Legislature(2003 - 2004)
05/12/2003 03:18 PM House FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 145 An Act relating to public interest litigants and to attorney fees; and amending Rule 82, Alaska Rules of Civil Procedure. CHRIS KENNEDY, (TESTIFIED VIA TELECONFERENCE), ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, ANCHORAGE, commented on the changes made to the work draft adopted on May 9, 2003. He pointed out that the House Judiciary version of the bill abolished public interest litigant's status and did so for only cases involving decisions by one of the natural resource agencies. Whereas, the proposed committee substitute differs in two main ways: · It does away with public interest litigant status in all cases. It would abolish the public interest litigant doctrine which is a common law doctrine by the Alaska Supreme Court System about 25-years ago. It also recreates something similar to the public interest litigant doctrine by statute, only in constitutional cases. The net result will be regarding the question of special treatment for attorney fee matters. · It goes beyond the area of fees and into the area of bonds and security that courts require for preliminary injunctions. It insures that a variance of a public interest litigant doctrine cannot be used to create a special exemption-posting bond. That issue resulted from a response from an unpublished order in a Cook Inlet lawsuit. The committee substitute preemptively does address that issue in Section #3 by insuring that bonds or securities protects the party that is being restrained. Those kinds of bonds or securities will be applied across the board rather than a potential for discrimination. In those cases, the committee substitute does not differentiate between constitutional and non-constitutional. Representative Berkowitz inquired what would be needed before a person could qualify as a public interest litigant. TAPE HFC 03 - 88, Side B Mr. Kennedy explained that the current public litigant status consists of a four-part test. The person must qualify for all four items of the criteria. · The case needs to be designed to effectuate strong public policy. · The case must be one in which numerous people would benefit from the success of the lawsuit. · It would have to be a case that only a private party was expected to bring. · The party bringing the case cannot have significant economic incentive to otherwise bring the suit. That requirement is the core of the public litigant status. Representative Berkowitz asked if there recently had been an increase in public litigant litigation. Mr. Kennedy did not know if there had been a recent increase. The number of reported cases has been between 40 & 50. It is difficult to project the total number of cases as many do not go to appeal, which results in a reported decision. Often the public interest doctrine plays into the way the case is settled. Representative Berkowitz asked what the language "plays a role" means. Mr. Kennedy explained that one role could create an uneven playing field in litigation. An adverse outcome does not need to be of a concern to prevail. On the other, should one of the claims be successful, there could be a considerable award, which could include the attorney fees. He suggested that the uneven incentive structure encourages people to bring cases that include more speculative claims than an ordinary litigant might incur. Representative Berkowitz asked how many of those cases involved natural resources. Mr. Kennedy stated approximately 10% of the total. Representative Berkowitz voiced concern that the legislation attempts to fix problems with public litigant suits thus, slowing down development statewide. He claimed that the legislation was "over reactive" if indeed, only 10% of the cases involved natural resources. Mr. Kennedy pointed out that the committee substitute sought to address a broad selection of cases, which is one of the fundamental differences between the House Finance version and the House Judiciary version. The House Judiciary version was aimed solely at resource issues and cases; this legislation is considerably broader. Representative Berkowitz referenced the case involving the Capital Information Group. Mr. Kennedy stated that there had been quite a bit of litigation under the Public Records Act and that there are times when the requestors prevail. Representative Berkowitz asked if there was concern from the Administration that eliminating this part of the public interest litigant verbiage could have a "chilling" effect on the transparency of government, making records less accessible to the public. Mr. Kennedy responded that there is no concern along those lines. He indicated that the committee substitute does not create any penalty for that type case but rather treats them similarly to other civil litigation. The Administration hopes that by having this set of incentives, it will become possible to focus on facts of potential claims. Co-Chair Williams pointed out Amendment #1, offered by Representative Berkowitz. (Copy on File). Representative Kerttula requested a breakdown from the Attorney General's office of the cases that were either lost or settled under public interest litigants. Mr. Kennedy indicated that they do not keep complete records of that nature. There is a chart of all awards made in the natural resource cases over the last ten years. There has not been a need to "pull together all the cases", that involved the public litigant doctrine. In response to a query by Representative Kerttula, Mr. Kennedy speculated that the State had won most of those cases. Representative Kerttula asked how high the bonds were. Mr. Kennedy advised that the bonds could be quite high, since their purpose was to keep the party from being enjoined and added that there is no fixed amount for a preliminary injunction. Representative Kerttula asked if they had been routinely waived for public interest litigants. Mr. Kennedy indicated that recently there has been an expansion of that law. The intent of the committee substitute is to guarantee that the public interest doctrine is not expanded. Representative Kerttula requested a copy of the unpublished opinion. Mr. Kennedy agreed to provide that to the Committee. Representative Berkowitz MOVED Amendment #1. Co-Chair Williams OBJECTED. Representative Berkowitz explained that there are problems experienced by public litigants and that the amendment would address the delay brought about by court cases. He speculated that the larger problem has to do with uncertainty, not the process. The amendment preserves the public interest litigants and would instead require an expedited proceeding, to ensure that if there was a challenge to regulation or permitting that it could be addressed quickly with something equivalent to a criminal "speedy trial". Co-Chair Williams asked what would happen if neither side could reach an agreement in the 120 days. Representative Berkowitz explained, according to the criminal model, that the party would have the option of choosing. The person who is the subject of the suit would control the delay in the process, not the person bringing it. Mr. Kennedy noted that the Administration would oppose Amendment #1. He maintained that the amendment would change the "thrust of the bill". He noted that the intent of the legislation was to reform the public interest litigation policy, and that the current system encourages "kitchen sink" litigation. Mr. Kennedy commented that the committee substitute was protective of constitutional rights, creating special treatment and simplifies the doctrine for those cases, thus, lowering the bar. The legislation is more protective of constitutional rights than is current law. Mr. Kennedy pointed out that the substance of the amendment would add a new Section #1. He acknowledged Representative Berkowitz's desire to expedite the process, adding that in an effort to change the manner in which civil litigation is handled and changing the court schedule are complex issues and should be worked out carefully. The Administration would be reluctant to have the Legislature add such language without the opportunity to consult with trial attorneys. He reiterated that the Administration would oppose Amendment #1. Representative Berkowitz questioned the theory that the amendment would increase litigation. He stressed that it would leave the field basically unchanged. He added that the proposed fundamental change is complex and needs careful working, which goes to the heart of the bill. The public litigant doctrine is a "central issue of democracy" and is one of the few areas in which a single citizen could "stand up and try to affect change". He stressed that it is tremendously significant. Representative Berkowitz acknowledged that the Administration might not support the amendment, but pointed out the purposes indicated, the most important purpose is the significant costs associated with the process to the State and private citizens. He reiterated that those costs result from delays and uncertainties. A roll call vote was taken on the motion. IN FAVOR: Moses, Berkowitz, Kerttula OPPOSED: Stoltze, Whitaker, Chenault, Foster, Hawker, Meyer, Harris, Williams The MOTION FAILED (3-8). Representative Foster MOVED to report CS HB 145 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Kerttula OBJECTED. Representative Kerttula emphasized that the problems with private parties often revolve around delays. Cases in which public interest litigants have been successful, normally involve local community cases. She stated that when those cases are lost, the Alaska Supreme Court System has decided that those people should not be responsible to burden the "looser pay rule". Alaska is the only State that uses that rule and is an unusual rule in America. The legislation will cut off an important avenue allowing for certain cases to come forward and not facing the kind of financial burden that would exist in another case. She noted that she did not support the bill and would continue to work to define amendments for the House Floor. Representative Berkowitz commented that he had not observed "real evidence" around how difficult public interest litigants are. The difficult nature of public interest litigation addresses subsistence, reapportionment, recall, access, fishing and zoning violations. That is what every person does when the government is not doing that job for him or her. This is an ancient doctrine, which allows people to stand up when the laws are not being enforced. The proposed legislation is a sustained attack on the public. The current version should have been brought forward before the House Judiciary Committee because of the serious legal ramifications. The bill must be improved; the House Finance Committee does not understand the consequences of why it is before them. A roll call vote was taken on the motion. IN FAVOR: Stolze, Whitaker, Chenault, Foster, Hawker, Meyer, Williams, Harris OPPOSED: Berkowitz, Kerttula, Moses The MOTION PASSED (8-3). CS HB 145 (FIN) was reported out of Committee with a "no recommendation" and with zero note #1 by the Department of Law and zero note #3 by the Department of Administration.