Legislature(2003 - 2004)

05/15/2003 08:45 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     HOUSE BILL NO. 225                                                                                                         
     "An  Act  relating to  certain  civil  actions brought  by  the                                                            
     attorney   general  under  monopoly  and  restraint   of  trade                                                            
     statutes;  relating to the award of damages in  actions brought                                                            
     under those statutes; and providing for an effective date."                                                                
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
                                                                                                                                
Co-Chair  Wilken explained  this bill sponsored  by the House  Rules                                                            
Committee as  the request of the Governor,  "updates Alaska's  anti-                                                            
trust statutes  in response to a recent United States  Supreme Court                                                            
precedent.  This  legislation will  allow  the Attorney  General  to                                                            
bring an action on behalf  of consumers for violation of the State's                                                            
anti-trust laws and to recover damages."                                                                                        
                                                                                                                                
DAVID MARQUEZ,  Assistant Attorney  General, Office of the  Attorney                                                            
General, Department of Law deferred to Mr. Sniffen.                                                                             
                                                                                                                                
ED SNIFFEN,  Assistant  Attorney  General, Fair  Business  Practices                                                            
Section,   Civil  Division,   Department  of   Law,  testified   via                                                            
teleconference  from an off net location  that this bill  allows the                                                            
Attorney  General  to  represent  consumers   in actions   involving                                                            
indirect purchases.  He referenced  a flow chart distributed  by the                                                            
Department of  Law [copy on file, that details a situation  in which                                                            
a  conspiracy  or other  illegal  anti-trust  behavior  might  occur                                                            
between two  companies resulting in  an artificially inflated  price                                                            
passed along  through an  importer, a distributor,  a wholesaler,  a                                                            
retailer  and ultimately  to  consumers. He  informed  that in  this                                                            
instance, the  consumer is considered an indirect  purchaser because                                                            
the product was  not purchased directly from the "anti-trust  wrong-                                                            
doers".                                                                                                                         
                                                                                                                                
Mr. Sniffen  pointed out  that under current  State anti-trust  law,                                                            
the consumer  has no ability to bring  an anti-trust action  in this                                                            
situation  and  therefore  has no  remedy  to recover.  Instead,  he                                                            
stated the  consumer must  rely on entities  "further up the  chain"                                                            
i.e.  importer,  distributor,   wholesaler  or  retailer,  to  bring                                                            
action.                                                                                                                         
                                                                                                                                
Mr. Sniffen  assured  this matter  is not a  "theoretical  exercise"                                                            
stressing  that this  occurs  in Alaska  at  a cost  of hundreds  of                                                            
thousands  of  dollars.  He  told  of  one  case  involving  vitamin                                                            
manufacturers  conspiring to  keep the cost  of their products  high                                                            
that  was   eventually  settled  as   a  result  of  a  multi-state                                                             
litigation.  He   informed  that  States  with  similar   anti-trust                                                            
statutes to this  legislation were able to recover  approximately $1                                                            
million each  in fines and  penalties and  that states without  such                                                            
statutes  received nothing,  although Alaska  was able to  negotiate                                                            
with the settlement committee  to receive approximately $100,000. He                                                            
pointed out that Alaska,  as a participant in this litigation, could                                                            
have collected  an additional  $900,000 if  this legislation  was in                                                            
place. He furthered  that other situations  exist involving  women's                                                            
shoes and pharmaceuticals;  however  the State has not taken  action                                                            
due to lack of authority.                                                                                                       
                                                                                                                                
Mr.  Sniffen  told of  the  US Supreme  Court  case  Illinois  Brick                                                          
Company versus Illinois, which established the current rules.                                                                 
                                                                                                                                
Senator  Taylor commented  it was "fascinating"  that the  Committee                                                            
would move a bill relating  to collecting damages. He did not object                                                            
to the passage of this bill from Committee.                                                                                     
                                                                                                                                
Without  objection HB  225 MOVED  from Committee  with accompanying                                                             
fiscal note  #1 in an indeterminate  amount  from the Department  of                                                            
Law.                                                                                                                            
                                                                                                                                

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