the
appointment of Sharon Nahorney of Anchorage to the Commission on
Judicial Conduct. He said it is a reappointment, and he believes
that she is well known to everybody in the legislature. He stated
that this [consideration of appointments] is no reflection on any
individual, nor is it binding on a vote to any member. He
recommended moving along with the process.
CHAIRMAN KOTT announced that the committee would, then, take up
consideration of Sharon Nahorney of Anchorage, a reappointment
whose initial appointment was in 1991.
REPRESENTATIVE ROKEBERG said, "So moved."
CHAIRMAN KOTT said that is the motion to move Ms. Nahorney's name
from the committee. He agreed that signing the document is not
binding on anybody. He asked whether there was any objection.
Hearing none, he announced that Ms. Nahorney's confirmation would
be advanced to the floor for further consideration.
Alaska Judicial Council
Number 0411
CHAIRMAN KOTT announced that the committee would consider the
confirmation of Gigi Pilcher of Ketchikan to the Alaska Judicial
Council. He asked whether anything in Ms. Pilcher's resume would
require bringing her before the committee either via teleconference
or in person; there was no response. He commented on her extensive
work experience and the awards that she had received. He also
noted that she was the Ketchikan Public Servant of the Year in
1984.
REPRESENTATIVE ROKEBERG commented that Ms. Pilcher appears to have
a long history of public service in Alaska.
REPRESENTATIVE KERTTULA pointed out that Ms. Pilcher has also
served on the Alaska Sentencing Commission and the Alaska Juvenile
Justice Advisory Committee.
REPRESENTATIVE MURKOWSKI proposed that based upon Ms. Pilcher's
impressive resume, the committee should advance her name to the
full body.
CHAIRMAN KOTT accepted that as a motion to move Ms. Pilcher's name
forward to the full body for confirmation. He asked whether there
was any objection. There being none, he announced that Ms.
Pilcher's name would be advanced for confirmation.
Board of Governors of the Alaska Bar
Number 0596
CHAIRMAN KOTT announced that the committee would consider the
confirmation of Anastasia Cooke Hoffman of Bethel to the Board of
Governors of the Alaska Bar.
REPRESENTATIVE ROKEBERG said he wonders what a "cultural navigator"
is in the Alaska Court System. He asked whether it is a position
of employment.
REPRESENTATIVE KERTTULA conveyed her understanding that in the
court system, especially in Bethel and Dillingham, one often runs
up against trying to explain a civil or criminal law system,
regarding the right to remain silent, for example, versus a culture
that has existed for centuries that might go dramatically in other
directions. It really is a difficult situation. To her
understanding, these people [cultural navigators] help explain the
system and guide people through it.
REPRESENTATIVE ROKEBERG said he assumes that is when people are not
represented by counsel.
REPRESENTATIVE KERTTULA explained that she herself used to find, as
a public defender, that there simply were too many people to be
able to do justice. It really helps if people can come in and get
oriented better. She said that is just a brief understanding of
what the job does.
Number 0667
REPRESENTATIVE JAMES asked whether this is a reappointment.
CHAIRMAN KOTT specified that it is a new appointment.
REPRESENTATIVE JAMES asked how much work there is to this position.
She also asked whether Ms. Hoffman can do the job in Bethel or has
to travel to Anchorage, for instance. She further inquired about
the extent of the activity that Ms. Hoffman would be doing as a
member of the Board of Governors of the Alaska Bar.
REPRESENTATIVE KERTTULA noted that she herself had been president
of the bar and was on the board for five years. She explained that
there are meetings four times a year, quarterly. Ms. Hoffman would
get a big packet of information, which she could read at home; she
could teleconference in, "but mostly we fly people in for those
meetings." Alluding to the fact that Ms. Hoffman's resume says she
has a two-year-old son and is expecting another child in January,
Representative Kerttula reported that she herself had a friend who
had served quite successfully on the board while she had a very
young baby. From Ms. Hoffman's resume and background, especially
because she used to work for the court system, Representative
Kerttula said Ms. Hoffman looks like a great candidate for the
board.
REPRESENTATIVE JAMES agreed that it certainly is a good
opportunity, but said she still would have liked to have heard it
from Ms. Hoffman herself. She restated that she is willing,
however, to move appointees forward because that method has been
chosen.
CHAIRMAN KOTT pointed out that Ms. Hoffman had put a note on the
bottom of her resume saying she is currently unemployed and has
chosen to leave to her position with the Alaska Court System to
stay home with her son. He suggested that Ms. Hoffman recognizes
the requirements for this position; although committed to her
family life as well, she seems to understand what the commitment
would be to this particular position.
Number 0798
REPRESENTATIVE MURKOWSKI asked Representative Kerttula whether
there is geographic representation required on the Board of
Governors of the Alaska Bar. She said it appears that there is a
requirement that members be from all of the judicial districts.
REPRESENTATIVE KERTTULA answered:
There is for the elected members of the bar. For the
public members, there isn't, but I think that ... it's
often a voice that isn't represented because we don't
have many attorneys from Bethel. So, normally, the
people that'll be elected will be from Fairbanks or that
district. So it would be nice to have a person from that
area.
Number 0836
REPRESENTATIVE GREEN also addressed a question to Representative
Kerttula. Noting that Ms. Hoffman has only been out of high school
for nine years, he asked whether that apparent lack of experience
would be a deterrent or handicap.
REPRESENTATIVE KERTTULA replied:
The Board of Governors [of the Alaska Bar] even has an
established chair for young lawyers, because what happens
is we tend to get people who have been in the practice
quite a long period of time, so that it's really nice to
have younger people involved because there are a lot of
beginning lawyers, and sometimes we forget how difficult
it is for them. So when we have the younger lawyers or
we have young people on the board, it gives more of a
balance, and you tend to realize not everybody knows all
the rules, the stresses that are on them. So, at least
in my service on the board, it was really wonderful to
have that young lawyer position that we created.
REPRESENTATIVE GREEN pointed out that Ms. Hoffman is not an
attorney.
REPRESENTATIVE KERTTULA said she understands that, but Ms. Hoffman
has quite a bit of experience with the court system and would be
looking at that generation and providing that input in the decision
making.
Number 0975
REPRESENTATIVE KERTTULA made a motion to move Ms. Hoffman's name
forward for consideration. There being no objection, the
confirmation of Ms. Hoffman as an appointee was advanced for
consideration of the full body.
CHAIRMAN KOTT informed members that if anyone had questions between
now and whenever the confirmation is taken up by the full body, he
would encourage that member to call the appointee.
Select Committee on Legislative Ethics
Number 1015
CHAIRMAN KOTT announced that the committee would take up
consideration of Shirley McCoy's reappointment to the Select
Committee on Legislative Ethics. He noted that there is no formal
process required by statute of the House Judiciary Committee
regarding Ms. McCoy's appointment. However, initially members of
the Ethics Committee had appeared before the House Judiciary
Committee several years ago when that body was formed. Therefore,
the House Judiciary Committee has been given the opportunity to
address anything unusual or of interest regarding why Ms. McCoy
should or shouldn't be reappointed.
CHAIRMAN KOTT noted that he himself had served with Ms. McCoy for
a couple of years now, and has been impressed with her ability. He
noted that although Ms. McCoy would go before the legislature for
confirmation, hers was not an appointment by the Governor.
REPRESENTATIVE JAMES expressed amazement that Ms. McCoy is still
willing to do this job. She said Ms. McCoy does a really good job
at a job that she herself would never want.
CHAIRMAN KOTT assured members that Ms. McCoy enjoys doing what she
does, which he suggested is probably the reason that she wants to
be reappointed. He announced that he would advance Ms. McCoy's
name to the full body if there was no objection from the committee
or questions; no objections or questions were offered. He also
noted that Ms. McCoy lives in Juneau, indicating that she could be
contacted if any questions arose.
SB 193 - COLLECTION OF UNPAID WAGES
CHAIRMAN KOTT announced the next order of business would be CS FOR
SENATE BILL NO. 193(FIN), "An Act relating to the payment of wages
and claims for the payment of wages."
Number 1158
KRISTOPHER KNAUSS, Staff to Senator Drue Pearce, Alaska State
Legislature, came before the committee to present the bill. He
noted that SB 193 was introduced on behalf of a constituent,
Margaret Bauman, who had obtained employment with the Alaska
Business and Industry newspaper in the fall of 1998 on a
contractual basis. Over the course of her employment, wages were
illegally withheld from Ms. Bauman, and arrears reached over
$10,000 before the employment relationship ceased. Senate Bill 193
would raise the maximum cap to $20,000 for which the Department of
Labor & Workforce Development (DOLWD) may bring an action as a
small claim; existing law reads $7,500, excluding attorney fees.
MR. KNAUSS noted that Ms. Bauman had had a difficult time obtaining
her lost wages because it is difficult for attorneys to take these
types of cases on a contingency fee basis. In talking with the
department, he said, the bill contains a zero fiscal note. The
department would expect about 120 cases annually as the result of
the change, which would not impact the department. He noted that
department representatives were online via teleconference to answer
any technical questions.
Number 1251
CHAIRMAN KOTT asked Mr. Knauss why the figure is $20,000 and not
$25,000, $30,000, or an unlimited amount, for example.
MR. KNAUSS said he is not sure. He deferred the question to a
representative of the DOLWD.
Number 1301
J.R. "RANDY" CARR, Chief/Labor Standards & Safety, Wage & Hour,
Division of Labor Standards & Safety, Department of Labor &
Workforce Development (DOLWD), testified via teleconference from
Anchorage. The department has been looking at addressing this
problem for some years, he said, and they have been talking with
both defense and plaintiffs' [counsel]. The $20,000 is a threshold
value that existed before a private attorney would be interested in
taking a case to court. For anything under that figure, most
private attorneys would not be able to make any money. The figure,
therefore, fills that gap between cases that the department is
presently able to pursue and those cases that would attract the
interest of private counsel.
CHAIRMAN KOTT asked Mr. Carr whether a figure would have to be more
than $20,000 in order to attract a private attorney.
MR. CARR replied, "That's correct, sir."
Number 1351
REPRESENTATIVE JAMES stated her understanding that an attorney is
not needed for a small claims case because it is cut-and-dried in
a lot of ways and there has been an admission that a debt is owed.
Furthermore, a small claims case with a figure below $20,000 that
isn't settled would still have to go someplace else for resolution.
In that regard, a figure of $20,000 might preclude some valid cases
from being settled without an attorney.
Number 1411
MR. CARR pointed out that the cap for small claims cases would not
change for the private sector. The bill only amends the limit for
a case that may be brought by the DOLWD. Therefore, a person who
is not coming to the department for resolution would not be able to
pursue a small claims case on his or her own if the figure exceeded
$7,500. That person would have to file a case in district court.
Number 1446
REPRESENTATIVE MURKOWSKI noted that the sponsor statement reads,
"... SB 193 increases the amount of past wages that employees are
allowed to retain from $7,500 to $20,000 ...." However, according
to her understanding, the bill increases the amount that the DOLWD
can take on as a claim in small claims court. It doesn't have
anything to do with past wages that employees can retain.
MR. KNAUSS affirmed that.
Number 1503
REPRESENTATIVE GREEN noted that the sponsor statement reads, "...
SB 193 will update the law, making it possible for attorneys and
the DOLWD to pursue small wage claims ...." Yet the bill only
refers to the department, he said; it doesn't refer to an attorney
or anyone else for that matter to bring action. He asked whether
it is believed that only the DOLWD should have that prerogative or
whether he is misreading the sponsor statement.
Number 1554
MR. CARR replied that the intent of the DOLWD, in working with
Senator Pearce on the bill, was only to increase the statutory
jurisdiction for the department to pursue cases, not for private
counsel. As he indicated earlier, private counsel can very rarely
be obtained to pursue a case on behalf of a wage claimant if the
value is less than $20,000. The private bar, he said, really
doesn't seem to be interested in pursuing cases for less than
$20,000, whether an action is brought to small claims court or
district court. In relation to an individual taking a case on his
or her own motion without counsel, the department's experience has
been that the average wage claimant is not really equipped, even at
the $7,500 limit, to represent himself or herself against an
employer. The department doesn't think that would change if the
small claims jurisdiction were opened to allow a private party to
pursue a case of up to $20,000. It would provide a venue, but it
would not be effectively utilized because of a lack of expertise in
the system. The department, he said, feels that they are equipped
to represent cases in relation to an increase in the small claims
limit.
Number 1645
REPRESENTATIVE GREEN wondered about the logic behind what Mr. Carr
is saying. In other words, a person would have to go through the
Department of Law for a claim of $19,500, which is still 1.5 times
what one is able to do under the existing value of $7,500. It
seems that if a person doesn't want to do it, that's one thing, but
Mr. Carr is saying that a person can't do it, which is
significantly different.
MR. CARR replied that the department's motivation in working with
the sponsor was to only expand the abilities of the department.
The department was not looking at expanding all sorts of venues for
other parties to use small claims court to pursue wage claims. In
that regard, the department would not be able to project the impact
on the court system. The department, however, knows what the
impact would be and could project the impact on the court system on
the cases that they turn away, but they could not project the
impacts in relation to private parties or counsel.
Number 1721
REPRESENTATIVE GREEN commented that it seems ridiculous that a
skilled attorney working for someone else would be barred from
small claims court.
Number 1735
REPRESENTATIVE KERTTULA said she understands that the DOLWD is
trying to carve out an exemption for small claims, and that they
don't want to affect all kinds of small claims actions. She said:
You could change this so that you would say any small
claim dealing with wages under the statute, couldn't you?
... I'm with you. I think that people don't go to court,
period, without an attorney anymore, and that they just
are intimidated, even if it is small claims [court]. But
say you've got someone who really is willing to do it
rather than have to go through the department; if they
really wanted to do it, maybe we would increase it just
for that. But I'm not sure about the statutory cites.
I mean, if that's just Department of Labor [& Workforce
Development] going -- but, anyway, does that make any
sense?
MR. CARR replied that conceptually it makes sense, but the
department is seeing a trend in employers hiring an attorney and
bumping a case out of small claims court and into district court in
the hope that the department will drop the case. And by letting
anyone get involved for cases involving up to $20,000, he expects
that to be the rule rather than the exception. As a result, an
individual who is filing his or her own motion would have to obtain
counsel or drop the case. And attorneys representing someone "on
the cheap" in small claims court would end up investing time and
effort in district court, which they were trying to avoid in the
first place.
REPRESENTATIVE KERTTULA said that is a good explanation.
Number 1846
REPRESENTATIVE ROKEBERG said the bill is intended to give the
department the authority to use the court and help them to resolve
a claim prior to going to court. He asked Mr. Carr whether most
claims are resolved prior to going to court.
MR. CARR affirmed that. Perhaps 85 to 90 percent of cases are
resolved administratively. The remainder are either determined to
be invalid after an investigation or are filed in court. Of the
cases filed in court, only about one-half actually go to trial.
The increase in allowing the department to initially accept a wage
claim for up to $20,000 would give them the ability to make contact
with an employer and attempt to resolve matters administratively.
The department believes that they would still resolve the "lion's
share" of these cases short of having to file a court action.
Number 1914
REPRESENTATIVE ROKEBERG said the bill keeps people out of the
district court and keeps them in a simpler venue for proceedings;
in that regard, he thinks that it would save the court system
money. He suggested that unless the legislature is willing to
revisit the issue of raising the cap on the small claims court,
that may create a large fiscal note to the court system; he
mentioned getting testimony from the Alaska Court System about
that. He further suggested that it is a Pandora's box. He added:
I'd be very concerned about doing that because that would
give anybody that right to walk in there without counsel
to try to take some of these cases on, and we've heard
testimony that ... they can be moved into district court
by the lawyer's counsel, ... if that's the case. ...
That's the kind of issue we're getting into on balance.
Number 1983
REPRESENTATIVE GREEN asked Mr. Carr what the department would do
with a $25,000 claim. Would the department attempt to settle out
of court as well?
MR. CARR replied that if it is a straight wage claim under AS
23.05, then the department would not be able to take the wage claim
or contact the employer or make any attempts to resolve it.
However, the department may be able to take a case that involves a
mix of minimum wage or overtime and wages - so that both AS 23.05
and AS 23.10 are in effect - because there is no cap on the amount
of money that the department can pursue in relation to minimum wage
claims and overtime. There are practical limitations in relation
to filing a matter in small claims court, however, and whether or
not the department has the wherewithal to take the case through the
Office of the Attorney General in district or superior court.
Number 2026
REPRESENTATIVE GREEN said:
Well, my concern ... is that you [Mr. Carr] testified
that the majority of these are settled out of court and
then those do half of those are dropped later, so we're
talking about a relatively small number that only ...
this department has the right to go up. It seems to me
you're crafting a speciality bill, because now you can
actually see some merit to it, because it's high enough
to excite you but you don't want anybody else in there.
And if you leave it the way it is, you may still be
trying to defend somebody, that small number that aren't
settled out of court, and allow you to get some higher
recompense. And I still am having difficulty why that's
necessarily a good idea. I don't know that it would act
as a deterrent, as Representative Rokeberg said, because
you settle out of court now in most of them anyway.
Number 2070
MR. CARR responded that the department does settle the majority of
their cases under the $7,500 cap, and raising that cap would give
them the ability to handle larger cases and represent those who
can't find representation now due to the size of their case. He
hopes that they would be able to continue their track record of
settling cases administratively. It would do the department little
good to simply be able to take those cases if they did not have the
ability to pursue them in court as the ultimate "hammer," if they
were unable to bring the employer to the table and settle the
matter administratively.
Number 2104
REPRESENTATIVE GREEN asked Mr. Carr whether the $20,000 figure was
arrived at arbitrarily or is a "break" between those cases that the
department would like to take and those that they figure need to
got to court.
MR. CARR replied no, it is not a break per se but a dollar value
that has been provided to the department by members of both the
defense and the plaintiffs' bar. Both agree that a case under
$20,000 cannot be taken for any profit. As a result, they turn
clients away routinely if a case is less than $20,000, and the
department turns clients away if a case is over $7,500. The result
is that individuals like Margaret Bauman can't get representation
and can't get their cases to court. In response to a question by
Representative Green regarding whether the $20,000 is an arbitrary
number, Mr. Carr said no, the figure of $20,000 was agreed upon and
suggested to the department by the plaintiffs' bar. The department
originally was looking at a figure of $15,000, and several members
of the plaintiffs' bar had said they wouldn't take a case for less
than $20,000. When the department had discussed the matter with
the sponsor of the bill, $20,000 was agreed upon.
Number 2160
REPRESENTATIVE CROFT referred to Section 6 of the bill, which read:
Sec. 6. AS 23.05.220(c) is amended to read:
(c) The department may not accept an assignment of a
claim in excess of the amount set out in AS 22.15.040 as
the maximum amount, exclusive of costs, interest, and
attorney fees, for the jurisdiction of the district court
to hear an action for the payment of wages as a small
claim.
He noted that the department is limited to the jurisdiction of
small claims court. In that regard, the department can't take an
assignment that would go to district court.
MR. CARR explained that the department can take an assignment that
goes to district or superior court, but for those cases the
department has to rely on resources of the Office of the Attorney
General to represent them. He pointed out that the bill deals with
two different sets of statutes. In AS 23.05, a straight wage claim
cap that does not include overtime or minimum wage is set
traditionally at a smaller level. It was originally set at $250,
then was raised to $1,000, $2,000, and $5,000, and now it is set at
$7,500 and tied to the small claims limitation because that is
where the effective leverage is, in being able to pursue these
matters at essentially no cost to the state. In that regard, the
department represents themselves, and they do not have to have the
Office of the Attorney General represent them. The department pays
for every minute of time that they get out of the Office of the
Attorney General. The department can take larger cases, he added,
but they have to pick and choose. The department cannot take every
case over the $7,500 level to court because they have a limited
budget for their attorneys.
Number 2227
REPRESENTATIVE CROFT conveyed his understanding that Section 6
limits the department to the jurisdiction of the small claims court
cases unrelated to overtime and the minimum wage. In that regard,
if a claim doesn't involve overtime or the minimum wage, the
department can't go past the jurisdiction of the small claims
court, which is $7,500.
MR. CARR affirmed that.
REPRESENTATIVE CROFT asked Mr. Carr whether the department's
jurisdiction is unlimited in the areas of overtime and the minimum
wage.
MR. CARR replied, "That's correct."
REPRESENTATIVE CROFT noted that he has been concerned about small
claims for a while now. He had introduced legislation last year or
the year before, together with Representative Fred Dyson, that
would have increased the jurisdiction of small claims court. He
noted that small claims court has relaxed rules of evidence, and,
in general, the judge is more free to help the parties through the
process. It is less confrontational and costs less, but it takes
more of the court system's time, which is what he suggested
Representative Rokeberg is worried about. Representative Croft
further stated that the court system worries every time that the
legislature extends the jurisdiction of the small claims court
because their judges have to spend more time helping the parties
along. He referred to an e-mail dated February 5, 2000, from Will
Schendel, and read the following excerpt from it:
There are two solution to this problem: One solution is
to make a statutory change to award the winning employee
a full recovery of attorney fees, as is currently the
case for suits over unpaid minimum or overtime wages.
My first preference, then, is for the legislature to put
some real teeth into the unpaid wage assignment law in
Anchorage [Alaska] by encouraging the private bar to take
more of these cases (through an award of full attorney
fees); at the same time, the cap on wage and hour
assignments could be raised, so that wage and hour could,
if it had the resources and time, take more of the
claims, ...
REPRESENTATIVE CROFT said:
The difficulty we're in here is decisions about how and
if to pursue your claim are not made on the merits of the
claim; they're made on jurisdiction of the small claims
court and your ability to find an attorney that can
represent you at that. And for small amounts, you could
have the most ironclad - factually and legally - claim;
you were simply not paid what was due under the law ....
And if it's a sizeable enough issue, if it's ten thousand
dollars, you can't bring it yourself in small claims
court and get the full amount, and you can't really
afford to get an attorney, so you either go without
representation in court -- but you're worried here not
about the merits, which is what seems to me ... that
litigants should be worried about. Do I have a good
claim? Do I have one that is correct?
No matter how good your claim, you can't get it heard in
a cost-effective manner. And ... whoever Mr. Schendel is
was saying ... that you can fix this by doing what we do
in overtime minimum wage. If you win, then you will get
paid your attorney fees and costs. That means you can
now evaluate things not on necessarily the size of the
claim but its merits. And ... it seems to me we're
dancing around a problem, that there's ... no problem
with what the bill tries to do, except that it may not
try to do enough of the problem to really cure it.
Raising the jurisdiction will allow them, just them, to
take certain cases on their own to district court, but it
doesn't solve a lot of the problems Representative Green
was talking about, and it does seem to me that it's going
to take more of your time, [Mr. Carr]. I mean, it won't
be attorney general time; it won't be as costly, but
isn't this going to lead to you more often in district
court in those cases that go from seventy-five hundred to
twenty thousand? And why is there a zero fiscal note?
Number 2410
MR. CARR answered that Representative Croft is correct in that it
would take more of the department's time, but that is their job.
In regard to the zero fiscal note, the department would expect to
see a 10 percent increase in wage claim load, statewide, which
equates to about 100 to 120 new cases. As he had indicated
earlier, the department settles about 85 percent to 90 percent of
the cases; in that way, if that number holds true, the department
is only looking at about 10 to 12 cases that make it to a filing
level in small claims court. Mr. Carr said he is not going to be
that naive, however. He thinks that when talking about a larger
dollar value, the department is going to see a larger percentage of
cases that don't get resolved and have to go to small claims court
for action. The department is looking at approximately 50 cases
statewide that would have to be filed in small claims court.
Historically, he noted, only half of the cases filed end up in
trial, which equates to an amount that the department believes can
absorb with existing staff by making some internal adjustments.
Number 2473
REPRESENTATIVE CROFT said there seem to be two ways to go in the
event an employer does not pay what was due under the law. One is
to empower the government to represent a person in more claims,
which will cost more money and more government employees at some
point. He commented that it is generous of the DOLWD to think that
they can absorb the extra work now, but at some point they will ask
for more people to represent employees in court.
TAPE 00-48, SIDE B
Number 0001
REPRESENTATIVE CROFT suggested it won't be a zero fiscal note
forever. The other way is for the government to take a claim for
a person. He thinks that the legislature should directly confront
that difficulty by providing authorization for the department to
get the attorney fees and costs if they win in certain categories
of actions.
Number 0024
REPRESENTATIVE JAMES agreed with Representative Croft in that small
claims ought to be increased to a higher amount, but she believes
that there would be a huge fiscal note. Her rationale is that if
$20,000 is the bottom line for getting an attorney to represent a
claimant, those with valid claims ought to be able to go to small
claims court; otherwise, a person with a claim between $7,500 and
$20,000 is left "out in the cold." Noting that the DOLWD has
experts in this respect, she agreed with Mr. Carr that this is
their job, and that they should represent the workers in Alaska.
Representative James said she understands the $20,000. Although
she would like to have it a little higher on these cases, she would
go along with whatever people say they are willing to accept on
that.
Number 0142
REPRESENTATIVE GREEN remarked that he would certainly subscribe to
the concept expressed by Representative Croft in which the winning
side would get pay the attorney fees; in that way, it would act as
another deterrent from going to court. He asked Mr. Carr how much
of an attorney's time is charged against preparation, whether a
case goes to court or goes to negotiation. It seems that these
cases would require an attorney's time, he said, but maybe not a
court's time, which has got to affect the department.
REPRESENTATIVE CROFT commented that Mr. Carr is going to get
himself into trouble for indicating that the department can absorb
the extra cases.
Number 0180
MR. CARR explained that the department "cheats" in that they don't
have any attorneys on staff; they instead have trained wage and
hour investigators on staff that handle the cases, including doing
the footwork, investigating, auditing, negotiating and prosecuting
of a case in small claims court if a matter cannot be resolved. In
that regard, the department pays the investigators a salary and
does not have to pay attorney fees as part of a contractual line
item in their budget.
REPRESENTATIVE GREEN pointed out that it sounds as if there is
money involved nevertheless.
MR. CARR noted that the department has seven wage and hour
investigators statewide who are employed on a full-time basis.
Number 0214
REPRESENTATIVE CROFT indicated there would be weeding out and
settling for the cases handled by the department.
MR. CARR replied, "That's correct." The weeding out process, he
hopes, will involve for the most part a settlement and a collection
on behalf of the employee.
Number 0239
REPRESENTATIVE GREEN asked Mr. Carr whether it is correct that a
judge or magistrate could hear a claim with the increased cap.
MR. CARR affirmed that.
Number 0253
REPRESENTATIVE GREEN noted that the qualifications to be a
magistrate are that a person has to be 21 years of age and a
resident of the state for six months. He asked whether the sponsor
would be willing to go before an untrained magistrate for a $20,000
settlement.
MR. CARR replied that he can't speak for the sponsor, but in most
instances when the department ends up in small claims court, a
major part of their job is to educate the bench in relation to the
requirements of the statute, the applicability of state law, and
case precedent. The department has found that the parties sitting
on the bench are amenable to having that type of information
presented and that they are generally capable of absorbing the
information and rendering a proper decision.
REPRESENTATIVE GREEN commented, "At no extra cost."
CHAIRMAN KOTT responded, "And that's at no extra cost." It's
almost like going before the youth court.
Number 0304
REPRESENTATIVE MURKOWSKI noted that in her "former life" as an
acting magistrate, she had heard wage and hour claims. The
statutes are, as Mr. Carr has indicated, pretty cut-and-dried. It
isn't as if there would be a full court hearing where both sides
are going down all kinds of "rabbit trails." The claims and
defenses are pretty straightforward. If the dollar amount is
increased, she said, it wouldn't get that much more complex.
Number 0346
REPRESENTATIVE JAMES remarked that her experience with small claims
court is that the case has to be cut-and-dried; otherwise, it is
pushed to district court.
Number 0362
REPRESENTATIVE GREEN recalled that he had gone to small claims
court six times when the cap was at $2,000. Although he had won
all six cases, it did no good because he never got any money.
Number 0377
CHAIRMAN KOTT stated that he is glad to hear Mr. Carr finally say
that there would be an increase in the number of cases that the
department would not be able to remedy administratively based on a
higher threshold. Chairman Kott said he believes that if the
amount increased, the department would find themselves before a
magistrate or in court more often. He asked Mr. Carr whether there
is a difference in whether the department represents an individual
as an employee or as a contract laborer.
Number 0414
MR. CARR answered that the department is able to represent only an
employee. The term "contract labor" is a misnomer that is used
frequently by employers and employees, but as a term of art it
means very little. In that regard, there are problems in
determining whether someone is an employee or a legitimate
independent contractor, and much of the investigation may involve
determining that status. If someone is found to be an independent
contractor in accordance with the criteria established by the state
supreme court, the department will not pursue the case.
Number 0442
CHAIRMAN KOTT asked Mr. Carr whether the criteria the department
uses have already been determined by the state supreme court.
MR. CARR said yes, they were determined in 1981 with a case
involving Jacko (ph) v. State.
Number 0460
CHAIRMAN KOTT asked Mr. Carr what the available remedy is for a
contractor.
MR. CARR replied that any independent contractor in a business
relationship has full use of the court system to resolve any civil
complaint, but one would have to pursue a claim on one's own and
through the private sector.
CHAIRMAN KOTT commented that he hopes it is above $20,000.
Number 0486
AL DWYER, Director, Central Office, Division of Labor Standards &
Safety, Department of Labor & Workforce Development, came before
the committee to testify. He told members that when the department
was first presented with the bill, they really didn't have any idea
the number of cases that they would be facing. Based on Mr. Carr's
experience and some of the investigator's experience, they assumed
that there would probably be 100 additional cases in which 90 would
be handled administratively. It seems that has changed. He asked
Mr. Carr to indicate what had changed his mind.
MR. CARR said his faith in human nature.
Number 0541
REPRESENTATIVE CROFT referred to AS 23.10.110(c), which reads as
follows:
(c) The court in an action brought under this section
shall, in addition to a judgment awarded to the
plaintiff, allow costs of the action and, except as
provided in (e) - (h) of this section, reasonable
attorney fees to be paid by the defendant. The attorney
fees in the case of actions brought under this section by
the commissioner shall be remitted by the commissioner to
the Department of Revenue. The commissioner may not be
required to pay the filing fee or other costs. The
commissioner in case of suit has power to join various
claimants against the same employer in one cause of
action.
REPRESENTATIVE CROFT said the subsection specifically references
the minimum wage and overtime. He asked Mr. Carr what sections
could be added to include other wage-type claims.
MR. CARR replied that Representative Croft is referencing the
Alaska Wage and Hour Act, which mandates the payment of minimum
wage and overtime. The area of issue today is found under Chapter
5 of Title 23, which gives the department authority to pursue
claims for wages and contract amounts such as unpaid benefits.
Chapter 5 of Title 23 does not address any statutory obligation to
pay minimum wage or overtime; it is primarily contractual in
nature. The two statutes function in a "parallel universe," he
said, but the enforcement is separate. The enforcement for minimum
wage and overtime is found under AS 23.10.110, and the enforcement
for anything else not related to minimum wage or overtime is found
under AS 23.05. In effect, they are two different programs. He
noted that the minimum wage and overtime statute does not have a
cap, while all other wages and debts due to an employee are subject
to a cap in regard to the amount that the department can pursue.
Number 0650
REPRESENTATIVE CROFT asked Mr. Carr whether AS 23.05.180, "Wages in
dispute," is the central section, while the others talk about who
can hear a claim and when.
MR. CARR replied, "No." He explained that AS 23.05.180, "Wages in
dispute," deals with the waiting time for penalties found in AS
23.05.140. The actual authority to pursue a claim is found in AS
23.05.220, "Assignment of liens and claims to department." Up
until 1998, the actual dollar cap was listed in that section. In
1998, the statute was amended to tie the dollar value of a wage
claim to the small claims jurisdiction, which increased to $7,500
in 1997.
Number 0739
MARGARET BAUMAN testified via teleconference from Anchorage in
support of SB 193. At present, the DOLWD can only pursue amounts
up to $7,500, but her former employer, Business News Alaska, owes
her in excess of $10,000 and has refused to pay. They have
acknowledged that they owe her money; they are essentially arguing
that she was a contract laborer and have brought the case to the
state DOLWD, who have found in the initial process and in the
appeals process that she was an employee - as did the Internal
Revenue Service. She said they have appealed the case to the
commissioner level, and she is sure they will appeal it to the
state superior court. It is a good thing that the department is on
her side, she said, because she cannot afford an attorney.
MS. BAUMAN noted that at the time she was working for Business News
Alaska, she was taking care of an elderly parent who required 24-
hour care, so she needed a job that would allow her to take care of
her mother; that was the reason she stayed with the job. She
commented that she would fax information to the committee which
indicates the amount owed, as well as the results of a database
search in relation to the individual who hired her, Kay Cashman.
The information indicates that Ms. Cashman has a track record of
debts all over the state. It seems that when an employer is
allowed to operate outside of the law, it creates a severe
disadvantage for those employers who are willing to abide by state
law, Ms. Bauman concluded.
Number 0970
CHAIRMAN KOTT indicated to Ms. Bauman that the committee had a copy
of her testimony.
Number 0896
CHAIRMAN KOTT asked whether there were further testifiers on
teleconference, then closed the meeting to public testimony.
Number 0910
REPRESENTATIVE CROFT noted that the overtime and minimum wage
sections in statute that allow for awards of attorney fees and
costs for prevailing parties seem to be pretty comprehensive. In
that regard, they allow an award to the plaintiff unless the
defendant shows, by clear and convincing evidence, that the act or
omission giving rise to the action was made in good faith, and the
defendant had reasonable grounds for believing it. It seems to be
balanced in that there is a way out for the defendant-employer.
That type of arrangement, he said, would allow for individuals like
Ms. Bauman to prosecute a claim on their own and to have a claim
judged on its merits instead of on a dollar amount. He said he has
been trying to formulate a conceptual amendment in relation to the
above, but isn't sure where to place it.
Number 0986
REPRESENTATIVE CROFT made a motion to adopt a conceptual amendment
[Amendment 1] to add provisions similar to those that apply to
overtime and minimum wage claims, specifically AS 23.10.110, that
describe the ability to get attorney fees in a prevailing situation
relating to "Article 2."
Number 1018
REPRESENTATIVE JAMES objected. She explained that she appreciates
the efforts of Representative Croft, but this is a much larger
issue than simply including a conceptual amendment in that
particular section in statute. She is not familiar with Ms.
Bauman's case, but individuals really need to go to the DOLWD to
resolve issues of contract laborers versus employees.
Representative Croft's conceptual amendment reduces the need for
the cap to be changed from $7,500 to $20,000, which is an important
opportunity for the department to go to small claims court, because
it is the most expeditious and quick way in light of the fact that
individuals need their money. She acknowledged that one does not
always obtain the money owed because the judgment has to be taken
and a method of collection has to be attached. From her
experience, however, people who do not receive their paychecks are
hurting. Therefore, the faster those folks can receive relief, the
better. She feels that this can be achieved the fastest through
small claims court, if the situation fits.
REPRESENTATIVE JAMES remarked that she wouldn't want to do
something that would eliminate the bill's purpose; she said the
department is very, very good at these issues. She suggested this
could be in a separate bill, but emphasized the need to hear from
the public in regard to how it would affect both employers and
employees. She doesn't believe it is appropriate to include in the
present bill and would vote "no" on the amendment.
Number 1152
REPRESENTATIVE KERTTULA surmised that one problem is that the
DOLWD, in the other cases, cannot obtain the full attorney fees.
She indicated this [amendment] would also resolve that issue.
MR. CARR noted that he has been doing this for 25 years; in that
time, he can count on one hand the number of cases in which
attorney fees have been seen. He emphasized, "We're so glad if we
can effect collection on behalf of the wage claimant. Even though
we may have an award for attorney fees, we're willing to give that
up just to get the wages paid to the worker." Mr. Carr said
although he appreciates the intent, he doesn't believe the award of
attorney fees would really trickle down to the department's budget.
Number 1230
REPRESENTATIVE MURKOWSKI commented that she doesn't believe this
amendment gets them where they need to go on this. She recognized
that if an individual does not receive his/her paycheck, the last
thing that individual wants to do is go from attorney's office to
attorney's office in order to find someone who will take this case
on a contingency fee basis. She echoed earlier comments that just
because an individual can receive a judgment does not mean he/she
will be able to collect on it. Therefore, to find an attorney to
take on a $15,000 claim is not that realistic. She suggested that
the easiest thing for these employees would be to assign their wage
claims to the Division of Wage & Hour, which moves the individual
through the process quickly. Therefore, whatever can be done to
expedite the process for that division will benefit the employee
far more than allowing attorneys to recover 100 percent of their
fees.
REPRESENTATIVE ROKEBERG spoke in opposition to Representative
Croft's amendment because it opens a statutory chapter that
requires review in total. For example, the effects of the
liquidated damages and other statutory penalties that exist have
not even been discussed today. Representative Croft's amendment
adds legal fees on top of potential liquidated damages and
statutory penalties. Therefore, he doesn't think it is appropriate
to do this without taking the entire scope of enforcement
procedures into account. He said SB 193 is a relatively
straightforward bill that intends to make an immediate "fix" to an
expanding jurisdiction. Representative Rokeberg suggested that
perhaps this needs to be reviewed, but under separate legislation.
Number 1408
REPRESENTATIVE CROFT responded that he thinks it [Amendment 1] does
dovetail with this legislation. He said, "I think it would give
[Mr. Carr] the power to say, ... 'We'd like you to settle, we have
jurisdiction now for claims up to $20,000, and if you don't, you
take their claim to an attorney for full fees.'" Representative
Croft said he believes the two approaches allow him to settle more
claims quicker by having this, but he does not suggest that DOLWD
should have this power. In general, he doesn't believe the
government should have this power; only the person affected by not
having his/her wages paid [should have it].
REPRESENTATIVE CROFT told members, "I'm not doing any change to the
liquidated damages that exist or don't exist in the various
different wage and hour sections." He explained that he is worried
that without some amendment which either increases some of the
money to the department to pursue these or provides some other
option for private individuals to pursue these, the bill doesn't
cure the problem at which it was directed. He reviewed the two
approaches, which are to either give [the division] more money to
hire more staff for this or to allow the individual to be empowered
to do this. Of those two approaches, he had chosen the latter.
CHAIRMAN KOTT asked if there was further discussion on Amendment 1;
none was offered.
Upon a roll call vote, Representatives Green, Croft, Kerttula and
Kott voted in favor of the adoption of Amendment 1.
Representatives Rokeberg, James and Murkowski voted against it.
Therefore, conceptual Amendment 1 was adopted by a vote of 4-3.
REPRESENTATIVE ROKEBERG requested hearing from the bill sponsor's
representative before proceeding further.
Number 1637
MR. KNAUSS said he could not speak on behalf of the sponsor.
However, the department doesn't have a problem with the amendment
[Amendment 1] just adopted.
REPRESENTATIVE ROKEBERG remarked that he is not sure how this all
fits together.
Number 1721
REPRESENTATIVE MURKOWSKI returned to Representative Rokeberg's
question regarding how the attorney fees would fit with the penalty
provisions, the liquidated damages provisions, and the mandatory
and discretionary penalty provisions in Sections 4 and 5 of the
bill. She asked whether Amendment 1 would affect [those
provisions] in any way.
MR. CARR answered that in regard to the cases brought forth by the
department, the amendment would not affect them. He explained that
the first amendment in Section 1 establishes the dollar value of
$20,000 exclusive of costs, interest and attorney fees. Therefore,
any award would not impact the amount that the department would be
able to pursue. With regard to private sector cases, he was not
prepared to address that at this time.
Number 1789
REPRESENTATIVE CROFT pointed out that Amendment 1 was a conceptual
amendment. He noted that he did not have any interest in delaying
this bill because it is a good bill, with or without this
amendment, although he believes it better with it. However, even
if the legislature is on an accelerated schedule for sine die
adjournment, it would not hurt to see the conceptual amendment, in
its actual form, and to review it and pass it out at the next
meeting.
REPRESENTATIVE JAMES also expressed the desire to hear from the
bill sponsor because she is not sure how this all fits together
either. Therefore, she agreed with Representative Croft that the
draft, with the conceptual amendment, should be reviewed and
evaluated.
REPRESENTATIVE ROKEBERG concurred. He said he would also like to
see the legislative history in regard to why there was a
differential and why this was done. He agreed that the committee
would be remiss if it were to [pass this bill out] like this. He
remarked that he may even vote against reporting it from committee.
REPRESENTATIVE JAMES related her belief that if there is a minimum
wage case and an overtime case, there is neglect and even fraud on
the part of the employer. If it is a clear case of the [employer]
not paying the wages, it should be easier to resolve, which is what
is addressed in this bill. However, the example [that generated
the legislation] was not such a situation.
CHAIRMAN KOTT announced that SB 193 would be held over, and the
bill, with the conceptual amendment [Amendment 1] in writing, would
be back before the committee at the next meeting. He asked members
to pose any questions they had to the department before the next
meeting. [SB 193 was held.]
HB 182 - CHARITABLE GAMING & GAMING ON FERRIES
Number 2080
CHAIRMAN KOTT announced the formation of a subcommittee to address
HOUSE BILL NO. 182, "An Act relating to charitable gaming and to
gaming on state ferries; and providing for an effective date." He
appointed Representatives Croft, Murkowski, Green, James, Kerttula,
Rokeberg and himself to serve as subcommittee members. Noting that
the subcommittee could not take action on the bill, he informed
members of a meeting on Friday, April 7. He indicated HB 182 had
been omitted inadvertently from the schedule, and a number of
people were in town to testify. [End of discussion of HB 182.]
SB 123 - ATTY FEES:APPORTIONMT/PUBLIC INT.LITIGANT
Number 2146
CHAIRMAN KOTT announced that the final item of business would be CS
FOR SENATE BILL NO. 123(FIN), "An Act relating to public interest
litigants and to attorney fees; and amending Rule 82, Alaska Rules
of Civil Procedure." He informed listeners that it was not his
intent to move the bill that day, but several testifiers had been
waiting on teleconference to testify. [Before the committee was
CSSB 123(FIN).]
Number 2166
DARWIN PETERSON, Staff to Senator Torgerson and the Senate Finance
Committee, Alaska State Legislature, offered an abbreviated
overview of the bill on behalf of the Senate Finance Committee,
sponsor of the bill. He informed members that SB 123 would
recognized public interest litigants by codifying them in Rule 82
[of the Alaska Rules of Civil Procedure]. It also would require
the court to "apportion enhanced attorney's fees by prevailing
issue."
CHAIRMAN KOTT asked whether there were questions, then opened
public testimony.
Number 2275
JOSEPH CIZEK testified via teleconference from Anchorage. He
informed members that he and his wife are being sued by two
individuals, a husband and wife, who claim to be public interest
litigants, having formed a nonprofit organization in which the
husband is president and the wife is vice president. The Cizeks
were threatened with this suit a year and a half ago, for more than
$500,000 in damages plus attorney fees. The case now is being
appealed. However, the attorney fees alone have bankrupted his
small business as a general contractor. He and his wife are out at
least $100,000 in attorney fees, and the plaintiffs are seeking
approximately $150,000 in attorney fees.
MR. CIZEK said he and his wife are forced to defend their position,
based upon what the city has said on a grandfather rights issue
relating to [a nonconforming] airstrip at the end of the Eagle
River Valley. During this legal battle, they were informed from
the start that there would be no hope of getting any attorney fees
back, even if they prevailed, because of the [plaintiffs'] claim to
be a public interest litigant group. "Something is not right
here," he emphasized, noting that the college fund for his daughter
is gone.
TAPE 00-49, SIDE A
REPRESENTATIVE MURKOWSKI asked whether the court has determined
that the plaintiffs in that case are, in fact, public interest
litigants.
MR. CIZEK said no, that it is before the superior court at this
time, and Judge Shortell has yet to make that ruling.
REPRESENTATIVE MURKOWSKI noted that there are some pretty specific
standards that must be met in order to be declared a public
interest litigant, and, from Mr. Cizek's brief description, it
sounds as if the plaintiffs aren't true public interest litigants,
although she doesn't have the facts.
MR. CIZEK said it appears that they will be granted that status.
CHAIRMAN KOTT noted that Mr. Cizek is a constituent of his, and he
has been directly involved in trying to settle that issue.
Number 0226
WEV SHEA, Attorney at Law, testified via teleconference from
Anchorage. He offered some personal background, noting that he has
been involved in the legal profession since 1966 and has practiced
law in Alaska since 1977, doing civil litigation almost solely. He
also noted that he has done criminal prosecution in both Hawaii and
Alaska, and was U.S. Attorney for the District of Alaska. He
cautioned about not getting too tied up in emotion on this. There
are very strict criteria for public interest litigant status, he
told members, citing as an example an Alaska Supreme Court case
involving Tim Cook (ph) that he himself had handled; in that case,
Mr. Cook (ph) had been fired as a commissioner on the Alaska Public
Utilities Commission (APUC) but eventually got his job back.
Public interest litigant status was not granted.
MR. SHEA noted that his position in that case was that because Mr.
Cook (ph) was a public servant, he shouldn't have to pay all of his
attorney fees, and should have been granted 100 percent of his
attorney fees. That issue was ruled upon, on remand, by Judge
Michalski, who accurately found, under the law - although Mr. Shea
disagrees with it - that Tim Cook (ph) had a monetary interest in
being on the commission because he was paid and therefore wasn't
entitled to public interest litigant status.
MR. SHEA said he is sure there is good reason to bring this
legislation. However, he would address the problem with not having
public interest litigation in voting contests and the right to
vote; that was primarily what he himself was concerned with when he
brought the first Dansereau case, which got an [Alaska] Supreme
Court decision in 1995, and then the second Dansereau case, for
attorney fees, on which he got an [Alaska] Supreme Court decision
in 1998. Mr. Shea pointed out that in election contest cases, the
litigants not only have to show that there is a violation of the
law with regard to the election itself but also must show that
there was a violation of the law which could have changed the
results of the election. Suggesting Representative Green had
spoken out on this, Mr. Shea mentioned breaking this out on various
causes of action, then said he would point out the fallacy of that
argument.
MR. SHEA reported that in the 1994 election, Governor Knowles won
by 536 votes; if 278 votes had gone the other way, or if it could
have been shown that those voters could have been influenced to
vote the other day, the election would have been a tie. With more
votes than that, Jim Campbell would have won. Ten gallons of
gasoline were given to everyone in the North Slope Borough who
voted in that district, about 1,500 people. However, the farthest
anybody went to vote in that borough was 12 miles, which he said
was ridiculous, being paid to vote. However, the Alaska Supreme
Court had ruled that there was not a valid state cause of action.
Mr. Shea noted that he had alleged that [cause of action] because
of having to choose between bringing the case in federal or state
court, and he had believed it was a federal violation because
[Congressman] Don Young was in the election. Mr. Shea said it is
in the statute that if there is a state senator or representative
running, then it is a federal election. However, the supreme court
didn't look to that. So that is one cause of action that is "out"
but which affected at least 1,500 votes.
Number 0643
MR. SHEA continued. He noted that the supreme court did say that
it was a violation of state law to mail a postcard to 7,000 to
8,000 voters that said "Vote for Tony Knowles - you have a chance
to win $1,000"; that was done by Doyon Drilling (ph), Tanana Chiefs
Conference and Fairbanks Native Association, and Mr. Shea said he
had prevailed on that case. He indicated there was a third case,
for irregularities in the North Slope voting process and not
keeping the voting polls open.
MR. SHEA expressed concern about the way this bill is written, and
the way it affects voters' rights. He stated:
I'll tell you, if I didn't bring that litigation,
[Representative] Con Bunde never would have brought his
bill, and you never would have passed the bill ... that
Tony Knowles signed on June 22, 1996, changing the law.
And the problem that I had was that Jim Campbell was
scared to death to bring a litigation. He was really
scared when I told him I'd already written a three-page
letter to the FBI [Federal Bureau of Investigation] with
regard to the federal violation.
Well, the U.S. Attorney wouldn't touch it because he's
[President] Bill Clinton's appointee. And in civil
rights and voting rights violations, the FBI will not
investigate the violations and pursue it unless the U.S.
Attorney, prior to the investigation, said that he will
prosecute the litigation. [Representative] Bunde refused
to do that. Your attorney general, Bruce Botelho, wasn't
going to take any action, and he didn't take any action;
he fought all the way on two cases that I took to the
supreme court.
And what is the problem with the way the bill is written,
as it affects voting rights, is that because Jim Campbell
was scared to take the case because it ... was so
controversial and somewhat confrontational, and the
legislature sure wasn't jumping in and taking a stand at
that time - none of you were, those of you that were
there - was that I had to get ten citizens to step
forward to be the plaintiffs. ...
Under the statute, if the candidate won't do it - which
Campbell wouldn't, naturally, because the wrongdoers had
to do with the North Slope Borough, Tanana Chiefs,
Fairbanks Native Association and Doyon, all of which he's
done business or was continuing to do business with, in
various corporations and other businesses he had - could
I ever have asked, or would ten people ever have agreed,
to take on litigation of that magnitude, if they knew
they had a chance of being faced with attorney fees and
costs against them? This was not some fly-by-night
lawsuit that went up to the supreme court twice. This
was a lawsuit that went up twice and we prevailed both
times, and the public acted as the attorney general for
the State of Alaska because the attorney general for the
State of Alaska refused to act for the people. ...
Everybody seems to jump on the fact that the second
Dansereau case delineates the attorney fees and somehow
indicates - and the Daily News indicated - that Wev Shea
received $250,000, approximately, in attorney's fee. Let
me break that down for you. ... I advanced out-of-pocket
costs of approximately $25,000. I advanced fees in that
case of approximately $225,000, which was 1,500 hours,
approximately, at $150 an hour. The amount of time, that
was me and one attorney that assisted me for about a
hundred hours.
The amount of time expended by the attorney general to
fight that case: he had 14 attorneys that billed on the
case, 4 or 5 paralegals, and they billed well in excess
of what I bill, ... the number of hours. I find that
very peculiar since in both cases I had the burden [and]
... had to carry both cases, since we lost both cases at
the trial court level.
I can't really tell you how to approach this, other than
I think you're doing the state a real disservice if you
change this law with regard to voting and public interest
litigation, from that standpoint, when it comes to
election contests. I really don't know who you're going
to get to bring litigation that is this controversial,
like these two Dansereau cases or the Tim Cook (ph) case,
because I know when I called down, ... when Tim Cook (ph)
was terminated, and talked and approached a number of
legislators and a number of people in the leadership,
they themselves were not going to challenge Governor
Knowles' position. And that's why I did it.
And if any of you think that Wev Shea took these cases to
make money, I think you're sadly mistaken. I received,
from the State of Alaska, after those two appeals, ...
about $101,000, and I received it four years after I took
the case. And I took the case, ladies and gentlemen,
solely because I felt that the rights of the citizens of
the State of Alaska were grossly being abuse. And I'll
tell you, if I didn't do it, nobody was going to do it.
...
I guess you can ... do what you want with the public
interest litigation, and there's no question that there's
problems. But I'd be very, very leery of it in the
voting rights area, because what you're doing is, in this
state, without an [elected] attorney general, you've got
a clone for Tony Knowles sitting in the AG's [attorney
general's] office.
Number 1117
REPRESENTATIVE ROKEBERG stated his understanding that Mr. Shea had
prevailed in one portion of the case.
MR. SHEA affirmed that.
REPRESENTATIVE ROKEBERG asked Mr. Shea what the end result of the
case was.
MR. SHEA responded that he had advanced so much money, and it was
a year and a half after they had prevailed. Although there should
have been a new election, he couldn't go in, right off the bat, and
get an injunction because it was cost-prohibitive. These election
contest suits take 100 percent of [an attorney's] time, all of the
time. Basically, before the statute was changed, the supreme court
came out with the first Dansereau decision, "and we prevailed."
However, this decision came out in September of 1996, so Governor
Knowles had been in office two years. Although the court basically
said that approximately 7,000 to 8,000 votes were affected, at that
stage Mr. Shea said he couldn't open it up and press forward for a
new election.
MR. SHEA commented, "Try advancing $225,000." Noting that new
associates at law firms may be expected to bill 1,600 hours a year,
he said he had essentially given away time for a year. He proposed
the need to be sensitive and for somebody to be able to step in, in
this state, the way the law is now, when the attorney general isn't
willing to do so, especially regarding voting rights or when an
issue is very controversial, because a whole section of legislators
will have various conflicts. Mr. Shea added that when he had taken
that litigation, he didn't know he would be awarded attorney fees
because he had thought it was under Civil Rule 82; he was just
thinking about the wrong that had been done, and he had seen clear
violations, because of his familiarity with it, of state and
federal election law. Because neither the federal nor state
government was acting on it, he had stepped in.
MR. SHEA said he wouldn't take a similar case now unless he knew he
would be paid 100 percent of the attorney fees. Furthermore, in
election contest litigation where somebody won't step forward, how
could anyone ask ten voters to step forward and do it, when those
people could be subject to actual costs and attorney fees? He said
he couldn't address the situation in Eagle River [testified about
earlier], but setting up a nonprofit organization has nothing to do
with being a public interest litigant.
Number 1393
ROBIN SMITH testified via teleconference from Anchorage as follows:
A fundamental tenet ... of the American democratic system
is that the executive and legislative branches of
government must act lawfully and constitutionally,
subject to review and restraint by an independent
judiciary. This bill, I believe, would support
government [tyranny] by stripping the common citizens'
right to challenge the state.
We need to be realists. It takes a lot of money to bring
a suit against the state. And this bill would limit all
but the rich ... in coming forward ... to sue the state.
A citizen would not only have to incur 80 percent of the
cost if he or she won but also the state cost if they
lost. ... It would be as if the legislators were asked to
defend bills that the citizenry challenged and said were
unconstitutional. And I have to ask how many of you
would be willing to put up your own money and say, "Yes,
... we have to countersue, we have to respond to this
suit that's brought by the citizens." I fear that few of
you would be willing to put your own money forward on
this.
So I ask you ... to please stop this bill now. It really
undermines the right of the individual citizen to
challenge the state, and I think that's one of the
beauties of ... our American system.
Number 1488
DALE BONDURANT testified via teleconference from Kenai in
opposition to SB 123, suggesting he has a well-known history as a
public interest litigant. He spoke in support of the public
interest litigant process, which has a commendable history of
promoting the ability of the smallest common public interest to be
heard as well as those special personal interests of the more rich
and powerful. This process has allowed the public to participate
and actually make a valuable difference in the protection of the
benefits of the law for the public, he told members. In a free
constitutional democracy, one may not agree with another's position
and yet agree with others' rights to hold and expound upon their
positions; the opportunity to be heard on the merit of that
position is what makes the freedom so valued.
MR. BONDURANT said that those who support SB 123 would handcuff the
operation of the public interest litigant process when more
powerful interests take advantage of and knowingly abuse the
process. However, the voices of the latter will not be muted
because of having the financial resources to continue their special
interests. Eliminated will be the small players who have a
legitimate, common public concern. Because there no longer will be
an organized, responsible and affordable avenue to pursue the
public interest in these cases, they will fail. As is popularly
stated, "Don't throw the baby out with the wash water."
MR. BONDURANT said some believe this bill will stop abuse of the
process. However, it will not. More powerful parties, even if
they lose in adjudication of their purpose, have a large cadre of
supporting advocates that can financially remit up to $100,000 in
tax-exempt contributions. But SB 123 will destroy the general
public's ability to participate in a process on the merits of the
public interest issue. Mr. Bondurant urged members to please
defend the right of the general public to be heard above the clamor
of the politically powerful. He concluded:
We have been very active in the public interest issues
such as access to Alaska's public waters, fish, wildlife
and equal public access to these common-property
resources. And we're now involved financially and
dedicated to try to win back the state's sovereignty over
these navigable waters and ... the public resources. So
... don't cut out "us." Our donations are $10 or less,
and we're fighting this battle for the entire public.
So, I think this bill is very bad, and I ask you to vote
"no" on it. Thank you very much.
Number 1656
REPRESENTATIVE CROFT asked Mr. Bondurant whether he was one of the
appellees on the McDowell lawsuit.
MR. BONDURANT specified that he is one of the named appellees on
that lawsuit.
REPRESENTATIVE CROFT said he understands that Sam McDowell got
about $100,000, perhaps a little more, to pay for his attorney fees
in that. Furthermore, he also understands that Mr. McDowell
doesn't think he could have done that suit without the public
interest litigant status. He asked whether that is Mr. Bondurant's
opinion too.
MR. BONDURANT replied:
Very much so. And we sure didn't get back all of our
fees, and, like the one gentleman said, we didn't get
ours back for quite a long time. But maybe a more
pertinent case right now is one that I was a named
plaintiff in that, and that was the Alaska Public
Easement Defense Fund, back in 1977, when we fought so
the public will have reasonable access to all public
waters in the state of Alaska. And we're very proud of
that thing, and it's, ... again, for the public's use.
REPRESENTATIVE CROFT asked Mr. Bondurant whether he was a public
interest litigant in that case.
MR. BONDURANT answered:
Yes, sir, there were three of us, and I was one of the
named litigants in that one. And that was in 1977. And
we also fought in the Gulkana (ph) case; we weren't a
named litigant, but me and Sam McDowell were the only
people there representing the state.
Number 1729
CHAIRMAN KOTT asked whether anyone else wished to testify, then
closed public testimony. He announced his intention of sending the
bill to a subcommittee consisting of Representatives Murkowski,
Croft and Kerttula, with Representative Murkowski chairing. [SB
123 was held over.]
Number 1778
CHAIRMAN KOTT called an at-ease from 3:23 p.m. to 3:24 p.m. He
called the meeting back to order and announced that the House
Judiciary Standing Committee was recessed to the call of the chair.
He told members that the meeting would reconvene at 2 p.m. the
following day in order to take up the subcommittee report on HB 211
and any other pending legislation.
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