Legislature(1999 - 2000)

02/17/2000 09:23 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE                                                                                                        
February 17, 2000                                                                                                               
9:23 AM                                                                                                                         
SFC-00 # 30, Side A & B                                                                                                         
SFC-00 # 31, Side A                                                                                                             
CALL TO ORDER                                                                                                                   
Co-Chair John Torgerson convened the meeting at                                                                                 
approximately 9:23 AM                                                                                                           
PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell,                                                                         
Senator Al Adams, Senator Dave Donley, Senator Pete Kelly,                                                                      
Senator Loren Leman, Senator Randy Phillips, Senator Gary                                                                       
Wilken, Senator Green                                                                                                           
Also Attending: SENATOR ROBIN TAYLOR; DARWIN PETERSON,                                                                          
Finance Committee Aide, Co-Chair Torgerson; LAUREE HUGONIN,                                                                     
Director, Alaska Network on Domestic Violence and Sexual                                                                        
Assault; PAM LABOLLE, President, Alaska State Chamber of                                                                        
Attending via Teleconference:  From Anchorage: BOB DICKSON,                                                                     
Attorney, Atkinson, Conway and Gagnon.  From Wrangell:                                                                          
David Sneed.                                                                                                                    
SUMMARY INFORMATION                                                                                                             
SB 123-ATTY FEES:APPORTIONMT/PUBLIC INT.LITIGANT                                                                                
The Committee heard testimony from the sponsor and members                                                                      
of the public.  The bill was held in Committee.                                                                                 
SB 6-DISPOSALS OF STATE LAND                                                                                                    
The Committee heard testimony from the sponsor and members                                                                      
of the public.  The bill was held in Committee.                                                                                 
SENATE BILL NO. 123                                                                                                             
"An Act relating to public interest litigants and to                                                                            
attorney fees; and amending Rule 82, Alaska Rules of                                                                            
Civil Procedure."                                                                                                               
DARWIN PETERSON, Finance Committee Aide, Co-Chair                                                                               
Torgerson, stated that currently, the court treats public                                                                       
interest litigants differently than civil litigants. He                                                                         
then referred to a handout, which explained the difference                                                                      
between the various proposed committee substitutes before                                                                       
the Committee regarding this issue.  He continued that                                                                          
Version "I" of SB 123 amends Rule 82, which allows for the                                                                      
award of attorney's fees to and against public interest                                                                         
litigants in the same manner as civil litigants under Rule                                                                      
82.  He stated that the prevailing public interest litigant                                                                     
receives 30 percent of attorney's fees for a case, which                                                                        
goes to trial and 20 percent attorney's fees for a case                                                                         
that does not go to trial. He noted that a loosing public                                                                       
interest litigant would be required to pay the prevailing                                                                       
party 30 percent for a trial case, and 20 percent for a                                                                         
non-trial case.  Mr. Peterson stated that the exceptions to                                                                     
varying attorney's fees found under Rule 82, would apply to                                                                     
public interest litigants under Version "I" before the                                                                          
Committee.  He affirmed that under this same Version                                                                            
apportionment would not be required for attorney's fee.  He                                                                     
noted that this change took place in reaction to the case                                                                       
of Dansereau v. Ulmer and he went on to outline the                                                                             
particulars of this decision.   He added that essentially                                                                       
the court found that apportionment does not have to be                                                                          
applied by issue.  Mr. Peterson noted that under current                                                                        
statute, a public interest litigant could be awarded                                                                            
attorney's fees for all of their issues even if they                                                                            
prevailed on just one.  In response to a question posed by                                                                      
Co-Chair Parnell, he stated that it was up to the judge's                                                                       
discretion to pay attorney's fees for regular civil                                                                             
litigants, under Rule 82, by issue.                                                                                             
Mr. Peterson continued that Version "I" does not address                                                                        
the issue of cost as is noted in Version "K."  He referred                                                                      
to this latter Version and stated that it amends Rule 79                                                                        
and Rule 82.  He noted that Rule 79 deals with costs and                                                                        
Rule 82 deals with attorney's fees.  Mr. Peterson asserted                                                                      
the under Version "K," a prevailing public interest                                                                             
litigant would receive 50 percent of attorney's fees for a                                                                      
case that goes to trial and 25 percent for those that do                                                                        
not.  He remarked that under this Version, a judge would                                                                        
award attorney's fees against a losing public interest                                                                          
litigant if the court finds that an issue is frivolous.  He                                                                     
continued that this same Version allows the court to                                                                            
apportion attorney's fees by issue. He added that another                                                                       
difference with Version "K" is that it touches on cost, an                                                                      
issue which had not been addressed before.  He continued                                                                        
that this was also allowed for a prevailing public interest                                                                     
litigant in regards to cost apportioned by issue.  Mr.                                                                          
Peterson noted that a losing public interest litigant would                                                                     
pay costs for frivolous issues only.                                                                                            
Mr. Peterson continued with a summary of Version "M," which                                                                     
is a compromise Version.  He noted that it only amended                                                                         
Rule 82, so that a public interest litigant would receive                                                                       
attorney's fees in the same manner as civil litigant, which                                                                     
is 30 percent if a case goes to trial and 20 percent if it                                                                      
does not, only if the court found the issue frivolous.  He                                                                      
added that the fees should be apportioned by issue.  He                                                                         
affirmed that a losing public litigant would not have to                                                                        
pay attorney's fees to a prevailing party unless the court                                                                      
finds that the issue is frivolous.  He continued that the                                                                       
exceptions under Rule 82 (b) (3) would apply, adding that                                                                       
the court may vary attorney's fees above the 30 percent/20                                                                      
percent limit for exceptional circumstances.  He explained                                                                      
that the court would be required to apportion by issue                                                                          
unless the court could find exceptional circumstances.                                                                          
Senator P. Kelly referred to Version "M" and asked about                                                                        
the requirement of frivolousness for the award of                                                                               
attorney's fees.  He asked about the latitude awarded to                                                                        
the courts to make this determination.                                                                                          
Co-Chair Torgerson responded with a general discussion                                                                          
about the intent of this legislation to encourage public                                                                        
interest litigant efforts.  He noted that his goal in                                                                           
drafting the proposed language was to keep the public                                                                           
interest litigant held harmless.  He added that currently                                                                       
under Rule 11, the court has this discretion.                                                                                   
Co-Chair Parnell noted under Version "I" that public                                                                            
interest litigants should be treated the same as civil                                                                          
litigants.  He added that public interest litigants should                                                                      
not be required to pay more attorney's fees than civil                                                                          
litigants.  He continued that Version "K," on page two in                                                                       
awarding costs or attorney's fees, includes the following                                                                       
language: "if the court finds that an issue presented by a                                                                      
public interest litigant upon which litigant was not the                                                                        
prevailing party, was not well grounded in fact or not                                                                          
warranted by existing law or good faith argument then the                                                                       
court may award attorney's fees."  He noted that the same                                                                       
type of language is included for costs, but added that this                                                                     
language did not exist in Rule 82 in respect to civil                                                                           
litigants.  He added that if a party to a case thinks that                                                                      
the other party's claims are frivolous, then a Rule 11                                                                          
motion can be filed.  He continued that this remedy already                                                                     
exists for both civil litigants and public interest                                                                             
litigants.  Co-Chair Parnell summed up that he did not                                                                          
think this type of language was necessary to include in any                                                                     
Committee Substitute adopted by the Committee.                                                                                  
Senator Adams stated that he did not think this legislation                                                                     
was necessary.  He noted the companion measure, HB 176,                                                                         
failed on the floor.  He added that the Supreme Court ruled                                                                     
that public interest litigant cases are to be encouraged.                                                                       
He felt as though the rules in place were sufficient.                                                                           
LAUREE HUGONIN, Director, Alaska Network on Domestic                                                                            
Violence and Sexual Assault, stated that in 1996 after the                                                                      
passage of the Domestic Violence Act, the court system in                                                                       
trying to implement portions of this Act, refused to allow                                                                      
individuals to apply for three separate protective orders,                                                                      
something which had been granted as part of this Act.  She                                                                      
then went into specific detail regarding the agencies her                                                                       
organization worked with to rectify this problem, as well                                                                       
as those procedural steps they took to avoid litigation.                                                                        
She noted that her agency was unsuccessful in these                                                                             
efforts.  She noted that the Network then took their case                                                                       
to court as a public interest litigant against the court                                                                        
system administration to compel them to comply to the                                                                           
"three protective order" statute.  The Network was                                                                              
successful.  She noted that the Network did everything                                                                          
necessary to reduce their costs to pursue this action, as                                                                       
well as trying to settle out of court, but the court system                                                                     
was not willing to compromise.  She remarked that although                                                                      
they were awarded attorney's fees, they did not get the                                                                         
full amount and were forced to fundraise to make up the                                                                         
difference.  She urged the Committee to consider those                                                                          
small entities that are forced to bring forward valid                                                                           
arguments, which can benefit many.  She then shared her                                                                         
feelings regarding the distinction between non-public                                                                           
interest litigants and public ones.                                                                                             
Senator Green asked Ms. Hugonin why she felt her                                                                                
organization should be exempt from the same standards that                                                                      
apply to anyone else who choses to bring litigation. She                                                                        
commented that it was hard to argue this issue because of                                                                       
the political sensitivity involved.                                                                                             
Ms. Hugonin responded that the difference between being a                                                                       
public interest litigant, and two citizens that may have a                                                                      
disagreement, for example, is that a public interest                                                                            
litigant has the potential to bring forth an issue that                                                                         
could benefit the public at large.                                                                                              
BOB DICKSON, testified via teleconference from Anchorage.                                                                       
He stated that he was a lawyer and a shareholder in the law                                                                     
firm of Atkinson, Conway and Gagnon.   He stated that he                                                                        
supported Version "I" of this legislation because it                                                                            
fundamentally treats all public interest litigants (PIL)                                                                        
the same as all other civil litigants.  He clarified that                                                                       
the Alaska Supreme Court has held that it is the lower                                                                          
court's discretion to determine who is the prevailing                                                                           
party.  He noted that the lower court is supposed to look                                                                       
at all of the issues, determine which are core and those                                                                        
that were litigated to determine who prevailed.  He                                                                             
continued that the Supreme Court did not necessarily give                                                                       
the lower court the discretion to divide up issues, but to                                                                      
determine whom the overall, prevailing party is when all of                                                                     
the issues litigated are considered.                                                                                            
Mr. Dickson suggested that this discretion is very                                                                              
difficult to implement.  He noted that some of the CS                                                                           
Versions include language that allows the award of                                                                              
attorney's fees on an issue by issue basis, something which                                                                     
would be especially hard to carry out.  He continued in                                                                         
regards to Version "K," before the Committee, which allows                                                                      
attorney's fees to be awarded only against a PIL, when                                                                          
their case is determined frivolous.  He stressed that Rule                                                                      
82 already allows for attorney's fees for frivolous                                                                             
lawsuits or as sanctions against vexatious conduct, but                                                                         
that this rarely happens                                                                                                        
Mr. Dickson responded to comments made by Senator Adams                                                                         
regarding the necessity of SB 123 in light of tort reform.                                                                      
He offered that litigation involving public interest                                                                            
litigants has nothing to do with torts, which is when a                                                                         
party allegedly does something wrong, is negligent and                                                                          
there is an incentive of monetary award to right a wrong.                                                                       
He continued that public interest litigant cases usually                                                                        
center on an issue that affects the community at large such                                                                     
as opposition of a timbering operation or when someone                                                                          
attacks a zoning ordinance or an election result.                                                                               
Mr. Dickson stated that public interest litigation is an                                                                        
exception to Rule 82.  He added that the related concepts                                                                       
are not codified or set out in statute or even in Rule 82.                                                                      
He asserted that as a result, the Alaska Supreme Court                                                                          
essentially makes political decisions that ought to be made                                                                     
by the legislature.  He offered that out of over 100 cases                                                                      
since 1968, those parties accorded public interest litigant                                                                     
status, live a subsistence lifestyle.  He used the example                                                                      
of newspapers, even though they are commercial operations,                                                                      
they have been awarded this status, along with                                                                                  
environmental protection and conservation groups, also                                                                          
Native cultural interests, home owners who are opposing an                                                                      
apartment house going up a few doors away, etceteras.  He                                                                       
noted that in contrast oil companies, miners, logging                                                                           
companies, trucking companies, labor unions, and others                                                                         
have always been consistently refused the status of public                                                                      
interest litigants because the Supreme Court has said that                                                                      
these parties have a sufficient economic interest in the                                                                        
result of the litigation.                                                                                                       
Mr. Dickson pointed out that the court has made                                                                                 
distinctions about who is considered a public interest                                                                          
litigant for the good of the public.  He referred to the                                                                        
McCave case, which launched the concept of awarding full                                                                        
attorney's fees to a party that prevails.  He cited the                                                                         
following language to bolster his point: "litigation on                                                                         
behalf of the public interest should be encouraged.  Few                                                                        
aggrieved parties would be in the position to advance the                                                                       
public interest by invoking the injunctive powers of the                                                                        
courts."  He summarized (in his opinion) that the Supreme                                                                       
Court wishes to encourage these types of public issues that                                                                     
have gone through the executive branch and have been found                                                                      
in accordance with the laws passed by the legislature.  He                                                                      
felt as though the Supreme Court wants these issues to be                                                                       
brought before them for their interpretation of the issues.                                                                     
He added that the results of these decisions are basically                                                                      
a matter of separation of powers, as to who should make the                                                                     
political decision to determine which groups are going to                                                                       
be preferred over others.                                                                                                       
Mr. Dickson stressed that there was a very definite pattern                                                                     
of those groups and interests out of the 100 or so cases                                                                        
originally cited which could be considered "politically                                                                         
correct," or politically influential such as newspapers and                                                                     
others.  He continued that these groups that receive this                                                                       
status, do so over the interests of those groups aligned                                                                        
with economic development, such as the mining or timber                                                                         
industry.  He submitted that these more political                                                                               
designations of merit ought to be made by the legislature                                                                       
and suggested the passage of Version "I" to effectuate this                                                                     
change.  He added that Version "I" treats all PIL litigants                                                                     
the same as other civil litigants.  He noted that Alaska is                                                                     
the only state in the union that permits the recovery of                                                                        
even a portion of attorney's fees as a matter of course in                                                                      
all civil cases.  He continued that Rule 82, in its normal                                                                      
application, does have the affect of keeping frivolous                                                                          
lawsuits at a minimum and awarding those people who have                                                                        
prevailed, giving them an incentive because they will be                                                                        
able to recover a portion of their attorney's fees.  He                                                                         
added that since all other civil litigants in the state                                                                         
have to abide by Rule 82, in its normal application, all                                                                        
other parties ought to be treated equally, without trying                                                                       
to give a boost or a detriment to one political group over                                                                      
Senator Adam asked what the purpose of applying Civil Rule                                                                      
82 was to public interest litigants.  He thought that                                                                           
Alaska Rules of Civil Procedure helped to stop frivolous                                                                        
lawsuits.  He also wondered if this legislation would                                                                           
stifle the right of individuals or Alaska organizations to                                                                      
question the actions of the state, thus upsetting the                                                                           
checks and balances presently in place.                                                                                         
Mr. Dickson responded that Rule 11 was a part of the Rules                                                                      
of Civil Procedure and basically states that any lawyer who                                                                     
signs a pleading, certifies that they have made some                                                                            
reasonable inquiry into the facts of a case.  He added that                                                                     
this rule requires that arguments should be made,                                                                               
reasonably based upon the facts and in accordance with the                                                                      
law.  He remarked that he has never seen a lawsuit thrown                                                                       
out of court as frivolous.  He continued that the Alaska                                                                        
Supreme Court in interpreting Rule 82, created an                                                                               
additional provision allowing for full attorney's fees                                                                          
against a loosing party if the case is frivolous.                                                                               
Mr. Dickson noted that this legislation would take the                                                                          
financial incentive to bring suit as a result of a                                                                              
disparity and it would put everybody on an equal standing                                                                       
who have wrongs or interests, which need protection.  He                                                                        
added that presently, public interest litigants are not                                                                         
required to pay attorney's fees if they lose, but stand to                                                                      
gain attorney's fees if they prevail.  He felt as though                                                                        
this situation has been abused in the past.                                                                                     
Senator Adams asked why it was necessary to apply Civil                                                                         
Rule 82 to public interest litigants.                                                                                           
Mr. Dickson responded that the Supreme Court awards fees                                                                        
and costs by virtue of AS 09.60.10, which authorizes them                                                                       
to determine costs including attorney's fees assigned to                                                                        
the prevailing party in a civil action.  He noted that Rule                                                                     
82 automatically covers PIL litigation, but this                                                                                
legislation attempts removal of an exception to it.                                                                             
PAM LABOLLE, President, Alaska State Chamber of Commerce                                                                        
stated that her organization supports this legislation.                                                                         
She noted that the Chamber has never been able to declare                                                                       
themselves public interest litigants even though they are a                                                                     
non-profit organization.  Presently, the Chamber is                                                                             
challenging three different claims and has had to raise                                                                         
funds to defend themselves, she offered.  The Chamber would                                                                     
like the law to require the same percentage of cost and                                                                         
fees paid to a public interest litigant as the percentage                                                                       
of issues raised on which the litigants prevail.                                                                                
Co-Chair Parnell made a motion to adopt CSSB 123, 1-                                                                            
LS0636\M as a working draft.  He noted that this Version                                                                        
would make the civil and public interest litigants more                                                                         
equal in standing.  Hearing no objection it was ADOPTED.                                                                        
Senator Donley noted that the draft Version "M" was a                                                                           
reasonable compromise to the provision in Section 2, which                                                                      
provides that unless exceptional circumstances are found,                                                                       
public interest litigants are provided with larger than                                                                         
Rule 82 awards.  He added that Version "M" also includes                                                                        
apportionment by issue, which does not presently exist.  He                                                                     
continued that there are present allowances for determining                                                                     
whether a case is frivolous, but he thought it worthwhile                                                                       
to reiterate this right through Version "M."                                                                                    
Amendment #1:  Senator Donley made a motion to substitute                                                                       
Section 2 of Version "M" for Section 2 of Version "I."                                                                          
Co-Chair Parnell stated that the Committee had an amendment                                                                     
before them.  He reiterated that Senator Donley had moved                                                                       
an amendment adding language from Version "M," page two,                                                                        
subsection (g) that would require the court to apportion                                                                        
fees by issue and stated, if the "court finds an issue                                                                          
presented by public interest litigants to be frivolous,                                                                         
then the court shall award attorney's fees under (b) of                                                                         
this rule."  He noted that this provision was more punitive                                                                     
to public interest litigants than the civil litigants since                                                                     
it requires the court to apportion fees by issue, which is                                                                      
not required of non-public interest litigants.                                                                                  
Co-Chair Parnell objected.  He disagreed with the court                                                                         
apportioning fees by issue and noted how difficult this                                                                         
would be.  He continued that frivolous sanctions are                                                                            
already granted under Rule 11, so he felt as though the                                                                         
insertion of this clause was not necessary.                                                                                     
Tape: SFC - 99 #30, Side B, 10:10 AM                                                                                            
Co-Chair Torgerson commented on why the language regarding                                                                      
frivolousness was included in Version "M," the first of                                                                         
which is because the courts do not use this provision.  He                                                                      
continued that this Version would redirect the courts on                                                                        
how they should apportion or set fees, while at the same                                                                        
time not award them if frivolousness is determined by the                                                                       
use of Rule 82.  He understood that Rule 11 existed for                                                                         
this purpose, but was doubtful that the court considers it                                                                      
very seriously.                                                                                                                 
Co-Chair Parnell referred to Version "M," on page two, line                                                                     
8 and read: "If the court finds an issue presented by a                                                                         
public interest litigant to be frivolous."  He thought                                                                          
about dividing the question, to vote once on whether the                                                                        
court could apportion fees and then vote on whether they                                                                        
could award fees for bringing forward a frivolous issue.                                                                        
Additional discussion followed regarding whether an                                                                             
attorney could apportion their fees by issue if forced to                                                                       
do so.  It was determined that this could be conducted on                                                                       
an approximation.                                                                                                               
Senator Wilken asked for clarification under Version "I,"                                                                       
that for non-monetary judgments the prevailing PIL would                                                                        
receive 30 percent, no more, no less, and whether or not                                                                        
Version "M" contained some other manner of calculation.                                                                         
Co-Chair Parnell responded that under Version "I" a PIL                                                                         
could receive more than 30 percent, but noted that under                                                                        
Rule 82 enhanced attorney's fees over 30 percent are only                                                                       
available if the parties prove certain factors.  He added                                                                       
that this is available to both civil and PIL litigants.  It                                                                     
was determined that apportionment by issue was the same                                                                         
across both Versions "I" and "M" of this legislation.                                                                           
There was some general discussion about the difference                                                                          
between the two.                                                                                                                
Senator Donley stated that Version "I" implies that                                                                             
apportionment is available, afforded by Rule 82.  He added                                                                      
that Version "M" requires apportionment by incorporation of                                                                     
specific language to this effect.                                                                                               
Co-Chair Torgerson called for a short at ease at 10:15 AM.                                                                      
Co-Chair Parnell asked Mr. Dickson when the court awards                                                                        
attorney's fees and whether or not they currently apportion                                                                     
by issue.                                                                                                                       
Mr. Dickson responded that the Supreme Court has                                                                                
discouraged awarding attorney's fees by issue. He added                                                                         
that the lower courts have been instructed on numerous                                                                          
occasions to look at all of the issues, decide which are                                                                        
the ones primarily litigated and which ones are the core                                                                        
points.  He continued that the party, who prevails on these                                                                     
core issues, is determined to be the prevailing party and                                                                       
then recovers 30 percent of all attorney's fees if the case                                                                     
goes to trial.  He noted that this would be so, even if                                                                         
some of those attorney's fees were spent on unsuccessful                                                                        
motions for summary judgment or discovery issues that were                                                                      
disregarded.  He summed up that the issue of who prevails                                                                       
is within the discretion of the trial court.                                                                                    
Co-Chair Parnell asked if Mr. Dickson had any experience                                                                        
with attorney's fees being awarded based upon a particular                                                                      
issue as versus, based on a prevailing party determination.                                                                     
Mr. Dickson responded that he understood that the trial                                                                         
court is supposed to determine whom prevailed overall and                                                                       
not on an issue by issue basis.  He noted that it is                                                                            
difficult to determine how much attorney's fees are spent                                                                       
on which issue.  He offered that typically all issues move                                                                      
forward at the same time and some are subject to a summary                                                                      
judgment.  He summed up that it is very difficult to                                                                            
separate out fees that are attributable to a definitive                                                                         
claim or point.                                                                                                                 
Senator Donley gave a scenario of professional litigators                                                                       
who might enter 20 different pleas for any given lawsuit,                                                                       
based on an hourly rate of $30 to $40.  He noted that these                                                                     
same attorneys could potentially file for attorney's fees                                                                       
in relation to these 20 claims, but do so based upon a                                                                          
higher hourly rate to make more money.  He added that they                                                                      
could potentially take this money and file more lawsuits                                                                        
for the purposes of claiming attorney's fees.  He noted                                                                         
that this type of system could actually encourage frivolous                                                                     
lawsuits if attorneys see the potential of pleading issues                                                                      
they felt they could get attorneys fees, even if they only                                                                      
prevail on one issue.  He felt a good compromise would be                                                                       
to apportion only the issues that they prevailed upon and                                                                       
only if the court awards more than the standard Rule 82.                                                                        
Co-Chair Torgerson asked if this would be above the 30                                                                          
Senator Donley responded affirmatively and added that if                                                                        
the court went above the 30 percent, then they would be                                                                         
required to apportion.                                                                                                          
Co-Chair Torgerson noted that this would not be true in                                                                         
regards to Rule 82, because Rule 82 allows excesses of 30                                                                       
percent.  He asked if Mr. Dickson had a comment regarding                                                                       
this possibility.                                                                                                               
Mr. Dickson responded that this might be a reasonable                                                                           
compromise.  He noted that it was true that Rule 82 permits                                                                     
a trial court to go beyond the 30 percent or 20 percent,                                                                        
but that there were are about six different factors that                                                                        
affect this determination.  He added that one of these                                                                          
factors was that, to the extent to which a given fee award                                                                      
may be so erroneous to the non-prevailing party, it would                                                                       
deter similarly situated litigants from the voluntary use                                                                       
of the courts.  He used the example of keeping poor people                                                                      
out of the courts as an issue that has troubled the Supreme                                                                     
Court with Rule 82, and rightfully so.  He pointed out with                                                                     
this most recent amendment, if the Committee were to say                                                                        
Rule 82 applies to everybody, including public interest                                                                         
litigants, this would still give the lower court the                                                                            
opportunity to prevent the losing public interest litigant                                                                      
from being hit with a lot of attorney's fees.  He noted                                                                         
that if the court awarded more attorney's fees on an issue                                                                      
by issue basis above the 25 to 30 percent, this would be                                                                        
better than the current system.                                                                                                 
Senator Parnell asked why the Committee would treat public                                                                      
interest litigants differently than civil litigants in this                                                                     
instance.  He gave an example of someone that might file                                                                        
eight different claims in a complaint, one or two of, which                                                                     
is very strong, the other six of which they have a ten-                                                                         
percent chance of winning.  He pointed out that currently,                                                                      
a civil litigant is allowed to ask for attorney's fees                                                                          
related to these claims, but the proposed language before                                                                       
the Committee would not allow the same for public interest                                                                      
Senator Donley responded that the court should apply this                                                                       
to everyone under Rule 82, but if the court goes beyond                                                                         
what is allowed under this rule the court could apportion                                                                       
based on which issues were prevailed upon.  He felt this                                                                        
was necessary since the court uses the public interest                                                                          
litigant label to abuse the process in order to award                                                                           
excessive fees.                                                                                                                 
Mr. Dickson hesitated to suggest making a change beyond the                                                                     
20 to 30 percent applied to all litigants. He noted that                                                                        
there have been numerous challenges to Rule 82 and saw                                                                          
potential changes to this rule as creating more of the                                                                          
same.  He stated that he would rather make all litigants                                                                        
equal under the law.                                                                                                            
Senator Adams added that the compromise language suggested                                                                      
by Senator Donley was very good.  He had hoped this was the                                                                     
direction the Committee was leaning towards.                                                                                    
Co-Chair Parnell outlined once again his argument against                                                                       
trying to apportion attorney's fees by issue.                                                                                   
Senator Donley reiterated his intent that if the court                                                                          
awards an excess of the Rule 82 standard amount, then it                                                                        
would apportion based on issue, unless it finds exceptional                                                                     
circumstances.  He added that the court should be required                                                                      
to explain why they deemed exceptional circumstances if so                                                                      
Senator Green asked if actual costs of attorney's fees are                                                                      
submitted for consideration in these circumstances.                                                                             
Mr. Dickson responded that this is based upon actual                                                                            
attorney's fees incurred and actual checks written by a                                                                         
client.  He added that the court then determines if these                                                                       
costs are reasonable and if not, are reduced and then 30                                                                        
percent of this amount is calculated.  He noted an                                                                              
exception to this scenario with a Trustees of Alaska case,                                                                      
where they showed that similar lawyers charge $150 to $200                                                                      
per hour for the same services they provide for $40 to $50                                                                      
per hour and that their time should be valued at a higher                                                                       
Senator Green asked if the Committee could address this                                                                         
problem since she felt that this was the bigger issue.                                                                          
Senator Donley stated that a court could find, after                                                                            
passage of this law, that for all cases they would award                                                                        
the value of an action versus actual costs.  He noted that                                                                      
the court would have to do this for all litigants and not                                                                       
just the PIL.                                                                                                                   
Co-Chair Torgerson asked that Senator Donley remove his                                                                         
motion and requested that compromise language be drafted.                                                                       
Senator Donley made a motion to WITHDRAW Amendment #1                                                                           
before the Committee.                                                                                                           
Co-Chair Torgerson ordered the bill HELD in Committee.                                                                          
SENATE BILL NO. 6                                                                                                               
"An Act relating to the disposal of state land."                                                                                
DARWIN PETERSON, Finance Committee Aide, Co-Chair Torgerson                                                                     
reviewed the adopted committee substitute, 1-LS0071\H and                                                                       
the proposed committee substitute, Version "M."  He noted                                                                       
that everywhere in Version "H" where the state is required                                                                      
to dispose of land, the word "offer" was included, and he                                                                       
added that the new language would read, "the state shall                                                                        
offer for disposal."  He continued that the number of                                                                           
acreage to be offered was changed from 250,000 acres to                                                                         
100,00 acres.  He offered that the "creation of the Land                                                                        
Disposal Advisory Board," was deleted from Version "H" and                                                                      
replaced by public nominations that are sent to the State                                                                       
Land Commission.  He continued that all the sections in the                                                                     
bill that address lapse dates are changed to June 30, 2009,                                                                     
which is the sunset date of the new Land Commission.  He                                                                        
noted that the previous sunset date was also deleted, so                                                                        
the Land Commission would exist in perpetuity.  He added                                                                        
that Section 7, Section 9, Section 11, that address the                                                                         
powers of the Commissioner, were given to the Commission in                                                                     
order to submit reports to the Legislature for analysis and                                                                     
assessment of market demand.  Mr. Peterson concluded that                                                                       
Version "M" of this bill was much shorter in length than                                                                        
the previous.  He noted that a fiscal note had not yet been                                                                     
requested yet for Version "M."                                                                                                  
Co-Chair Torgerson suspected that this legislation would                                                                        
have a $10 million dollar fiscal note attached.  He noted                                                                       
that the state currently has 50,000 acres of land to be re-                                                                     
offered that was included in this legislation.  He                                                                              
continued that 150,000 acres would be added to this                                                                             
legislation and the fiscal note would reflect the necessary                                                                     
zoning costs, mapping costs, etceteras.                                                                                         
Senator Adams referred to and asked for an explanation of                                                                       
Section Two, which creates the Land Sale Commission, and                                                                        
then to Section 10, which solves disputes between the                                                                           
Commissioner and the State Land Commission when there are                                                                       
problems deciding what lands should be offered in the first                                                                     
Co-Chair Torgerson explained how the land would be                                                                              
considered for distribution.                                                                                                    
Senator Phillips referred to page four and asked what the                                                                       
difference was between permanent fund eligibility and                                                                           
living in Alaska for a year.                                                                                                    
SENATOR TAYLOR responded that the primary reason for                                                                            
inserting this section was that a lot of public comment and                                                                     
concern was expressed about how Alaska land-holdings were                                                                       
being offered for sale.  The Department of Natural                                                                              
Resources was posting available land on the Internet.  He                                                                       
noted one example, where some groups of wealthy doctors                                                                         
were outbidding local Juneau residents who had tried                                                                            
obtaining these same offerings for years.  He outlined the                                                                      
legislation that was passed as a result of this situation,                                                                      
with allowances for residents who qualify for the permanent                                                                     
fund dividend.                                                                                                                  
Senator Phillips questioned the current law and its                                                                             
residency requirements that allows for at least one year                                                                        
prior to date of application and pointed out that this new                                                                      
committee substitute proposes something else.  He asked                                                                         
what the differences were between the two.  He generally                                                                        
noted conflicts of using the Permanent Fund Dividend status                                                                     
as a determinant for this program qualification.                                                                                
Senator Taylor responded that they would work on this                                                                           
Senator Taylor added that included in the first "blush" of                                                                      
this bill, was a requirement that the purchaser would pay                                                                       
for the appraisal and land survey, which would help                                                                             
diminish the attached fiscal note.  He noted that this                                                                          
clause had been taken out of the latest Version.                                                                                
Co-Chair Torgerson responded that this issue would be                                                                           
considered again, but pointed out that the state as                                                                             
property owner is the only entity that can bring action                                                                         
before local planning commissions.  He noted that this did                                                                      
not mean that the Committee could include some type of                                                                          
stipulation to pay costs up front.  He pointed out that if                                                                      
the State were going to sell land, somehow, they would have                                                                     
to come up with the necessary money and establish a solid                                                                       
program to transfer this property.                                                                                              
DAVID SNEED, testified via teleconference from Wrangell.                                                                        
He stated that he had been a resident of Alaska for eleven                                                                      
years.  He noted that he has tried saving money in order to                                                                     
buy land, but added that the he was unable to keep up with                                                                      
rising appraisals.  He recommended that the Committee                                                                           
encourage development of remote sites, while making these                                                                       
areas less dependent upon publicly supplied services.  He                                                                       
added that the Department of Natural Resources makes too                                                                        
much land available for recreation rather than for private                                                                      
residential status.  He outlined his ideas about making                                                                         
land available for agricultural pursuits.  He stated his                                                                        
concern about two real estate members being placed on the                                                                       
Tape 31, Side A, 11:05 AM.                                                                                                      
Senator Phillips asked Mr. Sneed if he thought applicants                                                                       
under this legislation should pay for the land survey and                                                                       
Mr. Sneed did not respond.                                                                                                      
The bill was HELD in Committee.                                                                                                 
Co-Chair Torgerson adjourned the meeting at 11:09 a.m.                                                                          
SFC-00 SS1 (15) 02/17/00                                                                                                        

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