Legislature(1995 - 1996)
05/03/1995 01:43 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
May 3, 1995
1:43 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator Lyda Green, Vice-Chairman
Senator Mike Miller
MEMBERS ABSENT
Senator Al Adams
Senator Johnny Ellis
COMMITTEE CALENDAR
Confirmation Hearings: Commission on Judicial Conduct; Patrick
Brown, Joann Holmes, Arthur Peterson
CS FOR HOUSE BILL NO. 38(JUD) am
"An Act relating to criminal sentencing; relating to good time
credit; relating to the availability for good time credit for
offenders convicted of certain first degree murders; relating to
definite sentences, parole, good time credit, pardon, commutation
of sentence, modification or reduction of sentence, reprieve,
furlough, and service of sentence at a correctional restitution
center for offenders with at least three serious felony
convictions; and amending Alaska Rule of Criminal Procedure 35."
CS FOR HOUSE BILL NO. 274(JUD)
"An Act relating to the state's tuberculosis control program; and
providing for an effective date."
CS FOR HOUSE BILL NO. 120(FIN)
"An Act relating to public employers defending and indemnifying
public employees and former public employees with respect to claims
arising out of conduct that is within the scope of employment."
CS FOR HOUSE BILL NO. 158(FIN) am(ct rls pfld)(efd fld)
"An Act relating to civil actions; amending Alaska Rule of Civil
Procedure 95."
PREVIOUS SENATE COMMITTEE ACTION
HB 38 - No previous Senate action to report.
HB 274 - No previous Senate action to report.
HB 120 - No previous Senate action to report.
HB 158 - No previous Senate action to report.
WITNESS REGISTER
Patrick Brown, Commissioner-designee
711 Gaffney Rd.
Fairbanks, AK 99701
Joanna Holmes, Commissioner-designee
Judicial Conduct Commission
310 K St., Room 301
Anchorage, AK 99501-2064
Art Peterson, Commissioner-designee
350 N. Franklin St.
Juneau, Alaska 99801
Patty Swenson
Legislative Aide
Alaska State Capitol
Juneau, Alaska 99811-1182
POSITION STATEMENT: Testified for sponsor of HB 38
Barbara Brink
Public Defender Agency
Dept. of Administration
900 W. 5th Ave., Suite 200
Anchorage, AK 99501-2090
POSITION STATEMENT: Testified in opposition to HB 38
Brant McGee
Office of Public Advocacy
Dept. of Administration
900 W. 5th Ave., Suite 525
Anchorage, AK 99501-2090
POSITION STATEMENT: Testified in opposition to HB 38
Representative Con Bunde
Alaska State Capitol
Juneau, Alaska 99811-1182
POSITION STATEMENT: Sponsor of HB 38
Margot Knuth
Assistant Attorney General
P.O. Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Testified on HB 38
Margaret Berck
Alaska Civil Liberties Union
227 7th St.
Juneau, Alaska 99801
POSITION STATEMENT: Testified in opposition to HB 38
Jerry Shriner
Special Assistant
Department of Corrections
240 Main St. Suite 700
Juneau, AK 99801
POSITION STATEMENT: Testified on HB 38
Gail Voigtlander
Assistant Attorney General
1031 W. 4th Ave., Suite 200
Anchorage, AK 99501-1994
POSITION STATEMENT: Testified on HB 120
Stephanie Galbraith
Brad Thompson
Division of Risk Management
P.O. Box 110218
Juneau, AK 99811-0218
POSITION STATEMENT: Answered questions on HB 120
Kevin Ritchie
Alaska Municipal League
217 Second St., Suite 200
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of HB 120
Elmer Lindstrom
Special Assistant
Department of Health & Social Services
P.O. Box 110601
Juneau, Alaska 99811-0601
POSITION STATEMENT: Testified in support of HB 274
Dick Cattenaugh
POSITION STATEMENT: Testified in support of HB 158
Daniella Loper
Legislative Aide
Alaska State Capitol
Juneau, Alaska 99811-1182
POSITION STATEMENT: Gave a sectional analysis of HB 158
ACTION NARRATIVE
TAPE 95-29, SIDE A
Number 001
CHAIRMAN ROBIN TAYLOR noted a quorum was not present, however
testimony would be taken and absent committee members would be
referred to the record.
PATRICK BROWN, Commissioner-designee to the Commission on Judicial
Conduct, discussed his background. He has been a practicing
attorney in Fairbanks for 20 1/2 years, and is seeking
reappointment to his present seat on the Commission. He has served
on the Commission for eight years, and feels qualified to continue
to serve.
SENATOR TAYLOR commented he is aware of Mr. Brown's professional
record. He thanked Mr. Brown for his willingness to serve.
SENATOR GREEN asked what the function of the Alaska Commission on
Judicial Conduct is. MR. BROWN replied the Commission was
established as part of the Alaska Constitution to review complaints
from the public and attorneys concerning sitting judges at the
supreme, superior, and district court levels. The Commission
cannot hear complaints regarding magistrates or tribal judges. The
Commission investigates violations of the Judicial Conduct Code and
can also initiate investigations.
JOANNA HOLMES, Commissioner-designee, has been involved in bush
justice since the early 1970's as an employee of the Alaska
Federation of Natives. At that time she served as a member of a
Governor's Task Force on Children. In 1989-93 she served as a
member of the Alaska Sentencing Commission. She believes her
experience working in rural areas in both criminal and civil
justice will enable her to do a good job.
Number 105
SENATOR TAYLOR thanked Ms. Holmes for her testimony.
ART PETERSON, Commissioner-designee, highlighted his background.
His experience as a legislative attorney, assistant attorney, and
private practice attorney has given him a variety of perspectives
on the Alaska government and court system. He believes the
Commission is important, and he has always been committed to the
idea of the independence and integrity of the judicial system.
When the public perceives wrongdoing, it is essential to have a
body to investigate the situation and make recommendations to the
Supreme Court.
SENATOR GREEN commented serving on the Commission must be extremely
difficult. MR. PETERSON responded at times there are very
difficult issues that come before the Commission, however the
majority of complaints are handled by staff.
Number 147
SENATOR TAYLOR stated a large percentage of the cases appearing
before the Commission are filed by disgruntled litigants who are
trying to find an excuse for the reason they lost a case. For the
disgruntled litigants with valid causes, however, it is incumbent
upon the Commission to investigate and use a great deal of
discretion in the manner in which the task is approached. He
stated he is somewhat suspect of a star chamber established
primarily to act as both prosecutor and tryer of fact. Because
that responsibility is so huge, it is a tremendous commendation
that Commission members have always comported themselves very
professionally. He added the same system is used on the
legislative level with the establishment of the Legislative Ethics
Committee.
SENATOR TAYLOR thanked all of the participants for testifying.
HB 38 SENTENCING;3RD SERIOUS FELONY OFFENDER
PATTY SWENSON, staff to Rep. Bunde, sponsor of the measure,
described HB 38. The bill provides a 40-99 year prison sentence
for third-time class A felons. Discretionary parole and good time
sentence reductions would not be available to those offenders,
however they could request, from the court, a reduction in sentence
after they have served the greater of one-half of their definite
term or 30 years. HB 38 gives the prosecutors some discretion in
the decision to pursue third-strike sentencing to avoid unjust
results in certain cases where the evidence may be weak. The bill
also allows prosecutors some flexibility to proceed with normal
presumptive sentencing provisions when necessary. The legislation
is crafted to keep costs to a minimum.
Number 225
BARBARA BRINK, Deputy Public Defender, offered the following
insight into the impact of HB 38 on the Public Defender Agency.
HB 38 creates a class of defendants that can be subjected to a 40-
99 year mandatory term. Because it is without the possibility of
parole, or a good-time provision, the bill creates the most severe
penalty available in the states. Increased litigation will result,
increasing costs to the Public Defender Agency in the following
three ways. First, a person charged with a third-strike felony
will want to go to trial. Unlike the Department of Corrections,
which anticipates a fiscal impact down the road, the Public
Defender Agency will be severely impacted immediately. Second,
because of the consequences, these trials will involve extended
investigations, lengthy trials, and expert witnesses. These cases
will require the most skilled and experienced litigators and
therefore the most expensive attorneys. Before a case can go to
trial, the Public Defender Agency will have to do a collateral
attack: it will have to scrutinize the prior strikes of the
defendant to ensure constitutional validity. That will require
review of volumes of material from previous cases. If any of the
prior convictions were out-of-state, travel will be required, as
well as contractual expenses, and appearances in court in other
states if court action is necessary there. For the prior strike to
count, the felony would have to have been committed in Alaska,
there must have been a plea or constitutionally valid trial, and
there must have been competent counsel. Third, more felony
convictions will end up in trial, since nobody will want a first
strike on their record: increased litigation will also arise in the
first and second strikes.
MS. BRINK continued. Currently 94 percent of all felony cases
result in retrial. Even a single trial is an extreme drain on
resources. For the District Attorney's Office, law enforcement,
courts, judges, clerks, bailiffs, juries, etc., a single trial can
consume weeks of time. The system is not capable of allowing every
single criminal defendant to go to trial. With the three-strike
law, the system would collapse upon itself. Plea bargaining
results in convicts serving long jail sentences without the need
for a trial. Three-strikes legislation has been used in other
states without success. In California, the legislation has been on
the books for one year and is straining the criminal justice system
to the point of deadlock. It is clogging court calendars and
forcing fewer prosecutions of other crimes. Previously in
California, 90 percent of all felony cases were plea-bargained; now
the number is less than 14 percent. The California three-strike
law is broader than HB 38, the third strike can be any felony
offense, however the California experience illustrates that the
policy makers that passed the legislation consistently
underestimated the impact the legislation would have. The
expansion of HB 38, from 40-99 years, means that more cases will be
filed than anticipated. Prosecutors tend to save 99 year sentences
for the worst cases. Under HB 38, the prosecutor has to decide by
arraignment in Superior Court whether it is a three-strike case.
With violent crime rates lower, and little or no growth in the
overall crime rate over the past two decades, the impetus for HB 38
needs to be examined. The largest number of inmates are 18-24 year
old males, without high school diplomas, and unemployed. Education
and prevention methods need to be discussed as alternatives.
Number 353
SENATOR TAYLOR announced the committee would move the calendar back
to confirmations, since Senator Miller arrived. SENATOR GREEN
moved the Senate Judiciary confirmation report be sent out of
committee with individual recommendations. There being no
objection, the motion carried.
Number 370
BRANT McGEE, director of the Office of Public Advocacy, concurred
with Ms. Brink's testimony. He reiterated that each case will go
to a lengthy trial and will not be subject to charge or plea
bargaining. Prior convictions will be attacked by the defense in
an attempt to eliminate a prior felony conviction. The financial
impact on the Office of Public Advocacy will be substantial since
it is likely the Public Defender Agency will be representing many
of these people.
SENATOR TAYLOR asked if the Public Defender Agency will have the
choice of whether to make a collateral attack, if issues are
available on previous convictions, or to plea bargain instead.
MR. McGEE answered under Title 18 and the Rules of Professional
Conduct, the Public Defender Agency is required to represent
zealously any defendant whose case it is given by the court system.
The Public Defender Agency must do what is best for the client, and
a collateral attack will be one of the only ways to relieve the
burden of the punishment. Frivolous attacks will not be pursued,
but to determine whether a collateral attack is frivolous would
require an exhaustive review of the prior felony case.
Number 410
SENATOR TAYLOR stated he wanted, for the record, an explanation of
the options available under this legislation, from people working
in the field. He expressed concern that people who complain the
Public Defender Agency is clogging up the courts assume the Agency
has a choice in how to represent the defendant.
MR. McGEE clarified the Public Defender Agency attorneys do not
have any choices if they want to continue to practice law in
Alaska. They have a constitutional and ethical responsibility to
do whatever they can for their client. SENATOR TAYLOR asked if an
attorney would be disbarred for not doing whatever he/she could.
MR. McGEE replied a second lawyer would be hired to attack the
first lawyer's performance, the costs skyrocket, and the courts are
tied up even longer.
Number 442
REPRESENTATIVE CON BUNDE provided the following testimony. HB 38
will cost money, but those costs are to protect citizens. The
preference of the Public Defender Agency to plea bargain serious
offenses, and allow those people back out on the streets, has
created the revolving door problem. HB 38 allows for prosecutorial
discretion, and will only be used in the most serious of cases. He
discussed the discrepancy in the projected number of cases by
different agencies, and in the fiscal notes. Supporters of the
issue are willing to pay the price to keep the most violent felons
off the street. They are not capable of being rehabilitated, and
have been in the system twice already for five to fifteen years.
As existing laws apply, they would go to jail for another 12 1/2
years for a third conviction. As the Department of Corrections'
fiscal note indicates, there would be no fiscal impact for that
time period since those offenders would be in jail during that time
anyway. About 250 people are in jail for third felony convictions,
and about 150 are in jail for subsequent felony convictions. He
questioned the expense of letting these people back into society.
Habitual criminals take a substantial amount of money out of the
public coffer, at the expense of the public. That expense does not
include the human tragedy they cause.
Number 486
SENATOR TAYLOR commented his concern is that the legal systems in
California and Washington State are breaking down because of this
legislation. The result may be that fewer people would be
prosecuted because of a lack of district attorneys. Prison
overcrowding is already problematic.
REPRESENTATIVE BUNDE reminded Senator Taylor that HB 38 is very
different from the California and Washington laws. SENATOR TAYLOR
noted the bill limits the provisions to class A felons, and has a
ten year time limit, which are commendable provisions. However, he
indicated professionals in the criminal justice system have no
choice in the matter, since it removes discretion from the
prosecutor and defender in the ability to bargain.
Number 509
REPRESENTATIVE BUNDE responded the bill does allow for
prosecutorial discretion, in that prosecutors are allowed to pick
and choose the cases that are appropriate. SENATOR TAYLOR asked if
there would be significant restrictions placed on prosecutors when
choosing. REPRESENTATIVE BUNDE stated he believes the discretion
would lie solely with the prosecutor as to whether the evidence and
severity of the case warrants this charge. The prosecutor is
limited by the type of crime when applying this sanction. After
reviewing the case, the prosecutor would notify the court the
habitual offender option was being sought.
Number 526
SENATOR TAYLOR applauded Rep. Bunde for introducing the
legislation, as it is a necessary tool, although he is concerned
the ramifications of the bill are not yet understood. He added the
idea is not new, most Western states had a habitual criminal law on
the books for years and almost all of those states rejected that
law. Many of the reasons for rejection were corrected in HB 38.
Number 536
MARGOT KNUTH, Assistant Attorney General, stated the Department of
Law favors the concept of treating repeat offenders more harshly,
however the fiscal consequences of HB 38 are considerable. Section
15 removes the good time provision. The Department of Law believes
there are two advantages to "good time." First, it motivates good
behavior; its elimination will be a disincentive to cooperative
behavior. Second, the amount of time accumulated under good time
upon release, is time the person is under supervision by the
Department of Corrections. This supervision cannot exist unless
there has been some credited time. The supervision is a good way
to reintroduce a parolee into society. For those reasons, the
Department of Law would propose that Section 15 not be adopted.
Number 566
SENATOR TAYLOR asked Ms. Knuth if she found anything in Ms. Brink's
or Mr. McGee's testimony she would disagree with, from her
experience. MS. KNUTH answered she did not; and agreed HB 38 will
prompt more defendants to go to trial because he/she would have
nothing to lose by doing so, and that it will require collateral
attacks on prior felonies.
Number 586
SENATOR TAYLOR asked Ms. Knuth to describe how an attorney would
attack a conviction that had been established and firm for five
years. MS. KNUTH stated the attorney would file a special pleading
that initiates a new case, the purpose of which is to review the
case for constitutional violations that may have occurred in the
course of the prosecution. If any violations did exist, there
would be a basis for vacating that conviction. A bill introduced
by the Governor puts some restraints on repeat re-examinations of
what the public considers to be final convictions.
SENATOR TAYLOR gave the following example. A defendant pleads
guilty to a second felony offense, and after serving the sentence,
is picked up on another felony charge seven years later. The
current attorney notes the defendant is Mexican, does not speak
English very well, and was held in jail for three days. The
attorney will challenge the prior conviction based on the
defendant's Miranda rights.
TAPE 95-29, SIDE B
SENATOR GREEN asked if the Department of Law is assuming the "good
time" provision would provide an incentive for good behavior for a
third time felon. MS. KNUTH commented it is true that even a third
time offender with a 50 year sentence believes that "good time"
behavior will lessen the sentence by one-third.
SENATOR TAYLOR stated he disagrees with the "good time" concept as
it was invented to free up prison space. At a sentencing course at
a judges' college he attended, with international participants,
sentencing procedures were compared. In Australia a 20 year
sentence means the prisoner will serve 20 years; if prisoners
misbehave, their sentences are extended. In Alaska, prisoners are
unpunished by early release, for crimes they already committed.
Number 557
REP. BUNDE agreed with Senator Taylor's assessment of the "good
time" provision, and noted that a person convicted of sexual abuse
of a minor could serve as little as five years and be out on "good
time." The notion that the parole system is successful is a
misperception. These people are psychopaths and need to be
isolated from the general population so that more people are not
victimized.
SENATOR TAYLOR asked for an estimate of the difference between
current sentences for third time class A felons, and the sentence
that would be received under HB 38. REP. BUNDE affirmed the
average sentence for a third time serious felon is 12 1/2 years.
Under HB 38, the convict would serve at least one-half, or 30
years, of the 40 - 99 year sentence.
MS. KNUTH added the 12 1/2 year sentence is correct if a person is
convicted of a single class A felony offense which has a maximum
term of 20 years. Usually these defendants have committed multiple
offenses with a series of consecutive sentences. The group most
likely to fit within the parameters of HB 38 are serving 30 or more
years already through consecutive sentencing on multiple
convictions.
SENATOR TAYLOR asked if that is why the fiscal note from the Dept.
of Corrections is as low as it is. MS. KNUTH replied
affirmatively. SENATOR TAYLOR asked if HB 38 would only apply to
prospective felons. REP. BUNDE answered HB 38 has a ten year
retroactive clause.
Number 522
SENATOR GREEN asked on which conviction for those convicts
currently serving long sentences, the sentence was imposed (the
third or greater than third). MS. KNUTH explained it is on several
convictions entered at the same time for a third time offender.
There may be multiple victims, typically a sex offender commits
several offenses before they are apprehended and charged. If
convicted on all charges, part of the sentences are consecutive.
SENATOR GREEN clarified it may be the person's first appearance in
court but that person has been accused of several crimes.
SENATOR TAYLOR referred to the retroactive clause on page 8 and
clarified it only is retroactive for 10 years. REP. BUNDE added it
only applies to three separate class A felony convictions,
therefore it would not apply to a person convicted of raping three
people as one charge. He stated a person convicted at the age of
25 would be free at age 45, under current law, yet research shows
a person in their 60's is less inclined to violence.
Number 482
SENATOR TAYLOR discussed a case in Florida in which a 17 year old
youth plea bargained and received a 44 year sentence for a first
offense. He was one of the people who shot the German tourists.
The choice was to plea bargain and serve 44 years, or be prosecuted
under the felony murder rule and face the death penalty.
Number 464
MARGARET BERCK, representing the American Civil Liberties Union
(ACLU), gave the following testimony. The ACLU is opposed to HB 38
for several reasons. This approach would be costly and is not the
best use of limited expenditures in the criminal justice system.
In response to comments made by previous witnesses, regarding a
potential increase in the number of trials, she noted a previous
client she represented chose to go to trial last December to
prevent a "strike" in anticipation that HB 38 might pass. ACLU
believes judges should have independence in judging individuals
that come before them, to allow judges to take into account
individual qualities when fashioning a sentence. HB 38 will cause
greater resources to be applied to a smaller group of people.
Aside from the increase in the number of trials, plea bargaining
may be used to obtain an offense that would not be considered a
"strike." She discussed another client who had prior felony
convictions, although not class A felonies, who was sentenced to 61
years, with 20 years suspended. She commented HB 38 essentially
sets up a very specific category of offenders and suggests
mandatory sentencing ranges for those individuals, and may allow
defense attorneys to argue for lesser sentences for other serious
offenders. HB 38 may apply to other bodies of case law in
unforeseen ways. She discussed the provision which prevents
sentence modification unless one-half or 30 years of the term is
served. She discussed a case of a terminally ill prisoner and
explained HB 38 would preclude a judge from allowing relief in such
a case.
Number 357
SENATOR TAYLOR noted that provision is in Section 6, and commented
the result of deleting that section would be the deletion of the
one-half or 30 year provision, therefore a language change would be
necessary. The intent would be to allow the court to make a
discretionary choice for extraordinary circumstances. MS. BERCK
stated she made her motions under Alaska Criminal Rule 35B.
SENATOR TAYLOR asked Ms. Berck her opinion of the "good time"
provision. MS. BERCK stated she would support providing inmates
with motivation to comply with rules and regulations within the
correctional setting, however she hoped a judge would take into
account the "good time" allowance when determining the length of a
sentence, or consecutive sentences.
Number 296
SENATOR GREEN questioned the solution to repeat offenders who
continue to commit serious crimes, if the three strikes approach is
not used. MS. BERCK noted this approach spends a large amount of
money on a small segment of offenders, albeit serious offenders.
The increase in crime is caused by the young male population, and
she feels tougher sentences initially, for crimes of a less serious
nature, might be a successful alternative.
Number 248
JERRY SHRINER, Special Assistant with the Dept. of Corrections,
discussed the department's zero fiscal note. He pointed out that
given the best of circumstances, if offenders were able to be
released at the end of 30 years, the population covered by this
bill would reach 450 people in 30 years. That number is higher
than current prison capacity in the state. Under current
sentencing practices, the same number of people will be in prison
in 12 1/2 years, as that number tends to remain constant. The
increase under HB 38 to 450 inmates in 30 years would be in
addition to other increases in the prison population that may
occur. A 450-bed medium to maximum security prison would cost at
least $80 million in current dollars to construct, and $10-$12
million per year in operating costs.
MR. SHRINER continued. Mandatory sentencing law studies have been
conducted in several states and have yielded the following
conclusions. In Delaware, with respect to drug and violent crimes,
incarcerating repeat offenders has had no effect on the rise in the
crime rate. Other factors are fueling the increase in crime. The
Pennsylvania Commission on Correctional Planning has recommended
all mandatory laws be repealed in favor of sentencing guidelines,
to give more flexibility to judges to consider individual
characteristics. In Oregon, a plan was adopted that recommended
that any new programs focus on probation, parole, and intermediate
sanctions. The Campaign for an Effective Crime Policy, a national
organization comprised of 750 justice and correctional experts,
concluded the streets are not any safer as a result of mandatory
sentencing, and that the cost-effectiveness of incarcerating repeat
offenders, from any perspective, is questionable. In states that
have studied their mandatory sentencing laws, they have studied
them from the standpoint of rising crime rates despite the
incarceration of more habitual criminals. They also extended the
studies to determine to what extent those sentences act as a
deterrent to committing a crime. While 65 percent of offenders
noted they were well aware of mandatory sentencing prior to their
offense, only 25 percent actually considered it when making the
decision to commit the crime.
Number 157
SENATOR TAYLOR asked Mr. Shriner to contact John Rees, of the
Corrections Corporation of America. That corporation owns the
correctional facility in Arizona that Alaska has contracted with.
The 500 bed facility took 5 1/2 months to complete at a cost of $14
million. He stated it would make no sense to build a prison in
Alaska for $80 million. He asked Mr. Shriner what the cost of
housing inmates at Spring Creek is. MR. SHRINER replied it cost in
excess of $100 per day, per prisoner. He pointed out state
facilities in Arizona cost $43 per day, and private facilities cost
$59 per day.
SENATOR TAYLOR moved the adoption of a conceptual amendment that
would allow for judicial discretion to release prisoners under
unusual circumstances (as proposed by Ms. Berck), in Section 6,
page 3. There was objection to the amendment. The motion failed
with Senators Green, and Miller voting "nay," and Senator Taylor
voting "yea."
SENATOR TAYLOR moved a second amendment suggested by MS. KNUTH, to
delete Section 15. SENATOR GREEN objected to the motion. The
motion failed with Senators Green and Miller voting "nay," and
Senator Taylor voting "yea."
SENATOR MILLER moved CSHB 38 (JUD)am out of committee with
individual recommendations. There being no objection, the motion
carried.
HB 120 INDEMNIFICATION OF PUBLIC EMPLOYEES
DANIELLA LOPER, staff to Representative Porter, sponsor of the
measure, gave the following testimony. HB 120 requires the state
or a municipality to provide legal defense for their employees in
actions that occur during the scope of their employment. Employers
would not be responsible for indemnifying acts of gross negligence
or intentional or willful misconduct. Additionally, the employer
would also be excused from indemnification when the case involves
disciplinary, administrative or criminal matters brought against
the employee. The implementation of HB 120 is already common
practice, and most municipalities now indemnify their employees.
Teachers are indemnified under AS 14.12.090. HB 120 is supported
by the Department of Law, and many other organizations. A similar
house bill died in the Senate Rules Committee last year.
TAPE 95-30, SIDE A
GAIL VOIGTLANDER, assistant attorney general, testified from
Anchorage. She stated HB 120 is clear, and details scenarios when
employees would be covered.
SENATOR TAYLOR asked if HB 120 sets up a new civil cause of action
on behalf of employees against employers. MS. LOPER noted that
section was removed last year. She explained page 3, line 3
outlines how the employee would seek legal defense, and page 4,
line 8, describes how an employee would handle denial of
indemnification.
SENATOR TAYLOR asked for clarification. MS. LOPER replied the
employee would file for declaratory relief. There are no
guidelines at this time, which is costing the state money.
Number 065
SENATOR TAYLOR asked how HB 120 will save the state money since
there is a letter agreement in place now. MS. LOPER stated that is
common practice in most cases, but several witnesses testifying
before the House Judiciary Committee commented the state is
spending a lot of money because nothing is outlined.
SENATOR TAYLOR asked whether the state is being charged money to
defend employees it should not defend, or if the state is being
charged for litigation when employees sue for failure to defend.
MS. LOPER was unsure, but repeated if nothing is outlined, there
could be claims made against the employer by the employee.
MS. VOIGTLANDER commented the bill does not create a new cause of
action, it merely sets forth, in statute, the public
employers'/public employees' responsibilities.
SENATOR TAYLOR questioned the need to put in statute, what has been
common practice for years. He stated various labor unions have
negotiated various deals with the state, and there is now a hold
harmless provision in the bill that says if the labor negotiators
negotiated a better deal, that would supersede the requirements in
the bill.
Number 203
STEPHANIE GALBRAITH, assistant attorney general, testified in
support of HB 120. It clarifies the obligations between public
employers and public employees. As litigation increases, more
employees are being individually named in lawsuits.
SENATOR TAYLOR asked Ms. Galbraith if she has an indemnification
letter from her employer. MS. GALBRAITH answered no. [The
remainder of Ms. Galbraith's testimony was indiscernible.]
BRAD THOMPSON, director of the Division of Risk Management,
explained the Division funds a self-insurance program for defending
and indemnifying state employees, both those in the collective
bargaining unit, and others without such contractual protections.
Among those in the collective bargaining unit, there are several
contracts with differing provisions. HB 120 codifies existing
policies and procedures that the state does, and has provided, and
is more explicit in employee participation. He described the
state's policy regarding the scope of responsibility toward
employees.
Number 272
SENATOR TAYLOR asked how HB 120 will save the state money if it
only codifies current practice. MR. THOMPSON did not believe there
would be a significant savings, however it might help avoid the
expense of a second counsel to resolve legal conflicts between the
defense and counsel.
SENATOR GREEN asked if this would be similar to errors and
omissions coverage in other settings. MR. THOMPSON stated a
professional practitioner may purchase a commercial E&O policy that
contains similar terms and conditions.
SENATOR GREEN asked if private employees would be likely to have
such coverage. MR. THOMPSON replied the private employer, to
protect his/her interests, most likely has procured a form of
liability insurance.
SENATOR GREEN asked about self-insurance. MR. THOMPSON noted the
state self insures for the first $5 million. In prior years the
state self-insured for differing amounts.
SENATOR TAYLOR asked Mr. Thompson how long he has been with the
Division of Risk Management. Mr. Thompson replied since January of
1981. SENATOR TAYLOR asked why the state is self-insured. Mr.
Thompson stated it is more cost effective to do so. SENATOR TAYLOR
commented that anyone who has the money runs away from that
industry as quickly as possible and self insures. MR. THOMPSON
added the state procures significant catastrophe insurance.
Number 336
SENATOR GREEN asked if this bill was driven by labor negotiations.
MR. THOMPSON believed the bill was conceived to address those
employees named individually in civil litigation, as public
employees, especially those without a labor agreement that
addresses the defense practices provided to them.
SENATOR GREEN asked if the original practice of an employer
covering an employee resulted from a labor agreement. MR. THOMPSON
replied it is normal for the employer to be liable for the act of
the employee.
SENATOR TAYLOR stated that his main concern is categorizing, and
attempting to guess, all of the different ramifications that may
occur in the employee/employer relationship. He repeated his
concern that codifying something that has been in practice, with no
benefit to each side, or cost saving, could create unforeseen
problems.
MR. THOMPSON explained the vast majority of states have specific
legislation providing similar protections to their employees. Many
states extend those protections down to the municipal government
structure. He did not believe HB 120 would increase the exposure
for public employers; it provides security for the employee. The
state has operated a sophisticated self insurance program for
years, however municipalities have not. A civil action against a
municipal employee is rare, and is alarming when it occurs.
SENATOR TAYLOR discussed three lawsuits against employees of his
community in the past year. In each case, the insurance carriers
had written letters of reservation against each of those employees
and the city, reserving the right to make a claim against them.
The insurance company then selected the attorney and decided when
and if the cases would be settled. He did not see how HB 120 would
be beneficial to his community.
KEVIN RITCHIE, representing the Alaska Municipal League, testified
in favor of HB 120. The bill reinforces the concept that if an
employee was not involved in any wrongdoing, the employer will
defend him/her. The way it can save time and money is by
reassuring peace officers, and other people who have to make very
important decisions, that they will be defended. In the case of
insurance in small communities, the employee who does not have the
assurance of coverage may hire his/her own attorney. That creates
an additional legal expense for the employee, and in some cases
pits the employee against the employer. He added the Alaska
Municipal League provides an insurance pool for small communities.
SENATOR GREEN asked about the University of Alaska. MR. THOMPSON
noted it is self insured to a lesser level than the state.
Number 430
SENATOR MILLER moved HB 120 out of committee with individual
recommendations. SENATOR TAYLOR objected. The motion failed with
Senators Adams, Taylor, and Green voting "nay," and Senator Miller
voting "yea."
HB 274 TUBERCULOSIS CONTROL
The next item on the agenda was CSHB 274 (JUD). ELMER LINDSTROM,
special assistant to Commissioner Purdue in the Dept. of Health &
Social Services (DHSS), testified. HB 274 was introduced at the
request of the Governor, as the result of several incidents this
past year relating to the recent outbreak of tuberculosis in
Alaska. In these incidents, highly contagious individuals were
unable, or unwilling, to take their medication. Under existing
statute, DHSS sought to require those individuals to take the
medication. The existing statute does provide for quarantine. In
one instance, DHSS was taken to court on the premise the existing
law is deficient and does not provide the necessary due process
guarantees for an individual subject to quarantine. At the advice
of the Department of Law, HB 274 was drafted to establish due
process rights, and allow DHSS to quarantine people in rare
instances where people are unable or unwilling to take medication.
An identical bill was introduced in the Senate (SB 138), and was
heard in the Senate HESS committee. Identical committee changes
were made to both versions. The two changes by the House Judiciary
committee were to eliminate any reference to criminal penalties for
individuals subject to quarantine. Second, an individual subject
to these proceedings would be allowed to seek that any court
proceedings be closed door proceedings.
SENATOR TAYLOR felt CSHB 274 (JUD) to be a fine piece of
legislation, but expressed concern that people can be put in jail
for tuberculosis, but not for intentionally infecting others with
AIDS.
SENATOR GREEN moved CSHB 274 (JUD) out of committee with individual
recommendations. There being no objection, the motion carried.
HB 158 CIVIL LIABILITY
SENATOR TAYLOR announced he would take testimony on the six court
rule changes, requested by Senator Adams. He first took
teleconference testimony.
Number 521
DICK CATTENAUGH testified via teleconference from Anchorage. He
stated HB 158 is supported by many organizations statewide. He
discussed ways in which the current law hurts small businesses.
Punitive damages are not covered by insurance policies, and can
potentially destroy a firm and the individual owners of a firm.
This can cause small firms to settle rather than fight a case, to
minimize costs. In a case his firm was involved in, members did
not want to put their personal net worths in jeopardy to prove they
did no wrong.
Number 565
DANIELLA LOPER, staff to Representative Porter, sponsor of HB 158,
provided the highlights of HB 158.
HB 158 creates a more equitable distribution of the cost and risk
of injury and will reduce costs associated with the civil justice
system in that it will eliminate duplicate recoveries for injured
plaintiffs. It will establish thresholds for damage awards in
order to allow predictability of liability exposure. It will also
stabilize the rapidly escalating costs of health care associated
with civil liability. It will require one-half of punitive damages
awarded by a court be deposited to the general fund since punitive
damages were never established to compensate the injured plaintiff,
but rather to punish the wrongdoer. The Municipality of Anchorage
supports HB 158.
MS. LOPER gave the following sectional analysis.
Section 2 deals with the statute of repose which prevents a lawsuit
from being filed after eight years. Most states offer a statute of
repose between four and six years. Exclusions to the statute of
repose are as follows: product liability; hazardous substances;
defective products; intentional acts of gross negligence; fraud or
fraudulent misrepresentation; intentionally concealed acts; or
undiscovered presence of a foreign body that has no therapeutic or
diagnostic purpose.
Number 595
SENATOR TAYLOR commented he was contacted by a woman representing
300 breast implant recipients. They are very concerned about
potential health hazards resulting from those implants. He asked
MS. LOPER how she would respond to those concerns, since many of
those women received the implants more than eight years ago.
MS. LOPER assumed breast implants would be considered a defective
product. SENATOR TAYLOR noted the problems could also be caused by
medical malpractice.
TAPE 95-30, SIDE B
MS. LOPER believed the defective product exclusion under the
statute of repose would give that group an unlimited time in which
to file a lawsuit.
MS. LOPER explained Section 3 makes a technical change suggested by
the Division of Legal Services. Section 4 provides for two years
of accrual, the time from which an injury is discovered.
Number 586
SENATOR TAYLOR asked if that provision would apply to women who had
Dalkon Shields. MS. LOPER was unsure, but replied those products
would be considered defective products under the statute of repose,
therefore would be excluded. SENATOR GREEN clarified the person
would have two years from the time symptoms appeared and the
problem was discovered to file the suit, not two years from the
time the Dalkon Shield was inserted. SENATOR TAYLOR noted he had
a client who had a Dalkon Shield inserted ten years prior, and had
given birth to two children, and had six miscarriages. She had
been misdiagnosed for ten full years by 12 different physicians.
The problem was discovered after surgery.
MS. LOPER asked how the case turned out. SENATOR TAYLOR replied
she found a contingency attorney to represent her against some very
large insurance companies. MS. LOPER noted she was allowed to file
the claim, and HB 158 would not change that ability.
MS. LOPER explained Section 5 limits the non-economic cap on
damages to $500,000 unless there is disfigurement. In most states,
the limitations on non-economic damages range anywhere from
$250,000 to $400,000. HB 158 has a two-tier system: there is a
$300,000 cap on non-economic damages for pain and suffering, and if
the injury is substantially more serious (defined in the bill), the
cap would be $500,000 on non-economic damages. An amendment
adopted on the House floor allows each child and the spouse in a
family to file a claim for that amount.
SENATOR TAYLOR questioned page 5, line 11, which allows the
$500,000 amount for a person who has third degree burns over one-
half or more of his/her body. If the burns do not cover at least
one-half of a body, the limit would be $300,000. He noted he had
third degree burns over 35 percent of his body 25 years ago, which
was an extremely painful experience.
MS. LOPER stated Senator Taylor's experience was unfortunate,
however many quadriplegics and paraplegics support HB 158. She
stated there must be some predictability to the system, and that
non-economic damages should not be treated as a lottery ticket. A
jury does not have anything substantial upon which to base the
judgment, whether it is $300,000 or $500,000. In most cases in the
state of Alaska, it is rare for non-economic damage awards to be
above $200,000. She estimated in the past five years there have
probably been less than five awards of $500,000.
Number 508
SENATOR TAYLOR asked what the purpose of Section 5 is, in light of
that fact. MS. LOPER responded the purpose is to offer
predictability to the system. SENATOR TAYLOR questioned if the
five awards she referred to were a reaction to passion on the part
of the jury, rather than a meaningful decision. MS. LOPER stated
that unlike economic damages, where there is a paper trail, and
include economic, medical, and wage costs, there is
unpredictability.
SENATOR TAYLOR asked how Section 5 provides any certainty. MS.
LOPER replied that would occur by the limit of $500,000 for non-
economic damages. SENATOR TAYLOR ascertained the predictability
would be in the fact that the plaintiff would not get an award from
the jury commensurate with the damages the jury should award. He
asked if the five awards of $500,000 made by juries that went
"nuts" over the past five years is the unpredictability HB 158
attempts to curtail. MS. LOPER explained that any case that is
filed in which an injury occurred is open to the lottery ticket of
non-economic damages. SENATOR TAYLOR disagreed.
Number 475
MS. LOPER described Section 6, dealing with punitive damages.
Section 6 codifies punitive damages as defined by the Alaska
Supreme Court: outrageous conduct, including acts done with malice
or bad motives, or reckless indifference to the interest of another
person. SENATOR TAYLOR asked, if that was the same standard of law
to which Mr. Cattenaugh and his firm were to be held, so that when
he made his decision about whether or not the firm was at risk for
a punitive damage award, his attorneys would have advised him that
the Alaska Supreme Court has determined it was outrageous conduct,
including acts done with malice or bad motives, or reckless
indifference to the interest of another person. He stated Section
6 does not change anything for Mr. Cattenaugh's firm concerning
punitive damages. MS. LOPER stated that is correct, to the best of
her knowledge. She stated there is no cap on punitive damages, but
a formula is offered.
MS. LOPER explained the formula for punitive damages in Section 6
is three times the compensatory damages (the economic damages plus
non-economic damages), or $300,000, whichever is greater. SENATOR
TAYLOR asked if a person had $1,000,000 in economic damages and
$300,000 in non-economic damages, how much he/she could collect in
punitive damages. MS. LOPER calculated the punitive damages could
be $3.9 million. If the injured person was awarded no economic or
non-economic damages, the amount could be $300,000. She explained
of the $3.9 million punitive award, one-half would go to the state,
the other one-half would go to the injured party.
Number 439
SENATOR TAYLOR questioned the incentive for an injured party to
request punitive damages, if one-half is given to the state. He
asked if the state would pay for one-half of the attorney fees to
get the punitive damage award. MS. LOPER replied the state has
absolutely no standing, as stated in the bill, because punitive
damages were never established to compensate the injured party, but
to punish the wrongdoer. SENATOR TAYLOR asked who would pay for
the attorney. MS. LOPER answered the attorney would base the
contingency fee on the full amount before it is divided.
Number 428
SENATOR TAYLOR discussed the following scenario. If the punitive
damage award is $300,000 and the attorney takes the contingency fee
(50 percent) off of the full amount, the attorney would receive
$150,000. The injured party would then get $75,000, or one-half of
the remaining award. MS. LOPER agreed, and repeated the reason is
that punitive damages were not established to compensate the
injured party; they were established to punish the wrongdoer.
SENATOR TAYLOR stated under HB 158, the attorney would receive
twice as much as the victim. MS. LOPER agreed, and noted an
amendment on the House floor failed, but would have based the
attorney's contingency fee on a percentage of the injured party's
one-half portion.
Number 408
SENATOR TAYLOR asked how many punitive damage awards have been
awarded in the past five years in Alaska. MS. LOPER estimated the
number was under ten, because the state of Alaska has one of the
toughest standards for punitive damage awards.
SENATOR TAYLOR asked if the punitive damage provision in HB 158
would apply to a case similar to the Exxon Valdez case. MS. LOPER
replied that case was covered by federal law. SENATOR TAYLOR noted
the state also filed suit. MS. LOPER believed any state suits
filed would fall under the provisions of HB 158, if passed.
SENATOR TAYLOR commented if a tanker spilled oil around Southeast,
the damages would not be economic. MS. LOPER indicated economic
damages were awarded in the Exxon Valdez case. SENATOR TAYLOR
stated there were also punitive and non-economic damages, to cover
the loss of environmental things, such as the ambiance. MS. LOPER
noted, under maritime law, awards for non-economic damages cannot
be made. SENATOR TAYLOR clarified that under maritime law there is
a sailing to suitor's clause, which allows the injured party to
bring the suit to either state or federal court. If the case is
tried in state court, state laws apply, therefore, the injured
party would be allowed to sue for non-economic damages. Under
maritime law, there is a limitation on liability which is the value
of the ship.
MS. LOPER informed Senator Taylor that a bill passed the House in
Congress and is working its way through the Senate, that limits
non-economic damages to $250,000, and uses the same formula for
punitive damages.
SENATOR TAYLOR ascertained the state received $50 million from the
Exxon Valdez case, for "restitution." MS. LOPER stated those
punitive damages will be going to the injured parties, not to the
state. SENATOR TAYLOR noted a company owning a leaky oil tanker
would support the bill in Congress.
Number 359
MS. LOPER explained Section 8 clarifies the plaintiff is the only
party that can choose to take periodic payments. Security should
be posted, and self-insured municipalities would be excluded.
SENATOR TAYLOR asked for the definition of an "authorized insurer."
MS. LOPER assumed it would be an insurance company that could offer
enough money not to cause the court any problems for any kind of
security to be posted. SENATOR TAYLOR stated it means people who
are authorized to sell insurance in the state of Alaska. MS. LOPER
offered to obtain the statutory definition.
MS. LOPER discussed Section 9 which offers inflation adjustments
for periodic payments, so that the court will specify the
percentage or method for increases of future periodic payments to
cover inflation. She added it will prevent future litigation for
adjustment of the original award. SENATOR TAYLOR asked Ms. Loper
if she had any money invested between 1976 and 1980. He remarked
that had the best experts been hired in 1975 to determine an
inflation rate for an award, they would have been wrong. MS. LOPER
commented there was not even a provision in current law that
adjusted future payments by anticipated inflation, so this section
was added for the benefit of the injured plaintiff. She guessed
the plaintiff could request the periodic payment schedule be
amended if inflation rates changed radically.
MS. LOPER described the collateral benefits section (Section 10).
Most of the section is current law, except for the fact that
plaintiffs would not be able to recover duplicate amounts received
from collateral sources. It provides exceptions for certain
collateral sources that are subrogated to the claimant, and for
death benefits and worker compensation benefits. It allows a
person defending a defendant to introduce evidence of amounts
received from certain collateral sources and prohibits a person who
provides a collateral benefit that is introduced into evidence from
recovering that amount from the claimant or being subrogated the
rights of the claimant.
SENATOR TAYLOR asked how that would apply to a construction worker
who was badly injured on the job due to an improperly manufactured
DA cap. The worker begins to receive worker compensation payments
and brings suit against the third party for negligence. MS. LOPER
stated workers compensation benefits cannot be introduced as a
collateral benefit (lines 25-29, page 7). SENATOR TAYLOR noted
that is convenient for the insurance company defending because that
way the jury would not hear about how much money was paid by
workers compensation to keep the worker alive before the suit was
settled.
MS. LOPER noted it is similar to Civil Rule 411. If the workers
compensation benefit was $100,000, and the third party's damages
for negligence amounted to $200,000, the workers compensation award
could not be introduced as a collateral source. If the workers
compensation award was for $300,000, he/she would have to pay the
employer $100,000 for the workers compensation, and would keep
$200,000. SENATOR TAYLOR asserted the jury would not know the
worker owed the $100,000 bill that would have to be paid. He asked
what other sources the jury could be informed of. MS. LOPER
replied medical benefit payments could be disclosed. SENATOR
TAYLOR answered if a person is responsible enough to purchase an
insurance policy to cover his/her own injuries, even though the
other party was negligent, they could claim they did not owe the
claimant that amount. MS. LOPER gave the following example. An
employee is covered by health insurance by the employer, and is
involved in an accident (not job related) and breaks a leg. The
hospital bill is $50,000. Her medical insurance covers 80 percent
of the $50,000. The jury awards $100,000. Even though the medical
benefit was paid for by the insurance company, the employee would
pocket that money. SENATOR TAYLOR asked what kind of policy would
allow that since the carrier would sue for payment. Under state
health care coverage, if the state covers medical bills, the
injured party is required to sue the negligent party or the state
can terminate health care coverage. The state does not pay
attorney's fees for the law suit. Most insurance carriers have a
similar provision in their contracts.
SENATOR TAYLOR clarified under Section 10, the jury would be
informed that the injured party received $50,000 from the employer,
to prevent the injured party from receiving a judgement of
$100,000. MS. LOPER stated plaintiffs are overcompensated all of
the time; they are not repaying the insurance company. SENATOR
TAYLOR asked MS. LOPER if she had any evidence to cite. She stated
she did it herself. SENATOR TAYLOR noted if she was reimbursed for
$100,000, the negligent party would essentially get credit for the
$50,000 paid by the employer. MS. LOPER asserted collateral
benefits are not designed to punish the wrongdoer, that would be
paid under punitive damages. SENATOR TAYLOR remarked that if the
award was for $100,000, and the jury was informed the insurance
company paid $50,000 in medical bills, the difference would be
$50,000 paid to the injured party, and the wrongdoer would
essentially be rewarded by not having to pay the medical costs.
Number 076
MS. LOPER responded everyone bears the cost in the increase of
insurance rates. An injured party could punish a drunk driver
under punitive damages, collateral benefits were never designed to
offer duplicate recoveries to the injured party. SENATOR TAYLOR
believed the employer has the right to be reimbursed for the cost
of medical expenses paid by the employer, which will keep rates
down. MS. LOPER replied it basically sets up a no-fault state.
The intent of the section is to stop the overcompensation of
plaintiffs.
TAPE 95-31, SIDE A
SENATOR TAYLOR argued that punitive damages cannot be relied on,
since they are very rarely awarded, and one-half would have to be
paid to the state under HB 158. Also, punitive damages are not
covered by an insurance policy. He repeated that if Aetna paid
$50,000 in medical bills, and the injured party sues, Aetna would
be entitled to repayment. If the judgement was $100,000, Aetna
would be repaid $50,000, and the attorney's contingency fee of 30
percent would amount to $30,000. The remainder of $20,000 would go
to the injured party. SENATOR TAYLOR explained that under HB 158,
under the collateral rule, the amount of the award would be
$50,000, of which 30 percent would be paid to the attorney
($17,000) but $50,000 would still be owed to Aetna.
Number 295
SENATOR TAYLOR commented he did not understand why the sponsor
would want to deprive the insurance carrier who did no wrong, from
being able to seek subrogation and restitution. He noted this
provision would work well for a millionaire since one's own money
is not considered a collateral source. MS. LOPER said an indigent
person would collect the same amount as the millionaire.
SENATOR TAYLOR asked how the working class person would be affected
by the collateral source provision. MS. LOPER answered if the
person was insured, there would be no subrogation, and the person
would have to show that some compensation had been made, and that
the injured party did not pay the hospital bill out of pocket.
SENATOR TAYLOR repeated his concern that the collateral source
provision allows the "bad" guy to take credit for the "good" guys
coverage. MS. LOPER replied she views the situation from the
standpoint of returning the injured party to where they were prior
to the accident. From that perspective, she believes the
collateral benefits section in current law overcompensates the
injured party. SENATOR TAYLOR asked for data on the amounts of
overcompensation awards.
MS. LOPER explained Section 11. It deals with the apportionment of
fault by bringing in all parties responsible for the accident. It
does away with joint, civil liability. In Section 11 the phrase
"party to person" is removed and the clause, "or other person
responsible for the damages to each claimant regardless of whether
the other person, including the employer, is or could have been
named as a party to the action" is added. That would stop the
practice of going after the person with the deep pocket by naming
each person responsible for the accident as a party to the action,
including the employer. This section would reverse the Lake v
Construction decision.
Section 12 further delineates the apportionment of fault. MS.
LOPER stated when the injured party brings a claim to court, all
parties that have a percentage of fault must be named, instead of
just naming one that is insured for the largest amount. SENATOR
TAYLOR asked if this provision would result in multiple litigation
which would increase costs, as opposed to suing the two most liable
parties. MS. LOPER replied all people responsible for the act
would be sued. SENATOR TAYLOR stated the defendant has always had
the right to name and bring into the suit all parties involved. He
added if a person was hit by two cars and the accident resulted in
a pileup, the injured party would have to sue all cars involved,
and the state for poor road maintenance, rather than the two
drivers who were primarily responsible for the accident. He
questioned the increased amount of court time the provision would
create. MS. LOPER stated she believes it is fair and just to name
all those responsible for the accident, rather than allow those who
have no insurance to walk away from a case. SENATOR TAYLOR claimed
the defendant would bring in other responsible parties, rather than
taking sole responsibility.
MS. LOPER believed the issue to be a policy call and that Senator
Taylor is saying the defendant should take full responsibility,
even though he/she is only 10 percent at fault, but has the most
insurance coverage. SENATOR TAYLOR clarified that under current
law, a wealthy contractor who is being sued, but is only
responsible for 10 percent of the damages, would have his attorneys
bring the other defendants into court. He stated Section 12 forces
the injured victim to figure out who all of the actors were, down
to the smallest percentile of liability. MS. LOPER reiterated
Section 12 is designed to prevent the plaintiff from suing one
party only because that party has the most money.
MS. LOPER explained Section 13 allows either party to make an offer
to settle a claim up to 10 days before a trial begins. The offer
must be accepted within 10 days and recorded by the clerk of the
court.
Section 14 deals with prejudgment interest and changes the interest
rate from the fixed amount of 10.5 percent, to a floating rate,
three percent above the Federal Reserve District discount rate.
SENATOR TAYLOR asked if the prejudgment interest is determined on
the date the process is served, rather than the date of injury.
MIKE LESSMEIER, State Farm Insurance, clarified it would be
determined on the date of written notification by the claimant,
which could be the date of injury.
Section 15 disallows the payment of prejudgment interest for future
economic damages, future non-economic damages, or for punitive
damages.
MS. LOPER stated Section 16 makes a technical change to current law
and includes all of the provisions in HB 158 in the Uniform
Arbitration Act.
Section 17 requires medical expert witnesses to meet certain
standards. SENATOR TAYLOR asked if a general practitioner would be
unable to testify to previous malpractice by a specialist, since
that practitioner was not trained in that particular discipline.
MR. LESSMEIER noted the general practitioner would be allowed to
testify. SENATOR TAYLOR asked for evidence of cases in which the
court has allowed a doctor, not familiar with a specific
discipline, to testify on that discipline.
MS. LOPER stated Section 18 defines the terms "professional
negligence" and "professional services" as used in HB 158. She
noted at one time there was a specific statute of limitations and
repose for health care providers, but that section was eliminated
in the House Finance Committee. SENATOR TAYLOR added AS 09.55.560
contains a definition of health care providers by listing each.
MS. LOPER described Section 19 as providing clarification of
circumstances in which hospitals are held directly liable for the
actions of a health care provider not employed by the hospital.
Current law permits a claimant to sue only the hospital, rather
than the doctor as an independent contractor, who may have less
ability to pay. SENATOR TAYLOR asked if current law only permits
the claimant to sue the hospital. MS. LOPER replied under current
law the claimant can sue both the doctor and the hospital. She
added the state of Alaska does not require doctors to carry
insurance. SENATOR TAYLOR stated that resulted from the first tort
reform movement. Doctors complained they could not purchase
insurance at a reasonable rate, so MICA was created which doctors
had to join. The state was sued by doctors who were able to find
less expensive insurance, so they did not have to be covered under
MICA. Since that time, the state has not been able to require
doctors to have malpractice coverage.
SENATOR TAYLOR commented line 29 defines when a doctor is an
independent contractor. MS. LOPER noted the definition is on page
11, line 19. SENATOR TAYLOR believed the definition classifies an
independent contractor as a welcome trespasser. MS. LOPER noted
the definition is further defined by the list of "health care
providers" on line 14, and the hospital will always be liable for
the hiring of an independent contractor if it was negligent in its
hiring practices. Section 19 also requires the independent
contractor to give notice of limited liability, posted in all
admissions areas and in area newspapers annually.
TAPE 95-31, SIDE B
SENATOR TAYLOR asked what that notice will mean to a patient. MS.
LOPER replied the only control a hospital administrator has over a
physician is in the hiring process. SENATOR TAYLOR stated as a
hospital attorney, he got rid of five doctors, and had their
licenses pulled. He stated a good hospital board and administrator
will regularly engage in peer review and will not cover for
incompetent doctors. He noted if the hospital in Tampa, where
several tragedies have recently occurred, had hired those doctors
as independent contractors, the hospital would have no liability to
any of the victims. MS. LOPER replied the hospital would not be
liable if it believed the doctors were competent when they were
hired. SENATOR TAYLOR asked how the hospital board would know if
the doctor was incompetent until he/she did an incompetent act.
MS. LOPER believed the hospital board would investigate a doctor's
background, and added if the hospital was negligent in hiring a
doctor, it would be liable. SENATOR TAYLOR stated mistakes are
considered negligence, and if a good surgeon makes a mistake, the
hospital would not share the liability. He discussed the heart
surgeon in Portland, Oregon who made fatal errors in two heart
transplant operations in one year, and how a notice of limited
liability would be of little help to the families of those victims.
MS. LOPER stated Section 20 prevents a person from suing if the
accident occurred while in the act of committing a felony. SENATOR
TAYLOR stated this section resulted from testimony in the House
Finance Committee about several young men who were attempting to
paint numbers on the roof of a high school as a prank, and one of
the men fell through a skylight and was disabled for life. He was
awarded several hundred thousand dollars because the skylight was
painted black and was difficult to see. He asked if this provision
was originally written to include any crime. MS. LOPER replied the
crime must be a felony. SENATOR TAYLOR clarified the section has
been tightened since it now includes a person who attempts to
convict a felony and not only a person convicted of committing a
felony.
MS. LOPER explained Section 21 is fashioned after Civil Rule 11.
It is an attempt to stop frivolous lawsuits from being filed. If
there is a violation, monetary sanctions of up to $10,000 shall be
imposed. SENATOR TAYLOR questioned whether a similar provision
exists in the rules of court. MS. LOPER stated affirmatively, but
noted there are no monetary sanctions. SENATOR TAYLOR stated it is
his understanding there are no limits, either. He asked what the
purpose of placing this provision in statute is. MS. LOPER
repeated the court rule does not specify monetary sanctions against
the attorney. SENATOR TAYLOR stated this provision caps the amount
the attorney can be charged. MR. LESSMEIER commented Rule 37
allows sanctions. MS. LOPER added Section 21 provides one option,
a larger sanction could be obtained using Rule 37.
MS. LOPER stated Alaska Rule of Civil Procedure 95 was amended in
Section 21. SENATOR TAYLOR noted that instead of changing the Rule
which would require a two-thirds majority vote, the statute is
changed, which has the effect of changing the rule.
SENATOR TAYLOR asked Ms. Loper to provide the requested information
as soon as possible, and adjourned the meeting at 6:26 p.m.
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