SENATE BILL NO. 178 "An Act relating to civil nuisance actions; and providing for an effective date." BRUCE BOTELHO, ATTORNEY GENERAL DESIGNEE, DEPARTMENT OF LAW responded to an inquiry by the House Finance Committee in regards to the constitutionality of HCS CSSB 178 (FIN). He distinguished between a private and public nuisance. He observed that a private nuisance is a "non-trespassing invasion of another's interest in private use and enjoyment of land." He summarized that a private nuisance threatens one person or a relative few people and involves interference in the use or enjoyment of land and is actionable by the individual person or persons whose rights have been disturbed. 1 Attorney General Botelho observed that HCS CSSB 178 (FIN) would amend AS 09.45.230. He explained that general nuisance law authorizes a private cause of action with two remedies, the right to seek to enjoin or abate the private nuisance; and the right to seek damages for the injury. He stressed that HCS CSSB 178 (FIN) leaves intact the general law of nuisance, except within the parameters detailed on page 1, line 7 through page 2 line 6, HCS CSSB 178 (FIN). Attorney General Botelho observed that HCS CSSB 178 (FIN) provides a definition of the term "nuisance", and bars any pending action that has not been brought to judgement before the effective date. Attorney General Botelho acknowledged that the purpose of HCS CSSB 178 (FIN) is clear. He noted that if a governmental institution has approved the issuance of a permit, license or order, after having determined that the activity to be conducted will not offend the public health or safety, then the permittee should be able to rely upon that determination with some reasonable assurance that there will not be interference with the conduct of the activity. Attorney General Botelho summarized that proponents feel that nuisance law as it currently exists is being abused by those who, disgruntled by their lack of success in blocking the issuance or renewal of permits, resort to this means to achieve their ends. He emphasized that there are appropriate remedies and sanctions that the court may impose on those that abuse the process. Attorney General Botelho outlined three potential constitutional problems. He stated that it is a fundamental principle of law that a person has a right to reasonable use and enjoyment of his property and to the extent there is substantial interference with that right, the person is entitled to a remedy or some form of compensation. He pointed out that HCS CSSB 178 (FIN) disallows a remedy to private property owners. He suggested that this may raise the question of constitutionality. He accentuated that courts are under a duty to construe statutes in a way that they will be found consistent with the Constitution. He reflected that the court could read into the statute a governmental taking and an implied right to seek damages from the government. Attorney General Botelho spoke to Amendment 3, provided by Representative Brown (copy on file). He observed that the amendment recognizes the liability of the state and is drafted to alleviate the constitutional problem. He pointed 2 out that the amendment would not address all the issues regarding the right to seek damages. He noted that there would be no viable remedy for landowners who move against federal permit holders. He added that liability for damages has effectively shifted from the permit holder to the public at large. Attorney General Botelho addressed the issue of state indemnification. He pointed out that there may be a potential constitutional problem with state indemnification. He questioned if the legislature can commit public resources for the taking of private property, for a non-public purpose. He emphasized that public lawyers could be called on to defend the conduct of permit holders. Attorney General Botelho challenged the constitutionality of the retroactive effective date. He noted that HCS CSSB 178 (FIN) would extinguish the right to maintain an action. He suggested that a pending tort claim may be a constitutionally protected property interest that itself cannot be taken away without due process. Attorney General Botelho acknowledged that the underlying motive for HCS CSSB 178 (FIN) is to make Alaska more "user friendly" to resource extraction industries, which will be the economic base of the state. He urged caution that in curing one perceived problem, another is not created. He accented that a prudent regulator, faced with the prospect of state liability, is likely to modify his conduct through additional public notice, strict conditions, indemnification, and disclaimers. Citizens dissatisfied with the conduct of regulators could bring increased injunctive actions against the state to block the issuance of permits. Attorney General Botelho conceded that he could not anticipate the court's position in regards to the matters previously discussed. He elucidated that some bans are in place in other states, that proponents may successfully argue that exceptions are narrowly crafted, and that public enforcement and remedies remain in effect. He maintained that the legislation can impose reasonable restrictions on the right to bring private nuisance actions. He pointed out that the legislature has already banned certain nuisance actions against agriculture, where one moves to the cause of the nuisance, AS 09.45.235. He added that the legislature can modify the definition of "nuisance". He read the state of California's definition of "nuisance": "Anything which is injurious to health, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the 3 comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, or highway, is a nuisance." Attorney General Botelho noted that HCS CSSB 178 (FIN) defines "nuisance" as: "A substantial and unreasonable interference with the use or enjoyment of real property, including water." Attorney General Botelho pointed out that the presumption that an activity conducted in accordance with a state or federal license or permit is reasonable, could be used to rebut nuisance lawsuits. Attorney General Botelho suggested that if HCS CSSB 178 (FIN) is adopted that AS 46. 03.870 would need to be amended. He stressed that contradictory statutes not remain. Representative Therriault asked if there is some point when a person unhappy with the result of actions taken to prevent an activity cannot bring additional court action. Attorney General Botelho replied that if an action to prevent the issuance of a permit is judged by the court to be invalid than the basis for additional action would not exist. In response to a question by Representative Therriault, Attorney General Botelho demonstrated that even if the permitting agency determines that no impact will be caused at the property line there is no way to guarantee that damages will not result. He raised the question of who would be responsible for damages. Representative Therriault emphasized that private property owners would be able to argue their case when the permit comes up for review if damages to their property has occurred. Attorney General Botelho pointed out that if damages occur the agency does not have the authority to assign damages to the permit holder. He acknowledged that agencies can impose stronger provisions. Representative Therriault noted that some permits contain provisions for compensation of possible damage by the permitted activity. Attorney General Botelho observed that the larger the permit and the closer to populated areas the greater the chance that permits will identify and anticipate most eventualities. In response to a question by Representative Foster, Attorney 4 General Botelho observed that the California definition of "nuisance" is a broad interpretation. He discussed the California definition of "nuisance". Representative Grussendorf asked for recommendations to accomplish the intent of the legislation. Attorney General Botelho prefaced his remarks by stressing that courts are constrained to try to determine that enacted legislation is constitutional. He observed that the substitution of the state as the body upon which damages can be asserted would raise the additional question of can the state use resources to satisfy a non public purpose. He suggested that the state be expressly permitted to tender the actual cost of the case. Representative Brown referred to Amendment 3. Attorney General Botelho reiterated that the best defense of Amendment 3 is to allow the state to tender the defense from the outset. He expounded that the cost of the case including the judgement be adopted by the state. Representative Brown questioned if the adoption of Amendment 3 would allow individuals to litigate against the state for damages occurring under federal permits. Attorney General Botelho could not answer the question. He noted that if there is a taking by the state as a result of the statute, the courts may focus on the fact that the state is the court remedy. He suggested that allowing the state to tender the case along with adoption of Amendment 3 may remedy the situation. Representative Brown provided to members a letter by Theresa Bannister, Legislative Counsel, dated 3/7/94 (copy on file). She asked if Attorney General Botelho agreed with assumptions, made by Ms. Bannister, that nuclear waste exception raise a constitutional equal protection issue. Attorney General Botelho did not feel that the issue is a major impediment. Representative Parnell referred to the opinion by Theresa Bannister, Legislative Counsel, regarding the retroactive clause. He noted that the abruptness of the action was cause for concern. He asked if the fact that the legislation was under consideration for an extended length of time would counteract the claim of abruptness of action. Attorney General Botelho felt that the court would consider the effective date of the action. (Tape Change, HFC 94-53, Side 1) Attorney General Botelho anticipated that the court would consider the fundamental fairness of the issue. He could 5 not recall other examples of litigation cut off by legislation. He discussed the retroactive change made by Economic Limit Factor. He illuminated factors that the court might consider. Representative Navarre raised the issue of equal protection of permit holders. Attorney General Botelho stressed that it is possible that an equal protection issue could be raised, if permittee subject to the same permit processes were treated differently. He anticipated that the court would allow the legislature to distinguish between classes of permittee. In response to a question by Representative Navarre, Attorney General Botelho emphasized that permitting agencies cannot control the actual impact of activities. Representative Navarre queried if private property holders testify that they believe an activity being reviewed for permitting will lower their property values and the activity after being permitted does result in a lowering of the private property values, if it would be a foreseeable harm. Attorney General Botelho answered that it could be a foreseeable harm. He stressed that the issue is, do they have entitlement to compensation for the reduced value. Representative Navarre asked who would be liable under HCS CSSB 178 (FIN). Attorney General Botelho replied that in order for a court to construe the legislation constitutional there would have to be an implied right of action against the permitting agency. Attorney General Botelho discussed private versus public nuisance actions. Representative Brown asked if the definition of "nuisance" should be uniform. Attorney General Botelho acknowledged that definitions may vary through statute. Representative Hanley asked if agencies can prohibit a permit from being issued based on a potential damage to private property. Attorney General Botelho affirmed that conditions can be placed or imposed to mitigate effects on private property. He pointed out that private and public interests overlap. Representative Navarre asserted that HCS CSSB 178 (FIN) extinguishes private property concerns even if they are not addressed. CSSB 178 (FIN) was HELD in Committee for further discussion.