Legislature(1999 - 2000)

04/09/1999 01:48 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
             SENATE JUDICIARY COMMITTEE                                                                                         
                   April 9, 1999                                                                                                
                     1:48 p.m.                                                                                                  
MEMBERS PRESENT                                                                                                                 
Senator Robin Taylor, Chairman                                                                                                  
Senator Rick Halford, Vice-Chairman                                                                                             
Senator Dave Donley                                                                                                             
MEMBERS ABSENT                                                                                                                  
Senator John Torgerson                                                                                                          
Senator Johnny Ellis                                                                                                            
COMMITTEE CALENDAR                                                                                                              
HOUSE BILL NO. 9                                                                                                                
"An Act relating to collection of settlement information in civil                                                               
litigation; amending Rule 41(a)(3), Alaska Rules of Civil                                                                       
Procedure, and Rule 511(e), Alaska Rules of Appellate Procedure;                                                                
and providing for an effective date."                                                                                           
     -MOVED HB 9 OUT OF 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."                                                                         
     -MOVED SB 123 OUT OF COMMITTEE                                                                                             
PREVIOUS SENATE COMMITTEE ACTION                                                                                                
HB 9 - No previous action to report.                                                                                            
SB 123 - No previous action to report.                                                                                          
WITNESS REGISTER                                                                                                                
Representative Brian Porter                                                                                                     
State Capitol                                                                                                                   
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Presented HB 9                                                                                             
Ms. Lauree Hugonin, Executive Director                                                                                          
Alaska Network on Domestic Violence and Sexual Assault                                                                          
130 Seward St. room 209                                                                                                         
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Commented on SB 123                                                                                        
Ms. Pam LaBolle, President                                                                                                      
Alaska State Chamber of Commerce                                                                                                
217 2nd St.                                                                                                                     
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Supported SB 123                                                                                           
Mr. Steve Williams, Attorney                                                                                                    
500 L St. Suite 400                                                                                                             
Anchorage, AK 99501                                                                                                             
POSITION STATEMENT:  Opposed SB 123                                                                                             
Ms. Charlotte MacCay                                                                                                            
1133 W. 15th Ave.                                                                                                               
Anchorage, AK 99501                                                                                                             
POSITION STATEMENT:  Supported SB 123                                                                                           
Ms. Judy Erickson, Owner                                                                                                        
Capital Information Group                                                                                                       
PO Box 21804                                                                                                                    
Juneau, AK 99802                                                                                                                
POSITION STATEMENT:  Opposed SB 123                                                                                             
ACTION NARRATIVE                                                                                                                
TAPE 99-25, SIDE A                                                                                                              
Number 001                                                                                                                      
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to                                                                 
order at 1:48 p.m. and announced HB 9 would be the fist order of                                                                
         HB 9-PERSONS REQUIRED TO FILE SETTLEMENT INFO                                                                          
REPRESENTATIVE BRIAN PORTER, sponsor of HB 9, explained the bill                                                                
enacts some cleanups related to tort legislation that has become                                                                
law. REPRESENTATIVE PORTER said the bill specifically addresses                                                                 
reporting of settlement results. HB 9 does the following things: it                                                             
makes clear that reporting of settlement information is mandatory,                                                              
it excludes areas not meant to be included, it clarifies that                                                                   
reporting requirements take effect after the appeal process is                                                                  
concluded, it amends the necessary court rules, and sets an                                                                     
effective date.                                                                                                                 
Number 040                                                                                                                      
CHAIRMAN TAYLOR asked how the current reporting system is working.                                                              
REPRESENTATIVE PORTER said the current system seems to be working                                                               
for adjudicated cases, but reporting for settled cases appears to                                                               
be a problem. CHAIRMAN TAYLOR commented this reporting requirement                                                              
is one aspect of the tort reform legislation he strongly supported,                                                             
as there is a serious need to compile information about these types                                                             
of cases.                                                                                                                       
Number 067                                                                                                                      
SENATOR DONLEY stated his support for the bill and asked how                                                                    
existing law deals with confidential settlements. REPRESENTATIVE                                                                
PORTER answered the settlement information is still gathered, but                                                               
the names of the litigants are excluded. SENATOR DONLEY confirmed                                                               
that the Alaska Judicial Council (AJC) would receive the settlement                                                             
information, even if the names were excluded. REPRESENTATIVE PORTER                                                             
assured the information would be transmitted to the AJC, and in                                                                 
fact, the Council would get the names, the names would simply not                                                               
be made public.                                                                                                                 
CHAIRMAN TAYLOR said the release of confidential information was a                                                              
concern of his. He stated that he thought the original bill dealt                                                               
with the treatment of confidential information by the AJC.                                                                      
Number 113                                                                                                                      
SENATOR DONLEY stated one of his concerns is prohibiting secret                                                                 
settlements in cases of public safety issues. He knows some                                                                     
settlements of product liability cases involve plaintiffs agreeing                                                              
not to inform others of the hazard on which their claim is based.                                                               
SENATOR HALFORD asked what could be done for an individual facing                                                               
"a Ford motor Company sized defendant" who could get a settlement                                                               
only if they do not release the information.  He said this puts the                                                             
burden on "the victim who has very little resources" for the trial                                                              
and the appeal(s), and "we pay for none of it." SENATOR DONLEY                                                                  
agreed that was true, but said "none of that affects this bill."                                                                
Committee members agreed.                                                                                                       
Number 138                                                                                                                      
SENATOR DONLEY moved HB 9 from committee with individual                                                                        
recommendations. Without objection, HB 9 moved from committee with                                                              
individual recommendations.                                                                                                     
             SB 123-PUBLIC INTEREST LITIGANT: FEES                                                                              
SENATOR DONLEY declared SB 123 is actually a Senate Finance bill                                                                
and stated he is the designated committee member presenting it. He                                                              
pointed out the committee has received letters of support for the                                                               
bill from the Ketchikan Gateway Borough (KGB) and the Alaska Miners                                                             
Association (AMA).                                                                                                              
SENATOR DONLEY said the bill implements court rule 82 for public                                                                
interest litigants. SENATOR DONLEY explained that up until a few                                                                
years ago, courts used to apportion judgements, now they simply                                                                 
award all legal fees whether a litigant prevails on all claims or                                                               
only some of them. SENATOR DONLEY said this promotes spurious                                                                   
lawsuits, since plaintiffs know they will receive compensation for                                                              
all cost even if they win on only one of their points. He said the                                                              
adoption of rule 82 provides reasonable fees for litigants and                                                                  
limits payment to costs associated with points on which the                                                                     
litigant prevails.                                                                                                              
SENATOR DONLEY said the letter of support from the KGB raises a                                                                 
good point: many of these organizations bringing litigation have                                                                
staff attorneys. These attorneys are likely paid salaries                                                                       
equivalent to $30 - $40 per hour. Sometimes, litigants charge fees                                                              
for the services of these attorneys as high as $150 an hour, and                                                                
actually make a profit on the fees awarded. SENATOR DONLEY                                                                      
commented, "That's just wrong." He concluded SB 123 adopts the same                                                             
rule used for other civil cases, it will prevent an inequity and                                                                
also save the state some money.                                                                                                 
Number 194                                                                                                                      
MR. STEVE WILLIAMS, an Anchorage attorney, spoke against SB 123.                                                                
MR. WILLIAMS explained the purpose of paying attorneys' fees for a                                                              
public interest litigant is to encourage private citizens  to raise                                                             
awareness of issues of public interest such as unlawful or                                                                      
unconstitutional conduct by a government entity. MR. WILLIAMS said                                                              
in this manner the public acts as "private attorneys general to                                                                 
vindicate the public interest and the rule of law."                                                                             
MR. WILLIAMS said SB 123 would affect only those cases where a                                                                  
public interest litigant prevails in a suit against an executive,                                                               
administrative, or legislative action by a state or local                                                                       
government. He said SB 123 would drastically reduce the incentive                                                               
to bring cases against officials who are acting illegally or                                                                    
unconstitutionally, and this is simply bad policy.                                                                              
MR. WILLIAMS suggested the committee review the history of public                                                               
interest litigation in Alaska. He said public interest litigation                                                               
has been used in a nonpartisan manner to benefit a broad range of                                                               
Alaskans' political beliefs.                                                                                                    
MR. WILLIAMS said public interest litigation covers issues such as                                                              
state elections, ballot initiatives, municipal taxes and more.                                                                  
These are the types of cases in which claims are, and should be,                                                                
brought by public interest litigants, according to MR. WILLIAMS.                                                                
MR. WILLIAMS argued that in these cases, public interest litigants                                                              
should be awarded full attorneys' fees if they prevail and be                                                                   
protected from an award of fees if they do not prevail. Public                                                                  
interest litigants by their very nature do not have an economic                                                                 
interest at stake; they do not have sufficient financial incentive                                                              
in to bring the case individually.                                                                                              
MR. WILLIAMS mentioned that, aside from the fact the bill is bad                                                                
public policy, regular rule 82 fees do not require apportionment by                                                             
issue, as this bill would require. This is because the court has                                                                
practical reasons for not deciding certain issues within a given                                                                
case. MR. WILLIAMS said private attorneys are paid to litigate all                                                              
aspects of a case, and public interest litigants should also be                                                                 
paid for arguing all aspects of a case. He maintained that the                                                                  
court has the power to eliminate or reduce frivolous or excessive                                                               
fees, or to impose fees on a litigant bringing a frivolous case.                                                                
MR. WILLIAMS reminded the attorneys on the committee that civil                                                                 
rule 11 prohibits frivolous claims and fines can be imposed on                                                                  
attorneys who assert them.                                                                                                      
Number 297                                                                                                                      
MR. WILLIAMS summed up his testimony as follows: SB 123 is                                                                      
unnecessary because of civil rule 11, it is bad public policy that                                                              
is politically misguided, and it will lead to further litigation of                                                             
this issue.                                                                                                                     
CHAIRMAN TAYLOR asked MR. WILLIAMS if he is familiar with the                                                                   
origin of public interest litigation. MR. WILLIAMS replied the                                                                  
original case was GILBERT v. STATE OF ALASKA, in which a state                                                                  
senatorial candidate challenged residency requirements                                                                          
unsuccessfully. In this case, the court found that public interest                                                              
litigants should not be held responsible for attorneys' fees.                                                                   
Number 350                                                                                                                      
CHAIRMAN TAYLOR said he was trying to remember if Alaska presaged                                                               
the federal court in their ruling on public interest litigation.                                                                
MR. WILLIAMS responded he did not believe the U.S. Supreme Court                                                                
ever adopted a public interest litigant rule for attorneys' fees.                                                               
In fact, Alaska is the only state that has a general rule which                                                                 
provides for awards of attorneys' fees to prevailing parties.                                                                   
CHAIRMAN TAYLOR said, "I believe there were decisions made at the                                                               
federal level which initiated this entire process."  He said his                                                                
frustration is with the federal system that awards special interest                                                             
groups for frivolous motions filed in order to delay resource                                                                   
development. Whatever the outcome of the suit, the federal                                                                      
government pays the attorneys' fees.  Five years ago, the U.S.                                                                  
Forest Service spent more than forty million dollars on cases in                                                                
which they prevailed. CHAIRMAN TAYLOR said this is an incentive to                                                              
bring frivolous claims, and when litigants have to pay fees, the                                                                
court will not see so much frivolous litigation. MR. WILLIAMS                                                                   
agreed that fines should be charged for frivolous cases filed; but,                                                             
he said, the court can already do this. Under the Alaska Public                                                                 
Interest law, litigants are only paid when they prevail. CHAIRMAN                                                               
TAYLOR maintained that he has not seen the court come down hard                                                                 
enough on spurious claims.                                                                                                      
Number 430                                                                                                                      
MR. WILLIAMS suggested SB 123 only affects litigants who win,                                                                   
reducing the fees they receive. Overall, MR. WILLIAMS believes this                                                             
bill will decrease opportunities for public interest litigation.                                                                
MR. WILLIAMS also observed that SB 123 will award prevailing public                                                             
interest litigants less than that awarded to successful commercial                                                              
litigants in civil cases.                                                                                                       
MS. CHARLOTTE MACCAY, representing COMINCO Alaska, stated her                                                                   
support for SB 123. She said that the permitting and developing                                                                 
process, especially as it relates to environmental concerns, is                                                                 
sometimes based more on fear of litigation than hard science. This                                                              
bill will force public interest litigants to carefully consider the                                                             
legitimacy of any case they seek to bring. She urged the committee                                                              
to pass SB 123.                                                                                                                 
Number 472                                                                                                                      
MS. LAUREE HOUGININ, Executive Director of the Alaska Network on                                                                
Domestic Violence and Sexual Assault (ANDVSA) spoke in opposition                                                               
to SB 123. MS. HOUGININ explained that ANDVSA was involved in a                                                                 
public interest litigation suit and they prevailed. Though they did                                                             
their best to keep costs low and even did fund raising, in the end,                                                             
they received fees amounting to only two-thirds of the amount they                                                              
spent on the case. She said this bill will affect situations where                                                              
small public interest litigants will be burdened by receiving only                                                              
a thirty percent award for fees.                                                                                                
MS. PAM LABOLLE, President of the Alaska State Chamber of Commerce,                                                             
stated the Chamber supports SB 123, saying some special interest                                                                
groups routinely use "public interest litigant" status to challenge                                                             
state resource development.                                                                                                     
Number 535                                                                                                                      
CHAIRMAN TAYLOR remarked that a group has no interest in settling                                                               
a case if they know they will be paid for all their costs and fees,                                                             
even if they prevail in only one-third of their claims. MS. LABOLLE                                                             
commented that sometimes the goal of these special interests is to                                                              
tie things up in litigation and "burn up as much money . . . as you                                                             
can possibly take from the opponent."                                                                                           
MS. JUDITH ERICKSON, owner of Capital Information Group (CIG),                                                                  
opposed SB 123. MS. ERICKSON recounted her experience as a public                                                               
interest litigant who sued Governor Hickel for access to public                                                                 
information.  She prevailed on the majority of the case and was                                                                 
awarded a portion of attorneys fees.  She noted that Capital                                                                    
Information Group had to petition for the status of public interest                                                             
litigant, this could have been argued by the state.                                                                             
MS. ERICKSON said this bill will not only affect resource                                                                       
development issues. As a "mom and pop" business, CIG could never                                                                
have brought this issue forward without public interest litigant                                                                
Number 571                                                                                                                      
SENATOR HALFORD moved SB 123 from committee with individual                                                                     
recommendations. Without objection, SB 123 moved from committee                                                                 
with individual recommendations.                                                                                                
With no further business to come before the committee, CHAIRMAN                                                                 
TAYLOR adjourned the meeting at 2:35.                                                                                           

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