SENATE LABOR AND COMMERCE COMMITTEE January 19, 1993 1:30 p.m. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator Steve Rieger, Vice-Chairman Senator Drue Pearce Senator Georgianna Lincoln Senator Judy Salo COMMITTEE CALENDAR SENATE BILL NO. 44 "An Act relating to civil liability for skiing accidents, operation of ski areas, and duties of ski area operators and skiers; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 44 - NONE WITNESS REGISTER Josh Fink, Committee Aide Senator Tim Kelly State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Testified on SB 44. John Heiser, Director Mountain Operations Alyeska Resort Olympic Circle Girdwood, Alaska 99587 POSITION STATEMENT: Supported SB 44. Timothy J. Lamb, Attorney representing Seibu, Alyeska Resort Delaney, Wiles, Hays, Reitman & Brubaker, Inc. 1007 West 3rd Ave. Anchorage, Alaska 99501 POSITION STATEMENT: Supported SB 44. Bruce Rizer 5530 Rabbit Creek Road Anchorage, Alaska 99577 POSITION STATEMENT: Opposed SB 44. Paul Swanson, Manager Eaglecrest P.O. Box 34878 Juneau, Alaska 99803 POSITION STATEMENT: Supported SB 44. Al Clough, Attorney City & Borough of Juneau Box 24003 Douglas, Alaska 99824 POSITION STATEMENT: Supported SB 44. Leroy Cabana 6100 Andover Circle Anchorage, Alaska 99516 POSITION STATEMENT: Opposed SB 44. Claudia Bieber 16450 St. James Circle Anchorage, Alaska 99516 POSITION STATEMENT: Opposed SB 44. Patti Rizer 5530 Rabbit Creek Road Anchorage, Alaska 99577 POSITION STATEMENT: Opposed SB 44. Lex Patten, Coach Alyeska Ski Club 449 Dailey #17 Anchorage, Alaska 99515 POSITION STATEMENT: Supported SB 44. ACTION NARRATIVE TAPE 93-2, SIDE A Number 001 CHAIRMAN TIM KELLY called the Labor and Commerce Committee meeting to order at 1:30 p.m. SENATOR KELLY introduced his bill, SB 44 (CIVIL LIABILITY FOR SKIING ACCIDENTS), and opened the teleconference with Anchorage. SENATOR KELLY then directed his committee aide, JOSH FINK, to familiarize the committee with the legislation. MR. FINK explained the legislation would strike a balance between protecting skiers and the ski resort operators, by removing ski resort operators from liability from injuries caused by inherent risks and dangers of skiing. MR. FINK assured participants it didn't absolve ski area operators from negligence as defined by the legislation, and would require ski area operators to prepare and obtain approval of a safety and operations plan from the Commissioner of Public Safety or the land management agency of the federal government. He said SB 44 would require ski area operators to provide a ski patrol with qualifications meeting or exceeding the standards of the National Ski Patrol program. In addition, MR. FINK said it would require ski resort operators to establish and maintain a tramway sign system and a sign system for ski trails and slopes intended to instruct skiers on the difficulty of the trail or slope. He further explained the legislation could have an economic impact in Alaska by lowering insurance costs to ski resort operators through out the state, hence lowering the cost of tickets. MR. FINK said SB 44 recognized the inherent risks of skiing with balancing the rights of skiers and ski resort operators. He said the legislation could encourage continuing development of ski resorts in Alaska. MR. FINK said the bill had zero fiscal notes from the Department of Commerce and Economic Development and the Court System. Number 026 SENATOR KELLY addressed the participants on the legislative teleconference network in Anchorage. He was told that TIM LAMB, the attorney for the company, Seibu, and the Alyeska Resort, would be testifying from Anchorage, while JOHN HEISER, the Director for Mountain Operations for the Alyeska Resort would be testifying first from Juneau. SENATOR KELLY checked to be sure those testifying in Anchorage could hear the Juneau testimony and asked MR. HEISER to be identified. MR. HEISER testified in support of SB 44, which he said would make skiers more responsible for the inherent risks of skiing, and ski operators more responsible for negligence on their part. He stressed the legislation was not "anti- anybody," but was a pro-economic development bill supported by the Governor, the Anchorage Economic Development Corporation, the Anchorage Convention and Visitors Bureau, the Alaska Visitor's Association, the Alaska Hotel/Motel Lodging Association, the Alaska Carpenter's Union, and several ski areas around the state, and he proffered letters of support. SENATOR KELLY requested MR. HEISER to read into the minutes the support letters: Anchorage Convention & Visitors Bureau, Alaska Visitors Association, Anchorage Economic Development Corporation, United Brotherhood of Carpenters, Joiners of America, Local Union 1281, Alaska Hotel/Motel Association, Days Inn, and the Westmark Hotels. MR. HEISER continued to explain the merits of the bill in relation to the duties of the ski area operators, the enhancement of the ski slopes, and the reduction of insurance rates for the ski developments that comply with the known requirements, especially after it is well established that claims arising from the inherent risks of incidents could be resolved by summary motions. MR. HEISER described the typical terrain of the ski slopes with all manner of variations, the vagaries of the weather, and the highly athletic sport of skiing, which, he said, required good physical conditioning and quick reflexes. He continued to describe the difficulties encountered in the sport of skiing which could not be controlled, and where all patrons cannot be protected from injuries. Number O75 MR. HEISER reported on Alyeska's enviable safety record when compared with other ski areas in the United States, and he recited comparable statistics with other ski areas. He claimed the ski accidents at Alyeska have consistently remained well below the national average. Despite their positive safety record, Alyeska spends a substantial amount of money each year defending claims, which number 6 to 8 open files at this time with a net claim exceeding $2 million. MR. HEISER reviewed the reasons why a relatively safe ski resort like Alyeska accrued high legal fees and insurance fees, citing the lack of protection against claims arising from skiing. He described the types of injuries in terms of the risks of skiing - with any injured person as a possible claimant and the award potentially large. MR. HEISER said that if Alaska was serious about attracting and developing winter tourism, then it was imperative the legislation provide a level playing field with other competitive states or nations with better protection from litigation. Number 101 SENATOR KELLY paused to introduce all of the committee members including those who just entered. Because of the number of possible questions, SENATOR KELLY did not think the bill would leave committee this day. SENATOR PEARCE questioned MR. HEISER on future cases filed against any ski slopes in the state with the passage of the legislation. He explained how it would assist in activating summary judgments to avert selected claims from going to a jury trial. MR. HEISER outlined the use of the summary judgement motion which would necessitate information about the accident as to who was responsible. The judge would make a ruling on the motion as to whether it should go to trial, or whether it would be covered by the law. To questions from SENATOR PEARCE, MR. HEISER explained why the summary judgement could not now be made. SENATOR SALO asked for MR. HEISER'S perception of the resort's liability and responsibility in regards to terrain, whether natural or artificial hazards. He described possible hazards and whether or not they could be controlled, and he defined some of the hazards as corrections in areas to improve safety - such as roads and lift towers. Number 149 SENATOR SALO expressed concern at the breadth of MR. HEISER'S definition of inherent risk in regards to terrain since she thought it was possible to mitigate the hazards. She cited grooming trails and picking up junk as an example of this mitigation. SENATOR SALO gave a hypothetical example of something being left on the trail, such as a broken tire from a vehicle. It snowed during the night, and she hit the tire the next morning on her first run, suffering an injury. She questioned the legal ramifications under the definition of the inherent danger and risk of skiing in SB 44, and whether she could bring a suit. SENATOR SALO was assured by MR. HEISER that she could file a claim and would probably not fall into the inherent risk category, but he said, a skier has a certain responsibility to avoid hazards just as a driver does. SENATOR KELLY asked for questions, and SENATOR RIEGER said he had questions for the lawyer, TIM LAMB, on line from Anchorage. SENATOR RIEGER asked about the reference to applying a standard of comparative negligence and how it would work. MR. LAMB explained how the jury could apportion the fault between the parties in the accident, where a skier may have exercised poor judgement or the ski resort may have been partially to blame for the hazard. He explained how the jury would split the judgement on comparative negligence. Number 194 SENATOR RIEGER followed with a speculative claim of $100 by an injured skier, and the jury determined the skier was 80% at fault, with the resort 20% at fault. He asked if the skier would be awarded $20, and MR. LAMB thought that would be correct. He explained how difficult it was currently to get a summary judgement without changing the statute, and he blamed the supreme court for a loose interpretation. MR. LAMB referred to the use of the comparative negligence doctrine in the Hiibschman v. City of Valdez case, which, he said, has made courts reluctant to grant summary judgments. He discussed the merits of the proposed legislation which would take into consideration careless mistakes by a skier. SENATOR RIEGER asked MR. LAMB what phrase in the bill would eliminate the jury trial and provide for a summary judgement. MR. LAMB said the bill set out detailed perimeters and specific requirements for both sides and would prevent the codification of common law. Number 250 SENATOR RIEGER suggested that it would in effect dismiss the case, and MR. LAMB said it was almost impossible to get a summary judgement. SENATOR RIEGER had questions as to the extent of flagging and signing, and MR. LAMB praised Alyeska for doing more of this than most states. He expected the flagging and signing to be continued in the new legislation, and he said Alyeska did more prevention than required. SENATOR RIEGER, in reference to the top of page 4, asked for clarification between Sec. 05.45.010 and Sec. 05.45.020 as to the prevention of accidents. He decided to leave his questions for the drafter. Number 300 SENATOR PEARCE, in reference to page 4, line 11, thought the $150 thousand in legal fees was low, and she asked MR. HEISER the percent that represented operating costs. MR. HEISER updated the current legal costs since 1989 to $200 thousand and the correct claimant fees to being over $2 million in reserves and claims and said it could be any where from 8 to ten percent of the operation costs. He said the number of small ski areas had diminished because of the increase in litigation and insurance costs. SENATOR SALO questioned MR. HEISER in reference to page 3, Section 12, line 4 about being "impractical to expect the operator to eliminate or mitigate these hazards, and skiers must accept these hazards as part of the risks of the sport." MR. HEISER explained there were many hazards that were difficult or impossible to mitigate because of terrain and other variables. Number 350 SENATOR KELLY wanted to know more specifically about the hazards, and MR. HEISER explained the hazards in the main heavily traveled skiing areas were mitigated, but the areas where the more capable skiers use have less mitigation. He praised Alyeska for its signing, roping, and padding in the heavily used areas. He outlined their strict guidelines, insurance inspections, and inspections by such departments as the Forest Service and the Department of Labor. SENATOR LINCOLN noted a group of trial lawyers in opposition to SB 44, and she asked if MR. HEISER was aware of any other groups in opposition. He was not aware of any opposition at this time. SENATOR KELLY said there was those in opposition to testify. SENATOR KELLY invited BRUCE RIZER in Anchorage to testify. MR. RIZER explained his personal interest in the bill since his son, BART RIZER, was killed while skiing at Seibu's resort, Alyeska, December 8, 1991. He claimed to be defending the consumers, the general public, and his personal interest. MR. RIZER asserted that the Alyeska Resort signed contracts with the US Forest Service, which specifically outlined obligations to be followed. Number 403 MR. RIZER expressed his outrage at the practices he felt SB 44 would mitigate in the insurance regulations governing the ski resort at Alyeska, as well as with the marking and mitigation of hazards as they appear on the mountain. He reviewed the laws and standards of other states in relation to those in Alaska, especially Colorado. MR. RIZER accused the resorts of wanting immunity from consumers, and to protect a Japanese conglomerate from claims and responsibilities. Number 451 MR. RIZER explained that much was made concerning the inherent risk of skiing as defined by the ski resorts and MR. HEISER, and he deplored the resistance to accepting responsibility. He stressed the operational plans promulgated by the U.S. Forest Service for Alyeska and approved by Department of Labor and the Department of Safety before the beginning of the season. MR. RIZER spoke disparagingly of the perceived lack of responsibility by Alyeska, and he accused Alyeska of trying to circumvent a decision by the Supreme Court mandating accountable for negligence. He stressed the need for shared responsibility between the skier and the ski area, but he emphasized the need for the mitigation of hazards. Number 499 MR. RIZER said he was totally against SB 44. SENATOR KELLY returned to Juneau to hear from PAUL SWANSON, the manager of Eaglecrest. MR. SWANSON testified the ski area was responsible for operating in a safe and reasonable manner and outlined the inherent risks over which he said the operator has very little control. He reviewed the problems of continuing to operate if they were hit with a lawsuit, and he blamed the ruling by the Supreme Court. MR. SWANSON gave similar reasons as previous supporters for his backing of SB 44. SENATOR KELLY questioned whether Eaglecrest had tower pads, and MR. SWANSON responded they did, but the pads were not required. SENATOR RIEGER quoted MR. SWANSON as saying that action mitigating a hazard would make the operator more liable than if the hazard had not been mitigated. MR. SWANSON referred to the Supreme Court ruling to sanction his point that unless he mitigated the hazard to perfection, he would be liable if it wasn't. SENATOR LINCOLN asked MR. SWANSON if he saw the bill as reducing insurance costs for liability, and MR. SWANSON said he thought it would define the liabilities for both the skier and the operator. She asked if he thought the bill would include cross country skiing, and MR. SWANSON thought there should be an expanded list of winter sports in the bill. TAPE 93-2, SIDE B SENATOR LINCOLN said she was looking for a better definition of skiing areas in the bill. SENATOR KELLY called on AL CLOUGH, Juneau Assembly member, ski instructor, past president of the Eaglecrest Board of Directors, and today speaking on behalf of the City and Borough of Juneau. MR. CLOUGH said the City and Borough of Juneau supports SB 44 and believes the legislation would help define and enhance winter recreation, specifically skiing throughout Alaska. He testified as to the beginning of Eaglecrest as a small operation that has grown to 50 thousand ski visits a year. MR. CLOUGH believes SB 44 defines the responsibilities of the operator/owner and the skiing public, as well as clarifying the inherent risks of the sport. He declared it was not physically possible to totally mitigate or eliminate the inherent risks of skiing in mountainous terrain that is constantly changing. MR. CLOUGH explained the lengths to which Eaglecrest mitigates and eliminate hazards in high use areas with tower pads, marking, and roping. He explained the bill would lay out the risks, but would not absolve the ski area from negligible acts. MR. CLOUGH praised the operation at Eaglecrest as a positive, although subsidized part of Juneau, with $50 thousand in insurance per year. He regarded the bill as protecting Eaglecrest and other small skiing operations from nuisance claims when people do not take responsibility for their own actions. MR. CLOUGH praised the bill as protecting and enhancing these small ski slope operations across Alaska, and he offered the assistance of MR. SWANSON to the committee. Number 051 SENATOR PEARCE questioned MR. CLOUGH, in reference to page 5, subsection (B), whether there were national regulations and training to deal with the required plan and patrol by ski area operators. MR. CLOUGH said Eaglecrest adhered to the national code and referred her to MR. SWANSON. SENATOR PEARCE restated her question to MR. SWANSON who assured her they followed the American National Standards Institute code. There ensued a discussion between the two about the code, insurance inspections, and a safety plan. MR. SWANSON answered questions from SENATOR KELLY about the ANSI code, the safety record at Eaglecrest, and whether the record was certified by the state. Number 124 MR. SWANSON explained they generated the record internally and gave it to the national ski area operators' association where the statistics are compiled. SENATOR KELLY returned to Anchorage to hear testimony from LEROY CABANA. MR. CABANA, a commercial fisherman, explained he did not have a personal interest in the bill, but was against the bill because of what he considered escape by ski operators of their liability. He asked for total insurance costs, and their last known gross and wondered if they were quibbling over dimes or dollars. SENATOR PEARCE shared her answer of 8 to ten percent of revenues from a previous question. Number 151 SENATOR KELLY asked MR. HEISER if Alyeska would have reduced ticket rates if SB 44 was passed. What would the public receive from the legislation? MR. HEISER explained how it would affect insurance costs which are passed on to the consumers. SENATOR KELLY pushed as to whether there would be decrease in the ticket costs, and MR. HEISER couldn't promise the prices would go down, but it would keep the increase to a minimum. SENATOR KELLY asked how many deaths there had been at Alyeska, and MR. HEISER said there had been one in-area death and another out-of-area death. SENATOR KELLY asked for a record of injuries, and MR. HEISER admitted to keeping quite extensive records generated by insurance companies. He described typical injuries of about 30 to 50 claims per year. Number 210 SENATOR KELLY asked MR. HEISER to run through a small claims accident. MR. HEISER said they have a policy of not settling such cases, so as not to set a precedence. He explained how the claim could evolve into a an actual suit. Then their legal department would be assembled for a series of depositions, or they try for a summary judgement motion. A trial might drag on for a couple of years before a decision. SENATOR KELLY asked if they ever settled out of court, and MR. HEISER answered it was possible to settle a nuisance amount if it could be settled for a reasonable cost. SENATOR KELLY asked about a correlation with health insurance, and MR. HEISER agreed that people with health insurance rarely made claims on Alyeska. Number 251 SENATOR RIEGER referred to back up material on the City of Valdez case, and asked for an explanation as to where the ski operator becomes partially liable. MR. LAMB, using the example of the skier hitting a snow covered wheel, said it could not be handled with a summary judgement motion and would most likely go to trial where a jury would apportion fault. He gave other examples to clarify the use of summary judgement motion, as well as a jury trial when the resort was at fault. SENATOR RIEGER asked if the examples could be characterized as those where the operators deviated from the American National Standards Institute code. MR. LAMB explained how it might be determined along with other factors, since the code was not a sole determinate. Number 303 SENATOR SALO asked MR. LAMB if his answer was given in the context of the current statute or of the proposed legislation. MR. LAMB explained that one of her previous examples would lead to a jury trial either way. They continued to discuss the differences in the current statute and the proposed legislation, and MR. LAMB described using the summary judgement provision to be relieved of paying nuisance claims. He said a one week trial would run about $75,000 until verdict with more intricate cases could run $125,000 per week. Number 347 When asked by SENATOR SALO about the cost of the yearly insurance premiums, MR. HEISER answered about 8 to 10% of operation costs per year. She asked how much it could it be reduced, but MR. HEISER choose to express his concern at the increase if the legislation did not pass. MR. LAMB entered the conversation to explain the ski lodge paid a deductible before the insurance would assume the costs. He gave an additional overview of all the legal costs involved. SENATOR KELLY, in response to a comment made by Mr. Lamb, said the Rizer accident was not an injury but a death, and MR. LAMB apologized. SENATOR RIEGER returned to one of MR. LAMB'S injury examples to ask if there would have been a convenience settlement, and MR. LAMB said they had settled with $5 thousand on a $90 thousand medical bill. Number 404 SENATOR PEARCE returned to the subject of the American National Standards Institute code, saying she could find no reference to the codes in the legislation. MR. LAMB admitted to not having read the ANCI codes, but he described the safety features on the hill, such as lighting, signs, and closed areas. Number 454 SENATOR PEARCE questioned him further about meeting the codes, and he evoked the use of the jury in such cases. She continued to push questions about the code, and MR. LAMB discussed the code in terms of guidelines, and insurance inspections. SENATOR PEARCE pressed him for additional answers on the use of the code. Finally, MR. LAMB explained that Alyeska was required to meet the ANCI standards under its Forest Service permit. Number 495 SENATOR PEARCE had some additional questions about unsafe slopes and the right of legal action by the skier. MR. LAMB said it would depend on how the injury occurred, and he described the circumstances under which they would file for a summary judgement. SENATOR KELLY questioned MR. HEISER as to whether Alyeska would be insured without inspection. He said they wouldn't and were inspected three times a year, and he described the inspection process. SENATOR KELLY asked MR. SWANSON if Eaglecrest had an insurance inspection each year, and he replied they did. Number 499 MR. CABANA returned to the teleconference network to continue his opposition to the legislation and his expectation of mitigation for any hazards that could be mitigated. He gave the example of a stump on the Alyeska slopes that should have been mitigated - but wasn't. (The second tape of this series did not record. The minutes are taken from the tape log.) SENATOR KELLY invited CLAUDIA BIEBER from Anchorage to testify next. MS BIEBER testified in opposition to SB 44, and began by explaining why she thought Alyeska was a dangerous place to ski. In addition to hazards, she said there were children, unsupervised and out of control, where alcohol was being served. MS BIEBER suggested an evaluation to determine what was best for Alaskans. Number 076 PATTY RIZER, mother of BART RIZER, who died on the slopes in 1991, spoke at some length in opposition to SB 44. MS RIZER began by describing their life as it was entwined in the community and the Alyeska ski slopes. She outlined the use of ski lessons and their safety precautions. Number 171 MS RIZER said the bill didn't help the consumer, and she asked SENATOR KELLY questions about the risks of skiers, and who monitored the ski industries. There was some discussion with MR. HEISER about that area being unmarked. MS RIZER reminded committee members that today (1/19/93) would have been BART RIZER'S birthday. Number 247 Last to testify was LEX PATTEN, a coach for the Alyeska Ski Club, who urged support for SB 247. He said he understood the inherent risks of skiing, but was concerned the programs might be jeopardized without the legislation. SENATOR KELLY concluded the committee meeting and said SB 44 would be held over until Thursday for additional work on the bill. There being no further business to come before the committee, the meeting was adjourned at 3:30 p.m.