Legislature(2003 - 2004)
04/09/2003 01:40 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 249 - RESTRAINT OF TRADE: FEES AND COSTS Number 0043 CHAIR McGUIRE announced that the first order of business would be HOUSE BILL NO. 249, "An Act relating to actions involving monopolies and restraint of trade; and providing for an effective date." CHAIR McGUIRE posited that HB 249 is a clarifying bill. She relayed that Civil Rule 82(a) of the Alaska Rules of Civil Procedure says, "Except as otherwise provided by law or agreed to by the parties, the prevailing party in a civil case shall be awarded attorney's fees calculated under this rule." Thus, she surmised, the philosophy has been that the prevailing party may recover its fees, adding that [HB 249] will make it absolutely clear that this same policy also applies with regard to antitrust cases. She mentioned that the legislature has not yet spoken clearly on this issue; under current statutory language, there is only reference to successful plaintiff recovery. Therefore, HB 249 is intended to clarify, and state expressly, that the successful antitrust defendant has the right to recover partial attorney fees. CHAIR McGUIRE noted that the legislature has already spoken similarly in the area of unfair trade practices and consumer protection - specifically in AS 45.50.537(b) - which states in part that, "a prevailing defendant shall be awarded attorney fees and costs as provided by court rule." She pointed out that HB 249 has an immediate effective date, and remarked that although she generally tries to "stay away from immediate effective dates," when clarifying an existing policy she believes it is appropriate to have an [immediate] effective date. "If we are going to speak, we should speak firmly, clearly, and immediately," she added. Number 0322 JEFFREY M. FELDMAN, Attorney, Feldman & Orlansky, remarked that the legislature, in AS 45.50.576, has already stated that if a plaintiff proves that an antitrust violation is wilful, then that prevailing plaintiff can recover actual attorney fees, rather than just the partial fees that [Rule 82] gives a prevailing party. He opined that a commonsense reading of that statute would lead a person to conclude that the general rules - the ordinary rules of Rule 82 - would apply to either a prevailing plaintiff or a prevailing defendant, and that a plaintiff that proves a wilful violation collects full fees. He noted, however, that the courts are not of one mind on this issue; he said that some judges would read that statute as displacing Rule 82 entirely, concluding that because the statute only awards prevailing plaintiffs fees, it is thereby intended to deprive prevailing defendants of any [attorney fees] reimbursement. He opined that a reading of that statute does not logically lead to such a conclusion. MR. FELDMAN posited that the purpose of HB 249 is to clarify that in enacting the aforementioned provision giving prevailing plaintiffs full [attorney] fees, the legislature did not intend to strip other prevailing parties of partial fee entitlements. He relayed that he is currently "defending one of the fish processors in the antitrust case that's presently being litigated in Anchorage." He said that "this issue" arose a couple of years ago when the processors prevailed on summary judgment and the trial court gave [his party] a signal that it would likely read the current statute as displacing Rule 82. He noted that this issue was never resolved because the grant of summary judgment in favor of the processors was reversed on appeal, and so his party has been "sent back for trial." He said that if his party were to ultimately prevail, under the trial court's current reading of the statute, his client would not be entitled to recover any attorney fees. He opined that this would be contrary to what was intended by the statute. MR. FELDMAN, in closing, said that it is not his intention, in proposing the concept of HB 249, to change the law, but rather to simply clarify [legislative intent] and spare his clients the burden of having to go through another two-year process of appeal. Number 0625 REPRESENTATIVE GRUENBERG suggested that rather than amend AS 45.50.576 by adding a subsection (c) - as is proposed by HB 249 - it might be better to amend (a)(1) of that statute by adding, after "person", the phrase "the prevailing party shall also be awarded the cost of the suit plus reasonable [attorney] fees according to court rule". MR. FELDMAN acknowledged that doing such would be an alternate way of approaching "this problem." He mentioned, however, that that would have the effect of "deleting, from [AS 45.50.576], the ... provision that would grant an award of full reasonable fees to prevailing plaintiffs for wilful violations." REPRESENTATIVE GRUENBERG surmised, then, that the court reads "reasonable [attorney] fees" as "full reasonable [attorney] fees." MR. FELDMAN indicated that that is correct. REPRESENTATIVE GRUENBERG asked Mr. Feldman whether it is his intention, with HB 249, to have the courts award full reasonable attorney fees to defendants as well. MR. FELDMAN said no, just Rule 82 fees. REPRESENTATIVE GRUENBERG suggested, then, that AS 45.50.576(a)(1) be amended to say, "including full reasonable [attorney] fees". "Let's add the word 'full' in there, so they'll understand what we're doing," he remarked. MR. FELDMAN said, "That may be granting us more than what I'm asking for." REPRESENTATIVE GRUENBERG indicated that it would not, and clarified that in addition to the change proposed by HB 249, his latest suggestion would be to also amend AS 45.50.576(a)(1) by adding the word "full" before "reasonable". MR. FELDMAN, in response, said his only goal is to ensure that a prevailing defendant is given Rule 82 fees. Number 0847 REPRESENTATIVE GARA opined that [Representative Gruenberg's] suggestion would be creating mischief with the statutes. He elaborated: There are a number of provisions where the State of Alaska has decided that certain cases are so important, and the attorney general's office doesn't have the presence to file these cases, that we want to encourage people to be able to find private counsel. And, so, in the consumer protection area, the antitrust area, there are provisions in there that provide for full [attorney] fees in recognition that the State of Alaska doesn't have the presence to take all of these cases that ... people would need them to take. And sometimes we refer to the full [attorney fees] provision as a reasonable [attorney fees] provision in the statute, [and] sometimes we use the word "full". My worry is, by changing "reasonable" to "full", that might imply, in all the other places in the statutes where we use the term "reasonable", that that doesn't mean full. And the term "reasonable [attorney] fees" has always been interpreted by the court to mean "full" - they understand what it means - I just don't think we need to ... change the wording of the statute at all. This follows the federal antitrust statute, which does the same thing. REPRESENTATIVE GRUENBERG offered his understanding that at the federal level, since this is the same as federal law, it is interpreted as "full". REPRESENTATIVE GARA affirmed that. Indicating he'd discussed it earlier that day with Mr. Feldman, he then brought up removing the immediate effective date. Representative Gara said he had no problem with the substance of the bill and was pretty confident that it accurately stated existing law and the way it should have been interpreted by the trial court in this case. He said he wasn't 100 percent comfortable, however, because he hadn't read every single case; he suggested the courts would have more insight in that area. He asked whether adopting the bill without Section 3 would have an impact as this case wends it way through the courts, and whether the courts would look at "our act in clarifying existing law as evidence of the meaning of existing law." MR. FELDMAN responded that if Section 3 were removed, the consequence for the currently pending Bristol Bay antitrust case would be that the proposed legislation would become effective 90 days after enactment; given how protracted the case has become, it is possible that the bill could be enacted without Section 3 and it still would apply to this case by the time final judgment is entered. He expressed doubt, therefore, that the immediate- effective-date provision controls whether this law is going to apply to this case. He also said he believes the court would still be obliged to consider the enactment "as an indication of how the statute, even before the enactment, should have been considered." He explained: If ... the legislature says, "This is a clarification and this is what the prior statute was intended to mean," I would like to think that the court would give that enactment appropriate deference and would weigh it and consider it. Now, courts do lots of things, and ... we'd have to wait and find out. ... I'll be candid and say that part of my motivation for being here is just to avoid the uncertainty and the cost and the delay of running that risk. But ... I understand your concern about it. ... If I thought that this was a substantive change in the law, it would trouble me more. But I really just think ... that it clarifies and makes explicit what I think was obviously intended when the statute was enacted originally. Number 1128 REPRESENTATIVE GARA said he thought he largely agreed and didn't believe it was a substantive change in the law. However, he acknowledged the need to analyze all the cases in order to be able to speak for sure. With regard to legislative intent, he offered his belief that this bill is consistent with the intent of the statutes, "even before it gets changed." He informed members that at some point during the hearing he would move to delete Section 3. REPRESENTATIVE OGG asked whether Mr. Feldman was aware of any antitrust cases in which the defendants prevailed in Alaska under Rule 82, and what the results were. MR. FELDMAN answered that he knew of no other private case tried under the antitrust statute, and thought this was the first; thus there is no precedent to draw on. He added: The trial court actually gave us a ruling ... that said, "I read the statute as precluding Rule 82 fees to prevailing defendants." That issue was part of what was appealed to the supreme court. But because the supreme court ... reversed the grant of summary judgment and sent us back for trial, the supreme court never addressed the issue of whether the trial court was right or wrong on that ruling. But Judge Michalski certainly has told us what his perspective is ... on the issue, and ... I assume he'll give me a fair chance to try and change his mind; if we win, we have that issue presented all over again. But ... he read the statute, and ... I respect him completely. And ... he's entitled to his view. ... I think it does violence to the words in the statute, though, in the intent. Number 1251 REPRESENTATIVE OGG asked what the argument would be on the other side of the existing case. MR. FELDMAN replied: Well, I know what their argument is because they advanced it ... when we had this issue crop up back in 1999, ... the first time. ... Rule 82 talks about "except as otherwise provided by law. Their view is that when the legislature speaks to [attorney] fees at all, it displaces Rule 82. And the only thing that thereby becomes operative is what the legislature has said, which, I supposed, ... if that were the rule, the legislature ought to keep in mind that if it ever says anything about [attorney] fees, it ought to make sure it says it completely and entirely, because it's effectively displacing Rule 82. Now, I'm not sure that that's a sensible reading ... of the law - and of the rule, for that matter - but ... they would say that because the antitrust statute only spoke to full fees for prevailing plaintiffs, it thereby displaced everything else. ... It depends on one's view, I suppose, of the intent of the statute as to whether that's true or not. We couldn't find anything in the history of the statute that supported that [view]. CHAIR McGUIRE asked whether anyone else wished to testify; she then closed public testimony. REPRESENTATIVE GRUENBERG, noting that [Mr. Feldman] was speaking on behalf of at least one of the defendants, asked whether the plaintiffs had been notified. He recalled that when legislation involves litigation, usually the policy has been to notify everyone. CHAIR McGUIRE offered her belief that most bills before the House Judiciary Standing Committee affect litigation in some way. She announced that her position is to provide five days' notice on every bill, and that the legislative information offices (LIOs) are available. She said this bill is no different from any other, and that there is no intent to either exclude or include anyone. MR. FELDMAN added that although he has a role as legal counsel for one of the parties in the case, this is a little outside those activities; he hadn't coordinated with the other defendants and didn't believe the other defendants knew that he'd sought this correction. He remarked, "We handled the appeal back in 1999 and, frankly, it always just kind of stuck in my craw that we were having to litigate that issue." He indicated that after realizing that another way to deal with this was to clarify the law, he'd begun the attempt. Number 1412 CHAIR McGUIRE announced that the hearing on HB 249 would be recessed in order to take up HB 164. [The hearing on HB 249 was recessed until later in the meeting.] HB 249 - RESTRAINT OF TRADE: FEES AND COSTS Number 2031 CHAIR McGUIRE announced that the committee would resume the hearing on HOUSE BILL NO. 249, "An Act relating to actions involving monopolies and restraint of trade; and providing for an effective date." Number 2070 REPRESENTATIVE SAMUELS moved that the committee adopt Amendment 1, which read [original punctuation provided]: Page 1, Line 9: Delete "this section" Insert "AS 45.50.562 - 45.50.570" REPRESENTATIVE GARA objected for discussion purposes. CHAIR McGUIRE explained that the purpose of Amendment 1 is to clarify that it's a suit under the [entire applicable] section. The current legislation only references AS 45.50.576, which refers to suits by persons injured and treble damages. Without this amendment, "the meat" of the suit isn't obtained, she remarked. REPRESENTATIVE GARA withdrew his objection. Number 2101 There being no further objection, Amendment 1 was adopted. Number 2117 REPRESENTATIVE SAMUELS moved that the committee adopt Amendment 2, which read [original punctuation provided]: Page 1, Line 10: After "costs", Delete "and" After "costs", Insert "of the suit, including" REPRESENTATIVE GARA objected in order to read Amendment 2. He then withdrew his objection. Number 2134 CHAIR McGUIRE noted that there were no further objections. Therefore, Amendment 2 was adopted. Number 2174 REPRESENTATIVE GARA moved that the committee adopt Amendment 3, which read [original punctuation provided]: Delete Section 3. CHAIR McGUIRE objected. REPRESENTATIVE GARA pointed out that virtually every time legislation impacting legal rights is enacted, it applies to all causes of action that accrue after the date of the act. Therefore, [new legislation doesn't impact the rules or the outcome of] pending lawsuits. The arguments presented in favor of HB 249 are good ones, he said, adding that he agreed with the substance behind HB 249. Furthermore, he anticipated that the courts will end up agreeing that the state's interpretation is the correct interpretation. He offered his belief that the antitrust case [referred to by Jeffrey M. Feldman in the first part of the meeting] should run its course. He noted that a superior court's ruling on [attorney] fees can be appealed. The Alaska Supreme Court will, he predicted, address the issue of [attorney] fees on appeal, and will likely issue a ruling favoring the defendants in this case. He said he didn't believe the legislature should make it a practice to pass legislation that would impact pending litigation. REPRESENTATIVE GARA then acknowledged the weakness of his argument: this legislation doesn't change existing law. However, he noted that he isn't the authority on the matter; rather, the supreme court is. Although he said that he hasn't read all of the relevant cases, he did believe that he has an understanding of the intent behind existing law. Again, he relayed his belief that ultimately the [Alaska Supreme Court] will agree that Civil Rule 82(a) of the Alaska Rules of Civil Procedure ("Rule 82") applies when a defendant prevails under antitrust statutes. Representative Gara said he didn't believe it looks good for the legislature to pass legislation that could be perceived as favoring one side in a [pending case] - a very contentious case. Number 2303 REPRESENTATIVE GARA explained that with the adoption of Amendment 3, the normal effective date provision will apply. Therefore, the legislation will be applicable a certain number of days after passage and will be applicable to all new causes of action. The courts should be left to make the decision, he opined. REPRESENTATIVE SAMUELS asked whether the elimination of Section 3 would also impact the case. REPRESENTATIVE GARA said he believes that the courts will always look to legislative history for legislative intent. He indicated that he didn't feel comfortable impacting a pending case. CHAIR McGUIRE reiterated her earlier statement regarding the need to speak clearly, effectively, and immediately on the subject. TAPE 03-34, SIDE B Number 2389 REPRESENTATIVE GRUENBERG relayed his belief that this is a different issue. Putting the effective date aside, the question [the committee wants] to address is another clause, the applicability section, that should be in the legislation. If the legislation is left as it is, Representative Gruenberg said, he thought the legislation would be interpreted as applying to all cases previously, currently, or prospectively. Upon an indication [from Chair McGuire] that such is not the case, Representative Gruenberg said that [the language] is ambiguous. Therefore, the legislation should include an applicability clause regardless of the effective date. REPRESENTATIVE OGG relayed his belief that [this legislation] is stepping out in such a way that [the legislature] could be perceived as acting as a court. When an act is passed, the court looks for legislative intent from the legislature that passed it. Therefore, the court would be looking back in time, to the legislature that passed the antitrust statute, to try to find legislative intent. Representative Ogg said [it seems] that by looking back in the future and specifying the intent of a past legislature, [this legislature would be] trying to influence something that "we" really don't know. He relayed his belief that this isn't the proper purview for the legislature, to be stepping in [on a current, very heated case]. If the desire really is to clarify the intent of a previous legislature, then an applicability clause is necessary, he opined. Number 2253 JEFFREY M. FELDMAN, Attorney, Feldman & Orlansky, noted his belief that this legislation is a clarification of current law, not a change in the law. If one believes that this is a clarification, then the question becomes why wouldn't one want it to apply to all cases, including those currently in the system. He said that a prospective effective date is even worse because it suggests that the legislation is changing the law in that this provision will only apply prospectively and thereby imply that something different must be applied in the past. Therefore, he stressed that he didn't want a prospective effective date. REPRESENTATIVE HOLM said that although he isn't an attorney, he did know that it's the legislature's job and purview to write law. Furthermore, it's not the legislature's place to allow interpretation by courts to indicate how the legislature writes law. Moreover, no legislature can bind another legislature and thus if a legislature chooses to say that an existing law is inappropriate, it's inherent upon that legislature to change it if the legislature so chooses. He said, "I don't think that we can't make those choices, in good faith." He then said that if this legislature feels that this legislation should be retroactive, then it should be so. Number 2172 REPRESENTATIVE GARA requested that the committee members place themselves in the shoes of someone involved in a lawsuit that's important to them. He also requested that the members imagine the opposite; a case in which an individual felt that he/she would prevail, and the other side felt the same but went to the legislature and requested clarity of the law such that that side's view was reflected in the law. The latter situation would be troubling, he said. Representative Gara said that it would look poorly upon the legislature to issue a rule that would be applied in a pending lawsuit. REPRESENTATIVE GARA, after noting his support of the policy, said that the legislature can pass a law and specify that the legislation will clarify the intent behind previous legislation. Because there are rules for interpreting statutes, he said, he wasn't concerned that passing HB 249 would send a message to the courts that the previous law was different. A letter of intent can be included with this legislation to specify that it clarifies the law, and all the comments on the record would support that as well. CHAIR McGUIRE noted that she respectfully disagreed with Representative Gara. She informed the committee that when someone requests that she introduce legislation, she won't do so if she doesn't think it's the right thing. She relayed her belief that [HB 249] is the right thing because she thinks it is the law and is consistent with Rule 82 and with fairness and equity. Furthermore, if the legislature speaks, she said, it should speak clearly. She said, "My concern is that if you speak halfway, even though you have all kinds of intent and don't have an immediate effective date, that may be interpreted as saying something as well." REPRESENTATIVE GRUENBERG asked if the committee wanted to include an applicability clause. He said that it seems that the committee can either choose to make [HB 249] applicable to pending cases or not. However, it seems that if the committee chooses to say nothing and the language remains ambiguous, that may be poor public policy. Representative Gruenberg suggested that the committee address [whether to make HB 249 applicable to pending cases or not]. CHAIR McGUIRE announced that the bill will move out of committee today. She reminded committee members that Amendment 3 is before the committee, and said she is maintaining her objection. Number 1907 A roll call vote was taken. Representatives Gara and Gruenberg voted in favor of Amendment 3. Representatives Anderson, Ogg, Holm, Samuels, and McGuire voted against it. Therefore, Amendment 3 failed by a vote of 2-5. Number 1898 REPRESENTATIVE GRUENBERG moved that the committee adopt Conceptual Amendment 4, which would add an applicability clause. The committee took an at-ease from 2:42 p.m. to 2:43 p.m. REPRESENTATIVE GRUENBERG specified that conceptually, the applicability clause would say, "This act applies to cases pending at trial or on appeal on the effective date of this act." CHAIR McGUIRE objected. Number 1844 A roll call vote was taken. Representative Gruenberg voted in favor of Conceptual Amendment 4. Representatives Anderson, Ogg, Holm, Samuels, Gara, and McGuire voted against it. Therefore, Conceptual Amendment 4 failed by a vote of 1-6. Number 1835 CHAIR McGUIRE, after remarking that the current title of HB 249 is too broad, made a motion to adopt Amendment 5, which reads [original punctuation provided]: Amend title to read: "An act relating to the award of attorney fees in civil actions brought under monopoly and restraint of trade statutes; and providing for and effective date." Number 1821 REPRESENTATIVE GRUENBERG objected, and said: I think it's still too broad. And I would move the following amendment to ... Amendment . After the word "fees", add the following, "to defendant under court rule". The title would then read: "An act relating to the award of attorney fees" -- I should say, "and costs" - "costs and attorneys fees". I'm going to say, "to the award of costs and attorneys fees to defendants under court rule in civil actions brought under monopoly ..." CHAIR McGUIRE said: "I have no objection to your friendly amendment. With that, do you maintain your objection to Amendment 5?" REPRESENTATIVE GRUENBERG said no. Number 1793 CHAIR McGUIRE asked if there were any further objections to adopting Amendment 5 [as amended]. There being none, Amendment 5 [as amended] was adopted. Number 1782 REPRESENTATIVE SAMUELS moved to report HB 249, as amended, out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, CSHB 249(JUD) was reported from the House Judiciary Standing Committee.