Legislature(1997 - 1998)
02/26/1997 01:10 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
February 26, 1997
1:10 p.m.
MEMBERS PRESENT
Representative Joe Green, Chairman
Representative Con Bunde, Vice Chairman
Representative Brian Porter
Representative Norman Rokeberg
Representative Jeannette James
Representative Eric Croft
Representative Ethan Berkowitz
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
*HOUSE CONCURRENT RESOLUTION NO. 11
Urging the Attorney General of the State of Alaska to use every
appropriate resource and due diligence to defend the state's
interests in the civil action filed against the state challenging
the 1996 revisions of the Northstar unit leases, and respectfully
requesting the Superior Court of the State of Alaska to give
expeditious consideration to the matter.
- MOVED CSHCR 11(JUD) OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 58
"An Act relating to civil actions; relating to independent counsel
provided under an insurance policy; relating to attorney fees;
amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules
of Civil Procedure; amending Rule 702, Alaska Rules of Evidence;
amending Rule 511, Alaska Rules of Appellate Procedure; and
providing for an effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HCR 11
SHORT TITLE: NORTHSTAR AGREEMENT LITIGATION
SPONSOR(S): REPRESENTATIVE(S) PHILLIPS
JRN-DATE JRN-DATE ACTION
02/19/97 398 (H) READ THE FIRST TIME - REFERRAL(S)
02/19/97 398 (H) JUDICIARY
02/26/97 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 58
SHORT TITLE: CIVIL ACTIONS & ATTY PROVIDED BY INS CO.
JRN-DATE JRN-DATE ACTION
01/13/97 43 (H) READ THE FIRST TIME - REFERRAL(S)
01/13/97 43 (H) JUDICIARY, FINANCE
01/16/97 95 (H) COSPONSOR(S): COWDERY
02/17/97 373 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
02/17/97 374 (H) JUDICIARY, FINANCE
02/19/97 (H) JUD AT 1:00 PM CAPITOL 120
02/19/97 (H) MINUTE(JUD)
02/21/97 (H) JUD AT 1:00 PM CAPITOL 120
02/21/97 (H) MINUTE(JUD)
02/21/97 429 (H) COSPONSOR(S): BUNDE
02/24/97 (H) JUD AT 1:00 PM CAPITOL 120
02/24/97 (H) MINUTE(JUD)
02/26/97 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE GAIL PHILLIPS
Alaska State Legislature
Capitol Building, Room 208
Juneau, Alaska 99801
Telephone: (907) 465-3472
POSITION STATEMENT: Sponsor of HCR 11
DALE BONDURANT
P.O. Box 1197
Soldotna, Alaska 99669
Telephone: (907) 262-0818
POSITION STATEMENT: Testified against HCR 11
JERRY McCUTCHEON
No Address or Telephone Number Provided
ACTION NARRATIVE
TAPE 97-27, SIDE A
Number 0000
CHAIRMAN JOE GREEN called the House Judiciary Standing Committee
meeting to order at 1:10 p.m. Members present at the call to order
were Representatives Green, Porter and Rokeberg. Representative
Bunde arrived at 1:17 p.m., Representative James arrived at 1:18
p.m., Representative Berkowitz arrived at 1:19 p.m. and
Representative Croft arrived at 1:20 p.m. This meeting was
teleconferenced to Anchorage, Kenai and Cordova.
HCR 11 - NORTHSTAR AGREEMENT LITIGATION
Number 0010
CHAIRMAN GREEN announced the first item on the agenda was HCR 11,
Urging the Attorney General of the State of Alaska to use every
appropriate resource and due diligence to defend the state's
interests in the civil action filed against the state challenging
the 1996 revisions of the Northstar unit leases, and respectfully
requesting the Superior Court of the State of Alaska to give
expeditious consideration to the matter.
Number 0028
REPRESENTATIVE GAIL PHILLIPS, sponsor of HCR 11, said on February
13, 1997, British Petroleum announced they would immediately stop
production work on their Northstar oil field development project.
The company indicated the reason for the work stoppage was their
concern about a lawsuit challenging revisions to the Northstar
lease terms ratified by the Alaska legislature and signed into law
by the Governor last year. She said HCR 11 asks the attorney
general of the state of Alaska to use every appropriate resource
and due diligence to defend the state's interest in this case. It
also respectfully requests the superior court to expedite
consideration of appending legislation so that work on the project
can resume as quickly as possible.
REPRESENTATIVE PHILLIPS said, in 1996, the legislature authorized
the commissioner of natural resources to revise the Northstar unit
oil and gas leases. At the time there was a strong commitment to
Alaska hire, Alaska build and Alaska buy in the development of the
field. Following the revised lease agreement, construction of
modules for the Northstar project began in Anchorage. Several
Alaskan construction and oil service companies made preparations
for the increased work load. People were hired and plans were put
into place. The lawsuit has directly resulted in many Alaskans
losing their jobs. In the interest of all Alaskans, this case must
be resolved quickly. The resolution simply asks the court to act
as expeditiously as possible on the hearing, in order to put
Alaskan families back to work.
REPRESENTATIVE PHILLIPS said there is a work draft before the
committee. She said committee changes were incorporated in the
work draft, but she had one other suggestion. Referring to page 2,
line 16, of the work draft, she recommended that line 16 be amended
from "would ask" to "has asked" in light of the newspaper article
which said that the Governor had asked the judge to toss out the
lawsuit on Northstar. She said HCR 11 will go hand in glove with
the Governor's request. Both the legislature and the Governor
would ask the courts, while fully recognizing the separation of
powers, to act as expeditiously as possible in this matter.
Number 0267
DALE BONDURANT testified next via teleconference from Kenai. He
said that this state will non-competitively give away the Northstar
royalty provision is another bump in the present legislative
giveaway program of Alaska's own resources for the real purpose of
increasing industry profit at the expense of the public's long term
benefits. Even after industry enters into and are successful in
the open and competitive bidding process, they come back and demand
self-interest changes in their contractual commitments. He said
industry is saying they can't have any more restrictive
regulations, but are readily demanding lower than their contractual
commitments, including their refusal to voluntarily pay their
royalty debts.
MR. BONDURANT said this resolution and the voluntary changes of the
industry's bidding contract liability is just another example of
the numerous pending bills intended to lower responsibility of
environmental protection, resource conservation and the public
trust rights as owner of Alaska's common property resource. The
1997 legislature's attitude flies in the face of the first
statement on HCR 11, "Whereas a majority of Alaskans support safe
and responsible oil development in the state". He ended there and
challenge the sponsor to add the following statement, "as proof of
this responsibility we offer the examination of the intent of the
following pending regulations which include HB 28, HB 29, HB 4, HB
23, HB 57, HB 58, HB 31, HB 60, HB 68, HB 109, HB 128."
MR. BONDURANT said industry's continued demand for more favorable
financial climate shows their self-interest attitude by extending
its lobby of a reduction in state budget funding for education and
sports. This includes a reduction of commitment for
extracurricular activities such as sports, music, crafts and social
activities as well as cutting health care for the young and
elderly.
Number 0543
JERRY McCUTCHEON testified next via teleconference from Anchorage.
He asked why BP (Alaska) Inc. started the Northstar modules knowing
that they were going to be sued. He said Badami is going to go on-
line before Northstar, the crews from Badami will transfer to
Northstar. He questioned why Northstar modules were started before
work began on the Badami modules, especially when the modules are
the same. He asked why the Badami modules are going to be built in
Calgary and why BP was in such a hurry to get the Northstar modules
started. He further questioned why BP didn't bother to check with
the Department of Transportation and Public Facilities (DOT/PF) as
to the adequacy of the three bridges to get the modules across of
which there will be four by the end of summer. Given all those
questions, it is rather obvious that BP started the Northstar
modules for the simple purpose of cancelling them.
Number 0710
REPRESENTATIVE CON BUNDE made a motion that the committee adopt the
committee substitute O-LS0615\B, dated February 26, 1997, as the
committee's working document. Hearing no objections, CSHCR 11(JUD)
was before the committee.
Number 0756
REPRESENTATIVE BRIAN PORTER made a motion to adopt Amendment 1,
located on page 2, line 16, deleting the words "would ask" and
replacing them with "has asked" to CSHCR 11(JUD). Hearing no
objection Amendment 1 was adopted.
Number 0794
REPRESENTATIVE BUNDE made a motion to move CSHCR 11(JUD) from
committee with individual recommendations as amended. Hearing no
objection CSHCR 11(JUD) was moved from the House Judiciary Standing
Committee.
SSHB 58 - CIVIL ACTIONS & ATTY PROVIDED BY INS CO.
Number 0814
CHAIRMAN GREEN announced the next item on the agenda was SSHB 58,
"An Act relating to civil actions; relating to independent counsel
provided under an insurance policy; relating to attorney fees;
amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules
of Civil Procedure; amending Rule 702, Alaska Rules of Evidence;
amending Rule 511, Alaska Rules of Appellate Procedure; and
providing for an effective date." He called a brief at ease at
1:23 p.m. The committee meeting resumed at 1:50 p.m.
Number 0888
CHAIRMAN GREEN withdrew the amendment labeled H.8 by Green, having
to do with the statute of repose. He then referred to Amendment 1,
H.1 Green, having to do with the civil liability of electrical
utility companies and said he wished to amend Amendment 1. He
called a brief at ease at 1:53 p.m. The meeting resumed at 1:55
p.m.
CHAIRMAN GREEN referred to Amendment 1 and suggested a change
occurring on line 8, remove the "." after utility and add the
following words, "relating to the production and delivery of
electrical service." Amendment 1, located on page 16, following
line 5: insert a new bill section to read: "*Sec.35. AS 09.65 is
amended by adding a new section to read: Sec. 09.65.085. Civil
liability of electric utility. (a) A utility offering electrical
service to the public for compensation under a certificate of
public convenience and necessity issued by the Alaska Public
Utilities Commission under AS 42.05.221 may not be held strictly
liable for property damage, death, or personal injury resulting
from an act or omission of the utility relating to the production
and delivery of electrical service. (b) This section does not
preclude liability for civil damages that are the result of an
intentional, reckless, or negligent act or omission." and renumber
the following bill sections accordingly.
Number 1014
REPRESENTATIVE PORTER made a motion to revise Amendment 1. Hearing
no objection the revised Amendment 1 was before the committee.
Number 1030
REPRESENTATIVE PORTER spoke to Amendment 1 and said it was his
understanding that there has not been a case in this state which
has determined that an electrical utility is strictly liable for
any incidence resulting from their delivery and production of
electrical service. There have been some cases in the state where
the finding seems contrary to (Indisc.--paper shuffling) law and
there is a current case in existence in this state that has not yet
been decided. He said SSHB 58 would not affect that case, but it
was because of this case that the utilities thought it was
appropriate to think ahead instead of waiting for the ax to fall.
The additional language relating to the production and delivery of
electrical services, basically, is added so that we're sure that
we're not exempting utilities from some other strict liability that
they may have in relation to some other activity that their
utilities might find themselves involved in. He said he did not
know what other strict liability they might have, but obviously
this amendment only refers to the production and delivery of their
electrical service, not some leaky storage tank that for whatever
other federal consideration might provide some other standard.
Number 1122
CHAIRMAN GREEN said Amendment 1 is probably a little bit of "belt
and suspenders" as there is the (b) section which would probably
exclude any of those things, but it's innocuous and it makes sure
that we are only talking about those acts generating electricity.
Number 1137
REPRESENTATIVE ETHAN BERKOWITZ said it has been a long time since
he has played in the realm of strict liability, but he recalled
that if there was an inherently dangerous material that created a
problem, usually dynamite that explodes somewhere, then strict
liability is attached.
Number 1161
REPRESENTATIVE PORTER said in many cases this is the truth. Having
read the hornbook recitation in Prosser, the hornbook indicated
that in most instances they do not find strict liability when the
provision of a service is required and regulated as opposed to
handling something inherently dangerous because you choose to do
so. He clarified that utility services are regulated and it is a
requirement that they be provided.
CHAIRMAN GREEN said the subsections would fall under that same
category.
Number 1210
REPRESENTATIVE ERIC CROFT said his concern on strict liability was
that there are inherently dangerous activities. He said the intent
is understood to be that providing electricity is a service rather
than a product within the strict product liability rules. He said
he would be more comfortable with language that talked about strict
products liability, rather than all the other product liability and
subsection (b) comes closer towards that language. He said he
would not fight about this language as long as it is understood for
the record that we are really talking about products liability and
that we think of electricity as a service rather than a product.
Number 1273
REPRESENTATIVE BERKOWITZ referred to the language in Amendment 1
which talks about the production and delivery of electrical
services and said he was leery of the conjunctive "and" as opposed
to the disjunctive "or". He said he would much prefer the word,
"or", because when you use the word, "and", you impose two elements
of proof.
Number 1303
CHAIRMAN GREEN said he would accept that language change as a
friendly amendment to Amendment 1.
REPRESENTATIVE BERKOWITZ said he would propose "and" be changed to
"or" in Amendment 1. Hearing no objection, Amendment 1 was
modified.
Number 1324
REPRESENTATIVE BUNDE made a motion to adopt Amendment 1. Hearing
no objection Amendment 1 was adopted.
Number 1332
CHAIRMAN GREEN said Amendment 2 is titled, Rokeberg, located on
page 8, line 13, delete: "Anchorage, all items index" and
inserting: "U.S. City Average, all urban consumers, all items
indexes".
Number 1344
REPRESENTATIVE PORTER said he had discussions with Representative
Rokeberg about Amendment 2 and would move to adopt it to SSHB 58.
Number 1358
REPRESENTATIVE BERKOWITZ objected for the purposes of discussion.
He asked how the averages compare in terms of the results.
Number 1365
REPRESENTATIVE PORTER said Representative Rokeberg's research into
this area had been for a different bill, he found that the
Anchorage, all items index, as established by the Department of
Labor had shrunk to only being published once a year. The U.S.
City Average, all urban consumers, all items indexes, as
established by the U.S. Department of Labor is published every
month. Representative Rokeberg's said this index would be more
current and the applicability would better than the other index.
Representative Porter did not know what the differences would be in
terms of results.
Number 1419
CHAIRMAN GREEN commented that fiscal problems would be addressed in
the House Finance Standing Committee, if this is a major concern.
Number 1436
REPRESENTATIVE BERKOWITZ said he was interested in knowing how much
the Alaskan user is being helped or hurt by the tort system.
CHAIRMAN GREEN suspected the amount was not going to be as much of
a difference as had been addressed. He said the availability of it
and the fact that it is a broader index would be the difference.
Number 1449
REPRESENTATIVE JEANNETTE JAMES said she did not have faith in the
Consumer Price Index or any type of index upwards, she would like
the index to go down.
Number 1474
CHAIRMAN GREEN offered a friendly amendment to Amendment 2 to
change the word "indexes" to "indices".
Number 1488
REPRESENTATIVE BERKOWITZ made a motion to move the friendly
amendment. Hearing no objection "indices" was added to Amendment
2. He maintained his objection until clarification could be given
on what would result from the change in indexes.
Number 1498
A roll call vote was taken on Amendment 2. Representatives Bunde,
Porter, James and Green voted yea. Representatives Croft and
Berkowitz voted nay. Representative Rokeberg was absent for the
vote. Amendment 2 was adopted.
Number 1560
REPRESENTATIVE CROFT made a motion to move Amendment 3, located on
page 5, line 21, following "(1)": delete "is a hemiplegic,
paraplegic, or quadriplegic and has permanent functional loss of
one or more limbs resulting from injury to the spine or spinal
cord" and insert "suffers severe disfigurement or sever physical
impairment".
CHAIRMAN GREEN objected to the motion.
REPRESENTATIVE CROFT said Amendment 3 takes the current cap
structure for non-economic damages and without changing it, simply
broadens the category of persons who we would consider to be
severely injured. Right now the category is extremely limited and
only includes those people suffering from a spinal cord injury.
Amendment 3 replaces this list with, "suffers sever disfigurement
or severe physical impairment". He referred to the difficulties
the committee has had with making a list of who we consider to be
badly hurt.
REPRESENTATIVE CROFT referred to a case that he worked on where a
person who did asphalt paving lifted the lid and was covered in hot
asphalt. His spinal cord was not injured, but he was almost
killed. They never thought he would live, he is still in great
pain, he still has to wear soft, specially made suits under
anything he wears. It was one of the most horrible injuries he
could imagine where essentially this person was aflame for an
extended period of time. This person does not have a spinal injury
and he is not a paraplegic.
REPRESENTATIVE CROFT worried about the bill saying the only these
people so we consider to have $500,000 of non-economic damages,
those non-economic damages being pain and suffering. This person
is in what he would consider the worst pain and suffering he could
imagine, yet this statute would put him in the lower category of
$300,000. He said he did not want to get into the debate of whose
injury is greater but did not think it was true that the only
person, that we or a reasonable jury would consider to have
$500,000 in non-economic damages, would be somebody who has a
spinal cord injury.
REPRESENTATIVE CROFT said the person he referred to would not have
significant wage damages, his wage differential would be small.
The punitives were not really an issue in this case, but they would
be capped under SSHB 58. The money he received would essentially
be the money on which he would survive the rest of his life. He
said it constrains the jury's ability to estimate what the pain and
suffering of that injury and added that he disagrees with the whole
concept of capping. Amendment 3 simply says, if you are going to
cap it, recognize that there are other things which cause
tremendous pain and suffering which a reasonable jury could award
$500,000. This list should not just include spinal cord injuries
or in the interest of completeness the person who has permanently
impaired cognitive capacity and is incapable of making independent,
responsible decisions. He said he would understand this to mean
brain damage.
Number 1750
CHAIRMAN GREEN said he shared his concern and shared that when he
was in high school he had an impairment to one eye. He said
blindness is not covered in this list.
Number 1774
REPRESENTATIVE PORTER said everyone in the committee could come up
with an individual case that is very compelling personally. He
said if the injury happened on the job, it would be covered under
worker's compensation and SSHB 58 would not affect it because there
are no non-economic damages in worker's compensation cases. If
there happened to be some possibility of a third party defendant in
the worker's compensation case then that case could be heard in
superior court. The case that Representative Croft cited is
compelling, but Amendment 3 does not represent that case. It
represents virtually the wide-open, ill-defined, undefined version
that exists in current law with the exception of adding to the
term, "disfigurement", "severe disfigurement". He said there is no
definition for severe disfigurement, there is no definition for
severe physical impairment and that is the essence of the problem.
REPRESENTATIVE PORTER recognized that Amendment 3 is within the
restraints of the proposed bill. The problem is that these
exceptions, disfigurement or severe physical impairment, are the
exceptions to non-economic damages that without the caps provides
a totally open-ended possibility. He said that is the problem
which creates concern, on anyone who might find themselves as an
unintentional tort feasor, that potentially they might be wiped out
by an open ended, ill-defined potential claim. For that reason, he
spoke out against Amendment 3.
Number 1876
REPRESENTATIVE BERKOWITZ said we have a great system where lawyers
from two parties can get together in a court room and talk to a
jury of 12 people. One side can make a compelling case that severe
disfigurement has occurred and the other side can make a compelling
argument that severe disfigurement hasn't occurred. We have juries
solely to sort out questions like this. He expressed his trust in
an Alaskan jury to be able to make the determination of whether
someone who has been horribly burned would qualify for non-economic
damages as opposed to someone who has lost a limb or suffered some
form of paralysis. He said that when the rights of the jury are
circumscribed and we seek to impose our legislative view of the
world, we do a disservice to the jury system. He understood the
need to have certainty in the civil process and is supportive of
that, but he also believed that we have to trust people to make
decisions. Whether it is the person who winds up committing a tort
or suffering a tort or sitting on a jury, we have to give some
trust to the people. He spoke in favor of Amendment 3.
Number 1943
REPRESENTATIVE PORTER said if every case that was filed which had
this potential went to that jury, he would not be quite as
insistent as he is about not liking Amendment 3. He referred to
testimony, and testimony from previous hearings on this bill in
previous legislative years, and said 95 percent of the cases filed
don't go to trial, they are settled. They are settled by virtue of
exposure once a determination has been made that a defendant has
some responsibility, that there was some negligence involved. He
then asked how much the individual defendant could afford. There
was testimony regarding this issue and said he believed that many
settlements are higher than they should be. This has an impact all
over the state because of the open-ended nature and the ill-defined
nature of non-economic damages and punitive damages.
Number 2007
REPRESENTATIVE JAMES said she did not share the same confidence
that Representative Berkowitz has in the judicial system. She
separates the judicial from the legislative process and said her
obligation is to the legislative process as a separate part of
government. The legislature establishes the ground rules and then
the judicial system is supposed to follow them. She said she likes
to give the judicial system as little leeway and as much guidance
as possible because most of the time they don't find things like
she does. She questioned who is to say she is right or they're
right, but this is the way the system works. She would rather have
it specifically defined so as not to be defined by some other
method. She said $500,000 is a lot of money when they are going to
get other monies.
Number 2061
REPRESENTATIVE CROFT said Amendment 3 has no effect on the amount
of the caps, it really says that some categories of injury might be
worth $500,000 instead of $300,000 in non-economic damages. He
agreed that it uses a general standard because he is worried about
the legislature defining what severe disfigurement is. He is
worried that the legislature would say that the only thing that can
require an increased, but still capped, level of damages is spinal
cord or brain damage injuries which is the language as SSHB 58
currently stands. Amendment 3 does not allow the jury to break
somebody or the unlimited ability to access damages over $500,000.
It simply gives them the ability to say what is severe. Right now
we say, in our determination, severe is only spinal cord or brain
damage injuries.
REPRESENTATIVE CROFT referred to the chair's example and his
example and said these are two incidences which a reasonable jury
would consider severe enough injuries to increase the amount of
non-economic damages to $500,000. He did not feel a capped,
contained $500,000 for the non-economic loss, the pain and
suffering, the loss of enjoyment of life, loss of consortium
equaled blindness of a child. These are the areas that we are
compensating. Other than these non-economic damages in SSHB 58,
you get wages. We are defining the worth of a person,
encapsulating the enjoyment of their life into three piles, setting
aside punitive, non-economic and economic damages. Economic
damages for someone who does not earn that much is not highly
valued. This non-economic category allows us to value all of the
different aspects of life that they have lost from this injury.
Currently it is a list structure which simply says the only
serious, severe injuries are paralysis and brain damage.
REPRESENTATIVE CROFT said whatever list was made today would be
incomplete and we should allow, within a cap, a structure for a
general definition which would let the jury decide. He referred to
Representative Porter's comment on the worker's compensation aspect
and said this was quite right. Addressing the concerns that the
defendant could be wiped out and that Amendment 3 is the type of
unlimited category that we currently have, he said it is the
standard we had for unlimited assessment, but the cap remains. It
just allows a jury to determine for itself what is severe, rather
than just saying it is brain damage or paralysis.
Number 2224
A roll call vote was taken on Amendment 3. Representatives Croft
and Berkowitz voted yea. Representatives Porter, James, and Green
voted nay. Representatives Bunde and Rokeberg were absent for the
vote. Amendment 3 failed to be adopted.
Number 2278
CHAIRMAN GREEN raised the concern that when you have a list you
automatically exclude what isn't on it. He said a loss of hearing
or a loss of sight is a measurable quantity as compared to severe
disfigurement or severe physical impairment. He said the category
should include the loss of hearing and the loss of sight. He
offered an amendment that on page 5, line 21, the word "complete"
between functional and loss, and then after "loss" add "of hearing
or sight or loss". So that it would read, "functional complete
loss of hearing or sight or loss of one or more limbs". He said he
would put the word, "complete" in that to clarify how much loss is
a loss.
Number 2329
REPRESENTATIVE CROFT said functional would seem to encapsulate the
concern that if they have one eye they can see, but if their sight
is so impaired it is then a functional loss. He worried that
somebody could lose use of their arm, except for a twitch, perhaps
a pinky movement. He did not have an objection to simply adding
hearing or sight to the wording.
Number 2370
REPRESENTATIVE BERKOWITZ said the committee is bartering with
different types of human misery. He applauded the effort to expand
the universe of cases that would come within the reach of this
paragraph, but it demonstrates the problems the legislature faces
with trying to categorize all the possible afflictions that can
result in non-economic damages in excess of a cap or even within a
cap. He urged the committee to accept this amendment because it is
better than what we have, but it does not go far enough. It
wouldn't cover the burn victim and said there would be hundreds of
horrors that the committee is not even beginning to approach
listing in this part of the bill.
Number 2408
REPRESENTATIVE JAMES said this section puts a cap on non-economic
damages with the exception of a few cases which could have an
additional $200,000. She commented that who you are depends on how
extensively a particular loss would be. It is difficult to
compare, when you are looking at apples and oranges, what the
effect is going to be on that person.
TAPE 97-27, SIDE B
Number 0000
REPRESENTATIVE JAMES said a maximum level has been set at $300,000
unless you have the items listed which could result in another
$200,000. She said whether or not the person receives $300,000 or
$500,000 is a choice made by someone other than the legislature.
She said the more that this section is played with, without some
sort of scientific process, the more messed up the bill gets.
CHAIRMAN GREEN withdrew the amendment.
Number 0078
REPRESENTATIVE BERKOWITZ said the minority members were in an
awkward position because if they left, the proceedings would be
required to cease under Mason's. He did not want to be
unnecessarily rule bound, but felt awkward staying.
Number 0101
REPRESENTATIVE CROFT said SSHB 58 is one of the most important
things the legislature would consider this year or in the next two
years and said he wanted the opportunity to convince
Representatives Bunde and Rokeberg that the proposed amendments are
important qualifications to the changes being made to the tort
system. He said he is uncomfortable staying when he does not have
the opportunity to convince to those two members.
CHAIRMAN GREEN called a brief at ease at 2:32 p.m. The meeting
resumed at 2:45 p.m. He said the next item was Amendment 4, page
5, line 17: following "exceed", delete "$300,000", insert
"$500,000" and on page 5, line 19: following "section", delete "may
not exceed $500,000", insert "are not limited".
Number 0085
REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 4.
Number 0172
REPRESENTATIVE PORTER objected to the motion.
Number 0182
REPRESENTATIVE BERKOWITZ said no one has yet explained to him where
the $300,000 comes from, why that number was chosen and what it is
the product of. It seemed to him that it is not a lot of money
over the course of a lifetime, it is barely enough money to buy a
house and pay for its upkeep and doesn't seem fair compensation for
a serious injury.
Number 0206
REPRESENTATIVE BERKOWITZ said a lot of what goes on in a courtroom
or in the trial process is a search for finding equities, trying to
get to a fair solution to a conflict. Fairness depends on the
circumstance of each individual situation. For the committee to
circumscribe how much fairness someone is entitled to is very
problematic. Settlement negotiations do not happen in a vacuum,
there is not an arbitrary quality to legal proceedings that people
seem to think and referred to a book that was thick with legal
rules on how to proceed in a courtroom. There are damages
involved, a universe of knowledge to gather which can help you
determine the negotiation result. If someone has a car crash that
results in this type of injury or that type of damage to the
vehicle then there are other cases where you can look to see what
sort of damages have been awarded. The process is not entirely
arbitrary. Some of the results are due to the attorney's powers of
persuasion, but some of it is due to existing facts and what other
juries have recognized to be acceptable settlements.
REPRESENTATIVE BERKOWITZ said Amendment 4 says that we can't really
establish what is fair without looking at the circumstances of each
case. The legislature is sort of in an ivory tower above
everything, not down on the ground looking at the particulars of
each case, and we ought to let the folks who can make those
decisions make those decisions.
Number 0284
REPRESENTATIVE PORTER clarified that the committee was talking
about the subjective area of pain and suffering, not of the loss of
a house. He said Representative Berkowitz alluded to fairness and
said that is why he felt caps should be in place. Amendment 4
would eliminate the cap on the exceptional and have it open ended
again. He said a lot of the settlement has to do with the
attorney's power of persuasion. There is unfairness of this
situation, in his mind, if the plaintiff has an eloquent attorney.
He said it is fair if there are reasonable caps in these areas so
that there can be consistency and fairness.
Number 0354
CHAIRMAN GREEN said sales organizations rely on the mentality of a
persuasive barrister or a persuasive attorney. He referred to the
coffee cup case. A case could be brought before a jury, who might
be affected and award something they don't feel is the right award
following the case such as people regret buying items on impulse
the morning after the purchase. He said there are some land deals
that have a buyer's remorse provision included with some out that
allows the buyers to go back and change the agreement. You don't
have that when a jury awards a tremendously large sum, except
through the appeals process. He said if we remove the $500,000
cap, we might as well not have tort reform. We need to bring some
degree of assurance to the tort system and for that reason he
opposed Amendment 4.
Number 0419
REPRESENTATIVE JAMES raised the issue of why should we have a cap.
She used the analogy of her children telling her something isn't
fair and her reply that life isn't fair. She said a person might
feel that there is no amount of money that can give them back what
they lost. She questioned how you can put a value on something
like the death of a child. No amount of money is going to make it
better. She said where the money comes from is the issue. To
establish some kind of equilibrium in the system where people can
go on with their life. There is a proper role for putting caps on
these issues, what the cap is or should be she could not answer.
She referred to the work that people have put in with this issue
and said it should be based on what the awards have been, what
people have an availability to pay or how much insurance they can
afford to carry and still be able to do business.
REPRESENTATIVE JAMES said the bottom line of the whole issue is if
we don't have economic activity occurring, we don't have people who
are willing to put their investment into providing jobs and work
for people then these people are not going to have any support at
all. She supported having some caps and balance within the system.
There also needs to be some semblance of issues out there that will
let economic activity continue in this country.
Number 0578
REPRESENTATIVE CROFT clarified that death came under (b).
Number 0609
REPRESENTATIVE BERKOWITZ asked how the $300,000 figure was
determined.
Number 0612
REPRESENTATIVE PORTER said it started as $250,000 which was, at the
time, the tracked amount in federal legislation going through the
U.S. Congress. During the process which occurred in the previous
legislature, the bill did not start from ground zero, it started
(indisc.--coughing) two and then it moved up to $300,000.
Number 0639
REPRESENTATIVE BERKOWITZ referred to Representative James'
testimony that tort actions were somehow impeding economic activity
and asked her to explain what she meant.
Number 0650
REPRESENTATIVE JAMES said she would discuss this issue, but did not
see how it would be relevant to the discussion right now.
Number 0674
REPRESENTATIVE CROFT said Amendment 4 represents the only way for
us to estimate the entirety of a person's worth after we've given
them what the marketplace recognizes. That amount of worth
includes everything but how much you could have earned and the
medical expenses you have, to generalize, and added that there are
some other smaller categories. He said if we are going to value
people beyond what they make, this is the area of the bill in which
we do it. He expressed having problems with only valuing people by
how much they make and also of having problems with capping,
particularly at this low level, the entirety of a person's worth.
He listed some non-traditional employment such as a housewife and
a subsistence hunter.
REPRESENTATIVE CROFT said to estimate what a blind child could have
earned would be difficult. As a jury he could try to estimate what
the loss is. He said it would not make the child whole or sighted
and added that this would be the best solution. Money is always
going to be an insufficient remedy for the injuries we are talking
about here. There are some things that can be done with money that
allow them to live a better life. You can have enough money to
learn how to read again without sight, you have enough to try and
make up for what you have lost. For the legislature to say that
the death of a child is worth $300,000 plus what we can figure out
they might have earned in their life is simply insufficient to
estimate the entirety of a person's worth.
Number 0809
REPRESENTATIVE PORTER disagreed. He said it is much easier to
figure out future wages, even for an infant, than it would be to
say how much the loss of a child or the loss of this person's
ability to function is worth by an abstract manner. If it is that
this person lost their sight and has to then learn how to read by
Braille, it is an economic damage. He disagreed that economic
damages are wages only. Any legitimate cost that accrues from the
injury, which you can demonstrate you wouldn't have had, is an
economic damage that you can ask payment for. What you get, of
course, is going to be the result of your own persuasion. It is
certainly a legitimate request, a legitimate claim, in requesting
economic damages.
Number 0863
REPRESENTATIVE BERKOWITZ said if you look at some of the problems
with breast implants and people who have suffered poisoning as a
result of botulism, you can get the economic damages of how much
money they would have earned had they not been hurt. You can get
the numbers for how much it's going to cost them to go through
therapy, those are the economic damages. You can't get those
numbers when you are talking about someone who has been a housewife
or a househusband. You can't get those numbers for someone who has
been living a subsistence lifestyle. There has to be another
avenue to correct those harms. He said we are talking in the realm
of compensatory damages, not punitive damages. Compensatory
damages are divided into economic and non-economic categories. We
have limited the economic damages, essentially, to those who have
an economically measurable lifestyle. By capping non-economic
damages we are doing nothing to right an injustice that has been
done to someone who is living at home, working at home, living in
the bush, leading a subsistence lifestyle. There are whole
categories of people who will never have access to the complete and
total justice they deserve if we put caps on it.
Number 0942
REPRESENTATIVE BERKOWITZ said there has been talk that SSHB 58 is
good for business. He said he has learned that insurance rates
have fallen in seven of the last nine years. The argument that
tort reform is an essential predicate for the reduction of
insurance rates doesn't hold water. Businesses in Alaska are
flourishing in spite of the existing tort system. He cautioned
going through a wholesale revision of a system that most of us know
very little about without completely understanding the
consequences. There is the law of unintended consequences that
people talk about over and over regarding legislation. He can't
detail all the consequences that will arise from passage of a bill
like this, but the unintended will rear up and bite us as surely as
he was sitting here.
REPRESENTATIVE BERKOWITZ said one of the greatest guarantees we
have that people will behave appropriately with one another is a
result of the check and balance that comes in the courtroom. He
said if we do anything to erode that check, we are showing a lack
of confidence in our system. He said he believed, essentially,
that the system works. It needs some tinkering, but SSHB 58 is not
going to fix what's wrong.
Number 1022
REPRESENTATIVE PORTER said if someone on who was a subsistence
hunter or an unemployed person who was injured to the extent that
they could no longer provide their own subsistence style of living
or provide their own activities within the house, then they could
claim those things as economic damages and that someone will have
to do those activities for them. It is the concept of making the
person whole as a result of someone else's negligence. We are
talking about pain and suffering. A reasonable cap on an otherwise
open-ended area of compensation. Testimony was given that there
are a number of things that affect insurance rates and as we have
improved our safety, we have produced some benefits in rates.
Number 1077
REPRESENTATIVE CROFT said if a housewife is injured or killed you
can get the economic damage of having a maid come in, but you don't
get any value for her life other than what she would have earned.
The primary value for that person's life is on the economic side as
it is on the medical. The pain, suffering, inconvenience, loss of
enjoyment of life, loss of consortium are what the bill caps which
is the rest of the value of that life. He submitted that the
economic part would put a very low value on a housewife's life.
Here in this section is where you value them as a person and this
is where we are arbitrarily capping their value.
Number 1138
CHAIRMAN GREEN expressed concern that if we did not have a cap we
would be saying that whatever value the injured person and the
attorney who takes a case places upon their life or injury is what
should be received. An elevated compensation for non-economic
damages which then could affect the amount received for punitive
damages because there is a multiplier effect. You as an attorney,
pleading this case, convince the jury how critical it is that we
compensate this person and then take a third or more of that
compensation. He said this is the difficulty he has with this
issue.
Number 1233
REPRESENTATIVE BERKOWITZ said if you get compensation that is
hugely out of line, the defendant thinks it is hugely out line,
then the defendant will appeal. Exxon has not paid out its $5
billion, they are exhausting their appeals because they think that
it is too much money while people in Alaska think that amount is
fair. The courts are going to hear the evidence in a deliberate
fashion. He said courts are somewhat inoculated to the persuasive
abilities of lawyers and the courts will make a determination to
lower the judgement if that is in the interest of justice. There
are phrases that come across in a courtroom time and time again
such as "interest of justice" and "fairness". He said
Representative James indicated that she did not feel that there was
fairness in the world. He said there is no absolute fairness, but
he thought we are all compelled to pursue fairness and justice and
when we abdicate that responsibility, we're abdicated our
responsibilities as legislators or advocates of justice which he
personally felt was a step that should not be taken.
Number 1300
CHAIRMAN GREEN expressed concern that, in the cases discussed, the
attorney had persuaded the jury to award too much. The defendant
appeals and then the decision about award is left to the judge or
whatever the makeup of the appellate court is. He said that
judgment is really not in the interest of justice, even though the
judge or court is well trained. The whole concept of our form of
government is that elected people might have a better handle than
someone who is either appointed, or elected to the court in the
event that the case goes to the Supreme Court.
Number 1355
REPRESENTATIVE BERKOWITZ said the legislature is wed to process
because it provides order. There is order in the courts. He
referred to the McDonald's case and said the judgment might have
been very high, but it was reduced significantly as it went through
the court process. He said he was not prepared to discuss the
equities of that case, but the cases that people read about in the
newspaper are the extreme cases. You don't hear about the cases
that are regularly settled for $20,000 or $200,000 when it is a
fair judgement and within the realm of the norm. You only hear
about the unusual cases. It is not a good precedent for us to
legislate based on these unusual cases.
REPRESENTATIVE BERKOWITZ said one of his complaints during the
course of this debate is that the committee has not had access to
the facts. He question the numbers at which people were settling.
Most of the lawyers he knew are rational human beings and would not
try to get more than they were actually going to receive. It is a
risk calculus every time you get out there. You know what is in
your hand and pretty much what is in the other guy's hand, but
there are upper limits to the game. He said it is not this
production of damages that takes place within a vacuum.
Number 1513
REPRESENTATIVE CROFT said the contingent fee is the irritant to a
lot of people. He said he would hate to see the legislature
deprive injured people of their recovery because we're irritated
that attorneys keep a portion of it. The contingent fee is
necessary because it is very often injured poor people who cannot
afford to take on an attorney, like a defendant can, for three
years, paying the expenses and costs and then only at the end
getting their investment back. He said the question is do we want
to allow people to set up an alternative arrangement, or do we want
to require them to pay as they go. He said we would not want to
deprive people of that right to making an independent, contractual
right to make an alternative arrangement which would suit their
needs.
Number 1601
REPRESENTATIVE CROFT said, in the eloquence issue, there are good
defense attorneys as well as good attorneys for the plaintiff. He
did not feel the jury was being bamboozled by brilliance on one
side.
Number 1622
REPRESENTATIVE PORTER said he rejected the attitude and image that
plaintiffs are poor people who can't afford to retain a lawyer and
that the defendant is Ford Motor Company. The vast majority of
businesses in Alaska are small businesses, people with a lot of
guts that are taking a big risk which a lot of us aren't doing.
They can't afford attorneys anymore than poor plaintiffs can.
Number 1676
CHAIRMAN GREEN said there might be an initial reaction to a large
settlement which can be changed through appellate court proceedings
to fall below the caps being discussed in SSHB 58. He said it is
perhaps a disservice to say that without a cap you can shoot for
the moon, when perhaps it will be beaten down below the amount.
Number 1718
A roll call vote was taken on Amendment 4. Representatives Croft,
and Berkowitz voted yea. Representatives Porter, James and Green
voted nay. Representatives Bunde and Rokeberg were absent for the
vote. Amendment 4 failed to be adopted.
Number 1771
CHAIRMAN GREEN called a brief at ease at 3:16 p.m. The meeting
resumed at 3:37 p.m. He said the issue before the committee was
Amendment 5, located on page 9, line 15 through page 10, line 16:
delete all material and renumber the following sections
accordingly. Page 20, line 11 through line 20: delete all material
and renumber the following sections accordingly. Page 24, lines 13
through 17: delete all material and renumber the following sections
accordingly.
Number 1820
REPRESENTATIVE CROFT made a motion to adopt Amendment 5.
Number 1823
REPRESENTATIVE PORTER objected to the motion.
REPRESENTATIVE CROFT said this was out of the cap and monetary area
and into the apportionment of fault which requires a brief
description of how it works now and how it would have to work under
SSHB 58. Making clear at the outset that we have complete
apportionment of fault, the question is how will we do it and what
mechanisms will structure it. He said 20 to 30 years ago we had a
joint and several liability in sort of a mixed form. Now the
statute is completely clear that the parties are allocated at their
appropriate fault and that is all they have to pay. The question
is whether it is a party or a person who has to be sitting in the
chair at the trial. The way it works now, after the case Benner v.
Wickman, which required that the plaintiff sue who they thought did
it. The defense might say that they are the only one who could be
liable, or they might argue that they're not liable or there are
other people that are liable which would result in the defense
bringing those people into the case. That is, for a number of
reasons, the most logical way to approach this situation.
REPRESENTATIVE CROFT said the question is, phrased in the law,
whether you can point to an empty chair. Whether a defendant could
say, without having the guts to bring them in, it was so and so
that did it. That person is not there, they have no opportunity to
defend themselves and that anything that the plaintiff against them
is not binding according to the law, it essentially becomes a wash.
Civil rule 14, after Benner v. Wickman was enacted, says exactly
that. He said the defense could say it was a whole litany of
people who did it, then the plaintiff could say that those people
should be brought into the case. If the defense is right, then the
defense will get a portion of the attorney's fees and costs, have
the power to do offers of judgement and it all logically works.
The defense can bring whoever they want to blame the situation on
into the case, they have the liability for costs if they are wrong
and they get the benefit of costs and attorneys fees if they are
right. He said it is a complicated structure, but all the rules
work. The person that says the other person did it has to bring
them in to show that they did it.
REPRESENTATIVE CROFT said the bill allows a system where you can
blame everyone. He would argue that you would not be doing your
job as a defense attorney if you didn't blame the world. This
strategy can lessen the blame on the defense and confuse the issue
to the jury. He said this type of defense strategy creates
multiple suits when the plaintiff doesn't believe a specific person
has done it. He said design professionals complain that they often
get thrown into the suit when it is a maintenance issue. He said
once the maintenance issue is raised the plaintiff doesn't have a
choice but to include them in the suit, because if they allocate
any portion of damage to them it has no effect unless the plaintiff
brings them into the suit. He said the plaintiff runs the risk of
mutually contradictory, multiple suits unless they bring in people
who they don't believe did it. Those are the two options under
SSHB 58 as it is written.
REPRESENTATIVE CROFT said there are many aspects of the current
system of which there are legitimate concerns about whether it
works or doesn't work; on caps, on punitive damages and whatever.
He said the current system has a logic. Our state as one of the
only states that require attorney's fees to be paid by the losers,
with our attorney's fees, our costs and our offers of judgement it
all creates a system which makes sense. The person you bring in is
the person you thought did it. If the defendant is trying to point
to other people, then they should have the guts to bring them in.
He said we ought to keep this and it is this area that the bill
does confusing damage to.
Number 2432
REPRESENTATIVE PORTER said there are two reasons to object
Amendment 5, the best one is that the people of the state of
Alaska, in 1988, voted in an initiative that they were buying an
elimination of any form...
TAPE 97-28, SIDE A
Number 0000
REPRESENTATIVE PORTER continued...party to the suit, rather than
(Indisc.) Consequently, we are half way back to where we started
from, unless the defendant brings in someone that they wish to make
this argument about that there will be an inability because they
are not a party to the suit, to describe somebody else's potential
responsibility.
REPRESENTATIVE PORTER said it is terribly wrong to have what is
described as the empty chair, an argument that falls apart in two
different areas. One, current law already creates an environment
for any case that has to do with an employee, employer and a third
party defendant. Unless a third party defendant can show that this
employer, who can't be brought into the case because of the
worker's compensation laws, is 100 percent at fault then any
awarded damages don't get apportioned to that employer. He said
there is already an area that creates the empty chair situation.
REPRESENTATIVE PORTER said there is a need for this kind of thing
and an elimination of joint and several liability because of the
strategy in some people's law firms to try and find a deep pocket
while trying not to name defendants who are judgment proof. That
is to say, those who don't have any money. It wouldn't do any good
to get a judgment against them because it wouldn't be beneficial in
terms of being able to recover money. He referred to Michael
Schneider's testimony that said there is a disincentive to sue
judgment proof people and that the deep pocket is someone they try
to go after.
REPRESENTATIVE PORTER said he has a bias for people who are in
business, to the extent that there is a presumption that they can
afford to do anything. It is okay under the current result by case
law of apportion to fault if a defendant feels that they are being
singled out and there is someone else responsible. It is okay for
them to have to go through the time and expense to bring somebody
else into this suit, but if the plaintiff doesn't want to then he
doesn't have to do so. He did not feel that this is right and it
is what the people of Alaska thought when they voted against joint
and several liability. The notion that all of a sudden this jury,
who is capable of deciding what damages we should have, has an
almost unlimited sideboards on what they could come up with are
now, all of a sudden, not capable of seeing a specious argument
about a potential defendant who may or may not have some real
culpability in this thing. He thought the jury could make this
judgment.
REPRESENTATIVE PORTER did not feel that the empty chair, except in
employer situations that are barred by law, would exist in any
event if there was any way, shape or form that there really was
someone else who was culpable because during discovery the fact,
that a defendant was going to lay responsibility on somebody else,
would come out. The plaintiff has the opportunity to amend his
complaint and say this is true and we are going to accuse them as
well. If there is an empty chair, it is because they don't think
that it is even worth it and the argument would fail or because it
is the employer which is already covered by law. He said
Amendment 5 should be rejected. He said we should stick with what
the people wanted and the committee should eliminate joint and
several liability.
Number 0395
CHAIRMAN GREEN asked if there was a situation where a plaintiff
loses his legs and knows that one person is guilty, but the case
involves five unknown people. He asked if the one person should be
held responsible for the $500,000.
Number 0453
REPRESENTATIVE CROFT said you will find out, during discovery, who
you believe is responsible for your injury, it is your burden to
prove that responsibility. He did not know how you would get an
anonymous person known as an actor to the injury. You can
speculate who might have contributed to the injury, but did not
know of a situation where you would get a situation where it was
"pretty sure they did it, don't know who they are." He said a
plaintiff would sue who he thought did it.
REPRESENTATIVE CROFT said Representative Porter was right in his
colloquy with Mr. Schneider. Some cases you might say that maybe
this person had a portion of fault in this case, but they are
bankrupt and I don't want them involved in this case. I'd rather
have all of the award be assigned to the two solvent people and
leave the third insolvent person out of the case. He asked what
the remedy would be for that situation. He questioned whether
defendants should be allowed to point everywhere or allow
defendants to point, bring in and have the responsibility for that
insolvent person and let the jury sort it out. The jury will
either say that person is not involved and is not liable or they
will say they are liable, in which case you get some extra money in
attorney's fees. The situation is solved by individual
responsibility for who you bring into a lawsuit. We don't know if
they don't bring in a person because they never thought they were
involved or if they are not bringing them in because they don't
have any money. The way to sort this out is for the defendant to
bring that person into the case.
Number 0612
REPRESENTATIVE JAMES referred to Representative Porter's comments
on Amendment 5 and added that she had just a little bit of
rebuttal. Her attitude on this issue is that the plaintiff is the
one who is trying to get some recovery, some healing. They are
doing it to this defendant. The defendant, in her opinion, is also
a victim. The perception out there is that it is too easy to take
someone to court. As a plaintiff you have to make the choice of
whether or not you can win or lose, but there is an additional
possibility of winning a settlement. The cost of defending a suit
is so high, settlement is a preferred option. She suggested that
we need to do something to slow down the process to make it a
little bit more difficult for a plaintiff to go after a deep
pocket. She said this plethora of lawsuits causes our courts to be
full and is the reason why there are more attorneys per capita in
Alaska than any other occupation. She said SSHB 58 is an attempt
to slow this process down.
Number 0811
REPRESENTATIVE BERKOWITZ said she was right in a lot of ways about
the need to slow down the process. He said it was one of the
problems he had with SSHB 58, it does nothing to address the front
end of cases. It addresses a case in the middle and addresses a
case in the end. The bill doesn't do anything to expedite
discovery, nothing to mediate or perform alternative dispute
resolution at the beginning. He reminded the committee that suits
are proliferated in and around Alaska. The number of suits have
held steady with about 1,000 cases a year since 1988 according to
data taken about court system filings between 1988 and 1995 in the
superior court. The number of district court cases declined from
532, in 1994, to 398, in 1995. Cases are more or less holding
steady.
REPRESENTATIVE BERKOWITZ said there is probably an impression that
more cases are going to trial because there is more attention and
more hysteria whipped up about this subject. He said in many ways
it is the perception of a problem, creating anxiety which adds to
the problem. He said a debate based on facts would be able to
ameliorate many of the concerns about the court system. He said we
need to address cases before they become frivolous.
Number 0912
REPRESENTATIVE PORTER said the court system has just completed a
review and amendment of their discovery system regarding the amount
of motions that are available and other such things. He said it
would be presumptuous of the legislature to jump in and not wait to
see the changes happen for a few years, to see what Judge Karl S.
Johnstone's work has accomplished. These revisions include an
alternative dispute resolution (ADR). He suggested that instead of
jumping into something, the judicial counsel can review existing
programs between this session and the next session. He said the
state of Washington has an existing program in the area of
mediation and added that we need to find out what is going on out
there.
Number 0976
REPRESENTATIVE PORTER said the provision in the offer of judgment
is aimed right after discovery has been accomplished so that a
person has a feel for how the case is, one way or the other. The
offer of judgments section comes into play and will certainly
induce early settlement, if at all possible.
Number 1021
REPRESENTATIVE CROFT referred to the 1988 amendment and its intent.
He said the ballot measure, now law, statement in support and
opposition is that people are assessed damages based on their
percentage of fault. There will be a jury determination of it, the
amendment does not deal with who has to bring the guilty parties
into the case. He questioned who has to take the burden to bring
them in if you say they did it. He said SSHB 58 goes contrary to
the spirit of ballot measure 2 and creates a system where you can
have conflicting assessments of fault by multiple juries, then you
aren't able to assess damages on the basis of a person's degree of
fault. There is a multiplication of lawsuits, rather than a
simplification.
Number 1100
REPRESENTATIVE CROFT said worker's compensation laws exists for the
empty chair but it is because we say, with the comprehensive
worker's compensation law, that we're going to make a deal. We
are wiping out the employees ability to sue, in exchange for quick
but limited damages in the compensation system. He said it is a
product of saying you have no right to sue your employer for work
place injuries that creates the small, anomalous result there. The
reason why the weird 100 percent provision has to come in is if
your employer is 100 percent liable, then you as the employee are
not liable at all.
Number 1155
A roll call vote was taken on Amendment 5. Representatives Croft
and Berkowitz voted yea. Representatives Bunde, Porter, James and
Green voted nay. Representative Rokeberg was absent for the vote.
Amendment 5 failed to be adopted.
Number 1193
REPRESENTATIVE CROFT made a motion to move Amendment 6, located on
page 3, line 11 through page 4, line 10: delete all material and
renumber the following sections accordingly.
Number 1197
REPRESENTATIVE PORTER objected to the motion.
Number 1200
REPRESENTATIVE CROFT said Amendment 6 removes the current general
statute of repose and said proposed Amendment 7 would discuss the
minor statute of repose. He said the concept of a statute of
repose is that, whether or not you know your cause of action, it
can die after a period of time, it can expire. The statute of
limitations, that Alaska as well as every other state has,
generally provide, Alaska globally provides, that the statute
starts when you knew or should have known of your cause of action.
You have some reason to believe that you ought to be suing someone.
It is not just that I knew, I may not have treated this with
reasonable diligence in investigating things. I can honestly say
that I didn't know, but if a reasonable person would have known
then the clock would have started ticking and I might have been out
of time. He said these are typically short periods, two, three.
For actions where it is sometimes harder to discover or evidence
doesn't go away that quickly, like contract actions, they allow
six.
REPRESENTATIVE CROFT said these cases are especially pernicious for
that exact reason. For someone who was not at fault, had no way to
know about it and lose their rights before they would have had a
chance to get them. He suggested a massive dose of radiation might
be an example for this type of situation. These provisions do
nothing to discourage litigation because you had no way to know
about it. In fact, they encourage some litigation. If someone
comes into a law office with any type of claim and it is about to
reach eight years then you have to sue. Under the general statute
of limitations and discovery you only have an incentive if there is
some reason to know of your cause of action. Now things are just
going to be lost when you had no way of knowing. You can
investigate more thoroughly, discover whether you have a cause of
action or not. It puts a devil's choice. Lose it absolutely or
risk a frivolous lawsuit. At some state of knowledge you are
forced into that, it is seven years, 360 days and you question what
you should do.
REPRESENTATIVE CROFT said the most objectionable thing is that
there are injuries that don't show up and referred to previous
testimony given to the committee. He said this is a ridiculously
extreme provision, it says none shall be done. Maybe there are
very few but, if you meet the threshold of discovery and within the
statute, why are we cancelling out those very few. He questioned
that if the doctor couldn't say any, then why was the committee
saying never.
Number 1420
REPRESENTATIVE PORTER said there is a very good, legitimate public
policy why the committee is suggesting that there should be a
statute of repose and one that fits into this general area of time.
He said any profession, doing business in Alaska, is required by
practical common sense to have liability insurance and that level
of coverage is expensive. He said the insurance, called claims
made coverage, covers you for a period of time and for any claim
that is made. When professionals retire, there is possibility of
purchasing what is called a "tail" to your liability exposure but
it is for an extremely limited time, most of them only are allowed
to be written for three years, but some go up to five years.
REPRESENTATIVE PORTER said a statute of repose for eight years
would still leave a professional exposed for another three years to
possible lawsuits. He felt Alaska ought to give its citizens the
opportunity to have the best professionals whether it is doctors,
lawyers, engineers, architects, contractors or some other
professional. It is well within reason that some people,
especially those at a level of expertise, are going to go to some
state that has a statute of repose.
Number 1549
REPRESENTATIVE PORTER said if someone came into a law office it is
obvious that they have discovered damage or a problem, thus they
would fall under the statute of limitations as it is now because
the accrual has already started. There was testimony about a six
year statute of limitations that the supreme court upheld saying
that there is an inability after a certain length of time to recall
facts correctly. Memories fade, documents are lost and there
should be a limited period of time after which you shouldn't be
accused because of a loss of those facts. He said this is the
other area that makes the statute of repose correct. The best
example of this logic is it applies to criminal cases. He referred
to a case involving sexual assault and death that was perpetrated
by someone recently released from jail with a prior conviction for
a similar crime. If that the person who committed that
reprehensible act would not have been discovered within five years,
it would not have been possible to bring that person before the
court because of all of these things that decrease the likelihood
of having reasonable evidence, memories and documents. He said
these reasons form the basis for the statute of repose which exist
in other states and criminal statutes and added that it is very
logical to apply it to this bill.
Number 1705
CHAIRMAN GREEN said section (b) seems to allow for a significant
number of situations that would not be subject to this statute.
Number 1717
REPRESENTATIVE PORTER said part of the process of compromise went
into the establishment of this list. The list includes defective
products, any intentional fraud, fraudulent misrepresentation acts,
gross negligence and similar things do not fall within this statute
of repose because those limits have already been established.
Number 1758
A roll call vote was taken on Amendment 6. Representatives Croft
and Berkowitz voted yea. Representatives Bunde, Porter, James and
Green voted nay. Representative Rokeberg was absent for the vote.
Amendment 6 failed to be adopted.
Number 1812
REPRESENTATIVE BERKOWITZ made a motion to move Amendment 7, located
on page 4, line 14: following "provider", and delete "if the
injured person is, on the date of the alleged negligent act or
omission, less than six years of age unless the action is commenced
before the person's eighth birthday", and insert "unless commenced
within eight years of the date of the alleged negligent act". He
said this is the most confusing part of the bill for him. It seems
that what we are doing is denying children the same protection that
we afford adults. If a child somehow suffers a negligent injury at
the hands of a health care provider before the age of six, she or
he has to bring suit before the age of eight. He said we don't
impose what is essentially a two year burden on adults, we give
adults a full eight years.
REPRESENTATIVE BERKOWITZ said the example that springs to mind is
someone who negligently receives bad blood, maybe they go in for
surgery or stitches and there is no reason to suspect anything is
wrong until after they are eight-years-old. This limitation would
bar such an action and he thought it was unfair.
Number 1877
REPRESENTATIVE PORTER said it is not intended to and added that he
did not think it makes a restriction on kids that doesn't apply to
adults. It actually gives an expanded statute of limitations to
kids whereas an adult would only have two years. The outside of
this is eight years which is the statute of repose, six years plus
the two for the statute of limitations. Otherwise, if there were
an injury to an infant or shortly thereafter and the parent who
makes the suit should have known that it happened, it doesn't make
any difference. We won't bar those prosecutions because of the
statute of limitations, this expands it to six years plus two.
There was testimony that birth injuries in most cases are evident
within three years. The vast majority of those injuries are
evident by the time they get into preschool. As opposed to be a
detriment to kids at that age, it is a positive exception to the
statute of limitations so that anything that might happen to a
child, during those years when there is an inability for them to
communicate like a normal child, there would be this exception.
Number 1978
REPRESENTATIVE CROFT said an exception used to be made for a minor,
until they were 18-years-old. He said SSHB 58 changes the current
law in that we no longer allow to them to become adults before we
require them to know whether or not to bring up a suit. He said in
many situations, but not all, it would be the parents who would
make that decision. He said he was unsure of Representative
Porter's comments on the statute of limitations, but this the bill
is no better on the statute of repose. We should be treating
children better. Even though we have a number of exceptions, but
the exception for a child that turns eight and does not have anyone
looking after them is not there. We are presuming that every child
is cared for by someone that has their best interests at heart and
also has a good legal foundation who knows that there is something
magical about the eighth birthday. He said we should provide more,
not less, protection for children. Whether we are doing that in
some respects under the statute of limitations, we should be doing
more under the statute of repose.
Number 2052
A roll call vote was taken on Amendment 7. Representatives Croft
and Berkowitz voted yea. Representatives Porter, James and Green
voted nay. Representative Bunde abstained from voting and
Representative Rokeberg was absent for the vote. Amendment 7
failed to be adopted.
Number 2083
REPRESENTATIVE BERKOWITZ made a motion to move Amendment 8, located
on page 6, line 11: following "gain", delete "and", insert "or".
Number 2085
REPRESENTATIVE PORTER objected to the motion.
Number 2088
REPRESENTATIVE BERKOWITZ said, rather than focusing on the entire
cap on punitive damages which he disagreed with, he focused on one
small word. He said, whether it is a situation where someone is
running a stock scam or crashing a tanker into the rocks, there is
a situation where Sections 1 and 2 have to occur together. He said
he could be running a stock scam, making piles of money without
anyone getting hurt. When you put the conjunctive "and" into this
subsection it requires proof that both wrongful conduct in the
commercial activity and likelihood of death, serious physical
injury occurred. He said we would not want to encourage people to
perpetrate economic wrong on one another and the way to deter it is
to go after the proceeds and to punish them accordingly.
Number 2150
REPRESENTATIVE PORTER said the "and" after line 11 makes one and
two a requirement in order to establish both and said this is for
a very good reason. If you eliminate that "and" then the
additional higher level of punitive damages could be awarded to
anyone who was in business, anyone who is in a commercial business
is motivated by financial gain. If there is a business that is out
there which is not motivated by financial gain they would not be in
business for very long. Consequently, to eliminate the limited
scope for which it was intended to cover he would not withstand
more criticism than he has already received for this section
already.
Number 2198
REPRESENTATIVE CROFT said every business is motivated by financial
gain, but not every wrongful conduct or admission is motivated by
financial gain. The "and" does say, that the connection with
commercial activity be motivated by financial gain and said this
language could be cleaned that up a little. It seemed to him that
you would want to identify areas that were particularly worrisome.
One such area would be where the wrongful conduct was motivated by
financial gain, another might be where serious bodily injury was
likely and that either/or would be appropriate in sanctioning those
at the higher level.
Number 2241
REPRESENTATIVE PORTER said he could be talked into eliminating the
additional expanded cap, but not enhancing it.
Number 2253
REPRESENTATIVE BERKOWITZ said we are proceeding under the
assumption that (Indisc.--coughing) are always on the receiving end
of suits, but there are some 8,000 small businesses that took
advantage of wrongful conduct in order to begin a suit that
resulted in punitive damages. The businesses he referred to were
the commercial fishermen who achieved and earned punitive damages
based on the Exxon Valdez case. Under this construction, he did
not think they would have been able to collect punitive damages.
Number 2289
REPRESENTATIVE PORTER said commercial fishermen would get punitive
damages within the provision of (b), they wouldn't get it under
(c). The provision of (b), if the Exxon Valdez case had been in
state court, would have resulted in several billion dollars worth
of punitive damages within SSHB 58. He said this bill does not
affect the Exxon Valdez settlement, this bill wouldn't affect it if
it happened the day after the day became enacted because it is a
federal case in a maritime area of law which does not revert back
to state law.
Number 2329
A roll call vote was taken on Amendment 8. Representatives Croft
and Berkowitz voted yea. Representatives Bunde, Porter and Green
voted nay. Representatives James and Rokeberg were absent for the
vote. Amendment 8 failed to be adopted.
Number 2349
REPRESENTATIVE BERKOWITZ made a motion to move Amendment 9 located
on page 10, lines 30 through 31: delete lines 30 and 31, page 11,
line 1: preceding "trained", delete (2)", page 11, line 2:
following "issue", delete";and", insert "." and page 11, lines
three through six: delete lines three through six.
Number 2361
REPRESENTATIVE PORTER objected to the motion.
Number 2370
REPRESENTATIVE BERKOWITZ said a time honored response to an
objection in court is to argue that the evidence being proposed
should be admitted and that the objection should not be sustained
because the objection merely goes to the weight versus the
admissibility of the evidence. In other words if someone has a
quarrel with evidence, they can argue against it and say it's not
important, its not relevant, it comes from a biased source. This
provision attacks the admissibility of evidence that should be
admitted and be subject to examination based on its weight.
REPRESENTATIVE BERKOWITZ said it is not always easy to get experts
to testify in the bush because of the expense. He said this also
assumes that such an individual exists to discuss the standard of
care. Once again the committee is in the position of determining
which standards of care might apply. We could be talking about
someone who is whaling out of Barrow, there is no one who has been
licensed to do that. He suggested that we limit the restrictions
imposed by this section and we allow it to revert to the body of
law that is pretty accurately described in the rules of evidence.
Number 2457
REPRESENTATIVE BERKOWITZ said we are not always going to find
people who are licensed, we are not always going to bring them in
and it poses an undo burden.
Number 2462
REPRESENTATIVE PORTER said this expert witness qualification as it
says in the first line, "in an action based on....
TAPE 97-28, SIDE B
Number 0000
REPRESENTATIVE PORTER continued...expert opinion on that
professional's negligence should be in the ballpark of the
qualifications of that professional trained in the same basic
disciplines. He referred to a similar bill that was in the
legislature a few years ago and said there were two or three pages
of much broader and restrictive language on who we thought would be
appropriate to testify in these kinds of cases. This bill is
really a mitigation of that two or three pages worth of
requirements. He said this bill recognizes that there might not be
specific boards in existence for some professions and if there
isn't then we don't expect it. If there are specific boards then
that is where the knowledge should be obtained from to testify as
an expert.
Number 0045
REPRESENTATIVE PORTER referred to testimony in past years that
there are "hired gun" experts whose particular point of view on
certain things is well known and these people are sought to testify
in cases where that well known point of view would be of benefit to
a particular side of the case. He said this is the reason for the
limited expert witness qualification provision.
Number 0077
CHAIRMAN GREEN said instead of saying a profession who is licensed
if appropriate, the "if appropriate" is redundant because it is
implied that if they are not required to have a license there just
won't be a requirement.
Number 0090
REPRESENTATIVE CROFT said this works to the advantage of closed
professional societies such as the law or medical professions.
This requirement is difficult to obtain in small communities. When
a requirement is made that if you are going to sue a professional,
then one of their own professionals would need to testify against
them. The more specialized the profession is or the smaller the
state, the harder it is going to be to get anyone to break ranks
and say they didn't do a good job in engineering, law, medicine, et
cetera. For a long time there was a gentleman's agreement that you
didn't testify against someone else in your profession in a small
community. You had to find someone else to say why their action
was wrong such as a professor of law or medicine, a chiropractor or
someone who wouldn't be ostracized from their profession for doing
testifying. It is still problematic to prove that a professional
did anything wrong by forcing other professionals in the field to
testify against them, saying that the only people that the public
can trust are the people who are friends with the defendant.
Number 0158
REPRESENTATIVE PORTER said this problem exists in another area that
he did not think anyone had any controversy with, the review
committee on medical malpractice cases. He said this isn't what
the particular provision says, on line 30, page 10, "may not
testify unless a professional who is licensed in this state or in
another state or country". If you find somebody who meets these
qualifications from other states, the board certification only has
to be recognized by people in this state.
Number 0194
REPRESENTATIVE CROFT said very often in a professional malpractice
you are talking about the community standards that are there, so it
is very difficult to get an outside opinion on what the Anchorage
practice is.
Number 0209
CHAIRMAN GREEN asked, if you had a professional who was falling
into this category, how would you establish the credibility of
witnesses who may not understand or be knowledgeable enough to
testify against the defendant. He referred to an engineer on trial
and said you probably need someone who is a professional engineer
to make sure what the engineer did was wrong.
Number 0235
REPRESENTATIVE CROFT said you do want a professional opinion. He
said the credibility of hired guns is pretty low and it is fairly
easy for any defense attorney to show that. He said there are
questions that can be used to reveal their bias such as, "How many
times have you testified sir?", "How many times have you testified
for the plaintiff as opposed to the defendant?", "What are you
being paid for being here today?" As an attorney you tell the jury
that this person is a quack and you tell it by proof. You are
given free rein to go into their qualifications. A plaintiff is
going to be better advised to get professional witnesses, but he
asked if this should be a requirement. If you cannot find this
professional witness should you not be allowed anyone?
Number 0276
REPRESENTATIVE BERKOWITZ said usually what happens when you want to
introduce an expert is that you tell the other side and the judge
that you want to introduce an expert on this and that subject. Out
of the presence of the jury there is some discussion about the
expert's qualifications. You qualify as an expert by reason of
knowledge, skill, experience, training or education and you can
testify accordingly. The judge will make a determination whether
someone who purports to be an expert is an expert. The judge will
do the standard balancing test that always happen. Is it more
prejudicial than probative to let this expert testify? That way
hopefully you are weeding the quacks out before the jury has to
listen to them.
REPRESENTATIVE BERKOWITZ said we already have well established
rules about experts. There can't be more than three experts
testifying in a case unless the court says it is too many or there
should be more experts who testify. He said for the legislature to
try and superimpose the court's discretion in a particular area
without being aware of the particular facts and circumstances of
particular court cases. He felt that it ran the risk of placing an
undo burden not just on plaintiffs, but also on defendants to
produce the experts and this will ultimately work against the
interest of justice.
Number 0341
REPRESENTATIVE PORTER said with all due respect to the court
system, that is the problem. The courts are made up of individual
judges who have individual opinions on who should be able to give
an opinion in their court. The very subjective rule that they can
consider experience, college or those things has a wide latitude of
wiggle room. This bill tries to say that it is appropriate and
good public policy that if a professional is going to be judged,
then a professional of at least someone in the same general area
knowledge and background should be the person to offer another
opinion on the disputed action.
Number 0380
A roll call vote was taken on Amendment 9. Representatives Croft
and Berkowitz voted yea. Representatives Bunde, Porter, James and
Green voted nay. Representative Rokeberg was absent for the vote.
Amendment 9 failed to be adopted.
Number 0401
REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 10
located on page 7, lines 6 through 7: following "of", delete "a
party", insert "both parties" and on page 24, line 6: following
"by". delete "a party", insert "both parties".
Number 0404
REPRESENTATIVE PORTER objected to the motion.
Number 0406
REPRESENTATIVE BERKOWITZ said the problem that he has with how this
section is structured is that once a judgment has been rendered it
seems a little peculiar to allow a person who has lost to dictate
the terms of payment. A situation occurs where the plaintiff owes
medical bills, the hospital wants them to pay right away, but the
other side doesn't want to give me the lump sum. They want the
amount to trickle out over a period of time and the plaintiff is
still stuck with the bulk of the medical bills.
REPRESENTATIVE BERKOWITZ said he did not see how this section helps
reduce insurance costs or how it helps businesses. The business
would have been adjudged guilty or if it is an individual, has
already been found to be liable.
Number 0475
REPRESENTATIVE PORTER referred to proposed Amendment 16 which would
make clear that what we are talking about in this periodic payment
section addresses future damages and not current medical bills or
anything like that. He referred to line 8, page 7, the word
"future" would be put back in with Amendment 16. Assuming that
Amendment 16 would pass, we are left with the idea that the
defendant should be able to elect this as well as the plaintiff.
REPRESENTATIVE PORTER said the defendant should be able to do this
because we are addressing future damages which are things that will
occur in the out years, may be paid in the out years. This makes
sense because there have been studies that people who come by
large, single amounts of money at one time have a propensity to
expend them much quicker then if they had come into the money under
normal circumstances. This would leave someone who was injured and
unable to work in a position of costing the state. This provision
is a benefit to the defendant if they can do this within the
limited area of future damages where they might be able to set up
a strictly established annuity or periodic payment with the
security that it will be there. If this is set up correctly then
the money can be invested and there can be some return from the
investment and it will reduce the overall total that they would
have to put in, varying percentages of reduction based on what a
good investment year was. It could make the difference between
somebody having enough wherewithal to set up this thing or going
out of business. If they go out of business, nobody wins. The
plaintiff doesn't get any money and a business shuts down.
Number 0629
REPRESENTATIVE BERKOWITZ said the plaintiff should be accredited
the same opportunity to spend the money as he or she chooses. We
are all supposed to be people of free will, independent and if I
want to blow my money it is my prerogative. If I want to hoard it
and use it wisely, it is also my prerogative. It is unduly
paternalistic for us to say we should dictate how a victorious
plaintiff is going to spend the proceeds of a lawsuit, whether it
is future or incurred damages.
Number 0679
A roll call vote was taken on Amendment 10. Representatives Croft
and Berkowitz voted yea. Representatives Porter, Bunde, James and
Green voted nay. Representative Rokeberg was absent for the vote.
Amendment 10 failed to be adopted.
Number 0700
REPRESENTATIVE CROFT made a motion to adopt Amendment 11, located
on page 16, line 8, following "hospital" through page 16, line 31:
delete all material and insert "may not escape liability for the
actions or inactions of emergency room physicians by contractual
device, change in employment status, or purported notice to or
waiver by emergency room patients. Nothing in this section is
intended to modify the standard of care for emergency room
physicians or apply to a physician that is independently hired and
not associated with the hospital's provision of emergency
services." and renumber the following sections accordingly.
Number 0704
REPRESENTATIVE PORTER objected to the motion.
Number 0706
REPRESENTATIVE CROFT said the purpose of Amendment 11 is to
enshrine Jackson v. Powers rather than contradict it. The bill
would overrule Jackson V. Powers and Amendment 11 would take
essentially the text from the case and make it part of state law.
Jackson v. Powers is used because, in part, emergency rooms are
required services. If you set up a hospital then you have to set
up an emergency room. A hospital will financially benefit by the
provision of their general medical services and in exchange they
will provide emergency medical services. The individual doctors
and hospital could not fracture the negligence picture by limiting
their liability where only individual doctors would be liable for
their own services. In general, enterprises are liable for the
torts of their employees. The businesses make a profit and part of
the cost of doing business is the harm their business caused. The
more they can reduce the harm their businesses cost, the more
profit they have. It is an appropriate principle we've had in the
law for hundreds of hundreds of years.
REPRESENTATIVE CROFT said this provision of the bill is
particularly troublesome in how it proposes to notify victims.
These are emergency room patients. They are coming into a hospital
because a traumatic event has happened and there is a sign located
there that says Dr. so and so are your doctors, but the hospital is
not going to take any responsibility for what they do. As a lawyer
that is confusing, as a non-lawyer that would be confusing. He
questioned whether someone should or shouldn't be supervising those
doctors.
REPRESENTATIVE CROFT referred to testimony regarding this issue,
when a witness was asked if he would provide an employee, someone
he trusted enough to take responsibility of a situation, the
witness said there were no employee doctors. The doctors are all
independent contractors, a legal construction that most people
don't understand. It depends on a multi-factored test. In reality
those doctors don't work for the hospital, the hospital has
contracted with those doctors to provide services or with Jane
Smith Inc., a doctor professional corporation. He said not only is
your liability limited to that professional, it often limited to
that professional corporation of limited liability of which the
sole employee is Jane Smith. It seems to be a poor trick to play
on the injured people of this state that when they go into a
hospital they are given a notice that is confusing to understand.
If the notice was explained the injured person would still not have
an option and in any event they are not in the situation to make
much of a rational decision because they are injured.
Number 0912
REPRESENTATIVE CROFT said there is a superficial appeal to having
only the individual person be responsible for their individual act.
It has been a principle of law, for some time, that an enterprise
is responsible for the ordinary conduct of its employees when they
do it. A trucker hits somebody and that is Acme Trucking's
responsibility because driving is within the performance of the
employee's duties. If we don't allow this, we so fracture the
system that nobody injured by the normal conduct of an enterprise
can get recompensed.
REPRESENTATIVE CROFT read the section from "Jackson v. Powers" that
he summarized, "we are persuaded that the circumstances under which
emergency care is provided in a modern hospital mandates the rule
we adopt today. Not only is the rule consistent with the public
perception of the hospital as a multi-faceted health care facility
responsible for the quality of medical care and treatment rendered,
it also treats tort liability in the medical arena in a manner that
is consistent with the commercialization of American medicine.
Finally we simply cannot fathom why liability should depend upon
the technical employment status of the emergency room physician who
treats the patient. It is the hospital's duty to provide the
physician which it may do through any means at its disposal. The
means employed, however, will not change the fact that the hospital
will be responsible for the care rendered by physicians it has a
duty to provide."
REPRESENTATIVE CROFT said, in conclusion, a couple of red herrings
proposed by a witness who talked about how this might lead to this
or that. The decision itself says that this holding is necessarily
limited. We do not change the standard of care with which a
physician must comply, nor do we extend the duty which we find non-
delegable beyond its natural scope. Our holding does not extend to
situations where the patient is treated by his or her own doctor in
the emergency room; such situations are beyond the scope of acute
care. Amendment 11 encapsulates those clarifications; if you are
treated by your own doctor then it is your own business, but if you
are treated in an emergency room then the emergency room will be
responsible if they individually or collectively harm you. He said
this is a reasonable expectation of the people of this state.
Number 1051
REPRESENTATIVE PORTER said if the people that he has talked to
about this particular area of the law had the opportunity to
present opinions to the court, there is no doubt in his mind that
this court decision would have gone the other way. The hospital,
by law, has to provide emergency room services and thus have
entered into other agreements in order to provide this service.
There are reasons why in most cases, with the exception of
intentional acts, businesses are held responsible for the acts of
their employees. In many instances those businesses provide the
training of the function that the employee is doing. In almost all
situations a business provides the step by step procedures for
their employees. The business provides the supervision to see that
the employees are doing it this way and that way. They provide the
discipline if that doesn't happen and controlling the purse strings
allows for some degree of control over other people.
REPRESENTATIVE PORTER said none of these things accrue to a
contract doctor in an emergency room. The hospital doesn't have
the ability to set procedures for them. They are an independent,
professional expert in the medical field and will apply what they
learned in medical school and in their own training. They are not
trained or supervised by the hospital. If you don't have the
authority to control somebody's actions, you should not be held
responsible for them. The hospital does not even have the
authority to say they are not going to get into this field.
Number 1196
REPRESENTATIVE PORTER said, since Alaska is not a state that
requires professionals to have liability insurance, you could argue
that the hospital should check the qualifications of those doctors
to make sure that they have the basic qualifications, be diligent
in allowing them to have privileges in your hospital and require
the doctors to have liability insurance even though there is a
notice that you would or wouldn't understand and a notice
requirement published in the paper once a year. He said these
requirements would be a fair accommodation for the situation that
exists.
Number 1292
REPRESENTATIVE BERKOWITZ said the judicial process can be thorough.
He disputed the assertion that those who disagree with Jackson v.
Powers wouldn't have had the ability to weigh in with the court
because just as the committee did last week, they could have filed
an amicus brief and made their position known. He said he is sure
they had that opportunity to do it. Therefore Jackson v. Powers is
a fairly well considered decision.
Number 1329
REPRESENTATIVE CROFT said the hospital did not teach them medical
procedures, but the hospital does have an opportunity and an
obligation to see that they are supervised and to see to it that
training as well as the other two areas mentioned by Representative
Porter are done. He said it is a circular argument that because we
can rely on them as independent professionals, who the hospital has
no supervision over, we don't have to supervise them and people
shouldn't expect that we are. People rationally expect that there
are procedures, training and supervision in an emergency room as
there are other parts of the hospital. If the hospital is not
doing these things, they should be.
REPRESENTATIVE CROFT said, the argument that emergency rooms are
required by law, is a trade off that we made. We required
hospitals to provide emergency rooms because we need them and to
the extent that there is a cost to do it, that cost is recovered by
the other operations of the hospital. There are many other
situations where we require businesses to do certain additional
things and they can allocate the cost in other areas. He did not
think we would seriously argue with the legal requirement to run an
emergency room and that when you run it you should be responsible
for the conduct of the people you are employing.
Number 1404
REPRESENTATIVE CROFT said this fracturization has happened before,
will happen again and has rarely been attempted in so dangerous a
situation. For many years cabs tried to do this. When you sued a
cab company, you found out that there were individual, independent
drivers. He said when enough egregious examples occurred, we had
to go an fix the system because people were trying legal tricks on
the public. He said this bill spotlights the risk, rather than
spreading it across the enterprise which is the reasonable
approach. The hospital is not going to be liable in all of the
cases, they are going to be negligent in very few cases.
Number 1450
A roll call vote was taken on Amendment 11. Representatives Croft
and Berkowitz voted yea. Representatives Bunde, Porter, James and
Green voted nay. Representative Rokeberg was absent for the vote.
Amendment 11 was failed to be adopted.
CHAIRMAN GREEN said the committee would reconvene tomorrow at the
call of the chair.
ADJOURNMENT
There being no further business to conduct, CHAIRMAN GREEN
adjourned the meeting of the House Judiciary Standing Committee at
5:10 p.m.
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