HB 86-INJUNCTIONS AGAINST PERMITTED PROJECTS  CHAIR RALPH SEEKINS called the Senate Judiciary Standing Committee meeting to order at 1:32 p.m. Present were Senators Ogan and Therriault. The first order of business to come before the committee was HB 86. MR. JIM POUND, Staff to Representative Fate, sponsor of HB 86, said it would provide a private remedy to permittees or owners of state permitted projects who are the victims of frivolous or obstructionist type litigation. In addition to any other penalty or sanction otherwise currently provided by law, it will make a person who initiates or maintains a malicious claim against a state permitted project liable for damages by the lawsuit. It specifies the type of damages the aggrieved person would be able to seek. The cause of action is based on concepts established in law for stating a claim for unlawful civil proceedings and abuse of process. The benefits are that it avoids unfamiliar potential ambiguous language and once adopted, the courts will be able to draw up an existing case law from Alaska to help interpret and apply the law. HB 86 only applies to egregious cases and will not deter potential litigants from bringing legitimate meritorious cases to court. CHAIR SEEKINS stated they were considering CSSSHB 86(JUD) am, version W.a. SENATOR OGAN asked if there was a definition of malicious claim in somewhere statute. MR. POUND replied he didn't have a specific definition, but it relates to various aspects of the word "malice." Malicious, according to Black's Law, is characterized by or involving malice, having or done with wicked or evil, or mischievous intentions or motives, wrongful or done intentionally without just cause or excuse or as a result of ill will. That's according to the sixth edition of Black's Law, 1990. CHAIR SEEKINS said more than likely there was case law that defined malice and asked if Senator Ogan was suggesting defining "malice" for this section of the law. MR. POUND noted that "malicious prosecution" has a lot of case law behind it that could be part of the interpretation. SENATOR FRENCH arrived at 1:40 p.m. SENATOR FRENCH asked if frivolous could be malicious. MR. POUND answered that a frivolous claim could be broader than with malice. He thought the Supreme Court had actually defined the term, but he didn't have a specific case to cite. He said they are targeting mostly the types of lawsuits that are filed after a permitted project has gone through the entire process. These suits are often filed by professional non-profit law firms and individuals who feel they didn't get a fair deal, even though they were part of the entire process all the way through. MR. DAVID GREEN, Executive Director, First Amendment Project, said they are based in Oakland, California, and that Senator French invited him to address the committee on the proposed statute. The first amendment interest here is the right to petition the government for redress of grievances. The U.S. Supreme Court has spent a fair amount of time considering the right to petition the government and has come up with a very strong threshold requirement for someone to be immune from any liability for petitioning the government. That includes filing of a lawsuit or administrative action. They are immune unless their petitioning activity was objectively baseless. The main constitutional defect in the proposed statute is that the Supreme Court has very clearly said regardless of what the person's motive was in bringing the action, regardless of any bad faith they may have had, if the action was not objectively baseless, they are entitled to absolute immunity. Objectively baseless usually means that no reasonable litigant could realistically expect to secure favorable relief or that he was lacking in any probable cause to institute the proceedings. It's important that the test is objective, not subjective. One of the reasons for this protection is to avoid any infection of the person's subjective motives. This is in recognition that once the discovery process is started, it has a very chilling effect on a person exercising his first amendment rights. The second part of the test is looking at improper purpose or looking at whether the person bringing the lawsuit was seeking genuine relief or just exploiting the process. The third constitutional requirement was just affirmed by the U.S. Supreme Court earlier this week in a telemarketing decision. At any time you make provisions for an action that might restrict one's first amendment rights, the burden of proof is on the party bringing that action and it must be clear and convincing. MR. GREEN felt that the right to petition the government is stronger is situations in which someone is suing the government himself, because they do not believe the government is doing the job it was supposed to do or has exceeded its authority or is acting outside of its bounds. This proposed statute creates potential liability for someone who was actually suing the government. "I believe that the right to petition the government should be protected more strongly than it is today in ordinary civil litigation context." 1:55 p.m.  SENATOR FRENCH asked him if he was referring to the Professional Real Estate Investors v. Columbia case. MR. GREEN replied yes this is one of the leading cases in this area. SENATOR FRENCH asked if the Supreme Court rejected the subjective inquiry and relied on objective analysis. MR. GREEN replied yes. The Court was careful to say that not only was the objective test required it was the threshold of determination. You couldn't go further into the subjective inquiry without making an objective finding first. CHAIR SEEKINS asked if it was constitutional to award a certain amount of damages to someone based on a frivolous claim, but not on a malicious claim. MR. GREEN replied that the Supreme Court said the lawsuit must be objectively based and only if the litigation is objectively meritless, can the Court examine the litigant's subjective motivation. The fact that it was malicious is not relevant until you determine that it was baseless and that is directly from the Supreme Court case. That indeed is the argument that the Supreme Court rejected. The question before them was - was the presence of bad faith adequate and the Court said no. CHAIR SEEKINS asked if it would be better to say a frivolous "or" malicious case. MR. GREEN replied that it would have to say "and", because it requires both and added that he was not an authority on Rule 82. MR. ALVIN ANDERS said he is representing himself and that he is a member of the Libertarian party. He has the same problem with the bill that other people bring up. He thought it would have a chilling effect on small businesses and individuals who feel they got a bad shake from the government. It sounds like they are trying to outlaw thought crime and trying to fix a problem that probably exists from having too much government already. He said this would stop groups like the Institute for Justice, a Libertarian group that fights eminent domain and things like that. SENATOR THERRIAULT asked if he would challenge the eminent domain on the fact that the acreage is not needed or that an improper price was being paid. MR. ANDERS replied that the Institute for Justice is often fighting eminent domain for a part of a larger effort that does require some permits. Maybe the person does feel they got a bad shake by having their property unlawfully taken and are using their meager resources to try to stop the project until they feel justice is done. SENATOR FRENCH said when he was in law school, traffic stops were used by police to sometimes harass a minority that they thought might be breaking the law (by transporting cocaine), but they didn't have any real good reason to pull them over. There was a split in the Court of Appeals over whether or not you would ever look inside a police officer's mind to see if he had a bad reason for pulling someone over. The case got resolved after years and years of fighting over it - in the Supreme Court on a 9 - 0 vote. The Court said you don't look at the officer's subjective intentions. This keeps you from having to psychoanalyze the police officer about what he did in the field. He didn't think you could penalize someone for having a terrible reason for bringing a good lawsuit. He felt that they needed to put "objectively baseless" in there somewhere. SENATORS Ogan and Therriault both said they needed more time with this bill. CHAIR SEEKINS said they would hold HB 86 for further discussion.