SB 97-ATTY FEES: PUBLIC INTEREST LITIGANTS  VICE-CHAIR WAGONER told members that a committee substitute (CS) for SB 97, labeled Version D, had been prepared that is no longer specific to natural resource related litigation. He said he plans to move this bill to the Senate Judiciary Committee and asked participants to limit their testimony to 2 or 3 minutes. SENATOR SEEKINS moved to adopt Version D of SB 97 as the working document of the committee. SENATOR ELTON objected for the purpose of hearing public testimony. VICE-CHAIR WAGONER took public testimony. MR. AL SUNDQUIST spoke in opposition to SB 97. He told members that laws of questionable constitutionality must be challenged in the public interest. Public interest litigation provides the most effective way to defend Alaskan's constitutional rights against encroachments by state or local governments. SB 97 would jeopardize the ability of individuals to hold legislators accountable for misjudgments or misconduct. He asked committee members to reject SB 97. MS. JANEL WRIGHT, legal director for the Disability Law Center, stated opposition to SB 97 for the following reasons. The public interest litigant rule protects the public's ability to challenge state decisions on matters of broad public interest without the financial hardship of paying the state's attorney fees if that litigation is unsuccessful. SB 97 eliminates this protection by prohibiting courts from taking into consideration the public interest nature of a case when the court determines whether to award attorney's fees to the prevailing party. A very important component of the Disability Law Center's ability to advocate on behalf of Alaskans with disabilities is judicious pursuit of state court remedies. Eliminating public interest litigant status will effectively eliminate the opportunity of individuals with disabilities to access the judicial branch of their government to enforce their rights. MS. WRIGHT pointed out that individuals with disabilities have the highest unemployment rate nationwide and, as a group, have the highest number living in poverty. If faced with the prospect of liability for the defense attorney's fees, individuals with disabilities will be unable to protect their rights in the court. The public interest litigant exception does not foster frivolous lawsuits. The Alaska Supreme Court has clearly stated that anyone bringing a frivolous lawsuit exposes both the attorney and the client to defense attorney's fees. MS. JUNE PINNELL-STEPHENS stated opposition to SB 97 because when the government makes a mistake, an individual should not have to pony up the money to go to court to have it corrected. Only by gathering together as organizations can most individuals hope to take on that sort of action. MR. CRAIG TILLERY, Assistant Attorney General, Department of Law (DOL), offered to answer questions. SENATOR DYSON asked Mr. Tillery to explain the changes in Version D and how those changes will clarify that the bill no longer pertains only to resource related litigation. MR. TILLERY told members that Version D is substantially different from the original bill. The original version was focused on particular decisions by particular agencies. Version D takes a different approach and completely abrogates public interest litigant fees except in those instances where the legislature may choose to amend by statute. For example, currently, full attorneys fees are provided by statute for consumer protection cases. SENATOR DYSON said his impression is that this bill is aimed at stopping frivolous lawsuits that impede resource development through the use of court injunctions. If those lawsuits are filed for illegitimate reasons, the plaintiff would pay the cost of the litigation. He asked if Version D broadens the scope to the extent it will have a dampening effect on someone in the disability community who challenges a government action for valid reasons but loses the case. MR. TILLERY told members the original bill was broadened because of concern about an equal protection challenge. DOL felt the original bill would pass constitutional muster, however the argument would be more difficult than if the scope of the bill was broadened. In addition, the original version of the bill started "writing in what is excepted and it becomes very difficult to apply." Regarding the effect on an individual bringing a disability lawsuit in the public interest, MR. TILLERY said Version D would require the individual to decide the likelihood of prevailing on the merits of the case before filing. If the legislature believes people should be able to bring a specific type of lawsuit, the legislature could make that judgment by making exceptions in statute. This bill puts that decision squarely back in the hands of the legislature by eliminating the court system's broad-brush approach. VICE-CHAIR WAGONER announced that Senator Ben Stevens was present. SENATOR SEEKINS asked how many states have adopted a rule similar to Rule 82. MR. TILLERY said that very few, if any, have a similar rule. He said the federal system does not have one either. The U.S. Supreme Court stated it is not the province of the court system to make those judgments; public interest litigant status should be determined by a congressional or legislative decision. MR. TILLERY said some other state legislatures might grant attorneys' fees in specific instances, for example for consumer protection or anti-trust cases. Nevertheless, as a general rule, those decisions are not in the court's purview. SENATOR SEEKINS asked if the legislature passes this bill as it exists today [Version D], it could exempt certain types of cases through another piece of legislation. MR. TILLERY said that is correct. SENATOR ELTON said during the subcommittee discussion, his understanding was that no court rule would have to be eliminated because public interest litigant status is an exception to a court rule. However, he learned that a 1993 Supreme Court Order, No. 11-18, established a court rule that will be abrogated by this legislation. MR. TILLERY said it is DOL's view that the court created that rule through judicial exception. To remove the court's ability to apply that exception via this legislation would not abrogate a court rule but simply require the court to apply the original rule. SENATOR ELTON asked Mr. Tillery if he is familiar with the 1993 Supreme Court Order No. 11-18. MR. TILLERY said he did not have a copy of it. SENATOR ELTON said it would be helpful to understand why an exception is not a de facto court rule. MR. TILLERY offered to get back to Senator Elton with an answer to that question. SENATOR LINCOLN asked the amount of general fund dollars spent in 2002 on public interest litigation. MR. TILLERY said from FY 93 through FY 03, the state spent $4.5 million. SENATOR LINCOLN asked how much of the $4.5 million was spent on state resource agency cases. MR. TILLERY said he would have to get back to Senator Lincoln with an answer to that question. 3:50 p.m.  MR. KEN JACOBUS, an attorney in private practice and for the Republican Party, said his comments to the committee were on his own behalf. He said he had no problem with the original bill because it was designed to address a specific area of concern to the Governor: protection of natural resources and economic development. Although he prefers other solutions, he could support the original bill. However, he is opposed to broadening the bill to include all public interest litigant cases. He reminded members that when the government loses a public interest litigant case, there is nothing wrong with requiring the government to compensate for its wrongdoing. He pointed out that a number of Republicans would not be in the legislature were it not for the redistricting case, which was public interest litigation. Also, a number of legislators could not have collected campaign contributions but for the Singleton case, which allowed unlimited soft money contributions, again, public interest litigation. He said if a voter wants to challenge an election for a good reason, this bill would require the individual voter to pay attorney's fees to the state if he or she loses the case. He doubts anyone would have challenged the Lindauer candidacy if that were the case. MR. JACOBUS said he disagrees with Mr. Tillery's statement that Alaska Civil Rule 82 has a catch-all provision that says the courts may vary attorney's fees if the equities of the case so direct. The court can take any factor into account to determine the inequities of the case. If the court is no longer able to consider certain factors, that is the limitation on the catch- all provision of Rule 82. He advised that he has no problem with the legislature protecting natural resource cases. However, to take away the rights of public interest litigation across the board is inappropriate because of the numerous unintended consequences. He asked members not to enact the committee substitute [Version D]. SENATOR ELTON noted the purpose section of Version D cites increased litigation, arguments made with little merit, difficulties in compromising claims, and significant cost to the state and private citizens as reasons to eliminate public interest litigant status. He said when he read that, his immediate thought was that it may save the state money, but it creates a difficult standard for Alaskan citizens to meet. He asked Mr. Jacobus if that is the focus of his testimony. MR. JACOBUS said some of the statements in the purpose section are not really true. A person is unlikely to bring an argument with little merit because if one loses a public interest case, he or she does not get reimbursed for attorney's fees. He agrees that the public interest litigant doctrine leads to increased litigation, but it does not encourage frivolous litigation. He said it does not increase difficulty in compromising claims and, although it may cost the state more money, that cost is for wrongs that need to be redressed. SENATOR ELTON maintained his objection to adopting Version D as the working draft before the committee. He said he has concerns with the original bill, but those problems are magnified in the committee substitute. He felt Mr. Jacobus's testimony was compelling. He stated his belief that the only way many Alaska citizens feel able to challenge an overreaching state bureaucracy is through this rule. SENATOR BEN STEVENS asked how many of the testifiers are public interest litigant attorneys. He questioned whether the testifiers today are attorneys whose fees are paid by public interest litigants. SENATOR DYSON indicated he takes significant exception to Senator Stevens' statement if it was an indictment of Mr. Jacobus's testimony or integrity. SENATOR BEN STEVENS said he was just making the point that the committee needs to take that into consideration. VICE-CHAIR WAGONER announced a brief at-ease. SENATOR SEEKINS withdrew his motion to adopt Version D as the working draft before the committee. He then moved to pass SB 97 from committee with individual recommendations. SENATOR ELTON objected. SENATOR LINCOLN told members she will be voting against the motion. She said the cost of most of the cases has been small so for the legislature to tell Alaskans they have to give much thought to paying their own attorney fees for a public interest case is wrong. She noted she just received a letter from the Alaska Village Council Presidents who said they were involved in three public interest litigant cases, the Kasillie (ph) case and challenges to state agency decisions about fish and wildlife management. They are very concerned this legislation will deter the common person from filing a lawsuit against a state agency thereby allowing some bad public decisions to be made. VICE-CHAIR WAGONER said he would be supporting the bill because he has seen, at times, the unfairness of the public interest litigant doctrine. The motion to move SB 97 from committee carried with Senators Seekins, Dyson, Stevens and Wagoner in favor, and Senators Elton and Lincoln opposed. VICE-CHAIR WAGONER announced the bill would move to the Senate Judiciary Committee with its appropriate fiscal notes.