HOUSE JUDICIARY STANDING COMMITTEE February 26, 1997 1:10 p.m. MEMBERS PRESENT Representative Joe Green, Chairman Representative Con Bunde, Vice Chairman Representative Brian Porter Representative Norman Rokeberg Representative Jeannette James Representative Eric Croft Representative Ethan Berkowitz MEMBERS ABSENT All members present COMMITTEE CALENDAR *HOUSE CONCURRENT RESOLUTION NO. 11 Urging the Attorney General of the State of Alaska to use every appropriate resource and due diligence to defend the state's interests in the civil action filed against the state challenging the 1996 revisions of the Northstar unit leases, and respectfully requesting the Superior Court of the State of Alaska to give expeditious consideration to the matter. - MOVED CSHCR 11(JUD) OUT OF COMMITTEE SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 58 "An Act relating to civil actions; relating to independent counsel provided under an insurance policy; relating to attorney fees; amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules of Civil Procedure; amending Rule 702, Alaska Rules of Evidence; amending Rule 511, Alaska Rules of Appellate Procedure; and providing for an effective date." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HCR 11 SHORT TITLE: NORTHSTAR AGREEMENT LITIGATION SPONSOR(S): REPRESENTATIVE(S) PHILLIPS JRN-DATE JRN-DATE ACTION 02/19/97 398 (H) READ THE FIRST TIME - REFERRAL(S) 02/19/97 398 (H) JUDICIARY 02/26/97 (H) JUD AT 1:00 PM CAPITOL 120 BILL: HB 58 SHORT TITLE: CIVIL ACTIONS & ATTY PROVIDED BY INS CO. JRN-DATE JRN-DATE ACTION 01/13/97 43 (H) READ THE FIRST TIME - REFERRAL(S) 01/13/97 43 (H) JUDICIARY, FINANCE 01/16/97 95 (H) COSPONSOR(S): COWDERY 02/17/97 373 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS 02/17/97 374 (H) JUDICIARY, FINANCE 02/19/97 (H) JUD AT 1:00 PM CAPITOL 120 02/19/97 (H) MINUTE(JUD) 02/21/97 (H) JUD AT 1:00 PM CAPITOL 120 02/21/97 (H) MINUTE(JUD) 02/21/97 429 (H) COSPONSOR(S): BUNDE 02/24/97 (H) JUD AT 1:00 PM CAPITOL 120 02/24/97 (H) MINUTE(JUD) 02/26/97 (H) JUD AT 1:00 PM CAPITOL 120 WITNESS REGISTER REPRESENTATIVE GAIL PHILLIPS Alaska State Legislature Capitol Building, Room 208 Juneau, Alaska 99801 Telephone: (907) 465-3472 POSITION STATEMENT: Sponsor of HCR 11 DALE BONDURANT P.O. Box 1197 Soldotna, Alaska 99669 Telephone: (907) 262-0818 POSITION STATEMENT: Testified against HCR 11 JERRY McCUTCHEON No Address or Telephone Number Provided ACTION NARRATIVE TAPE 97-27, SIDE A Number 0000 CHAIRMAN JOE GREEN called the House Judiciary Standing Committee meeting to order at 1:10 p.m. Members present at the call to order were Representatives Green, Porter and Rokeberg. Representative Bunde arrived at 1:17 p.m., Representative James arrived at 1:18 p.m., Representative Berkowitz arrived at 1:19 p.m. and Representative Croft arrived at 1:20 p.m. This meeting was teleconferenced to Anchorage, Kenai and Cordova. HCR 11 - NORTHSTAR AGREEMENT LITIGATION Number 0010 CHAIRMAN GREEN announced the first item on the agenda was HCR 11, Urging the Attorney General of the State of Alaska to use every appropriate resource and due diligence to defend the state's interests in the civil action filed against the state challenging the 1996 revisions of the Northstar unit leases, and respectfully requesting the Superior Court of the State of Alaska to give expeditious consideration to the matter. Number 0028 REPRESENTATIVE GAIL PHILLIPS, sponsor of HCR 11, said on February 13, 1997, British Petroleum announced they would immediately stop production work on their Northstar oil field development project. The company indicated the reason for the work stoppage was their concern about a lawsuit challenging revisions to the Northstar lease terms ratified by the Alaska legislature and signed into law by the Governor last year. She said HCR 11 asks the attorney general of the state of Alaska to use every appropriate resource and due diligence to defend the state's interest in this case. It also respectfully requests the superior court to expedite consideration of appending legislation so that work on the project can resume as quickly as possible. REPRESENTATIVE PHILLIPS said, in 1996, the legislature authorized the commissioner of natural resources to revise the Northstar unit oil and gas leases. At the time there was a strong commitment to Alaska hire, Alaska build and Alaska buy in the development of the field. Following the revised lease agreement, construction of modules for the Northstar project began in Anchorage. Several Alaskan construction and oil service companies made preparations for the increased work load. People were hired and plans were put into place. The lawsuit has directly resulted in many Alaskans losing their jobs. In the interest of all Alaskans, this case must be resolved quickly. The resolution simply asks the court to act as expeditiously as possible on the hearing, in order to put Alaskan families back to work. REPRESENTATIVE PHILLIPS said there is a work draft before the committee. She said committee changes were incorporated in the work draft, but she had one other suggestion. Referring to page 2, line 16, of the work draft, she recommended that line 16 be amended from "would ask" to "has asked" in light of the newspaper article which said that the Governor had asked the judge to toss out the lawsuit on Northstar. She said HCR 11 will go hand in glove with the Governor's request. Both the legislature and the Governor would ask the courts, while fully recognizing the separation of powers, to act as expeditiously as possible in this matter. Number 0267 DALE BONDURANT testified next via teleconference from Kenai. He said that this state will non-competitively give away the Northstar royalty provision is another bump in the present legislative giveaway program of Alaska's own resources for the real purpose of increasing industry profit at the expense of the public's long term benefits. Even after industry enters into and are successful in the open and competitive bidding process, they come back and demand self-interest changes in their contractual commitments. He said industry is saying they can't have any more restrictive regulations, but are readily demanding lower than their contractual commitments, including their refusal to voluntarily pay their royalty debts. MR. BONDURANT said this resolution and the voluntary changes of the industry's bidding contract liability is just another example of the numerous pending bills intended to lower responsibility of environmental protection, resource conservation and the public trust rights as owner of Alaska's common property resource. The 1997 legislature's attitude flies in the face of the first statement on HCR 11, "Whereas a majority of Alaskans support safe and responsible oil development in the state". He ended there and challenge the sponsor to add the following statement, "as proof of this responsibility we offer the examination of the intent of the following pending regulations which include HB 28, HB 29, HB 4, HB 23, HB 57, HB 58, HB 31, HB 60, HB 68, HB 109, HB 128." MR. BONDURANT said industry's continued demand for more favorable financial climate shows their self-interest attitude by extending its lobby of a reduction in state budget funding for education and sports. This includes a reduction of commitment for extracurricular activities such as sports, music, crafts and social activities as well as cutting health care for the young and elderly. Number 0543 JERRY McCUTCHEON testified next via teleconference from Anchorage. He asked why BP (Alaska) Inc. started the Northstar modules knowing that they were going to be sued. He said Badami is going to go on- line before Northstar, the crews from Badami will transfer to Northstar. He questioned why Northstar modules were started before work began on the Badami modules, especially when the modules are the same. He asked why the Badami modules are going to be built in Calgary and why BP was in such a hurry to get the Northstar modules started. He further questioned why BP didn't bother to check with the Department of Transportation and Public Facilities (DOT/PF) as to the adequacy of the three bridges to get the modules across of which there will be four by the end of summer. Given all those questions, it is rather obvious that BP started the Northstar modules for the simple purpose of cancelling them. Number 0710 REPRESENTATIVE CON BUNDE made a motion that the committee adopt the committee substitute O-LS0615\B, dated February 26, 1997, as the committee's working document. Hearing no objections, CSHCR 11(JUD) was before the committee. Number 0756 REPRESENTATIVE BRIAN PORTER made a motion to adopt Amendment 1, located on page 2, line 16, deleting the words "would ask" and replacing them with "has asked" to CSHCR 11(JUD). Hearing no objection Amendment 1 was adopted. Number 0794 REPRESENTATIVE BUNDE made a motion to move CSHCR 11(JUD) from committee with individual recommendations as amended. Hearing no objection CSHCR 11(JUD) was moved from the House Judiciary Standing Committee. SSHB 58 - CIVIL ACTIONS & ATTY PROVIDED BY INS CO. Number 0814 CHAIRMAN GREEN announced the next item on the agenda was SSHB 58, "An Act relating to civil actions; relating to independent counsel provided under an insurance policy; relating to attorney fees; amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules of Civil Procedure; amending Rule 702, Alaska Rules of Evidence; amending Rule 511, Alaska Rules of Appellate Procedure; and providing for an effective date." He called a brief at ease at 1:23 p.m. The committee meeting resumed at 1:50 p.m. Number 0888 CHAIRMAN GREEN withdrew the amendment labeled H.8 by Green, having to do with the statute of repose. He then referred to Amendment 1, H.1 Green, having to do with the civil liability of electrical utility companies and said he wished to amend Amendment 1. He called a brief at ease at 1:53 p.m. The meeting resumed at 1:55 p.m. CHAIRMAN GREEN referred to Amendment 1 and suggested a change occurring on line 8, remove the "." after utility and add the following words, "relating to the production and delivery of electrical service." Amendment 1, located on page 16, following line 5: insert a new bill section to read: "*Sec.35. AS 09.65 is amended by adding a new section to read: Sec. 09.65.085. Civil liability of electric utility. (a) A utility offering electrical service to the public for compensation under a certificate of public convenience and necessity issued by the Alaska Public Utilities Commission under AS 42.05.221 may not be held strictly liable for property damage, death, or personal injury resulting from an act or omission of the utility relating to the production and delivery of electrical service. (b) This section does not preclude liability for civil damages that are the result of an intentional, reckless, or negligent act or omission." and renumber the following bill sections accordingly. Number 1014 REPRESENTATIVE PORTER made a motion to revise Amendment 1. Hearing no objection the revised Amendment 1 was before the committee. Number 1030 REPRESENTATIVE PORTER spoke to Amendment 1 and said it was his understanding that there has not been a case in this state which has determined that an electrical utility is strictly liable for any incidence resulting from their delivery and production of electrical service. There have been some cases in the state where the finding seems contrary to (Indisc.--paper shuffling) law and there is a current case in existence in this state that has not yet been decided. He said SSHB 58 would not affect that case, but it was because of this case that the utilities thought it was appropriate to think ahead instead of waiting for the ax to fall. The additional language relating to the production and delivery of electrical services, basically, is added so that we're sure that we're not exempting utilities from some other strict liability that they may have in relation to some other activity that their utilities might find themselves involved in. He said he did not know what other strict liability they might have, but obviously this amendment only refers to the production and delivery of their electrical service, not some leaky storage tank that for whatever other federal consideration might provide some other standard. Number 1122 CHAIRMAN GREEN said Amendment 1 is probably a little bit of "belt and suspenders" as there is the (b) section which would probably exclude any of those things, but it's innocuous and it makes sure that we are only talking about those acts generating electricity. Number 1137 REPRESENTATIVE ETHAN BERKOWITZ said it has been a long time since he has played in the realm of strict liability, but he recalled that if there was an inherently dangerous material that created a problem, usually dynamite that explodes somewhere, then strict liability is attached. Number 1161 REPRESENTATIVE PORTER said in many cases this is the truth. Having read the hornbook recitation in Prosser, the hornbook indicated that in most instances they do not find strict liability when the provision of a service is required and regulated as opposed to handling something inherently dangerous because you choose to do so. He clarified that utility services are regulated and it is a requirement that they be provided. CHAIRMAN GREEN said the subsections would fall under that same category. Number 1210 REPRESENTATIVE ERIC CROFT said his concern on strict liability was that there are inherently dangerous activities. He said the intent is understood to be that providing electricity is a service rather than a product within the strict product liability rules. He said he would be more comfortable with language that talked about strict products liability, rather than all the other product liability and subsection (b) comes closer towards that language. He said he would not fight about this language as long as it is understood for the record that we are really talking about products liability and that we think of electricity as a service rather than a product. Number 1273 REPRESENTATIVE BERKOWITZ referred to the language in Amendment 1 which talks about the production and delivery of electrical services and said he was leery of the conjunctive "and" as opposed to the disjunctive "or". He said he would much prefer the word, "or", because when you use the word, "and", you impose two elements of proof. Number 1303 CHAIRMAN GREEN said he would accept that language change as a friendly amendment to Amendment 1. REPRESENTATIVE BERKOWITZ said he would propose "and" be changed to "or" in Amendment 1. Hearing no objection, Amendment 1 was modified. Number 1324 REPRESENTATIVE BUNDE made a motion to adopt Amendment 1. Hearing no objection Amendment 1 was adopted. Number 1332 CHAIRMAN GREEN said Amendment 2 is titled, Rokeberg, located on page 8, line 13, delete: "Anchorage, all items index" and inserting: "U.S. City Average, all urban consumers, all items indexes". Number 1344 REPRESENTATIVE PORTER said he had discussions with Representative Rokeberg about Amendment 2 and would move to adopt it to SSHB 58. Number 1358 REPRESENTATIVE BERKOWITZ objected for the purposes of discussion. He asked how the averages compare in terms of the results. Number 1365 REPRESENTATIVE PORTER said Representative Rokeberg's research into this area had been for a different bill, he found that the Anchorage, all items index, as established by the Department of Labor had shrunk to only being published once a year. The U.S. City Average, all urban consumers, all items indexes, as established by the U.S. Department of Labor is published every month. Representative Rokeberg's said this index would be more current and the applicability would better than the other index. Representative Porter did not know what the differences would be in terms of results. Number 1419 CHAIRMAN GREEN commented that fiscal problems would be addressed in the House Finance Standing Committee, if this is a major concern. Number 1436 REPRESENTATIVE BERKOWITZ said he was interested in knowing how much the Alaskan user is being helped or hurt by the tort system. CHAIRMAN GREEN suspected the amount was not going to be as much of a difference as had been addressed. He said the availability of it and the fact that it is a broader index would be the difference. Number 1449 REPRESENTATIVE JEANNETTE JAMES said she did not have faith in the Consumer Price Index or any type of index upwards, she would like the index to go down. Number 1474 CHAIRMAN GREEN offered a friendly amendment to Amendment 2 to change the word "indexes" to "indices". Number 1488 REPRESENTATIVE BERKOWITZ made a motion to move the friendly amendment. Hearing no objection "indices" was added to Amendment 2. He maintained his objection until clarification could be given on what would result from the change in indexes. Number 1498 A roll call vote was taken on Amendment 2. Representatives Bunde, Porter, James and Green voted yea. Representatives Croft and Berkowitz voted nay. Representative Rokeberg was absent for the vote. Amendment 2 was adopted. Number 1560 REPRESENTATIVE CROFT made a motion to move Amendment 3, located on page 5, line 21, following "(1)": delete "is a hemiplegic, paraplegic, or quadriplegic and has permanent functional loss of one or more limbs resulting from injury to the spine or spinal cord" and insert "suffers severe disfigurement or sever physical impairment". CHAIRMAN GREEN objected to the motion. REPRESENTATIVE CROFT said Amendment 3 takes the current cap structure for non-economic damages and without changing it, simply broadens the category of persons who we would consider to be severely injured. Right now the category is extremely limited and only includes those people suffering from a spinal cord injury. Amendment 3 replaces this list with, "suffers sever disfigurement or severe physical impairment". He referred to the difficulties the committee has had with making a list of who we consider to be badly hurt. REPRESENTATIVE CROFT referred to a case that he worked on where a person who did asphalt paving lifted the lid and was covered in hot asphalt. His spinal cord was not injured, but he was almost killed. They never thought he would live, he is still in great pain, he still has to wear soft, specially made suits under anything he wears. It was one of the most horrible injuries he could imagine where essentially this person was aflame for an extended period of time. This person does not have a spinal injury and he is not a paraplegic. REPRESENTATIVE CROFT worried about the bill saying the only these people so we consider to have $500,000 of non-economic damages, those non-economic damages being pain and suffering. This person is in what he would consider the worst pain and suffering he could imagine, yet this statute would put him in the lower category of $300,000. He said he did not want to get into the debate of whose injury is greater but did not think it was true that the only person, that we or a reasonable jury would consider to have $500,000 in non-economic damages, would be somebody who has a spinal cord injury. REPRESENTATIVE CROFT said the person he referred to would not have significant wage damages, his wage differential would be small. The punitives were not really an issue in this case, but they would be capped under SSHB 58. The money he received would essentially be the money on which he would survive the rest of his life. He said it constrains the jury's ability to estimate what the pain and suffering of that injury and added that he disagrees with the whole concept of capping. Amendment 3 simply says, if you are going to cap it, recognize that there are other things which cause tremendous pain and suffering which a reasonable jury could award $500,000. This list should not just include spinal cord injuries or in the interest of completeness the person who has permanently impaired cognitive capacity and is incapable of making independent, responsible decisions. He said he would understand this to mean brain damage. Number 1750 CHAIRMAN GREEN said he shared his concern and shared that when he was in high school he had an impairment to one eye. He said blindness is not covered in this list. Number 1774 REPRESENTATIVE PORTER said everyone in the committee could come up with an individual case that is very compelling personally. He said if the injury happened on the job, it would be covered under worker's compensation and SSHB 58 would not affect it because there are no non-economic damages in worker's compensation cases. If there happened to be some possibility of a third party defendant in the worker's compensation case then that case could be heard in superior court. The case that Representative Croft cited is compelling, but Amendment 3 does not represent that case. It represents virtually the wide-open, ill-defined, undefined version that exists in current law with the exception of adding to the term, "disfigurement", "severe disfigurement". He said there is no definition for severe disfigurement, there is no definition for severe physical impairment and that is the essence of the problem. REPRESENTATIVE PORTER recognized that Amendment 3 is within the restraints of the proposed bill. The problem is that these exceptions, disfigurement or severe physical impairment, are the exceptions to non-economic damages that without the caps provides a totally open-ended possibility. He said that is the problem which creates concern, on anyone who might find themselves as an unintentional tort feasor, that potentially they might be wiped out by an open ended, ill-defined potential claim. For that reason, he spoke out against Amendment 3. Number 1876 REPRESENTATIVE BERKOWITZ said we have a great system where lawyers from two parties can get together in a court room and talk to a jury of 12 people. One side can make a compelling case that severe disfigurement has occurred and the other side can make a compelling argument that severe disfigurement hasn't occurred. We have juries solely to sort out questions like this. He expressed his trust in an Alaskan jury to be able to make the determination of whether someone who has been horribly burned would qualify for non-economic damages as opposed to someone who has lost a limb or suffered some form of paralysis. He said that when the rights of the jury are circumscribed and we seek to impose our legislative view of the world, we do a disservice to the jury system. He understood the need to have certainty in the civil process and is supportive of that, but he also believed that we have to trust people to make decisions. Whether it is the person who winds up committing a tort or suffering a tort or sitting on a jury, we have to give some trust to the people. He spoke in favor of Amendment 3. Number 1943 REPRESENTATIVE PORTER said if every case that was filed which had this potential went to that jury, he would not be quite as insistent as he is about not liking Amendment 3. He referred to testimony, and testimony from previous hearings on this bill in previous legislative years, and said 95 percent of the cases filed don't go to trial, they are settled. They are settled by virtue of exposure once a determination has been made that a defendant has some responsibility, that there was some negligence involved. He then asked how much the individual defendant could afford. There was testimony regarding this issue and said he believed that many settlements are higher than they should be. This has an impact all over the state because of the open-ended nature and the ill-defined nature of non-economic damages and punitive damages. Number 2007 REPRESENTATIVE JAMES said she did not share the same confidence that Representative Berkowitz has in the judicial system. She separates the judicial from the legislative process and said her obligation is to the legislative process as a separate part of government. The legislature establishes the ground rules and then the judicial system is supposed to follow them. She said she likes to give the judicial system as little leeway and as much guidance as possible because most of the time they don't find things like she does. She questioned who is to say she is right or they're right, but this is the way the system works. She would rather have it specifically defined so as not to be defined by some other method. She said $500,000 is a lot of money when they are going to get other monies. Number 2061 REPRESENTATIVE CROFT said Amendment 3 has no effect on the amount of the caps, it really says that some categories of injury might be worth $500,000 instead of $300,000 in non-economic damages. He agreed that it uses a general standard because he is worried about the legislature defining what severe disfigurement is. He is worried that the legislature would say that the only thing that can require an increased, but still capped, level of damages is spinal cord or brain damage injuries which is the language as SSHB 58 currently stands. Amendment 3 does not allow the jury to break somebody or the unlimited ability to access damages over $500,000. It simply gives them the ability to say what is severe. Right now we say, in our determination, severe is only spinal cord or brain damage injuries. REPRESENTATIVE CROFT referred to the chair's example and his example and said these are two incidences which a reasonable jury would consider severe enough injuries to increase the amount of non-economic damages to $500,000. He did not feel a capped, contained $500,000 for the non-economic loss, the pain and suffering, the loss of enjoyment of life, loss of consortium equaled blindness of a child. These are the areas that we are compensating. Other than these non-economic damages in SSHB 58, you get wages. We are defining the worth of a person, encapsulating the enjoyment of their life into three piles, setting aside punitive, non-economic and economic damages. Economic damages for someone who does not earn that much is not highly valued. This non-economic category allows us to value all of the different aspects of life that they have lost from this injury. Currently it is a list structure which simply says the only serious, severe injuries are paralysis and brain damage. REPRESENTATIVE CROFT said whatever list was made today would be incomplete and we should allow, within a cap, a structure for a general definition which would let the jury decide. He referred to Representative Porter's comment on the worker's compensation aspect and said this was quite right. Addressing the concerns that the defendant could be wiped out and that Amendment 3 is the type of unlimited category that we currently have, he said it is the standard we had for unlimited assessment, but the cap remains. It just allows a jury to determine for itself what is severe, rather than just saying it is brain damage or paralysis. Number 2224 A roll call vote was taken on Amendment 3. Representatives Croft and Berkowitz voted yea. Representatives Porter, James, and Green voted nay. Representatives Bunde and Rokeberg were absent for the vote. Amendment 3 failed to be adopted. Number 2278 CHAIRMAN GREEN raised the concern that when you have a list you automatically exclude what isn't on it. He said a loss of hearing or a loss of sight is a measurable quantity as compared to severe disfigurement or severe physical impairment. He said the category should include the loss of hearing and the loss of sight. He offered an amendment that on page 5, line 21, the word "complete" between functional and loss, and then after "loss" add "of hearing or sight or loss". So that it would read, "functional complete loss of hearing or sight or loss of one or more limbs". He said he would put the word, "complete" in that to clarify how much loss is a loss. Number 2329 REPRESENTATIVE CROFT said functional would seem to encapsulate the concern that if they have one eye they can see, but if their sight is so impaired it is then a functional loss. He worried that somebody could lose use of their arm, except for a twitch, perhaps a pinky movement. He did not have an objection to simply adding hearing or sight to the wording. Number 2370 REPRESENTATIVE BERKOWITZ said the committee is bartering with different types of human misery. He applauded the effort to expand the universe of cases that would come within the reach of this paragraph, but it demonstrates the problems the legislature faces with trying to categorize all the possible afflictions that can result in non-economic damages in excess of a cap or even within a cap. He urged the committee to accept this amendment because it is better than what we have, but it does not go far enough. It wouldn't cover the burn victim and said there would be hundreds of horrors that the committee is not even beginning to approach listing in this part of the bill. Number 2408 REPRESENTATIVE JAMES said this section puts a cap on non-economic damages with the exception of a few cases which could have an additional $200,000. She commented that who you are depends on how extensively a particular loss would be. It is difficult to compare, when you are looking at apples and oranges, what the effect is going to be on that person. TAPE 97-27, SIDE B Number 0000 REPRESENTATIVE JAMES said a maximum level has been set at $300,000 unless you have the items listed which could result in another $200,000. She said whether or not the person receives $300,000 or $500,000 is a choice made by someone other than the legislature. She said the more that this section is played with, without some sort of scientific process, the more messed up the bill gets. CHAIRMAN GREEN withdrew the amendment. Number 0078 REPRESENTATIVE BERKOWITZ said the minority members were in an awkward position because if they left, the proceedings would be required to cease under Mason's. He did not want to be unnecessarily rule bound, but felt awkward staying. Number 0101 REPRESENTATIVE CROFT said SSHB 58 is one of the most important things the legislature would consider this year or in the next two years and said he wanted the opportunity to convince Representatives Bunde and Rokeberg that the proposed amendments are important qualifications to the changes being made to the tort system. He said he is uncomfortable staying when he does not have the opportunity to convince to those two members. CHAIRMAN GREEN called a brief at ease at 2:32 p.m. The meeting resumed at 2:45 p.m. He said the next item was Amendment 4, page 5, line 17: following "exceed", delete "$300,000", insert "$500,000" and on page 5, line 19: following "section", delete "may not exceed $500,000", insert "are not limited". Number 0085 REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 4. Number 0172 REPRESENTATIVE PORTER objected to the motion. Number 0182 REPRESENTATIVE BERKOWITZ said no one has yet explained to him where the $300,000 comes from, why that number was chosen and what it is the product of. It seemed to him that it is not a lot of money over the course of a lifetime, it is barely enough money to buy a house and pay for its upkeep and doesn't seem fair compensation for a serious injury. Number 0206 REPRESENTATIVE BERKOWITZ said a lot of what goes on in a courtroom or in the trial process is a search for finding equities, trying to get to a fair solution to a conflict. Fairness depends on the circumstance of each individual situation. For the committee to circumscribe how much fairness someone is entitled to is very problematic. Settlement negotiations do not happen in a vacuum, there is not an arbitrary quality to legal proceedings that people seem to think and referred to a book that was thick with legal rules on how to proceed in a courtroom. There are damages involved, a universe of knowledge to gather which can help you determine the negotiation result. If someone has a car crash that results in this type of injury or that type of damage to the vehicle then there are other cases where you can look to see what sort of damages have been awarded. The process is not entirely arbitrary. Some of the results are due to the attorney's powers of persuasion, but some of it is due to existing facts and what other juries have recognized to be acceptable settlements. REPRESENTATIVE BERKOWITZ said Amendment 4 says that we can't really establish what is fair without looking at the circumstances of each case. The legislature is sort of in an ivory tower above everything, not down on the ground looking at the particulars of each case, and we ought to let the folks who can make those decisions make those decisions. Number 0284 REPRESENTATIVE PORTER clarified that the committee was talking about the subjective area of pain and suffering, not of the loss of a house. He said Representative Berkowitz alluded to fairness and said that is why he felt caps should be in place. Amendment 4 would eliminate the cap on the exceptional and have it open ended again. He said a lot of the settlement has to do with the attorney's power of persuasion. There is unfairness of this situation, in his mind, if the plaintiff has an eloquent attorney. He said it is fair if there are reasonable caps in these areas so that there can be consistency and fairness. Number 0354 CHAIRMAN GREEN said sales organizations rely on the mentality of a persuasive barrister or a persuasive attorney. He referred to the coffee cup case. A case could be brought before a jury, who might be affected and award something they don't feel is the right award following the case such as people regret buying items on impulse the morning after the purchase. He said there are some land deals that have a buyer's remorse provision included with some out that allows the buyers to go back and change the agreement. You don't have that when a jury awards a tremendously large sum, except through the appeals process. He said if we remove the $500,000 cap, we might as well not have tort reform. We need to bring some degree of assurance to the tort system and for that reason he opposed Amendment 4. Number 0419 REPRESENTATIVE JAMES raised the issue of why should we have a cap. She used the analogy of her children telling her something isn't fair and her reply that life isn't fair. She said a person might feel that there is no amount of money that can give them back what they lost. She questioned how you can put a value on something like the death of a child. No amount of money is going to make it better. She said where the money comes from is the issue. To establish some kind of equilibrium in the system where people can go on with their life. There is a proper role for putting caps on these issues, what the cap is or should be she could not answer. She referred to the work that people have put in with this issue and said it should be based on what the awards have been, what people have an availability to pay or how much insurance they can afford to carry and still be able to do business. REPRESENTATIVE JAMES said the bottom line of the whole issue is if we don't have economic activity occurring, we don't have people who are willing to put their investment into providing jobs and work for people then these people are not going to have any support at all. She supported having some caps and balance within the system. There also needs to be some semblance of issues out there that will let economic activity continue in this country. Number 0578 REPRESENTATIVE CROFT clarified that death came under (b). Number 0609 REPRESENTATIVE BERKOWITZ asked how the $300,000 figure was determined. Number 0612 REPRESENTATIVE PORTER said it started as $250,000 which was, at the time, the tracked amount in federal legislation going through the U.S. Congress. During the process which occurred in the previous legislature, the bill did not start from ground zero, it started (indisc.--coughing) two and then it moved up to $300,000. Number 0639 REPRESENTATIVE BERKOWITZ referred to Representative James' testimony that tort actions were somehow impeding economic activity and asked her to explain what she meant. Number 0650 REPRESENTATIVE JAMES said she would discuss this issue, but did not see how it would be relevant to the discussion right now. Number 0674 REPRESENTATIVE CROFT said Amendment 4 represents the only way for us to estimate the entirety of a person's worth after we've given them what the marketplace recognizes. That amount of worth includes everything but how much you could have earned and the medical expenses you have, to generalize, and added that there are some other smaller categories. He said if we are going to value people beyond what they make, this is the area of the bill in which we do it. He expressed having problems with only valuing people by how much they make and also of having problems with capping, particularly at this low level, the entirety of a person's worth. He listed some non-traditional employment such as a housewife and a subsistence hunter. REPRESENTATIVE CROFT said to estimate what a blind child could have earned would be difficult. As a jury he could try to estimate what the loss is. He said it would not make the child whole or sighted and added that this would be the best solution. Money is always going to be an insufficient remedy for the injuries we are talking about here. There are some things that can be done with money that allow them to live a better life. You can have enough money to learn how to read again without sight, you have enough to try and make up for what you have lost. For the legislature to say that the death of a child is worth $300,000 plus what we can figure out they might have earned in their life is simply insufficient to estimate the entirety of a person's worth. Number 0809 REPRESENTATIVE PORTER disagreed. He said it is much easier to figure out future wages, even for an infant, than it would be to say how much the loss of a child or the loss of this person's ability to function is worth by an abstract manner. If it is that this person lost their sight and has to then learn how to read by Braille, it is an economic damage. He disagreed that economic damages are wages only. Any legitimate cost that accrues from the injury, which you can demonstrate you wouldn't have had, is an economic damage that you can ask payment for. What you get, of course, is going to be the result of your own persuasion. It is certainly a legitimate request, a legitimate claim, in requesting economic damages. Number 0863 REPRESENTATIVE BERKOWITZ said if you look at some of the problems with breast implants and people who have suffered poisoning as a result of botulism, you can get the economic damages of how much money they would have earned had they not been hurt. You can get the numbers for how much it's going to cost them to go through therapy, those are the economic damages. You can't get those numbers when you are talking about someone who has been a housewife or a househusband. You can't get those numbers for someone who has been living a subsistence lifestyle. There has to be another avenue to correct those harms. He said we are talking in the realm of compensatory damages, not punitive damages. Compensatory damages are divided into economic and non-economic categories. We have limited the economic damages, essentially, to those who have an economically measurable lifestyle. By capping non-economic damages we are doing nothing to right an injustice that has been done to someone who is living at home, working at home, living in the bush, leading a subsistence lifestyle. There are whole categories of people who will never have access to the complete and total justice they deserve if we put caps on it. Number 0942 REPRESENTATIVE BERKOWITZ said there has been talk that SSHB 58 is good for business. He said he has learned that insurance rates have fallen in seven of the last nine years. The argument that tort reform is an essential predicate for the reduction of insurance rates doesn't hold water. Businesses in Alaska are flourishing in spite of the existing tort system. He cautioned going through a wholesale revision of a system that most of us know very little about without completely understanding the consequences. There is the law of unintended consequences that people talk about over and over regarding legislation. He can't detail all the consequences that will arise from passage of a bill like this, but the unintended will rear up and bite us as surely as he was sitting here. REPRESENTATIVE BERKOWITZ said one of the greatest guarantees we have that people will behave appropriately with one another is a result of the check and balance that comes in the courtroom. He said if we do anything to erode that check, we are showing a lack of confidence in our system. He said he believed, essentially, that the system works. It needs some tinkering, but SSHB 58 is not going to fix what's wrong. Number 1022 REPRESENTATIVE PORTER said if someone on who was a subsistence hunter or an unemployed person who was injured to the extent that they could no longer provide their own subsistence style of living or provide their own activities within the house, then they could claim those things as economic damages and that someone will have to do those activities for them. It is the concept of making the person whole as a result of someone else's negligence. We are talking about pain and suffering. A reasonable cap on an otherwise open-ended area of compensation. Testimony was given that there are a number of things that affect insurance rates and as we have improved our safety, we have produced some benefits in rates. Number 1077 REPRESENTATIVE CROFT said if a housewife is injured or killed you can get the economic damage of having a maid come in, but you don't get any value for her life other than what she would have earned. The primary value for that person's life is on the economic side as it is on the medical. The pain, suffering, inconvenience, loss of enjoyment of life, loss of consortium are what the bill caps which is the rest of the value of that life. He submitted that the economic part would put a very low value on a housewife's life. Here in this section is where you value them as a person and this is where we are arbitrarily capping their value. Number 1138 CHAIRMAN GREEN expressed concern that if we did not have a cap we would be saying that whatever value the injured person and the attorney who takes a case places upon their life or injury is what should be received. An elevated compensation for non-economic damages which then could affect the amount received for punitive damages because there is a multiplier effect. You as an attorney, pleading this case, convince the jury how critical it is that we compensate this person and then take a third or more of that compensation. He said this is the difficulty he has with this issue. Number 1233 REPRESENTATIVE BERKOWITZ said if you get compensation that is hugely out of line, the defendant thinks it is hugely out line, then the defendant will appeal. Exxon has not paid out its $5 billion, they are exhausting their appeals because they think that it is too much money while people in Alaska think that amount is fair. The courts are going to hear the evidence in a deliberate fashion. He said courts are somewhat inoculated to the persuasive abilities of lawyers and the courts will make a determination to lower the judgement if that is in the interest of justice. There are phrases that come across in a courtroom time and time again such as "interest of justice" and "fairness". He said Representative James indicated that she did not feel that there was fairness in the world. He said there is no absolute fairness, but he thought we are all compelled to pursue fairness and justice and when we abdicate that responsibility, we're abdicated our responsibilities as legislators or advocates of justice which he personally felt was a step that should not be taken. Number 1300 CHAIRMAN GREEN expressed concern that, in the cases discussed, the attorney had persuaded the jury to award too much. The defendant appeals and then the decision about award is left to the judge or whatever the makeup of the appellate court is. He said that judgment is really not in the interest of justice, even though the judge or court is well trained. The whole concept of our form of government is that elected people might have a better handle than someone who is either appointed, or elected to the court in the event that the case goes to the Supreme Court. Number 1355 REPRESENTATIVE BERKOWITZ said the legislature is wed to process because it provides order. There is order in the courts. He referred to the McDonald's case and said the judgment might have been very high, but it was reduced significantly as it went through the court process. He said he was not prepared to discuss the equities of that case, but the cases that people read about in the newspaper are the extreme cases. You don't hear about the cases that are regularly settled for $20,000 or $200,000 when it is a fair judgement and within the realm of the norm. You only hear about the unusual cases. It is not a good precedent for us to legislate based on these unusual cases. REPRESENTATIVE BERKOWITZ said one of his complaints during the course of this debate is that the committee has not had access to the facts. He question the numbers at which people were settling. Most of the lawyers he knew are rational human beings and would not try to get more than they were actually going to receive. It is a risk calculus every time you get out there. You know what is in your hand and pretty much what is in the other guy's hand, but there are upper limits to the game. He said it is not this production of damages that takes place within a vacuum. Number 1513 REPRESENTATIVE CROFT said the contingent fee is the irritant to a lot of people. He said he would hate to see the legislature deprive injured people of their recovery because we're irritated that attorneys keep a portion of it. The contingent fee is necessary because it is very often injured poor people who cannot afford to take on an attorney, like a defendant can, for three years, paying the expenses and costs and then only at the end getting their investment back. He said the question is do we want to allow people to set up an alternative arrangement, or do we want to require them to pay as they go. He said we would not want to deprive people of that right to making an independent, contractual right to make an alternative arrangement which would suit their needs. Number 1601 REPRESENTATIVE CROFT said, in the eloquence issue, there are good defense attorneys as well as good attorneys for the plaintiff. He did not feel the jury was being bamboozled by brilliance on one side. Number 1622 REPRESENTATIVE PORTER said he rejected the attitude and image that plaintiffs are poor people who can't afford to retain a lawyer and that the defendant is Ford Motor Company. The vast majority of businesses in Alaska are small businesses, people with a lot of guts that are taking a big risk which a lot of us aren't doing. They can't afford attorneys anymore than poor plaintiffs can. Number 1676 CHAIRMAN GREEN said there might be an initial reaction to a large settlement which can be changed through appellate court proceedings to fall below the caps being discussed in SSHB 58. He said it is perhaps a disservice to say that without a cap you can shoot for the moon, when perhaps it will be beaten down below the amount. Number 1718 A roll call vote was taken on Amendment 4. Representatives Croft, and Berkowitz voted yea. Representatives Porter, James and Green voted nay. Representatives Bunde and Rokeberg were absent for the vote. Amendment 4 failed to be adopted. Number 1771 CHAIRMAN GREEN called a brief at ease at 3:16 p.m. The meeting resumed at 3:37 p.m. He said the issue before the committee was Amendment 5, located on page 9, line 15 through page 10, line 16: delete all material and renumber the following sections accordingly. Page 20, line 11 through line 20: delete all material and renumber the following sections accordingly. Page 24, lines 13 through 17: delete all material and renumber the following sections accordingly. Number 1820 REPRESENTATIVE CROFT made a motion to adopt Amendment 5. Number 1823 REPRESENTATIVE PORTER objected to the motion. REPRESENTATIVE CROFT said this was out of the cap and monetary area and into the apportionment of fault which requires a brief description of how it works now and how it would have to work under SSHB 58. Making clear at the outset that we have complete apportionment of fault, the question is how will we do it and what mechanisms will structure it. He said 20 to 30 years ago we had a joint and several liability in sort of a mixed form. Now the statute is completely clear that the parties are allocated at their appropriate fault and that is all they have to pay. The question is whether it is a party or a person who has to be sitting in the chair at the trial. The way it works now, after the case Benner v. Wickman, which required that the plaintiff sue who they thought did it. The defense might say that they are the only one who could be liable, or they might argue that they're not liable or there are other people that are liable which would result in the defense bringing those people into the case. That is, for a number of reasons, the most logical way to approach this situation. REPRESENTATIVE CROFT said the question is, phrased in the law, whether you can point to an empty chair. Whether a defendant could say, without having the guts to bring them in, it was so and so that did it. That person is not there, they have no opportunity to defend themselves and that anything that the plaintiff against them is not binding according to the law, it essentially becomes a wash. Civil rule 14, after Benner v. Wickman was enacted, says exactly that. He said the defense could say it was a whole litany of people who did it, then the plaintiff could say that those people should be brought into the case. If the defense is right, then the defense will get a portion of the attorney's fees and costs, have the power to do offers of judgement and it all logically works. The defense can bring whoever they want to blame the situation on into the case, they have the liability for costs if they are wrong and they get the benefit of costs and attorneys fees if they are right. He said it is a complicated structure, but all the rules work. The person that says the other person did it has to bring them in to show that they did it. REPRESENTATIVE CROFT said the bill allows a system where you can blame everyone. He would argue that you would not be doing your job as a defense attorney if you didn't blame the world. This strategy can lessen the blame on the defense and confuse the issue to the jury. He said this type of defense strategy creates multiple suits when the plaintiff doesn't believe a specific person has done it. He said design professionals complain that they often get thrown into the suit when it is a maintenance issue. He said once the maintenance issue is raised the plaintiff doesn't have a choice but to include them in the suit, because if they allocate any portion of damage to them it has no effect unless the plaintiff brings them into the suit. He said the plaintiff runs the risk of mutually contradictory, multiple suits unless they bring in people who they don't believe did it. Those are the two options under SSHB 58 as it is written. REPRESENTATIVE CROFT said there are many aspects of the current system of which there are legitimate concerns about whether it works or doesn't work; on caps, on punitive damages and whatever. He said the current system has a logic. Our state as one of the only states that require attorney's fees to be paid by the losers, with our attorney's fees, our costs and our offers of judgement it all creates a system which makes sense. The person you bring in is the person you thought did it. If the defendant is trying to point to other people, then they should have the guts to bring them in. He said we ought to keep this and it is this area that the bill does confusing damage to. Number 2432 REPRESENTATIVE PORTER said there are two reasons to object Amendment 5, the best one is that the people of the state of Alaska, in 1988, voted in an initiative that they were buying an elimination of any form... TAPE 97-28, SIDE A Number 0000 REPRESENTATIVE PORTER continued...party to the suit, rather than (Indisc.) Consequently, we are half way back to where we started from, unless the defendant brings in someone that they wish to make this argument about that there will be an inability because they are not a party to the suit, to describe somebody else's potential responsibility. REPRESENTATIVE PORTER said it is terribly wrong to have what is described as the empty chair, an argument that falls apart in two different areas. One, current law already creates an environment for any case that has to do with an employee, employer and a third party defendant. Unless a third party defendant can show that this employer, who can't be brought into the case because of the worker's compensation laws, is 100 percent at fault then any awarded damages don't get apportioned to that employer. He said there is already an area that creates the empty chair situation. REPRESENTATIVE PORTER said there is a need for this kind of thing and an elimination of joint and several liability because of the strategy in some people's law firms to try and find a deep pocket while trying not to name defendants who are judgment proof. That is to say, those who don't have any money. It wouldn't do any good to get a judgment against them because it wouldn't be beneficial in terms of being able to recover money. He referred to Michael Schneider's testimony that said there is a disincentive to sue judgment proof people and that the deep pocket is someone they try to go after. REPRESENTATIVE PORTER said he has a bias for people who are in business, to the extent that there is a presumption that they can afford to do anything. It is okay under the current result by case law of apportion to fault if a defendant feels that they are being singled out and there is someone else responsible. It is okay for them to have to go through the time and expense to bring somebody else into this suit, but if the plaintiff doesn't want to then he doesn't have to do so. He did not feel that this is right and it is what the people of Alaska thought when they voted against joint and several liability. The notion that all of a sudden this jury, who is capable of deciding what damages we should have, has an almost unlimited sideboards on what they could come up with are now, all of a sudden, not capable of seeing a specious argument about a potential defendant who may or may not have some real culpability in this thing. He thought the jury could make this judgment. REPRESENTATIVE PORTER did not feel that the empty chair, except in employer situations that are barred by law, would exist in any event if there was any way, shape or form that there really was someone else who was culpable because during discovery the fact, that a defendant was going to lay responsibility on somebody else, would come out. The plaintiff has the opportunity to amend his complaint and say this is true and we are going to accuse them as well. If there is an empty chair, it is because they don't think that it is even worth it and the argument would fail or because it is the employer which is already covered by law. He said Amendment 5 should be rejected. He said we should stick with what the people wanted and the committee should eliminate joint and several liability. Number 0395 CHAIRMAN GREEN asked if there was a situation where a plaintiff loses his legs and knows that one person is guilty, but the case involves five unknown people. He asked if the one person should be held responsible for the $500,000. Number 0453 REPRESENTATIVE CROFT said you will find out, during discovery, who you believe is responsible for your injury, it is your burden to prove that responsibility. He did not know how you would get an anonymous person known as an actor to the injury. You can speculate who might have contributed to the injury, but did not know of a situation where you would get a situation where it was "pretty sure they did it, don't know who they are." He said a plaintiff would sue who he thought did it. REPRESENTATIVE CROFT said Representative Porter was right in his colloquy with Mr. Schneider. Some cases you might say that maybe this person had a portion of fault in this case, but they are bankrupt and I don't want them involved in this case. I'd rather have all of the award be assigned to the two solvent people and leave the third insolvent person out of the case. He asked what the remedy would be for that situation. He questioned whether defendants should be allowed to point everywhere or allow defendants to point, bring in and have the responsibility for that insolvent person and let the jury sort it out. The jury will either say that person is not involved and is not liable or they will say they are liable, in which case you get some extra money in attorney's fees. The situation is solved by individual responsibility for who you bring into a lawsuit. We don't know if they don't bring in a person because they never thought they were involved or if they are not bringing them in because they don't have any money. The way to sort this out is for the defendant to bring that person into the case. Number 0612 REPRESENTATIVE JAMES referred to Representative Porter's comments on Amendment 5 and added that she had just a little bit of rebuttal. Her attitude on this issue is that the plaintiff is the one who is trying to get some recovery, some healing. They are doing it to this defendant. The defendant, in her opinion, is also a victim. The perception out there is that it is too easy to take someone to court. As a plaintiff you have to make the choice of whether or not you can win or lose, but there is an additional possibility of winning a settlement. The cost of defending a suit is so high, settlement is a preferred option. She suggested that we need to do something to slow down the process to make it a little bit more difficult for a plaintiff to go after a deep pocket. She said this plethora of lawsuits causes our courts to be full and is the reason why there are more attorneys per capita in Alaska than any other occupation. She said SSHB 58 is an attempt to slow this process down. Number 0811 REPRESENTATIVE BERKOWITZ said she was right in a lot of ways about the need to slow down the process. He said it was one of the problems he had with SSHB 58, it does nothing to address the front end of cases. It addresses a case in the middle and addresses a case in the end. The bill doesn't do anything to expedite discovery, nothing to mediate or perform alternative dispute resolution at the beginning. He reminded the committee that suits are proliferated in and around Alaska. The number of suits have held steady with about 1,000 cases a year since 1988 according to data taken about court system filings between 1988 and 1995 in the superior court. The number of district court cases declined from 532, in 1994, to 398, in 1995. Cases are more or less holding steady. REPRESENTATIVE BERKOWITZ said there is probably an impression that more cases are going to trial because there is more attention and more hysteria whipped up about this subject. He said in many ways it is the perception of a problem, creating anxiety which adds to the problem. He said a debate based on facts would be able to ameliorate many of the concerns about the court system. He said we need to address cases before they become frivolous. Number 0912 REPRESENTATIVE PORTER said the court system has just completed a review and amendment of their discovery system regarding the amount of motions that are available and other such things. He said it would be presumptuous of the legislature to jump in and not wait to see the changes happen for a few years, to see what Judge Karl S. Johnstone's work has accomplished. These revisions include an alternative dispute resolution (ADR). He suggested that instead of jumping into something, the judicial counsel can review existing programs between this session and the next session. He said the state of Washington has an existing program in the area of mediation and added that we need to find out what is going on out there. Number 0976 REPRESENTATIVE PORTER said the provision in the offer of judgment is aimed right after discovery has been accomplished so that a person has a feel for how the case is, one way or the other. The offer of judgments section comes into play and will certainly induce early settlement, if at all possible. Number 1021 REPRESENTATIVE CROFT referred to the 1988 amendment and its intent. He said the ballot measure, now law, statement in support and opposition is that people are assessed damages based on their percentage of fault. There will be a jury determination of it, the amendment does not deal with who has to bring the guilty parties into the case. He questioned who has to take the burden to bring them in if you say they did it. He said SSHB 58 goes contrary to the spirit of ballot measure 2 and creates a system where you can have conflicting assessments of fault by multiple juries, then you aren't able to assess damages on the basis of a person's degree of fault. There is a multiplication of lawsuits, rather than a simplification. Number 1100 REPRESENTATIVE CROFT said worker's compensation laws exists for the empty chair but it is because we say, with the comprehensive worker's compensation law, that we're going to make a deal. We are wiping out the employees ability to sue, in exchange for quick but limited damages in the compensation system. He said it is a product of saying you have no right to sue your employer for work place injuries that creates the small, anomalous result there. The reason why the weird 100 percent provision has to come in is if your employer is 100 percent liable, then you as the employee are not liable at all. Number 1155 A roll call vote was taken on Amendment 5. Representatives Croft and Berkowitz voted yea. Representatives Bunde, Porter, James and Green voted nay. Representative Rokeberg was absent for the vote. Amendment 5 failed to be adopted. Number 1193 REPRESENTATIVE CROFT made a motion to move Amendment 6, located on page 3, line 11 through page 4, line 10: delete all material and renumber the following sections accordingly. Number 1197 REPRESENTATIVE PORTER objected to the motion. Number 1200 REPRESENTATIVE CROFT said Amendment 6 removes the current general statute of repose and said proposed Amendment 7 would discuss the minor statute of repose. He said the concept of a statute of repose is that, whether or not you know your cause of action, it can die after a period of time, it can expire. The statute of limitations, that Alaska as well as every other state has, generally provide, Alaska globally provides, that the statute starts when you knew or should have known of your cause of action. You have some reason to believe that you ought to be suing someone. It is not just that I knew, I may not have treated this with reasonable diligence in investigating things. I can honestly say that I didn't know, but if a reasonable person would have known then the clock would have started ticking and I might have been out of time. He said these are typically short periods, two, three. For actions where it is sometimes harder to discover or evidence doesn't go away that quickly, like contract actions, they allow six. REPRESENTATIVE CROFT said these cases are especially pernicious for that exact reason. For someone who was not at fault, had no way to know about it and lose their rights before they would have had a chance to get them. He suggested a massive dose of radiation might be an example for this type of situation. These provisions do nothing to discourage litigation because you had no way to know about it. In fact, they encourage some litigation. If someone comes into a law office with any type of claim and it is about to reach eight years then you have to sue. Under the general statute of limitations and discovery you only have an incentive if there is some reason to know of your cause of action. Now things are just going to be lost when you had no way of knowing. You can investigate more thoroughly, discover whether you have a cause of action or not. It puts a devil's choice. Lose it absolutely or risk a frivolous lawsuit. At some state of knowledge you are forced into that, it is seven years, 360 days and you question what you should do. REPRESENTATIVE CROFT said the most objectionable thing is that there are injuries that don't show up and referred to previous testimony given to the committee. He said this is a ridiculously extreme provision, it says none shall be done. Maybe there are very few but, if you meet the threshold of discovery and within the statute, why are we cancelling out those very few. He questioned that if the doctor couldn't say any, then why was the committee saying never. Number 1420 REPRESENTATIVE PORTER said there is a very good, legitimate public policy why the committee is suggesting that there should be a statute of repose and one that fits into this general area of time. He said any profession, doing business in Alaska, is required by practical common sense to have liability insurance and that level of coverage is expensive. He said the insurance, called claims made coverage, covers you for a period of time and for any claim that is made. When professionals retire, there is possibility of purchasing what is called a "tail" to your liability exposure but it is for an extremely limited time, most of them only are allowed to be written for three years, but some go up to five years. REPRESENTATIVE PORTER said a statute of repose for eight years would still leave a professional exposed for another three years to possible lawsuits. He felt Alaska ought to give its citizens the opportunity to have the best professionals whether it is doctors, lawyers, engineers, architects, contractors or some other professional. It is well within reason that some people, especially those at a level of expertise, are going to go to some state that has a statute of repose. Number 1549 REPRESENTATIVE PORTER said if someone came into a law office it is obvious that they have discovered damage or a problem, thus they would fall under the statute of limitations as it is now because the accrual has already started. There was testimony about a six year statute of limitations that the supreme court upheld saying that there is an inability after a certain length of time to recall facts correctly. Memories fade, documents are lost and there should be a limited period of time after which you shouldn't be accused because of a loss of those facts. He said this is the other area that makes the statute of repose correct. The best example of this logic is it applies to criminal cases. He referred to a case involving sexual assault and death that was perpetrated by someone recently released from jail with a prior conviction for a similar crime. If that the person who committed that reprehensible act would not have been discovered within five years, it would not have been possible to bring that person before the court because of all of these things that decrease the likelihood of having reasonable evidence, memories and documents. He said these reasons form the basis for the statute of repose which exist in other states and criminal statutes and added that it is very logical to apply it to this bill. Number 1705 CHAIRMAN GREEN said section (b) seems to allow for a significant number of situations that would not be subject to this statute. Number 1717 REPRESENTATIVE PORTER said part of the process of compromise went into the establishment of this list. The list includes defective products, any intentional fraud, fraudulent misrepresentation acts, gross negligence and similar things do not fall within this statute of repose because those limits have already been established. Number 1758 A roll call vote was taken on Amendment 6. Representatives Croft and Berkowitz voted yea. Representatives Bunde, Porter, James and Green voted nay. Representative Rokeberg was absent for the vote. Amendment 6 failed to be adopted. Number 1812 REPRESENTATIVE BERKOWITZ made a motion to move Amendment 7, located on page 4, line 14: following "provider", and delete "if the injured person is, on the date of the alleged negligent act or omission, less than six years of age unless the action is commenced before the person's eighth birthday", and insert "unless commenced within eight years of the date of the alleged negligent act". He said this is the most confusing part of the bill for him. It seems that what we are doing is denying children the same protection that we afford adults. If a child somehow suffers a negligent injury at the hands of a health care provider before the age of six, she or he has to bring suit before the age of eight. He said we don't impose what is essentially a two year burden on adults, we give adults a full eight years. REPRESENTATIVE BERKOWITZ said the example that springs to mind is someone who negligently receives bad blood, maybe they go in for surgery or stitches and there is no reason to suspect anything is wrong until after they are eight-years-old. This limitation would bar such an action and he thought it was unfair. Number 1877 REPRESENTATIVE PORTER said it is not intended to and added that he did not think it makes a restriction on kids that doesn't apply to adults. It actually gives an expanded statute of limitations to kids whereas an adult would only have two years. The outside of this is eight years which is the statute of repose, six years plus the two for the statute of limitations. Otherwise, if there were an injury to an infant or shortly thereafter and the parent who makes the suit should have known that it happened, it doesn't make any difference. We won't bar those prosecutions because of the statute of limitations, this expands it to six years plus two. There was testimony that birth injuries in most cases are evident within three years. The vast majority of those injuries are evident by the time they get into preschool. As opposed to be a detriment to kids at that age, it is a positive exception to the statute of limitations so that anything that might happen to a child, during those years when there is an inability for them to communicate like a normal child, there would be this exception. Number 1978 REPRESENTATIVE CROFT said an exception used to be made for a minor, until they were 18-years-old. He said SSHB 58 changes the current law in that we no longer allow to them to become adults before we require them to know whether or not to bring up a suit. He said in many situations, but not all, it would be the parents who would make that decision. He said he was unsure of Representative Porter's comments on the statute of limitations, but this the bill is no better on the statute of repose. We should be treating children better. Even though we have a number of exceptions, but the exception for a child that turns eight and does not have anyone looking after them is not there. We are presuming that every child is cared for by someone that has their best interests at heart and also has a good legal foundation who knows that there is something magical about the eighth birthday. He said we should provide more, not less, protection for children. Whether we are doing that in some respects under the statute of limitations, we should be doing more under the statute of repose. Number 2052 A roll call vote was taken on Amendment 7. Representatives Croft and Berkowitz voted yea. Representatives Porter, James and Green voted nay. Representative Bunde abstained from voting and Representative Rokeberg was absent for the vote. Amendment 7 failed to be adopted. Number 2083 REPRESENTATIVE BERKOWITZ made a motion to move Amendment 8, located on page 6, line 11: following "gain", delete "and", insert "or". Number 2085 REPRESENTATIVE PORTER objected to the motion. Number 2088 REPRESENTATIVE BERKOWITZ said, rather than focusing on the entire cap on punitive damages which he disagreed with, he focused on one small word. He said, whether it is a situation where someone is running a stock scam or crashing a tanker into the rocks, there is a situation where Sections 1 and 2 have to occur together. He said he could be running a stock scam, making piles of money without anyone getting hurt. When you put the conjunctive "and" into this subsection it requires proof that both wrongful conduct in the commercial activity and likelihood of death, serious physical injury occurred. He said we would not want to encourage people to perpetrate economic wrong on one another and the way to deter it is to go after the proceeds and to punish them accordingly. Number 2150 REPRESENTATIVE PORTER said the "and" after line 11 makes one and two a requirement in order to establish both and said this is for a very good reason. If you eliminate that "and" then the additional higher level of punitive damages could be awarded to anyone who was in business, anyone who is in a commercial business is motivated by financial gain. If there is a business that is out there which is not motivated by financial gain they would not be in business for very long. Consequently, to eliminate the limited scope for which it was intended to cover he would not withstand more criticism than he has already received for this section already. Number 2198 REPRESENTATIVE CROFT said every business is motivated by financial gain, but not every wrongful conduct or admission is motivated by financial gain. The "and" does say, that the connection with commercial activity be motivated by financial gain and said this language could be cleaned that up a little. It seemed to him that you would want to identify areas that were particularly worrisome. One such area would be where the wrongful conduct was motivated by financial gain, another might be where serious bodily injury was likely and that either/or would be appropriate in sanctioning those at the higher level. Number 2241 REPRESENTATIVE PORTER said he could be talked into eliminating the additional expanded cap, but not enhancing it. Number 2253 REPRESENTATIVE BERKOWITZ said we are proceeding under the assumption that (Indisc.--coughing) are always on the receiving end of suits, but there are some 8,000 small businesses that took advantage of wrongful conduct in order to begin a suit that resulted in punitive damages. The businesses he referred to were the commercial fishermen who achieved and earned punitive damages based on the Exxon Valdez case. Under this construction, he did not think they would have been able to collect punitive damages. Number 2289 REPRESENTATIVE PORTER said commercial fishermen would get punitive damages within the provision of (b), they wouldn't get it under (c). The provision of (b), if the Exxon Valdez case had been in state court, would have resulted in several billion dollars worth of punitive damages within SSHB 58. He said this bill does not affect the Exxon Valdez settlement, this bill wouldn't affect it if it happened the day after the day became enacted because it is a federal case in a maritime area of law which does not revert back to state law. Number 2329 A roll call vote was taken on Amendment 8. Representatives Croft and Berkowitz voted yea. Representatives Bunde, Porter and Green voted nay. Representatives James and Rokeberg were absent for the vote. Amendment 8 failed to be adopted. Number 2349 REPRESENTATIVE BERKOWITZ made a motion to move Amendment 9 located on page 10, lines 30 through 31: delete lines 30 and 31, page 11, line 1: preceding "trained", delete (2)", page 11, line 2: following "issue", delete";and", insert "." and page 11, lines three through six: delete lines three through six. Number 2361 REPRESENTATIVE PORTER objected to the motion. Number 2370 REPRESENTATIVE BERKOWITZ said a time honored response to an objection in court is to argue that the evidence being proposed should be admitted and that the objection should not be sustained because the objection merely goes to the weight versus the admissibility of the evidence. In other words if someone has a quarrel with evidence, they can argue against it and say it's not important, its not relevant, it comes from a biased source. This provision attacks the admissibility of evidence that should be admitted and be subject to examination based on its weight. REPRESENTATIVE BERKOWITZ said it is not always easy to get experts to testify in the bush because of the expense. He said this also assumes that such an individual exists to discuss the standard of care. Once again the committee is in the position of determining which standards of care might apply. We could be talking about someone who is whaling out of Barrow, there is no one who has been licensed to do that. He suggested that we limit the restrictions imposed by this section and we allow it to revert to the body of law that is pretty accurately described in the rules of evidence. Number 2457 REPRESENTATIVE BERKOWITZ said we are not always going to find people who are licensed, we are not always going to bring them in and it poses an undo burden. Number 2462 REPRESENTATIVE PORTER said this expert witness qualification as it says in the first line, "in an action based on.... TAPE 97-28, SIDE B Number 0000 REPRESENTATIVE PORTER continued...expert opinion on that professional's negligence should be in the ballpark of the qualifications of that professional trained in the same basic disciplines. He referred to a similar bill that was in the legislature a few years ago and said there were two or three pages of much broader and restrictive language on who we thought would be appropriate to testify in these kinds of cases. This bill is really a mitigation of that two or three pages worth of requirements. He said this bill recognizes that there might not be specific boards in existence for some professions and if there isn't then we don't expect it. If there are specific boards then that is where the knowledge should be obtained from to testify as an expert. Number 0045 REPRESENTATIVE PORTER referred to testimony in past years that there are "hired gun" experts whose particular point of view on certain things is well known and these people are sought to testify in cases where that well known point of view would be of benefit to a particular side of the case. He said this is the reason for the limited expert witness qualification provision. Number 0077 CHAIRMAN GREEN said instead of saying a profession who is licensed if appropriate, the "if appropriate" is redundant because it is implied that if they are not required to have a license there just won't be a requirement. Number 0090 REPRESENTATIVE CROFT said this works to the advantage of closed professional societies such as the law or medical professions. This requirement is difficult to obtain in small communities. When a requirement is made that if you are going to sue a professional, then one of their own professionals would need to testify against them. The more specialized the profession is or the smaller the state, the harder it is going to be to get anyone to break ranks and say they didn't do a good job in engineering, law, medicine, et cetera. For a long time there was a gentleman's agreement that you didn't testify against someone else in your profession in a small community. You had to find someone else to say why their action was wrong such as a professor of law or medicine, a chiropractor or someone who wouldn't be ostracized from their profession for doing testifying. It is still problematic to prove that a professional did anything wrong by forcing other professionals in the field to testify against them, saying that the only people that the public can trust are the people who are friends with the defendant. Number 0158 REPRESENTATIVE PORTER said this problem exists in another area that he did not think anyone had any controversy with, the review committee on medical malpractice cases. He said this isn't what the particular provision says, on line 30, page 10, "may not testify unless a professional who is licensed in this state or in another state or country". If you find somebody who meets these qualifications from other states, the board certification only has to be recognized by people in this state. Number 0194 REPRESENTATIVE CROFT said very often in a professional malpractice you are talking about the community standards that are there, so it is very difficult to get an outside opinion on what the Anchorage practice is. Number 0209 CHAIRMAN GREEN asked, if you had a professional who was falling into this category, how would you establish the credibility of witnesses who may not understand or be knowledgeable enough to testify against the defendant. He referred to an engineer on trial and said you probably need someone who is a professional engineer to make sure what the engineer did was wrong. Number 0235 REPRESENTATIVE CROFT said you do want a professional opinion. He said the credibility of hired guns is pretty low and it is fairly easy for any defense attorney to show that. He said there are questions that can be used to reveal their bias such as, "How many times have you testified sir?", "How many times have you testified for the plaintiff as opposed to the defendant?", "What are you being paid for being here today?" As an attorney you tell the jury that this person is a quack and you tell it by proof. You are given free rein to go into their qualifications. A plaintiff is going to be better advised to get professional witnesses, but he asked if this should be a requirement. If you cannot find this professional witness should you not be allowed anyone? Number 0276 REPRESENTATIVE BERKOWITZ said usually what happens when you want to introduce an expert is that you tell the other side and the judge that you want to introduce an expert on this and that subject. Out of the presence of the jury there is some discussion about the expert's qualifications. You qualify as an expert by reason of knowledge, skill, experience, training or education and you can testify accordingly. The judge will make a determination whether someone who purports to be an expert is an expert. The judge will do the standard balancing test that always happen. Is it more prejudicial than probative to let this expert testify? That way hopefully you are weeding the quacks out before the jury has to listen to them. REPRESENTATIVE BERKOWITZ said we already have well established rules about experts. There can't be more than three experts testifying in a case unless the court says it is too many or there should be more experts who testify. He said for the legislature to try and superimpose the court's discretion in a particular area without being aware of the particular facts and circumstances of particular court cases. He felt that it ran the risk of placing an undo burden not just on plaintiffs, but also on defendants to produce the experts and this will ultimately work against the interest of justice. Number 0341 REPRESENTATIVE PORTER said with all due respect to the court system, that is the problem. The courts are made up of individual judges who have individual opinions on who should be able to give an opinion in their court. The very subjective rule that they can consider experience, college or those things has a wide latitude of wiggle room. This bill tries to say that it is appropriate and good public policy that if a professional is going to be judged, then a professional of at least someone in the same general area knowledge and background should be the person to offer another opinion on the disputed action. Number 0380 A roll call vote was taken on Amendment 9. Representatives Croft and Berkowitz voted yea. Representatives Bunde, Porter, James and Green voted nay. Representative Rokeberg was absent for the vote. Amendment 9 failed to be adopted. Number 0401 REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 10 located on page 7, lines 6 through 7: following "of", delete "a party", insert "both parties" and on page 24, line 6: following "by". delete "a party", insert "both parties". Number 0404 REPRESENTATIVE PORTER objected to the motion. Number 0406 REPRESENTATIVE BERKOWITZ said the problem that he has with how this section is structured is that once a judgment has been rendered it seems a little peculiar to allow a person who has lost to dictate the terms of payment. A situation occurs where the plaintiff owes medical bills, the hospital wants them to pay right away, but the other side doesn't want to give me the lump sum. They want the amount to trickle out over a period of time and the plaintiff is still stuck with the bulk of the medical bills. REPRESENTATIVE BERKOWITZ said he did not see how this section helps reduce insurance costs or how it helps businesses. The business would have been adjudged guilty or if it is an individual, has already been found to be liable. Number 0475 REPRESENTATIVE PORTER referred to proposed Amendment 16 which would make clear that what we are talking about in this periodic payment section addresses future damages and not current medical bills or anything like that. He referred to line 8, page 7, the word "future" would be put back in with Amendment 16. Assuming that Amendment 16 would pass, we are left with the idea that the defendant should be able to elect this as well as the plaintiff. REPRESENTATIVE PORTER said the defendant should be able to do this because we are addressing future damages which are things that will occur in the out years, may be paid in the out years. This makes sense because there have been studies that people who come by large, single amounts of money at one time have a propensity to expend them much quicker then if they had come into the money under normal circumstances. This would leave someone who was injured and unable to work in a position of costing the state. This provision is a benefit to the defendant if they can do this within the limited area of future damages where they might be able to set up a strictly established annuity or periodic payment with the security that it will be there. If this is set up correctly then the money can be invested and there can be some return from the investment and it will reduce the overall total that they would have to put in, varying percentages of reduction based on what a good investment year was. It could make the difference between somebody having enough wherewithal to set up this thing or going out of business. If they go out of business, nobody wins. The plaintiff doesn't get any money and a business shuts down. Number 0629 REPRESENTATIVE BERKOWITZ said the plaintiff should be accredited the same opportunity to spend the money as he or she chooses. We are all supposed to be people of free will, independent and if I want to blow my money it is my prerogative. If I want to hoard it and use it wisely, it is also my prerogative. It is unduly paternalistic for us to say we should dictate how a victorious plaintiff is going to spend the proceeds of a lawsuit, whether it is future or incurred damages. Number 0679 A roll call vote was taken on Amendment 10. Representatives Croft and Berkowitz voted yea. Representatives Porter, Bunde, James and Green voted nay. Representative Rokeberg was absent for the vote. Amendment 10 failed to be adopted. Number 0700 REPRESENTATIVE CROFT made a motion to adopt Amendment 11, located on page 16, line 8, following "hospital" through page 16, line 31: delete all material and insert "may not escape liability for the actions or inactions of emergency room physicians by contractual device, change in employment status, or purported notice to or waiver by emergency room patients. Nothing in this section is intended to modify the standard of care for emergency room physicians or apply to a physician that is independently hired and not associated with the hospital's provision of emergency services." and renumber the following sections accordingly. Number 0704 REPRESENTATIVE PORTER objected to the motion. Number 0706 REPRESENTATIVE CROFT said the purpose of Amendment 11 is to enshrine Jackson v. Powers rather than contradict it. The bill would overrule Jackson V. Powers and Amendment 11 would take essentially the text from the case and make it part of state law. Jackson v. Powers is used because, in part, emergency rooms are required services. If you set up a hospital then you have to set up an emergency room. A hospital will financially benefit by the provision of their general medical services and in exchange they will provide emergency medical services. The individual doctors and hospital could not fracture the negligence picture by limiting their liability where only individual doctors would be liable for their own services. In general, enterprises are liable for the torts of their employees. The businesses make a profit and part of the cost of doing business is the harm their business caused. The more they can reduce the harm their businesses cost, the more profit they have. It is an appropriate principle we've had in the law for hundreds of hundreds of years. REPRESENTATIVE CROFT said this provision of the bill is particularly troublesome in how it proposes to notify victims. These are emergency room patients. They are coming into a hospital because a traumatic event has happened and there is a sign located there that says Dr. so and so are your doctors, but the hospital is not going to take any responsibility for what they do. As a lawyer that is confusing, as a non-lawyer that would be confusing. He questioned whether someone should or shouldn't be supervising those doctors. REPRESENTATIVE CROFT referred to testimony regarding this issue, when a witness was asked if he would provide an employee, someone he trusted enough to take responsibility of a situation, the witness said there were no employee doctors. The doctors are all independent contractors, a legal construction that most people don't understand. It depends on a multi-factored test. In reality those doctors don't work for the hospital, the hospital has contracted with those doctors to provide services or with Jane Smith Inc., a doctor professional corporation. He said not only is your liability limited to that professional, it often limited to that professional corporation of limited liability of which the sole employee is Jane Smith. It seems to be a poor trick to play on the injured people of this state that when they go into a hospital they are given a notice that is confusing to understand. If the notice was explained the injured person would still not have an option and in any event they are not in the situation to make much of a rational decision because they are injured. Number 0912 REPRESENTATIVE CROFT said there is a superficial appeal to having only the individual person be responsible for their individual act. It has been a principle of law, for some time, that an enterprise is responsible for the ordinary conduct of its employees when they do it. A trucker hits somebody and that is Acme Trucking's responsibility because driving is within the performance of the employee's duties. If we don't allow this, we so fracture the system that nobody injured by the normal conduct of an enterprise can get recompensed. REPRESENTATIVE CROFT read the section from "Jackson v. Powers" that he summarized, "we are persuaded that the circumstances under which emergency care is provided in a modern hospital mandates the rule we adopt today. Not only is the rule consistent with the public perception of the hospital as a multi-faceted health care facility responsible for the quality of medical care and treatment rendered, it also treats tort liability in the medical arena in a manner that is consistent with the commercialization of American medicine. Finally we simply cannot fathom why liability should depend upon the technical employment status of the emergency room physician who treats the patient. It is the hospital's duty to provide the physician which it may do through any means at its disposal. The means employed, however, will not change the fact that the hospital will be responsible for the care rendered by physicians it has a duty to provide." REPRESENTATIVE CROFT said, in conclusion, a couple of red herrings proposed by a witness who talked about how this might lead to this or that. The decision itself says that this holding is necessarily limited. We do not change the standard of care with which a physician must comply, nor do we extend the duty which we find non- delegable beyond its natural scope. Our holding does not extend to situations where the patient is treated by his or her own doctor in the emergency room; such situations are beyond the scope of acute care. Amendment 11 encapsulates those clarifications; if you are treated by your own doctor then it is your own business, but if you are treated in an emergency room then the emergency room will be responsible if they individually or collectively harm you. He said this is a reasonable expectation of the people of this state. Number 1051 REPRESENTATIVE PORTER said if the people that he has talked to about this particular area of the law had the opportunity to present opinions to the court, there is no doubt in his mind that this court decision would have gone the other way. The hospital, by law, has to provide emergency room services and thus have entered into other agreements in order to provide this service. There are reasons why in most cases, with the exception of intentional acts, businesses are held responsible for the acts of their employees. In many instances those businesses provide the training of the function that the employee is doing. In almost all situations a business provides the step by step procedures for their employees. The business provides the supervision to see that the employees are doing it this way and that way. They provide the discipline if that doesn't happen and controlling the purse strings allows for some degree of control over other people. REPRESENTATIVE PORTER said none of these things accrue to a contract doctor in an emergency room. The hospital doesn't have the ability to set procedures for them. They are an independent, professional expert in the medical field and will apply what they learned in medical school and in their own training. They are not trained or supervised by the hospital. If you don't have the authority to control somebody's actions, you should not be held responsible for them. The hospital does not even have the authority to say they are not going to get into this field. Number 1196 REPRESENTATIVE PORTER said, since Alaska is not a state that requires professionals to have liability insurance, you could argue that the hospital should check the qualifications of those doctors to make sure that they have the basic qualifications, be diligent in allowing them to have privileges in your hospital and require the doctors to have liability insurance even though there is a notice that you would or wouldn't understand and a notice requirement published in the paper once a year. He said these requirements would be a fair accommodation for the situation that exists. Number 1292 REPRESENTATIVE BERKOWITZ said the judicial process can be thorough. He disputed the assertion that those who disagree with Jackson v. Powers wouldn't have had the ability to weigh in with the court because just as the committee did last week, they could have filed an amicus brief and made their position known. He said he is sure they had that opportunity to do it. Therefore Jackson v. Powers is a fairly well considered decision. Number 1329 REPRESENTATIVE CROFT said the hospital did not teach them medical procedures, but the hospital does have an opportunity and an obligation to see that they are supervised and to see to it that training as well as the other two areas mentioned by Representative Porter are done. He said it is a circular argument that because we can rely on them as independent professionals, who the hospital has no supervision over, we don't have to supervise them and people shouldn't expect that we are. People rationally expect that there are procedures, training and supervision in an emergency room as there are other parts of the hospital. If the hospital is not doing these things, they should be. REPRESENTATIVE CROFT said, the argument that emergency rooms are required by law, is a trade off that we made. We required hospitals to provide emergency rooms because we need them and to the extent that there is a cost to do it, that cost is recovered by the other operations of the hospital. There are many other situations where we require businesses to do certain additional things and they can allocate the cost in other areas. He did not think we would seriously argue with the legal requirement to run an emergency room and that when you run it you should be responsible for the conduct of the people you are employing. Number 1404 REPRESENTATIVE CROFT said this fracturization has happened before, will happen again and has rarely been attempted in so dangerous a situation. For many years cabs tried to do this. When you sued a cab company, you found out that there were individual, independent drivers. He said when enough egregious examples occurred, we had to go an fix the system because people were trying legal tricks on the public. He said this bill spotlights the risk, rather than spreading it across the enterprise which is the reasonable approach. The hospital is not going to be liable in all of the cases, they are going to be negligent in very few cases. Number 1450 A roll call vote was taken on Amendment 11. Representatives Croft and Berkowitz voted yea. Representatives Bunde, Porter, James and Green voted nay. Representative Rokeberg was absent for the vote. Amendment 11 was failed to be adopted. CHAIRMAN GREEN said the committee would reconvene tomorrow at the call of the chair. ADJOURNMENT There being no further business to conduct, CHAIRMAN GREEN adjourned the meeting of the House Judiciary Standing Committee at 5:10 p.m.