Legislature(2003 - 2004)

05/12/2003 03:18 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                                                                     
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                                                                   
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                                                                   
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                                                                   
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                                                                   
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.                                                                       

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