Legislature(2003 - 2004)

05/06/2003 08:45 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 225                                                                                                            
                                                                                                                                
     "An  Act relating  to certain civil  actions brought  by                                                                   
     the  attorney general  under monopoly  and restraint  of                                                                   
     trade  statutes; relating  to  the award  of damages  in                                                                   
     actions brought under those  statutes; and providing for                                                                   
     an effective date."                                                                                                        
                                                                                                                                
CLYDE SNIFFEN, JR. ASSISTANT ATTORNEY  GENERAL, FAIR BUSINESS                                                                   
PRACTICES SECTION, CIVIL DIVISION  (ANCHORAGE), DEPARTMENT OF                                                                   
LAW  testified via  teleconference  and provided  information                                                                   
about the  bill.  He stated  that an antitrust  law currently                                                                   
existed that  prevented indirect  purchasers from  recovering                                                                   
losses in  anti-trust cases.   He explained that  an indirect                                                                   
purchaser  would  be  a  consumer  who  purchases  a  product                                                                   
without being aware that an "upstream"  anti trust conspiracy                                                                   
or violation  had  artificially inflated  the product  price.                                                                   
He  pointed  out  that  as a  result  of  current  anti-trust                                                                   
statutes, consumers  might not be able to receive  a positive                                                                   
settlement against the wrongdoer  since they did not purchase                                                                   
the product directly from the  wrongdoer. He gave the example                                                                   
that the price  of a product might  be kept high all  the way                                                                   
down  to the  retailer,  but that  the  fault would  actually                                                                   
remain  with the  supplier.   This bill  would amend  current                                                                   
anti-trust law,  and give the  Attorney General  authority to                                                                   
bring  claims  on  behalf  of  consumers  against  anti-trust                                                                   
wrongdoers "upstream".                                                                                                          
                                                                                                                                
Mr. Sniffen stated  that the current law originated  with the                                                                   
Supreme Court  case of Illinois  Brick Company  vs. Illinois,                                                                   
when the  Court had stated that  a suit could not  be brought                                                                   
"upstream".   He  noted,  however, that  the  Court had  also                                                                   
indicated that states had the  right to craft their own anti-                                                                   
trust laws.   He mentioned that  30 other states  had amended                                                                   
their laws  to allow  "upstream" suits.   He maintained  that                                                                   
there had  been a number  of cases when  the state  of Alaska                                                                   
had lost millions  of dollars of potential revenue  due to an                                                                   
inability to bring certain anti-trust suits.                                                                                    
                                                                                                                                
Representative Stoltze  expressed concern about  the price of                                                                   
fuels,  and  asked if  this  bill  provided tools  to  impact                                                                   
investigation in  this area.  Mr. Sniffen confirmed  that the                                                                   
bill would  enable the  Attorney General  to bring  action on                                                                   
behalf of  consumers should a  gas price increase  conspiracy                                                                   
be discovered.   He stated that currently such  a claim could                                                                   
not be brought.                                                                                                                 
                                                                                                                                
Representative Croft  MOVED to report HB225  out of Committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
note. There being NO OBJECTIONS, it was so ordered.                                                                             
                                                                                                                                
HB  225  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation  and  one previously  published  indeterminate                                                                   
fiscal note #1 from the Department of Law.                                                                                      

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