HB 168-INJUNCTION SECURITY: INDUSTRIAL OPERATION  1:44:52 PM CHAIR EGAN announced consideration of HB 168 [CSHB 168(JUD), labeled 27-LS0395\D, was before the committee]. He said that Representative Feige did an initial presentation on the bill last week. Before accepting public testimony, Chair Egan asked if he had any further comments. REPRESENTATIVE ERIC FEIGE, sponsor of HB 168, said he wanted to respond to some of the issues raised in a letter from the Alaska Conservation Alliance. It says this legislation is not aimed at frivolous lawsuits, and whether a lawsuit is frivolous or has merit is really a matter of opinion. The bond amounts are not determined by legislation but by the judge. Nothing in HB 168 specifies an amount. This bill in no way prevents Alaskans from challenging government issued permits. The state permit process allows for plenty of public input prior to granting permits with plenty of opportunities to appeal them along the way. He reaffirmed for the committee that Alaska has one of the most comprehensive permitting process of any of the 50 states. He directed attention to the legal memo prepared for Senator Egan, dated February 29, 2012, that mirrors one that was requested by Representative Gruenberg, dated March 21, 2011 (part of the original bill packet). It says that HB 168 parallels the requirements of Alaska Civil Rule 65(c) that states: No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant in such sum as the court deems proper. The payment of such costs and damages as maybe occurred or suffered by any party who is found to have been wrongfully enjoined or restrained. No such security shall be required of the state or a municipality or of an officer or an agency thereof. REPRESENTATIVE FEIGE said the end of the letter said this legislation is so broad that it may even prevent the state from enforcing violations of law, but that is not true. A state agency always has the option to simply withdraw the permit, especially if the company or an operator is found to be in violation of the terms of its permit. 1:48:56 PM He said that HB 168 was amended in House Judiciary, consulting with the Department of Law, to more closely mirror the language of the court rule. The CS would clarify that the proposed statute would not change it, and the discretion would be left entirely to the court. He said they were very conscious of not trying to change the court rule. REPRESENTATIVE FEIGE said when legally permitted projects are shut down it is not only the project sponsor who is affected but the project's workers who get laid off (both union and non- union) and their families. He saw HB 168 as a jobs bill and with the Labor and Commerce Committee referral he thought the Senate agreed. CHAIR EGAN asked the sponsor's staff, Ms. Hay, if she wanted to testify. LINDA HAY, staff to Representative Feige, indicated she did not want to testify on HB 168. MIKE SATRIE, Executive Director, Council of Alaska Producers, Juneau, AK, said the council supported HB 168. The council is a non-profit trade association representing the producing large metal mines and development projects in the State of Alaska; it supports a rigorous science-based permitting system that allows efficient and responsible development of Alaska's resources. They encourage and respect the public process used to manage these resources. Unfortunately, and too often, once the process has been completed and permits have been issued, opponents of a project file litigation to force the injunction or stay of these permits, which delays and potentially stops the permitted development. If this litigation is ultimately found to have no merit, it is Alaskan workers and their families who suffer the most due to lost wages and opportunity. To rectify this problem, HB 168 requires a party seeking a restraining order, preliminary injunction, a stay or a vacation of a permit to post a bond that would cover, amongst other things, lost wages and benefits if it is found the suit has been wrongfully enjoined. The courts have broad leeway in fixing the amount of this bond, which allows them to also protect the rights of the individual filing these suits. 1:52:18 PM MR. SATRIE said it's important to consider what HB 168 does and does not do. It does not affect federal permits, appeals or litigation. It does not in any way prevent appeals or litigation of state permits, and it does not restrict the rights of public interest litigants. But it does encourage engagement in the early stages of public participation in the permitting process. He said they want people to come to the table and find ways to make projects better and not rely on litigation to solve their differences. He said this measure also requires public interest litigants of state permits to recognize the financial risk of their actions and ultimately may provide security for Alaskan workers and their families. MR. SATRIE thanked the committee very much for taking the time to hear this bill that passed the other body with broad bipartisan support. 1:53:23 PM BARBARA HUFF-TUCKNESS, Director, Legislative and Governmental Affairs, Teamsters Local 959, Juneau, AK, supported HB 168. The important issue before this committee is the impact on Alaskan workers, she said. Several years ago it was the issue for the Pogo mine when 45 members were taken off the job because of some last minute litigation. They lost two weeks of work, and of course there was no recourse for them. The suit was not against the employer in this instance, and it was not successful. She said the workers ultimately returned to work and completed the project. CARL PORTMAN, Deputy Director, Resource Development Council (RDC), Anchorage, AK, supported HB 168. He said they supported efforts to bring more accountability to the appeals and litigation process for community and resource development projects. HB 168 makes progress in this regard by ensuring that opponents of projects have some skin in the game. Under current law, plaintiffs have little incentive not to file lawsuits and appeals and seek injunctions to stop development projects. Seeking injunctions cost plaintiffs very little, while the project sponsors endure the high cost of uncertainty and delay. The discovery phase in these types of cases can cost hundreds of thousands of dollars to the state and project proponents. Even when projects are not enjoined, the uncertainty of litigation can effectively stop progress. It is not just the project sponsor who is adversely affected by these injunctions, Mr. Portman said. The employees of the project sponsors' contractors are often burdened with the direct and immediate impacts of a stay on a permit, which causes construction and development to shut down. Under existing law, judges have not required opponents of developing Alaska's resources to post bonds or other security to cover the economic harm to projects and to the workforce caused by the parties seeking injunctions. HB 168 does not limit the ability of citizens to sue, but it requires a bond in those cases where an injunction is requested before the case is adjudicated. HB 168 strikes an appropriate balance by removing incentives for filing ideologically based challenges designed to delay projects while still preserving the right to bring meritorious challenges. 1:57:21 PM MR. PORTMAN said the timber industry in Southeast Alaska would be in better shape today if a bond was required before timber sales are adjudicated. This industry has been decimated by endless appeals and litigation over federal timber sales. Recent headlines include yet more legal challenges that may further delay exploratory drilling in the Alaska OCS (outer continental shelf), drilling that is yet to occur on leases sold in 2008. Litigation in the Arctic OCS is delaying the state's goal to increase throughput in TAPS through new OCS development. While these cases are in federal jurisdiction, litigation in state court is likely to increase with the primacy assumed over the water programs. MR. PORTMAN said the ability of project proponents to weather the storm of an unfounded stay of activities varies based on a project's economics and the strength of the balance sheets of those developing it. A worker who loses employment because of a court-ordered stay might not have that lasting power to wait out what is often a lengthy legal proceeding. It is fitting that this bill was referred to this committee, as both labor and commerce are directly impacted, he said. It can provide some accountability to mitigate disruption of commerce while protecting the interests of Alaskans engaged in projects that may be subject to challenge. He thanked them again for hearing this bill and urged its passage. CHAIR EGAN found no question and said he would hold HB 168 and take it up again soon.