Legislature(2017 - 2018)GRUENBERG 120

02/27/2017 01:00 PM House JUDICIARY

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01:01:12 PM Start
01:01:53 PM Confirmation Hearing(s)
01:25:49 PM HB69
02:34:19 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearing: Commission on Judicial TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
         HB 69-REPEAL WORKERS' COMP APPEALS COMMISSION                                                                      
1:25:49 PM                                                                                                                    
CHAIR CLAMAN announced that the  final order of business would be                                                               
HOUSE BILL  NO. 69, "An  Act repealing the  Workers' Compensation                                                               
Appeals  Commission;  relating to  decisions  and  orders of  the                                                               
Workers'  Compensation Appeals  Commission; relating  to superior                                                               
court   jurisdiction   over    appeals   from   Alaska   Workers'                                                               
Compensation Board  decisions; repealing Rules 201.1,  401.1, and                                                               
501.1, Alaska  Rules of Appellate  Procedure, and  amending Rules                                                               
202(a), 204(a)  - (c), 210(e),  601(b), and 603(a),  Alaska Rules                                                               
of Appellate Procedure; and providing for an effective date."                                                                   
1:26:38 PM                                                                                                                    
HEIDI  DRYGAS,  Commissioner,  Department of  Labor  &  Workforce                                                               
Development  (DLWD),  read  her  statement  into  the  record  as                                                               
     HB  69 will  repeal the  Workers' Compensation  Appeals                                                                    
     Commission  and return  the  appeals  process from  the                                                                    
     Workers'  Compensation  Board  to   the  courts.    The                                                                    
     commission  was  created   to  streamline  the  appeals                                                                    
     process  from  the  Workers'  Comp  Board  and  provide                                                                    
     expertise in  handling workers' comp cases.   Since its                                                                    
     creation   in  2005;   however,  50   percent  of   the                                                                    
     commission's  decisions  have   been  reversed  by  the                                                                    
     Alaska  Supreme   Court.    This  high   reversal  rate                                                                    
     underscores   the   fact   that   the   commission   is                                                                    
     ineffective.    The   commission  is,  essentially,  an                                                                    
     appellate  court  just  like  the  superior  court  and                                                                    
     almost  every   appellate  court  in  the   country  is                                                                    
     composed of a panel of  lawyers.  Yet, the commission's                                                                    
     lay-commissioners   have   no    legal   training   and                                                                    
     contribute very little in the  way of legal analysis to                                                                    
     the issues being  decided by the commission.   It falls                                                                    
     to the  commission's chair alone  to resolve  the legal                                                                    
     issues with  minimal input from  the lay-commissioners.                                                                    
     Further,  the   chair  also  writes   the  commission's                                                                    
     decisions;  therefore, the  commission's decisions  are                                                                    
     really the  work of one  person and  not the work  of a                                                                    
     panel with legal expertise  in workers' compensation, a                                                                    
     further  departure  from  the original  intent  of  the                                                                    
     By   eliminating   the   commission,   the   department                                                                    
     anticipates  a cost  savings of  over $220,000  for the                                                                    
     remainder of FY18, due to  the transition provisions in                                                                    
     the  legislation,  and   over  $440,000  in  subsequent                                                                    
     years.  The  impact on the public will be  minimal.  By                                                                    
     repealing  the  commission,  the appeals  process  will                                                                    
     revert  back  to  the superior  court,  which  was  the                                                                    
     process in place from statehood  until 2005.  The court                                                                    
     system  would see  an increase  of approximately  20-30                                                                    
     cases, give or  take a few, per year.   This volume can                                                                    
     be absorbed by the court system.                                                                                           
1:28:57 PM                                                                                                                    
DEBBIE   BANASZAK,    Legislative   Liaison,   Office    of   the                                                               
Commissioner,  Department   of  Labor  &   Workforce  Development                                                               
(DLWD), explained  the changes from  Version A to Version  O, and                                                               
clarified  that   the  word  "board"   refers  to   the  Workers'                                                               
Compensation  Board  and  the word  "commission"  refers  to  the                                                               
Workers' Compensation Appeals Commission.   This bill repeals the                                                               
Workers' Compensation Appeals Commission, she advised.                                                                          
MS BANASZAK explained  that the summary of changes  between HB 69                                                               
Version  A,  and CSHB  69  Version  O  are as  follows  [original                                                               
punctuation provided]:                                                                                                          
     Page 1, line 5 inserts  two inadvertently omitted court                                                                  
     rule  references, Appellate  Procedure Rule  602(c) and                                                                    
     (h) into the bill title.                                                                                                   
     Page 3, lines 4 -  9 simplifies the paragraph structure                                                                  
     and  wording of  the language  clarifying when  a board                                                                    
     order becomes effective and is final.                                                                                      
     Page 3, lines  10 - 19 clarifies the wording  of when a                                                                  
     board order may be stayed.                                                                                                 
     Page  3, line  20 removes  the first  sentence from  AS                                                                  
     23.20.126(c).   The sentence is unnecessary  because it                                                                    
     restates  a  provision  already  found  in  the  Alaska                                                                    
     Workers' Compensation Act.                                                                                                 
     Page  3,  lines   28  -  Page  4,  line   6  amends  AS                                                                  
     23.30.155(f) directly, instead  of repealing subsection                                                                    
     (f) and creating a new  subsection (r) as version A was                                                                    
     Page  4, lines  14  -  23 that  was  Section  8 in  the                                                                  
     original bill  was completely deleted.   In  Version A,                                                                    
     Section  8  addressed  "direct" court  rule  amendments                                                                    
     relating to  cost bonds and the  court system suggested                                                                    
     that it would be more  efficient and more consistent to                                                                    
     instead   address   these  through   "indirect"   court                                                                    
     amendments in  the new Section  10.  Because  Section 8                                                                    
     of  the  original  bill  was deleted  in  the  CS,  the                                                                    
     Section numbers  from that point  on are  renumbered in                                                                    
     the CS  (Ex: the previous  Section 9 is now  Section 8,                                                                    
     Page 4, line  12 removes AS 23.30.155(f)  from the list                                                                  
     of  statutes being  repealed  because  changes are  now                                                                    
     being made directly to AS  23.20.155(f), instead of the                                                                  
     original bill  which repealed  subsection (f)  and made                                                                    
     those changes in a new subsection (r) as discussed.                                                                        
     Page 4,  line 15 -  line 30 simplifies  the description                                                                  
     of  how  the  court  rules   are  amended  and  adds  a                                                                    
     description  of how  Appellate  Procedure Rules  602(c)                                                                    
     and  (h)   are  amended.    The   Indirect  Court  Rule                                                                    
     Amendments  in the  original bill  were  too wordy  and                                                                    
     potentially confusing,  and the court  system suggested                                                                    
     it be rewritten.                                                                                                           
     Page  4, line  31  -  Page 5,  line  17 simplifies  the                                                                  
     paragraph  structure and  wording of  the applicability                                                                    
1:32:58 PM                                                                                                                    
REPRESENTATIVE FANSLER  moved to  adopt the  committee substitute                                                               
for HB  69, Version 30-GH1773\O  as the working document.   There                                                               
being no objection, Version O was before the committee.                                                                         
CHAIR CLAMAN opened public testimony on [CSHB 69].                                                                              
1:33:58 PM                                                                                                                    
REPRESENTATIVE KOPP asked  whether there was any  pushback to her                                                               
statements  regarding   the  50  percent  Alaska   Supreme  Court                                                               
reversal, long wait times, and  the Workers' Compensation Appeals                                                               
Commission  otherwise  not  realizing   the  potential  the  2005                                                               
legislature anticipated.                                                                                                        
COMMISSIONER DRYGAS  responded that  no one,  including insurers,                                                               
employers and  plaintiff's counsel,  have come to  the department                                                               
with opposition.  She related that  there is a chart the previous                                                               
chair  put together  summarizing the  caseloads for  the Workers'                                                               
Compensation Appeals Commission since its  inception in 2005.  It                                                               
can  be a  bit confusing,  she described,  and as  far as  the 50                                                               
percent  reversal rate,  "of the  cases that  the Alaska  Supreme                                                               
Court has  decided on the  merits," roughly 50 percent  have been                                                               
overturned, and  there have been  dismissals for  various reasons                                                               
not relating  to the  merits of  the case.   In her  opinion, she                                                               
advised, the fact that no one  has stated opposition to this bill                                                               
is recognition that the  Workers' Compensation Appeals Commission                                                               
is  not working  as hoped  because it  is not  resulting in  more                                                               
efficient hearings.   It is not resulting in  this expertise that                                                               
was believed would be seen,  the commissioners have to have three                                                               
years of experience  on the Workers' Compensation  Board which is                                                               
how the  legislature came  up with  the expertise  to put  on the                                                               
commission.  It never realized itself in actuality, she said.                                                                   
1:36:55 PM                                                                                                                    
CHAIR CLAMAN,  in response to Representative  Eastman, noted that                                                               
the chairman of  the commission is not on the  list to testify at                                                               
this  point, and  that  his  office would  look  into having  the                                                               
commissioner testify.  The bill is not being moved today.                                                                       
1:37:26 PM                                                                                                                    
REPRESENTATIVE   EASTMAN  asked   the  general   makeup  of   the                                                               
commission,  length  of  terms,  and whether  the  positions  are                                                               
filled or vacant.                                                                                                               
COMMISSIONER  DRYGAS   deferred  to  Marie  Marks,   Division  of                                                               
Workers' Compensation,  and advised  that to her  knowledge there                                                               
are  currently no  vacancies  and there  is a  new  chair of  the                                                               
1:38:12 PM                                                                                                                    
MARIE  MARKS,   Director,  Division  of   Workers'  Compensation,                                                               
Department  of Labor  & Workforce  Development (DLWD),  responded                                                               
there  was  a vacancy  when  the  past commission  chair,  Andrew                                                               
Hemingway, retired,  and it is  currently filled  by Commissioner                                                               
Deirdre  Ford.   She  explained  that  the  chair is  a  fulltime                                                               
Division  of  Workers'  Compensation attorney  staff  member  who                                                               
rules on  the evidence, drafts the  decisions, and so forth.   In                                                               
addition  to the  chair, there  are  two labor  and two  industry                                                               
representative lay  members and  those seats are  not vacant.   A                                                               
board panel consists  of three members, the chair  and one member                                                               
each from industry and labor, and  there is a pool of five within                                                               
which to draw from but the  chair will always sit, and she opined                                                               
the terms are five years.                                                                                                       
1:39:44 PM                                                                                                                    
REPRESENTATIVE  EASTMAN  asked  how individuals  are  chosen  for                                                               
MS. MARKS  replied that it  is the same  as any other  boards and                                                               
commissions seat,  and opined that they  solicit for applications                                                               
to fill different seats, and  often the departments are active in                                                               
that  process.    Subsequently,  Alaska  Boards  and  Commissions                                                               
provides the governor with a  list of applicants and the governor                                                               
appoints the position.                                                                                                          
1:40:25 PM                                                                                                                    
REPRESENTATIVE  EASTMAN  opined  that  there is  something  of  a                                                               
disparity between the argument being  made for why the members of                                                               
the  commission  are not  experienced  enough  to be  making  the                                                               
decisions,  and  yet, the  governor  has  the ability  to  select                                                               
individuals with the correct credentials  to make good decisions.                                                               
He asked whether there was a reason that hasn't happened.                                                                       
MS. MARKS argued  that she wouldn't say that  the individuals are                                                               
not  qualified because  they are  certainly  qualified under  the                                                               
statute.  The  difficulty is that they are  lay commissioners and                                                               
the Workers'  Compensation Board is  made up of  individuals from                                                               
the community, some  with legal expertise and some  without.  She                                                               
explained that the Workers' Compensation  Board decides issues of                                                               
fact,  and when  a  case is  appealed it  moves  to the  Workers'                                                               
Compensation  Appeals Commission  wherein the  commission decides                                                               
matters of law, which  is difficult for a lay person  to do.  She                                                               
advised that a  retiring chair was honest about  his thoughts and                                                               
basically  told her  that he  is a  lone commissioner  because he                                                               
wrote all of the decisions, and  part of the problem is that when                                                               
a person is not an attorney they  are loathe to make changes to a                                                               
decision.    There   just  has  not  been  input   from  the  lay                                                               
commissioners and, she reiterated, for  a person to qualify to be                                                               
a  commissioner  they  must   have  Workers'  Compensation  Board                                                               
experience and they do have that.   Although, it turns out that a                                                               
different  kind  of  experience is  necessary  at  the  appellate                                                               
1:42:45 PM                                                                                                                    
CHAIR  CLAMAN  asked   whether  any  of  the   positions  on  the                                                               
commission are paid positions, or whether it is all volunteer.                                                                  
COMMISSIONER DRYGAS  responded that  two positions are  paid, the                                                               
attorney chair  is a  fulltime position and  there is  a fulltime                                                               
administrative staff position.                                                                                                  
1:43:16 PM                                                                                                                    
REPRESENTATIVE KREISS-TOMKINS requested  that Commissioner Drygas                                                               
speak to  the extent that HB  69 relates to the  omnibus workers'                                                               
compensation reform bill.                                                                                                       
COMMISSIONER DRYGAS opined that it  doesn't really relate, and if                                                               
it relates at  all it is through the  department's serious effort                                                               
at making  efficiencies wherever  possible, and looking  for ways                                                               
to do things  better with less money.  She  related that when she                                                               
became commissioner, the House  Finance Committee Co-Chair tasked                                                               
the  department  with the  responsibility  of  going through  its                                                               
statutes  to  determine  what   provisions  the  legislature  has                                                               
"saddled you with"  that are no longer working  or necessary that                                                               
could save  money.  Through  that process it was  discovered that                                                               
the  Workers' Compensation  Appeals Commission  was not  working,                                                               
she advised.                                                                                                                    
REPRESENTATIVE KREISS-TOMKINS  thanked her for that  context, and                                                               
noted  the uncanny  similarity of  her  comments to  that of  his                                                               
colleague's remarks on a piece  of legislation heard this morning                                                               
on the  floor of the House  of Representatives, that came  out of                                                               
this committee.                                                                                                                 
CHAIR CLAMAN opened public testimony on HB 69.                                                                                  
1:45:21 PM                                                                                                                    
NANCY  MEADE, General  Counsel, Administrative  Staff, Office  of                                                               
the Administrative  Director, Alaska  Court System,  advised that                                                               
the  bill  does  have  an  impact on  the  Alaska  Court  System,                                                               
obviously.  She  pointed out that this bill was  sponsored by the                                                               
executive  branch, and  last year  when it  came forward  she was                                                               
surprised  by it,  but then  worked with  the department  and its                                                               
representative  to ensure  that if  this  were to  be the  policy                                                               
adopted  by   the  legislature,  that  the   court  system  could                                                               
implement it  as smoothly  as possible.   She commented  that the                                                               
department  has been  receptive  to her  comments and,  although,                                                               
this  is not  something  the  court system  is  promoting, it  is                                                               
pleased to follow whatever policy  the legislature might put into                                                               
1:46:31 PM                                                                                                                    
CHAIR CLAMAN said  he assumed that where the  Department of Labor                                                               
& Workforce Development (DLWD) was  saving money by not having an                                                               
appeals commission, the court was  picking up the cost of hearing                                                               
those cases.                                                                                                                    
MS.  MEADE  agreed,  and  she explained  that  the  court  system                                                               
submitted  a zero  fiscal  note  because it  is  careful to  only                                                               
include fiscal  impact when it  actually requires  hiring someone                                                               
or expending  actual funds on  supplies, for example.   This will                                                               
result in more work  for the courts but not the  type of work she                                                               
could  monetize  into  a  position  that  would  be  required  to                                                               
implement  this.   Nevertheless, the  judges will  certainly have                                                               
more work to do as will the court system's staff, she explained.                                                                
1:47:22 PM                                                                                                                    
REPRESENTATIVE KOPP commented that  the committee received a good                                                               
presentation  from the  court system  earlier, and  asked whether                                                               
judges are salaried no matter how many hours they work.                                                                         
MS. MEADE answered in the affirmative.                                                                                          
REPRESENTATIVE KOPP asked how many  cases a year the court system                                                               
anticipates picking up with this  workload transfer to the court,                                                               
and also what is the average workload.                                                                                          
MS. MEADE advised that the  average number of cases appealed over                                                               
the past  ten years  was approximately  33 cases;  therefore, the                                                               
superior  court  would  anticipate  having  about  33  additional                                                               
administrative  appeals.   She  referred  to  the other  workers'                                                               
compensation bills  going through this  body, and noted  that any                                                               
changes in  the underlying  law may  lead to  additional appeals,                                                               
and possibly the more things  that are less established, the more                                                               
things may be appealed.  In  any case, she said, the court system                                                               
has  been   operating  under  the   assumption  there   would  be                                                               
approximately 33  additional cases.  These  cases, she explained,                                                               
are different  from many  of the other  cases the  superior court                                                               
handles,  and  they are  considered  by  the  judges to  be  more                                                               
challenging  and more  time consuming  than many  other types  of                                                               
cases.   These cases do  not have  the priority or  time pressure                                                               
issues that a child in need of  aid case does, or a criminal case                                                               
does, but are  very brief intensive and are often  done by judges                                                               
on a  Saturday because they are  longer cases to think  about and                                                               
resolve.   She stressed  that the judges  will do  whatever comes                                                               
before them  as they did it  previously.  She offered  her belief                                                               
that   the   underlying   reason  for   creating   the   Workers'                                                               
Compensation  Appeals  Commission  was that  the  superior  court                                                               
judges took  a long time  deciding these cases because  they were                                                               
not a high priority in terms of  a child case or a criminal case,                                                               
and such.  There were  some inconsistent decisions among superior                                                               
court judges and, she explained,  the only consistency would come                                                               
when  something  was  appealed   to  the  Alaska  Supreme  Court.                                                               
Superior  court  judges  do  not  have  particular  expertise  in                                                               
workers' compensation  law, which she  described as unique  and a                                                               
somewhat arcane  area of  law.  Even  though the  board's factual                                                               
findings  are  established,  the  court does  need  to  determine                                                               
whether  there is  substantial evidence  for  the findings  which                                                               
requires an extensive review of the record, she explained.                                                                      
1:50:40 PM                                                                                                                    
REPRESENTATIVE  LEDOUX surmised  that currently  cases go  to the                                                               
Workers' Compensation Board  and if the person does  not like the                                                               
board's decision,  they go to  the Workers'  Compensation Appeals                                                               
Commission as opposed to the superior court.                                                                                    
MS. MEADE responded in the affirmative.                                                                                         
REPRESENTATIVE LEDOUX continued that if  the person does not like                                                               
the  Workers'  Compensation Appeals  Commission's  determination,                                                               
the person goes straight to the Alaska Supreme Court.                                                                           
MS. MEADE  answered in the  affirmative, and explained  that this                                                               
bill   would  substitute   the   Workers'  Compensation   Appeals                                                               
Commission  for the  Alaska Superior  Court.   Therefore, a  case                                                               
could  go  from  the  board  with the  factual  findings  to  the                                                               
superior court for  review, and then to the  Alaska Supreme Court                                                               
for ultimate final review.                                                                                                      
REPRESENTATIVE LEDOUX surmised that quite  a few of the decisions                                                               
from the  Workers' Compensation Appeals Commission  were reversed                                                               
by the Alaska Supreme Court.                                                                                                    
MS. MEADE  responded that Commissioner Drygas  testified that the                                                               
reversal rate  is approximately  50 percent,  and noted  that the                                                               
court system  does not  keep stats exactly  on the  reversal rate                                                               
for certain types of decisions.                                                                                                 
1:52:05 PM                                                                                                                    
REPRESENTATIVE LEDOUX opined  that it is possible  there would be                                                               
less  likelihood of  an appeal  from the  superior court  because                                                               
those folks  would probably  have it  legally correct  than those                                                               
from the  Workers' Compensation  Appeals Commission,  which might                                                               
cut down some of the work for the Alaska Supreme Court.                                                                         
MS.  MEADE commented  that, interestingly,  the  number of  cases                                                               
appealed  to the  Alaska Supreme  Court from  the superior  court                                                               
prior  to  2005, and  the  number  subsequent  to 2005  from  the                                                               
commission,  was almost  unchanged  because  these are  difficult                                                               
cases with  a lot of facts,  and many of the  injured workers are                                                               
self-represented   and   sometimes   have   difficulty   creating                                                               
arguments and presenting things in  the most effective manner for                                                               
the court.                                                                                                                      
1:53:19 PM                                                                                                                    
REPRESENTATIVE EASTMAN  asked Ms. Meade  to speak to  the reasons                                                               
the Worker's Compensation Appeals  Commission was created and the                                                               
court's opinions to begin with.                                                                                                 
MS. MEADE  remarked that  as she alluded  to previously,  in 2005                                                               
there  was some  dissatisfaction  with the  way  the courts  were                                                               
handling  workers' compensation  appeals  and  the reversal  rate                                                               
bothered some people.  She reiterated  that she does not have the                                                               
data on  that, but  within her  review of  the records  from back                                                               
when, there was  the position that superior  court judges decided                                                               
cases in an  inconsistent manner, which can  happen with superior                                                               
court  opinions when  precedent is  not really  established until                                                               
the Alaska Supreme Court weighs in.   She continued that a sector                                                               
of the population  wanted experts deciding these  cases which was                                                               
those  familiar  with  workers' compensation,  and  many  of  the                                                               
state's  judges do  not have  that expertise  but they  did their                                                               
best.   It  was  dissatisfying  to some  people  when cases  were                                                               
decided in  a 12-18 month period,  and as a result,  the Workers'                                                               
Compensation  Appeals Commission  was intended  to address  those                                                               
problems.  She reiterated that  it was hoped the commission would                                                               
be  faster,  have  consistency,   and  that  people  with  better                                                               
expertise in this area would be deciding the cases.                                                                             
1:55:10 PM                                                                                                                    
REPRESENTATIVE  EASTMAN opined  that  the court  system has  been                                                               
doing its  best to hold down  costs in taking voluntary  cuts and                                                               
cutting  down hours,  and such.   He  asked her  to speak  to any                                                               
impact this change may have on the morale of the court system.                                                                  
MS.  MEADE said  she appreciates  the question,  and the  fact is                                                               
that  the  state's judges  in  court  accept everything  that  is                                                               
legitimately  brought  to   them.    In  the  event   it  is  the                                                               
legislature's policy  decision that  the court handle  these, the                                                               
judges, in  general -  although this is  a difficult  question to                                                               
answer,  have  very  good  morale.     Therefore,  she  does  not                                                               
anticipate people entering a phase  of depression, but it will be                                                               
additional  work, and  ultimately, unless  the court  system must                                                               
hire  a judge  to handle  these cases,  the fiscal  impact itself                                                               
wouldn't be there, she said.                                                                                                    
1:56:44 PM                                                                                                                    
REPRESENTATIVE KOPP  referred to therapeutic court  and specialty                                                               
judiciary  training  in  certain  areas of  the  law,  and  asked                                                               
whether, if  there were enough  cases, it would justify  a couple                                                               
of  judges  specializing  in  this  area of  law  similar  to  an                                                               
administrative law  judge type  of approach  dealing specifically                                                               
with  a certain  area of  law.   He asked  whether the  court has                                                               
discussed this possibility.                                                                                                     
MS.  MEADE answered  that  occasionally it  is  suggested to  the                                                               
courts  that there  be a  specialty  judge for  certain types  of                                                               
cases, and that  is something the court system  might consider as                                                               
it is  not a closed  door.   However, she related,  when thinking                                                               
about  how to  staff that,  the judge  would specialize  in these                                                               
type of  cases, meaning  that the  judge would not  work on   the                                                               
child in  need of  aid cases, criminal  cases, divorce  cases, or                                                               
the  routine cases,  and another  judge would  be taking  up that                                                               
work.   She said,  the court  system may  consider doing  that in                                                               
certain areas, although, in the  past there has been a reluctance                                                               
on  the part  of judges  to volunteer  to take  cases like  this.                                                               
Instead, she  explained, it has  been expedient and  efficient to                                                               
spread them around, but she  was unsure whether that would always                                                               
be the case.   The Alaska Supreme Court could  consider it if the                                                               
issue comes to the floor, or judges suggest it, she said.                                                                       
REPRESENTATIVE  KOPP  commented  that   it  appears  this  is  an                                                               
intractable problem similar to a tar  baby that no one wants when                                                               
trying to figure out where it is best housed.                                                                                   
1:58:40 PM                                                                                                                    
CHAIR CLAMAN  observed that a  possible solution to  a preemptory                                                               
challenge is to  not have judges specialize but, at  least in the                                                               
third  judicial district  assigned  three judges  to these  cases                                                               
rather than the  whole group.  He continued that  that would mean                                                               
if  someone exercises  a preemptory  challenge, the  person would                                                               
still get one of the three  judges that hears more of these cases                                                               
and  it would  increase the  odds of  consistency.   Although, he                                                               
acknowledged, it probably  doesn't do much in  the first, second,                                                               
and fourth  judicial districts due  to less judges to  spread the                                                               
cases around.                                                                                                                   
2:00:05 PM                                                                                                                    
MS. MEADE related  that all options are possible  and should this                                                               
legislation  become  law,  the   court  system  would  anticipate                                                               
handling these appeals like other  agency appeals and spread them                                                               
around.   She  agreed  that  most happen  in  the third  judicial                                                               
district which  is where most of  the decisions come out  of, and                                                               
is where  most of the  injured workers and employers  are located                                                               
because  that is  the population  center.   In  the event  issues                                                               
arose such  as timeliness or  something else, the court  would be                                                               
open to considering the most efficient  way to handle these.  She                                                               
also agreed that the preemptory challenge could be a challenge.                                                                 
2:00:49 PM                                                                                                                    
REPRESENTATIVE KREISS-TOMKINS  referred to  Representative Kopp's                                                               
description of this as a tar  baby and noted he was interested in                                                               
terms of comparative policy.  Given  the high rate of reversal in                                                               
both of the regimes to  address workers' compensation appeals, he                                                               
asked whether there are systems  hybridized or otherwise in other                                                               
states  that  seem  to  be  successful and  keep  down  rates  of                                                               
reversal,  and  otherwise   be  judicially  and  administratively                                                               
MS.  MEADE advised  that she  is not  familiar with  how workers'                                                               
compensation cases  are handled in  other states.   Although, she                                                               
said  she  is  aware  that  many other  states  have  an  appeals                                                               
commission  within  its  executive   branch.    Nonetheless,  she                                                               
remarked,  she was  probably  not qualified  to  answer how  well                                                               
those  work,  whether they've  been  changed,  or gone  back  and                                                               
2:02:05 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked  whether  she has  any  idea if  the                                                               
Workers'  Compensation  Appeals  Commission   was  more  or  less                                                               
generous to workers than the superior court.                                                                                    
MS. MEADE  answered that  she does  not know  and she  should not                                                               
speculate because it is not within her area of expertise.                                                                       
2:02:32 PM                                                                                                                    
REPRESENTATIVE LEDOUX  asked whether  Commissioner Drygas  or Ms.                                                               
Marx knows the answer to her question.                                                                                          
CHAIR CLAMAN noted that they are both shaking their heads [no].                                                                 
2:02:52 PM                                                                                                                    
MS.  MEADE  expressed  that  the  court is  willing  to  take  on                                                               
whatever  the legislature  gives  them to  resolve, and  although                                                               
they are difficult cases, the  court system's judges are ready to                                                               
take  it on  without  fiscal impact,  and  hopefully without  any                                                               
impact on their morale.                                                                                                         
2:03:41 PM                                                                                                                    
COMMISSIONER   DRYGAS  advised   that  she   did  not   have  any                                                               
information to  answer Representative LeDoux's question,  and the                                                               
cases  would  have to  be  surveyed  from  statehood to  2005  to                                                               
2:04:02 PM                                                                                                                    
REPRESENTATIVE LEDOUX  explained that she was  in the legislature                                                               
in  2005,  and it  was  part  of  an  attempt by  Governor  Frank                                                               
Murkowski to get down the  workers' compensation rates, and there                                                               
was a  feeling amongst some  in the business community  that this                                                               
would help.   The unions fought  it tooth and nail  and there was                                                               
basically a big blow up in the  building, it was the oil taxes of                                                               
2005, and it  was created with a bang and  it is interesting that                                                               
it will end with a whimper, she remarked.                                                                                       
2:05:08 PM                                                                                                                    
REPRESENTATIVE KREISS-TOMKINS asked  Commissioner Drygas the same                                                               
question  he asked  Ms. Meade  regarding  comparative policy  and                                                               
whether the department  has a perspective on models  that work in                                                               
other states  more efficiently  than Alaska,  and to  what extent                                                               
that information informed this legislation.                                                                                     
COMMISSIONER  DRYGAS  responded  that   the  department  has  not                                                               
investigated  what  other  states  have done,  and  she  couldn't                                                               
presume to  say what happened  12 years  ago when they  looked to                                                               
other regimes.   She said she  guesses this is what  they came up                                                               
with.   For the department's  purposes, it  wanted to go  back to                                                               
the way  it was  without having  a fiscal  impact.   She stressed                                                               
that she  wouldn't want to ever  speak for the court  system, and                                                               
acknowledged that the  department does not take  lightly that the                                                               
bill  would   essentially  burden   the  court  system   with  an                                                               
additional  roughly  20-30   cases  a  year.     The  system  was                                                               
functioning for many years and the  attempt to make it better did                                                               
not make it better, she said.                                                                                                   
2:07:20 PM                                                                                                                    
REPRESENTATIVE  REINBOLD  asked  Representative  LeDoux  why  the                                                               
unions were concerned about this commission.                                                                                    
REPRESENTATIVE  LEDOUX responded  that she  is not  here to  give                                                               
public testimony.                                                                                                               
2:07:46 PM                                                                                                                    
CONSTANCE  LIVSEY, Attorney,  advised  that she  is an  Anchorage                                                               
attorney and  the overwhelming  part of  her practice  is workers                                                               
compensation defense.  She said  she speaks with that perspective                                                               
and her  comments are  her own, although  certainly she  has been                                                               
contacted by a number of  clients both employers and insurers who                                                               
are concerned about HB 69.   Ms. Livsey spoke in opposition to HB
69,  and she  related  that  she is  in  favor  of retaining  the                                                               
Workers' Compensation Appeals Commission.   With approximately 17                                                               
years of  workers' compensation experience in  the superior court                                                               
appeals  system,  and 11  years  with  the Workers'  Compensation                                                               
Appeals   Commission  in   place,  and   from  a   practitioner's                                                               
perspective,  she  pointed  out that  the  Workers'  Compensation                                                               
Appeals  Commission  is  absolutely  a  better  mousetrap.    She                                                               
described it as  more efficient, more consistent,  the quality of                                                               
the decision making  is better and the chairs  of the commission,                                                               
with the  exception of  Andrew Hemingway  who was  an experienced                                                               
administrative law  judge, the others  have all  been experienced                                                               
lawyers  with a  workers'  compensation background.   Stephen  T.                                                               
Hagedorn,  and Philip  Ulmer  were lay  members  of the  workers'                                                               
compensation   board   for   many  years   before   they   became                                                               
commissioners.   While two  of the  three commission  members are                                                               
not lawyers, it is nonetheless  the case that on appeal sometimes                                                               
the  question  is  whether  the   board's  factual  findings  are                                                               
supported  by  substantial  evidence.   She  said  she  does  not                                                               
discount  the  input  and  importance of  the  lay  members,  but                                                               
without arguing  their individual merit, the  commission chair is                                                               
an   experienced  workers'   compensation   practitioner.     She                                                               
described this  as an arcane,  esoteric, and bizarre area  of law                                                               
that a  person does not wake  up one morning understanding.   The                                                               
reality of  the state's superior  court bench is they  are people                                                               
with  criminal law  and civil  law backgrounds  and no  wealth or                                                               
depth of  expertise in this area.   She described the  appeals as                                                               
complicated and  related that in  court, she would offer  an oral                                                               
argument to  a superior court  judge who was a  bright, talented,                                                               
respected member  of the bar,  but they  would have no  idea what                                                               
she  was talking  about  and  the commission  brings  a level  of                                                               
expertise not  found elsewhere.   She stressed that any  claim of                                                               
cost  savings  through  eliminating   the  commission  is  simply                                                               
illusory  because there  will  not be  fewer  appeals, they  will                                                               
simply be  shifted to  the superior court  that is  less familiar                                                               
with this  area of law  thereby taking  longer to decide  a case.                                                               
She described  this as  cost shifting and  not cost  savings even                                                               
though  certainly the  Workers'  Compensation Appeals  Commission                                                               
line item may  jump out in a  budget, and she described  it as an                                                               
attack on the  commission with a misguided attempt to  go back to                                                               
a system that was not working  well in the eyes of practitioners.                                                               
She expressed  concern over the  loss of the wealth  of expertise                                                               
that will be  hard to replace and will not  be replaced by taking                                                               
matters back to  superior court.  She urged the  committee to not                                                               
pass this bill.                                                                                                                 
2:12:57 PM                                                                                                                    
REPRESENTATIVE EASTMAN stated that  arcane and esoteric are words                                                               
of  great  interest to  lawmakers,  and  asked  her to  speak  to                                                               
whether the difficulties with the  law deal with things the state                                                               
is  responsible  for,  or whether  these  more  federally  driven                                                               
complications that make it esoteric.                                                                                            
MS. LIVSEY pointed  out that workers' compensation  is a creature                                                               
of  state law  in every  state, unless  the person  is a  federal                                                               
employee.  Alaska laws are not  any more complex and strange than                                                               
that of any other state, it is  just a body of statutory law with                                                               
which the average  lawyer that does not practice in  this area is                                                               
unfamiliar.  She said she compares  it to her trying to survive a                                                               
bankruptcy law  case because she would  have no idea of  what she                                                               
was talking  about, and that  is basically the world  of workers'                                                               
2:14:16 PM                                                                                                                    
REPRESENTATIVE LEDOUX  asked whether  there is an  association or                                                               
group of workers' compensation lawyers in Alaska.                                                                               
MS.  LIVSEY  responded  that  there  is  a  section  of  the  bar                                                               
association that  meets the first  Friday of every month,  and it                                                               
includes   workers'   compensation   practitioners   representing                                                               
employees  and  employers.   There  is  no other  association  of                                                               
workers' compensation lawyers, she said.                                                                                        
2:14:54 PM                                                                                                                    
REPRESENTATIVE LEDOUX  inquired as to whether  her opinions would                                                               
be  reflective of  the opinions  of the  section of  the workers'                                                               
compensation bar association.                                                                                                   
MS. LIVSEY related  that there are a range of  opinions as to the                                                               
commission being  perceived to  be under  fire, some  members are                                                               
somewhat resigned  to its disappearance, other  practitioners are                                                               
not  particularly fans,  and others  are.   She  stated that  she                                                               
would not say there is any split down employer/employee lines.                                                                  
REPRESENTATIVE  LEDOUX   queried  as  to  whether   the  Workers'                                                               
Compensation Appeals  Commission tends to lean  more favorably to                                                               
employees versus  employer than  the superior  court.   She asked                                                               
how that has turned out as far as her practice is concerned.                                                                    
MS.  LIVSEY  opined  that  the  high  degree  of  variability  in                                                               
superior  court  decisions  makes  it  a  difficult  question  to                                                               
answer.   As Ms.  Meade alluded,  one of  the realities  of going                                                               
before the superior court is that  each judge could decide a case                                                               
how he/she  saw fit without  a great  deal of consistency  in the                                                               
interpretation  of   the  law.    Whereas,   the  commission  has                                                               
developed  a more  consistent body  of law  and its  decisions do                                                               
have precedential value over subsequent  board cases.  She opined                                                               
that the  commission is not  perceived by practitioners  as being                                                               
pro-employer or pro-employee.                                                                                                   
2:17:37 PM                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS  said   that  after  hearing  this                                                               
testimony he  is curious,  pre-2005, if  there was  any judiciary                                                               
system to  allow certain judges  to develop more  familiarity and                                                               
expertise with  this esoteric and  arcane realm of law  to create                                                               
the best possible adjudication process.                                                                                         
2:18:31 PM                                                                                                                    
MS. MEADE  replied that the answer  to that is "No,"  their cases                                                               
are  randomly  assigned to  judges  based  on a  random  computer                                                               
procedure  and,  thereafter,  there   is  generally  not  trading                                                               
because judges are  ethically and otherwise required  to take the                                                               
cases  assigned to  them.   She  said that  is not  to say  there                                                               
cannot be some shuffling or  reassignment for efficiency or other                                                               
reasons.   It is  not for a  judge to say  they don't  like these                                                               
cases or that they would prefer  Judge X take these cases instead                                                               
because they are time consuming.   At the time, they were handled                                                               
just  like  any  other  agency  appeal,  randomly  assigned,  and                                                               
decided by that judge.                                                                                                          
2:19:38 PM                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS asked  whether an  idea along  the                                                               
lines of  a mechanism designating  a certain number of  judges to                                                               
take  these cases  to develop  familiarity and  consistency could                                                               
have potential.                                                                                                                 
MS. MEADE  answered that  as she  previously mentioned,  that can                                                               
happen and it may be decided  amongst the presiding judges or the                                                               
Alaska  Supreme  Court  that these  particular  cases  should  be                                                               
assigned or decided in a different  manner from other cases.  She                                                               
reiterated that it  is not out of the realm  of possibilities and                                                               
in  the past  there has  not  been a  lot of  interest in  having                                                               
specialty  judges in  certain areas,  for one  thing it  would be                                                               
hard  to get  judges  to volunteer  to take  these  cases at  the                                                               
expense  of  their  other  cases, and  the  organization  may  be                                                               
challenging.   She advised that she  is not saying that  it can't                                                               
happen, but it hasn't happened in the past.                                                                                     
2:21:43 PM                                                                                                                    
REPRESENTATIVE REINBOLD asked whether  she believes, in the event                                                               
this bill  passes, it is in  the best interest of  the courts and                                                               
those  judges that  will be  handling this,  to get  any type  of                                                               
training so they are more aware  of the innuendos of this type of                                                               
MS. MEADE  said the  court system does  have a  judicial training                                                               
conference once  a year and  this could  certainly be a  topic on                                                               
the agenda.   Every year it is decided what  needs to be included                                                               
within the  judicial training, focusing  on issues with  the most                                                               
impact to  the most people.   When considering that 33  new cases                                                               
will come to  the court, and there are 42  superior court judges,                                                               
she said  she was unsure it  was something that would  be focused                                                               
on at  a judicial conference.   She offered  that that is  not to                                                               
say that  if a  certain sitting  judge, or  soon to  be appointed                                                               
judge, decides that they love these  cases and they could be sent                                                               
to specialized training, possibly.                                                                                              
2:23:27 PM                                                                                                                    
REPRESENTATIVE REINBOLD  requested a  historic perspective  as to                                                               
why there was pushback in the past.                                                                                             
2:24:07 PM                                                                                                                    
DON  ETHRIDGE,   Lobbyist,  American  Federation  of   Labor  and                                                               
Congress  of Industrial  Organizations, Alaska  (Alaska AFLCIO),                                                                
advised that  the main issue at  that particular time was  that a                                                               
massive  change  in workers'  compensation  was  happening.   The                                                               
union objected  because they were  afraid it would  get political                                                               
with changes  in administrations, and  who would be  appointed to                                                               
the commission.   He  acknowledged that  so far  it has  not been                                                               
political, but  the union  still does not  think it  works right.                                                               
He explained  that the union  was sold a  bill of goods  that the                                                               
commission would  be so much  faster, better decisions.   Except,                                                               
he pointed out,  the unions are seeing the same  number of people                                                               
going to the Alaska Supreme Court  as before 2005, and the unions                                                               
do not believe it is worth the cost.                                                                                            
2:25:20 PM                                                                                                                    
REPRESENTATIVE REINBOLD said  she was pleased to hear  it did not                                                               
get political.  She asked  whether there are any resolutions from                                                               
the  members  supporting  getting  rid  of  the  commission,  and                                                               
whether he was  speaking on behalf of  the union representatives,                                                               
the union  bosses, or  whether he thinks  the members  would want                                                               
the commission.  She asked who this is impacting.                                                                               
2:25:49 PM                                                                                                                    
MR. ETHRIDGE advised  that he was speaking on behalf  of the AFL-                                                               
CIO, which is the umbrella of all of the unions under the AFL-                                                                  
CIO.   He remarked that  no members have  come out and  said they                                                               
don't support  the bill, it was  discussed it and there  has been                                                               
absolutely zero discussion against the bill.  Most of the AFL-                                                                  
CIO  members  are neutral  on  it  because  they don't  have  any                                                               
concern  one way  or  the other.   When  looking  at the  overall                                                               
package of "how  many members wind up going to  the appeals it is                                                               
a limited  number."  The  AFL-CIO does support the  department in                                                               
the fact that they do not believe it works correctly.                                                                           
2:26:41 PM                                                                                                                    
REPRESENTATIVE REINBOLD surmised  that there has not  been a vote                                                               
amongst the membership,  and asked whether he  believes that most                                                               
of the members or all of the  members are aware of this bill with                                                               
zero push back.                                                                                                                 
MR. ETHRIDGE  answered in the  affirmative.  He advised  that the                                                               
bill was  brought up  during the  legislative conference,  it was                                                               
discussed amongst  the leadership  with 140 members  present, and                                                               
there has been zero push back.                                                                                                  
REPRESENTATIVE REINBOLD asked for  clarification that it included                                                               
leadership  with  140  members  present,  yet  there  are  55,000                                                               
members.   She  commented that  she was  worried about  the other                                                               
members and  wanted to know  whether there was any  resolution or                                                               
any  vote or  any  issues at  all, and  whether  he believes  the                                                               
superior court can handle this  without specializing in this area                                                               
of law.                                                                                                                         
MR. ETHRIDGE  advised that it  was not  brought to a  vote, there                                                               
was no  resolution in support of  the bill and in  the event they                                                               
did  do a  resolution  it would  have been  the  same 140  people                                                               
voting  on  it  and  they   did  not  believe  a  resolution  was                                                               
necessary.  The  superior court is where appeals  were before and                                                               
they  had no  problems  going  through the  superior  court.   He                                                               
explained that  when they were  sold the  bill of goods  on this,                                                               
they were  told it would be  so much faster with  claims going in                                                               
and out,  and for some of  the claims it is  considerably faster,                                                               
but for those  that wind up going to the  Alaska Supreme Court it                                                               
lengthens the case.                                                                                                             
2:28:28 PM                                                                                                                    
REPRESENTATIVE REINBOLD  said not  to be  redundant, but  she was                                                               
not at  the meeting and  doesn't know who  was there.   She asked                                                               
whether  the  140  members  were all  leadership,  or  were  they                                                               
regular AFL-CIO union members.   She said she cares about whether                                                               
the  members are  having  a say  or whether  they  think this  is                                                               
working, it is an important policy call.                                                                                        
2:28:52 PM                                                                                                                    
MR. ETHRIDGE explained that many  members of the locals were also                                                               
at this meeting, it wasn't  just all union representatives at the                                                               
meeting.   He described it as  the biggest bunch of  new faces he                                                               
had  ever seen  at one  of  their conferences,  and that  younger                                                               
union members showed up.                                                                                                        
2:29:45 PM                                                                                                                    
CHAIR  CLAMAN,  after  ascertaining  no  one  further  wished  to                                                               
testify, closed public testimony on HB 69.                                                                                      
CHAIR CLAMAN  advised that the  committee will not be  moving the                                                               
bill  and he  is receptive  to  opening public  testimony in  the                                                               
2:30:09 PM                                                                                                                    
REPRESENTATIVE LEDOUX  related that she  would like to  hear from                                                               
the workers' compensation plaintiff's  bar, someone who typically                                                               
represents the employee rather than the employer.                                                                               
CHAIR   CLAMAN  referred   to  the   meeting   of  the   workers'                                                               
compensation section and encouraged Ms.  Livsey to let folks know                                                               
if  they  are interested  in  testifying  to contact  his  office                                                               
because the committee would like to hear from different people.                                                                 
MS. LIVSEY said she would pass the word along.                                                                                  
2:31:26 PM                                                                                                                    
REPRESENTATIVE EASTMAN  commented that the state  has an esoteric                                                               
set of  law that has been  bandied around from the  courts to the                                                               
commission and perhaps now going back  to the courts.  He related                                                               
that if  the law is esoteric  and arcane it is  the legislature's                                                               
job to make  it more understandable.  He noted  there is workers'                                                               
compensation  legislation  before  the House  of  Representatives                                                               
currently,  and  he  does  not   yet  have  a  position  on  that                                                               
particular  bill,  but  if any  representatives  are  sitting  on                                                               
committees dealing  with that  bill perhaps  what has  been heard                                                               
today  might be  good to  inject to  that conversation.   In  the                                                               
event  that bill  offers  an  opportunity to  make  the law  less                                                               
arcane and esoteric everyone would benefit, he said.                                                                            
CHAIR CLAMAN noted that Representative  Eastman should be pleased                                                               
that  the workers'  compensation  reform bill  is  coming to  the                                                               
House  Judiciary   Standing  Committee   and  he  will   have  an                                                               
opportunity to learn more.                                                                                                      
REPRESENTATIVE LEDOUX commented to make it less arcane.                                                                         
CHAIR CLAMAN  noted that some  of the features in  which workers'                                                               
compensation  is   arcane  and  complicated  is   many  years  of                                                               
precedent in  not only this  court, but  other courts.   There is                                                               
probably only  so much  the legislature  can do  to make  it less                                                               
unique because  there are  complicated rules  that apply  only to                                                               
workers'  compensation.    It  becomes   like  someone  who  does                                                               
criminal appeals  knows more about criminal  appeals than someone                                                               
that does civil appeals, he said.                                                                                               
[HB 69 was held over.]                                                                                                          

Document Name Date/Time Subjects
Judicial Conduct Commission Appointment-Melanie Bahnke Application 2.24.17.pdf HJUD 2/27/2017 1:00:00 PM
Judicial Conduct Commission Appointment-Jeannine Jabaay Application 2.24.17.pdf HJUD 2/27/2017 1:00:00 PM
HB069 ver O 2.18.17.pdf HJUD 2/22/2017 1:30:00 PM
HJUD 2/27/2017 1:00:00 PM
HJUD 3/10/2017 1:30:00 PM
HJUD 3/20/2017 1:00:00 PM
HB 69
HB069 Sponsor Statement 2.16.17.pdf HJUD 2/22/2017 1:30:00 PM
HJUD 2/27/2017 1:00:00 PM
HJUD 3/10/2017 1:30:00 PM
HJUD 3/20/2017 1:00:00 PM
HB 69
HB069 Summary of Changes ver O 2.24.17.pdf HJUD 2/22/2017 1:30:00 PM
HJUD 2/27/2017 1:00:00 PM
HJUD 3/10/2017 1:30:00 PM
HJUD 3/20/2017 1:00:00 PM
HB 69
HB069 ver A 1.30.2017.pdf HJUD 2/27/2017 1:00:00 PM
HL&C 2/6/2017 3:15:00 PM
HB069 Sectional Analysis ver A 1.30.2017.pdf HJUD 2/27/2017 1:00:00 PM
HJUD 3/10/2017 1:30:00 PM
HJUD 3/20/2017 1:00:00 PM
HL&C 2/6/2017 3:15:00 PM
HL&C 2/10/2017 3:15:00 PM
HB 69
HB069 Supporting Document-WCAC cases 1.30.2017.pdf HJUD 2/27/2017 1:00:00 PM
HJUD 3/10/2017 1:30:00 PM
HJUD 3/20/2017 1:00:00 PM
HL&C 2/6/2017 3:15:00 PM
HL&C 2/10/2017 3:15:00 PM
HB 69
HB069 Fiscal Note DOLWD-WCAC 2.16.17.pdf HJUD 2/27/2017 1:00:00 PM
HJUD 3/20/2017 1:00:00 PM
HB069 Fiscal Note JUD-ACS 2.16.17.pdf HJUD 2/27/2017 1:00:00 PM
HJUD 3/10/2017 1:30:00 PM
HJUD 3/20/2017 1:00:00 PM