Legislature(2003 - 2004)

04/23/2003 01:07 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          SB  97-ATTY FEES: PUBLIC INTEREST LITIGANTS                                                                       
                                                                                                                                
MR.   CHRIS   KENNEDY,   assistant   attorney   general   in   the                                                              
environmental section  of the Department  of Law  (DOL), presented                                                              
SB 97 as follows.                                                                                                               
                                                                                                                                
     The  public interest  litigant doctrine  was created  by                                                                   
     the Alaska  Supreme Court  in the  1970s. The court  has                                                                   
     defined a  public interest litigant  to be a  person who                                                                   
     brings  litigation  that  seeks   to  effectuate  strong                                                                   
     public  policies, would benefit  numerous people,  could                                                                   
     only  be brought  by  a private  party,  and that  lacks                                                                   
     sufficient  economic incentive  for a  private party  to                                                                   
     sue if it weren't for that broader public importance.                                                                      
                                                                                                                                
     Litigants  who  qualify  as  public  interest  litigants                                                                   
     benefit  from an  uneven playing  field  with regard  to                                                                   
     attorney  fees.  They  obtain  reimbursement  for  their                                                                   
     full attorney  fees if  they win.  They may even  obtain                                                                   
     fee  reimbursement if  they do not  actually prevail  in                                                                   
     court  but they're determined  to have  been a  catalyst                                                                   
     for changed  behavior by the other party.  If they lose,                                                                   
     on  the other  hand, the  winning party  can recover  no                                                                   
     fees  at all  from them.  The  public interest  litigant                                                                   
     doctrine  is not part  of Court Rule  82. It's  a common                                                                   
     law  doctrine that operates  outside  of the court  rule                                                                   
     framework.                                                                                                                 
                                                                                                                                
     When it  is applied  to the  state, the public  interest                                                                   
     litigant  doctrine   represents  a  substantial   public                                                                   
     subsidy  for suits  against  the state.  In the  natural                                                                   
     resource  area,  the state  has  paid out  about  three-                                                                   
     quarters  of  a  million  dollars   to  public  interest                                                                   
     litigants  in the  last  10 years.  In  giving you  that                                                                   
     statistic, I'm  talking about ordinary  natural resource                                                                   
     cases.  I'm  excluding  the  mental  health  land  case,                                                                   
     which is  kind of a special  and, hopefully,  a one-time                                                                   
     event.                                                                                                                     
                                                                                                                                
     The  payees  for these  public  interest  litigant  fees                                                                   
     have   included   Greenpeace,   Trustees   for   Alaska,                                                                   
     Southeast  Alaska Conservation Council  and a number  of                                                                   
     other entities.  That payout  of funds to these  parties                                                                   
     understates  the degree  of the subsidy.  The flip  side                                                                   
     of the public  interest litigant doctrine is  that these                                                                   
     parties did  not have to worry about paying  the state's                                                                   
     fees  if  the  state  prevailed.  This  means  that  the                                                                   
     calculus  going into  litigation is  very different  for                                                                   
     them.  People seeking  to overturn  or obstruct  actions                                                                   
     of the  state have  an affirmative  incentive to  take a                                                                   
     chance  on doubtful  claims  because  they may  win  and                                                                   
     earn  large rewards  in the  form of  full fees  without                                                                   
     having the  counterbalancing risk  of even partial  fees                                                                   
     being   awarded  against  them.   The  public   interest                                                                   
     litigant  doctrine  strongly  encourages  litigation  of                                                                   
     the kind that is quite expensive to the state.                                                                             
                                                                                                                                
     SB 97  restores balance  to these litigation  incentives                                                                   
     in  the natural  resource area,  concentrating on  cases                                                                   
     that  are   arrived  out   of  decisions  that   involve                                                                   
     considerable  public attention  and  public review.  The                                                                   
     parties  seeking  to  challenge  these  decisions  would                                                                   
     have  to  engage  in  the   same  balancing  of  limited                                                                   
     financial  rewards  for victory  and  limited  financial                                                                   
     penalties  for  being  wrong that  everyone  else  does.                                                                   
     Hence,  most  public  interest  organizations  are  well                                                                   
     financed.  They can engage  effectively in the  calculus                                                                   
     without  any   disadvantage.  They  do  not   require  a                                                                   
     subsidy to pursue their agenda.                                                                                            
                                                                                                                                
     The amendment  you see before  you adjusts SB 97  in two                                                                   
     important  ways. First  of all, it  clarifies that  this                                                                   
     leveling    of   the    playing    field   applies    to                                                                   
     administrative  appeals and not  just to ordinary  civil                                                                   
     actions. The  previous version  of the bill  simply said                                                                   
     that  civil actions  would be  covered and,  apparently,                                                                   
     at least some  of the case law differentiates  between a                                                                   
     civil action and administrative appeal.                                                                                    
                                                                                                                                
     Secondly, this  change would delete the  court amendment                                                                   
     part of  the rule. The bill  had attempted to  go beyond                                                                   
     limiting  the public interest  litigant doctrine  and to                                                                   
     address awards  of enhanced fees under Civil  Rule 82-3.                                                                   
     It was  decided, based  on comments  received since  the                                                                   
     bill was introduced,  that the bill should  address only                                                                   
     public  interest litigant  doctrine and  not to seek  to                                                                   
      tie the court's hand under Rule 82 at this time. So,                                                                      
       it becomes really a one-subject bill and makes no                                                                        
     amendment whatsoever to the court rule.                                                                                    
                                                                                                                                
                                                                                                                                
1:15 p.m.                                                                                                                     
                                                                                                                                
SENATOR FRENCH  asked Mr.  Kennedy if he  said the current  policy                                                              
requires a substantial  public subsidy, which in  essence provides                                                              
an affirmative  incentive  for public interest  litigants  to push                                                              
doubtful claims.                                                                                                                
                                                                                                                                
MR. KENNEDY said that is correct.                                                                                               
                                                                                                                                
SENATOR  FRENCH  said  when  he  reviewed  the  record  of  public                                                              
interest  litigation, he  found  the natural  resource cases  cost                                                              
less  than 10  percent  of the  total public  interest  attorneys'                                                              
fees paid by the state in the last 10 years.                                                                                    
                                                                                                                                
MR. KENNEDY  said he would have  to review the chart,  but Senator                                                              
French is  correct in that the  great majority of  public interest                                                              
fees  over the  last 10  years have  been  awarded in  non-natural                                                              
resource  cases.  He  thought the  ratio of  all cases  to natural                                                              
resources cases was 10:1.                                                                                                       
                                                                                                                                
SENATOR  FRENCH said  the amount  paid to  plaintiffs for  natural                                                              
resource  litigation  over  10  years  is  about  $718,000,  which                                                              
equals  about   $71,000  per  year.   He  said  that  is   not  an                                                              
astronomical amount  to pay one lawyer each year  to challenge the                                                              
government on  its application of  natural resource law.  He asked                                                              
if that amount is close to the amount Mr. Kennedy is paid.                                                                      
                                                                                                                                
MR. KENNEDY said that is correct.                                                                                               
                                                                                                                                
SENATOR FRENCH said  he is also curious about the  idea that there                                                              
is  no financial  disincentive for  public  interest litigants  to                                                              
bring cases.  He surmised if that  were true, one would  expect to                                                              
see outrageous claims filed in court and continually dismissed.                                                                 
                                                                                                                                
MR. KENNEDY  said he does  not believe  it would follow  that they                                                              
would  pursue  frivolous  claims  because  there  is  a  financial                                                              
disincentive  for pursuing  baseless claims.  He said  it is  true                                                              
that  some  claims filed  against  the  state by  public  interest                                                              
litigants  are  very  speculative  and  are  encouraged  by  their                                                              
insulation from  having to pay state  fees and the fact  that they                                                              
might receive a financial payout if they prevail.                                                                               
                                                                                                                                
SENATOR FRENCH asked  for an example of a frivolous  claim brought                                                              
in the natural resources arena.                                                                                                 
                                                                                                                                
MR.   KENNEDY  said   he  differentiated   frivolous  cases   from                                                              
speculative cases and  that he is not suggesting  these claims are                                                              
necessarily  frivolous. He  said an  example would  be the  Prince                                                              
William Sound contingency  plan litigation, which  has been fought                                                              
through  several lawsuits  in  recent years.  In  the most  recent                                                              
case, the public  interest litigants raised 84  issues in superior                                                              
court and  prevailed on  none. On appeal,  the litigants  filed 98                                                              
appellate points and  did not prevail on those.  The only argument                                                              
left is  about attorney fees.  He said it  is the presence  of the                                                              
public interest litigant  doctrine that enables people  to bring a                                                              
case like that and face no financial consequences for doing so.                                                                 
                                                                                                                                
CHAIR SEEKINS announced  that Senator Ellis joined  the committee.                                                              
He then  asked Mr. Kennedy  if the Prince  William Sound  case was                                                              
brought to delay  or harass or whether it is  a legitimate concern                                                              
that needs to be addressed to protect the public.                                                                               
                                                                                                                                
MR. KENNEDY said  he would not go as far as saying  it was brought                                                              
to delay  or harass. He thought  the environmental section  of DOL                                                              
felt it  contained speculative and  far-fetched claims  on matters                                                              
that  were  extensively   explored  through  the   public  comment                                                              
process. From  a public  policy standpoint,  DOL does  not believe                                                              
it was not useful to have the court hear those claims again.                                                                    
                                                                                                                                
CHAIR SEEKINS  asked whether  SB 97,  if enacted,  would act  as a                                                              
disincentive  to bring speculative  and far-fetched  cases  to the                                                              
court.                                                                                                                          
                                                                                                                                
MR.  KENNEDY   replied  he   believes  SB  97   would  act   as  a                                                              
disincentive.  He thought  claims  would be  more focused  because                                                              
litigants  would be  forced to  cull  their claims  to those  with                                                              
more merit.                                                                                                                     
                                                                                                                                
SENATOR  OGAN referred  to Senator  French's comment  that in  the                                                              
last  10 years  $718,000  has been  paid  for  attorneys' fees  in                                                              
public  interest  litigant cases.  A  case involving  drilling  in                                                              
Cook Inlet  tied that  project up  for a  substantial time  period                                                              
and cost  the company  millions of  dollars. He  said it  seems to                                                              
him  that  SB  97  is  an  attempt   to  be  consistent  with  the                                                              
Governor's policy  of streamlining development and  to make Alaska                                                              
an  attractive  place  to  invest.  He asked  Mr.  Kennedy  if  he                                                              
concurs.                                                                                                                        
                                                                                                                                
MR.  KENNEDY said  he  very much  concurs.  He would  hate to  see                                                              
everyone  get  "hung   up"  on  the  $718,000   because  the  real                                                              
financial effect  of these cases  is in the  cost to the  state to                                                              
respond  and in  the effect  they  have on  private parties  whose                                                              
projects  may  be stalled  for  many  years, resulting  in  costly                                                              
delays.                                                                                                                         
                                                                                                                                
SENATOR OGAN  indicated that he  works for a resource  development                                                              
company and is  very aware of the costs associated  with planning,                                                              
permitting and  mobilizing equipment and  people and the  costs of                                                              
putting everything  on hold because of a public  interest litigant                                                              
lawsuit.  These cases  cost  millions of  dollars  to the  private                                                              
sector and to the state treasury.                                                                                               
                                                                                                                                
CHAIR  SEEKINS asked  Mr. Kennedy  how much the  state could  have                                                              
attempted to  recover from  cases in which  it prevailed if  SB 97                                                              
was enacted 10 years ago.                                                                                                       
                                                                                                                                
MR.  KENNEDY  said  he  does not  believe  that  figure  has  been                                                              
determined and  that it would  be a tall  order to  calculate that                                                              
figure. He  estimated that  one attorney in  his office  spent two                                                              
years  working full  time on  the  Prince William  Sound case.  In                                                              
addition,  the   oil  shippers   had  to  pay  private   attorneys                                                              
substantial amounts  as well. He said  he does not want  to single                                                              
out that case, but it is one he is very familiar with.                                                                          
                                                                                                                                
SENATOR  OGAN  said  he  wasn't  only referring  to  the  cost  of                                                              
attorney's fees for  the private sector; he was  also referring to                                                              
the cost  of equipment depreciation  while it sits idle.  He noted                                                              
it costs  twice as  much to do  business in Alaska  as it  does in                                                              
the Lower  48 because  of labor and  shipping. Therefore,  to ship                                                              
equipment  to Alaska  and have it  sit idle  while the  management                                                              
must stay  to keep  the "engine running"  until the  litigation is                                                              
cleared up is very costly.                                                                                                      
                                                                                                                                
CHAIR   SEEKINS  announced   the  committee   would  take   public                                                              
testimony.                                                                                                                      
                                                                                                                                
MR. BOB  BRIGGS, staff attorney  for the Disability Law  Center of                                                              
Alaska, told  members that the  Disability Law Center  is required                                                              
by  federal  law  to  be  authorized  as  the  state's  system  to                                                              
represent  Alaskans with  disabilities  in  all forums,  including                                                              
the courts.  One of the  Center's tools  is to seek  litigation to                                                              
redress  a grievance.  The Center  disagrees with  the concept  of                                                              
eliminating the public interest litigant exception.                                                                             
                                                                                                                                
MR.  BRIGGS  said  he  comes  to this  debate  as  a  former  U.S.                                                              
assistant   attorney  representing   the  federal  government   in                                                              
environmental  and  other  kinds  of  lawsuits.  In  addition,  he                                                              
worked as an  assistant attorney general for the  State of Alaska.                                                              
Throughout  his   career,  he  has  worked  to   represent  public                                                              
interests.  He said  what is in  the public's  interest is  always                                                              
subject to  debate. In  this debate,  it is  important to  keep in                                                              
mind the aspect  of the public interest litigant  exception, which                                                              
is to  preserve the right  of access to  the courts for  those who                                                              
may not  have the financial  incentive and  ability to  get access                                                              
otherwise.                                                                                                                      
                                                                                                                                
MR. BRIGGS asked  members to look at two Alaska  court rules: Rule                                                              
82 of  the Alaska Rules  of Civil Procedure,  and Rule 508  of the                                                              
Alaska Rules  of Appellate  Procedure. The  concept of  the public                                                              
interest litigant  section is  given context  in these  two rules.                                                              
Civil  Rule 82  lists  the  various factors  that  a  court is  to                                                              
consider  when deciding  whether  to award  attorney's  fees to  a                                                              
prevailing party and  to calculate the amount of that  fee. One of                                                              
those factors is  the extent to which a given fee  award may be so                                                              
onerous  to   the  non-prevailing   party  that  it   would  deter                                                              
similarly  situated litigants  from voluntary  use of the  courts.                                                              
He said  in essence,  that rule contains  the basic  expression of                                                              
the  right of  access  to the  courts that  the  rule attempts  to                                                              
protect.  The  public  interest  litigant doctrine  is  merely  an                                                              
explanation  of   that  basic   concept.  Other  factors   include                                                              
adjustment of the  award based on vexatious or  bad-faith conduct,                                                              
the  relationship  of  the  amount   of  work  performed  and  the                                                              
significance of the matters at stake.                                                                                           
                                                                                                                                
MR. BRIGGS  suggested that  a court that  presided over a  case in                                                              
which   all  84   claims   were  lost   should   take  that   into                                                              
consideration  when   calculating  the  attorney's   fee  assessed                                                              
against the  losing party. That  might be grounds for  finding the                                                              
litigation  to be  vexatious  or filed  in  bad-faith. That  would                                                              
cause  the  court  to  not recognize  the  status  of  the  public                                                              
interest  litigant as  such. He  pointed out  the public  interest                                                              
litigant exception  is flexible  and is  designed to allow  courts                                                              
to  look at  the  merits  of the  case  and  the way  the  parties                                                              
conducted themselves.                                                                                                           
                                                                                                                                
MR. BRIGGS  explained that  Appellate Rule 508  does not  have the                                                              
same laundry  list of  factors, but it  does expressly  state that                                                              
if  a  court  determines  that   an  appeal  or  cross  appeal  is                                                              
frivolous or  that it has been  brought for the purpose  of delay,                                                              
it may  award actual  attorney's fees.  In any  case, a  court can                                                              
decide to  award full fees against  the litigant. He  told members                                                              
he sat on  the Civil Rule 82  committee in 1983 when  the rule was                                                              
revised.  He   was  partially  responsible  for   the  explanatory                                                              
notation  on pages  211 and  212.  He was  partially motivated  to                                                              
serve by  the fact  that he  had served  as a government  attorney                                                              
and recognized  the power  of government  against the  individual,                                                              
and  the importance  of providing  individuals with  the power  to                                                              
question government action through the courts.                                                                                  
                                                                                                                                
MR. BRIGGS  said SB  97 does not  appear to  affect the  rights of                                                              
Alaskans  with disabilities  to  access the  courts. However,  its                                                              
vagueness  raises  the  question  of whether  it  will  have  that                                                              
effect.  The proposed  amendment seems  to narrow  the focus  even                                                              
more so that the  bill would only focus on the  decisions of three                                                              
state  agencies.  That makes  the  bill  less threatening  to  the                                                              
right  of  access  of Alaskans  with  disabilities  and  to  other                                                              
Alaskans with public interest claims.                                                                                           
                                                                                                                                
He urged members  to consider the words of Justice  Kennedy of the                                                              
U.S.  Supreme Court  when  deciding  whether this  legislation  is                                                              
wise in  its effect on  the rights of  some people to  gain access                                                              
to the courts.  He quoted Justice  Kennedy from the case  of Legal                                                              
Services Corporation vs. Velasquez:                                                                                             
                                                                                                                                
     Interpretation  of the law  and the Constitution  is the                                                                   
     primary  mission of  the judiciary when  it acts  within                                                                   
     the  sphere  of  its  authority to  resolve  a  case  or                                                                   
     controversy.    An   informed   independent    judiciary                                                                   
     presumes  an informed,  independent bar.  By seeking  to                                                                   
     prohibit the  analysis of certain  legal issues,  and to                                                                   
     truncate  presentation  to  the  courts,  the  enactment                                                                   
     under  review  prohibits  speech   and  expression  upon                                                                   
     which  courts must  depend  for the  proper exercise  of                                                                   
     the judicial  power. Congress cannot wrest the  law from                                                                   
     the Constitution,  which is  its source. Those  then who                                                                   
     controvert  the principle  that the  Constitution is  to                                                                   
     be considered  in court as  a paramount law  are reduced                                                                   
     to the necessity  of maintaining that courts  must close                                                                   
     their eyes to the Constitution and see only the law.                                                                       
                                                                                                                                
MR.  BRIGGS  said   in  that  case,  the  court   was  looking  at                                                              
restrictions  made by  Congress  on the  legal  claims that  Legal                                                              
Services  Corporation lawyers  could  make  in representing  their                                                              
clients. SB  97 does not restrict  the kinds of claims  that could                                                              
be  brought  but it  creates  an  obstacle  for certain  kinds  of                                                              
plaintiffs to bring  actions in court. He said he  is aware of the                                                              
need to  diversify Alaska's economy,  including the need  for more                                                              
resource  development. However,  he urged  members to think  twice                                                              
before  restricting  access  to   the  courts  for  one  group  of                                                              
Alaskans because  that action could  create a precedent  for other                                                              
groups.                                                                                                                         
                                                                                                                                
CHAIR SEEKINS  said this  legislation limits  the kind  of actions                                                              
that can be brought; it does not limit any group of Alaskans.                                                                   
                                                                                                                                
MR. BRIGGS  said he misspoke and  the Chair is correct.  His point                                                              
is that  if access to  the court is  restricted for  certain kinds                                                              
of actions  that will open the  door to restricting access  to the                                                              
court as a forum available to others.                                                                                           
                                                                                                                                
CHAIR SEEKINS  said that is the  intent of the bill. He  asked how                                                              
many  legislators  served on  the  committee that  reviewed  Civil                                                              
Rule 82 in 1983.                                                                                                                
                                                                                                                                
MR. BRIGGS  said he  does not believe  any legislators  served. He                                                              
recalled that  an Alaska Supreme  Court justice and  attorneys who                                                              
had  primarily represented  tort  litigants served.  At the  time,                                                              
the rule  was up for  debate because of  a concern that  there was                                                              
too much tort litigation.                                                                                                       
                                                                                                                                
CHAIR  SEEKINS  asked Mr.  Briggs  if he  finds  it  odd that  the                                                              
Legislature might want  to discuss what the officers  of the court                                                              
decided to do, in terms of what kind of cases can be brought.                                                                   
                                                                                                                                
MR.  BRIGGS  said  it  is  absolutely   within  the  Legislature's                                                              
prerogative to amend any court rule.                                                                                            
                                                                                                                                
SENATOR THERRIAULT  referred to  Rule 508 (court  determination of                                                              
a  frivolous appeal  or  cross-appeal) and  asked  how often  that                                                              
finding is made.                                                                                                                
                                                                                                                                
MR. BRIGGS did not  know but said when cases are  decided, whether                                                              
by settlement  or judgment,  the litigants must  file a  report so                                                              
it  might be  possible  to determine  the  number  cases from  the                                                              
database of reports.                                                                                                            
                                                                                                                                
SENATOR THERRIAULT  said he asked  because he believes  judges are                                                              
very  reluctant to  declare a  case to  be frivolous.  He said  he                                                              
doesn't believe that language prevents the potential for abuse.                                                                 
                                                                                                                                
1:42 p.m.                                                                                                                     
                                                                                                                                
SENATOR FRENCH  thanked Mr.  Briggs for his  analysis in  light of                                                              
his  background   as  an  attorney  for  the   federal  and  state                                                              
governments. He  asked if Mr. Briggs  would be surprised  to learn                                                              
that in the  last 10 years, a  total of 15 natural  resource cases                                                              
were found  to be public  interest litigant  cases. He  also asked                                                              
if Mr.  Briggs is  surprised to  learn the  number of  those cases                                                              
have  decreased  over  time.  He   questioned  how  that  decrease                                                              
supports the idea that this rule spurs on weak claims.                                                                          
                                                                                                                                
MR. BRIGGS  said he is  not well schooled  on the amount  of money                                                              
DOL has sought in  payment of claims and judgments.  The only data                                                              
he  has heard  is the  data  referred to  by  Senator French.  The                                                              
committee  does not  have  data from  private  litigants on  their                                                              
costs,  which  is unfortunate.  However,  from  the data  that  is                                                              
available, it  is clear that  the largest beneficiaries  of public                                                              
interest  litigation  have  been attorneys  who  have  represented                                                              
litigants  in redistricting  cases. He suggested  that is  exactly                                                              
what the  public interest  litigant exception  is supposed  to do,                                                              
which is to encourage  access to the courts on  important subjects                                                              
such as the validity of elections.                                                                                              
                                                                                                                                
CHAIR  SEEKINS asked  Senator French  to share  his data with  the                                                              
rest of the committee.                                                                                                          
                                                                                                                                
SENATOR FRENCH agreed to do so.                                                                                                 
                                                                                                                                
SENATOR  THERRIAULT  said he  agrees  with  Mr. Briggs  about  the                                                              
redistricting  litigation  because  those  cases  are based  on  a                                                              
constitutional   interpretation  of  socio-economic   compactness,                                                              
etcetera.  In discussions  he has  had with other  members  of the                                                              
Senate, he has sensed  a certain amount of agreement  on the issue                                                              
of  maintaining  access  to  the court  system  for  the  disabled                                                              
community. His read  on the current bill is that  the committee is                                                              
trying to prevent any impact to those kinds of cases.                                                                           
                                                                                                                                
MR.  BRIGGS  said   the  Disability  Law  Center   recognizes  the                                                              
committee's effort  to narrow  the focus of  the bill  [to natural                                                              
resource  cases] and  appreciates  it. He  maintained  that it  is                                                              
difficult   to   create   a  better   environment   for   resource                                                              
development while  preserving access to the courts  for others who                                                              
are not  focused on  that particular debate.  The Center  takes no                                                              
position  on the bill  but he  cautioned members  that, like  many                                                              
subjects   that  involve   constitutional   issues,  raising   the                                                              
prospect  of  defining one  special  class  whose rights  are  not                                                              
subject  to  such protection  creates  a  precedent. That  is  his                                                              
biggest concern.                                                                                                                
                                                                                                                                
MR. BRIGGS  said he  has advised  families that  if they  pursue a                                                              
case against  the state  and the state  prevails, the  family will                                                              
face a large  risk of liability. Some families  decide they cannot                                                              
afford to  take that risk. He  said one way the  Legislature could                                                              
accomplish its goal  is to at least maintain the  freedom of risk.                                                              
Class  action litigation,  in his  view, occurs  when people  have                                                              
lost  the political  battle and  turn to  the court  to gain  some                                                              
support for  their position.  He said  he personally believes  the                                                              
full  fees doctrine,  when  one  wins, does  encourage  litigation                                                              
because  litigation  is very  expensive  for private  lawyers  who                                                              
have to pay  the rent. On  the other hand, non-profit  groups that                                                              
are funded  to pursue  a particular  interest will probably  still                                                              
go to court  but they won't be  so chilled by facing  the prospect                                                              
of [liability].                                                                                                                 
                                                                                                                                
SENATOR  THERRIAULT  asked Mr.  Briggs  if  he believes  there  is                                                              
justification  to limiting  the upside but  removing the  downside                                                              
risk.                                                                                                                           
                                                                                                                                
MR. BRIGGS  said the  downside risk  is what  chills the  right of                                                              
access of regular people to the courts more than anything else.                                                                 
                                                                                                                                
MR.  RICH  HEIG,  general  manager  of  the  Greens  Creek  Mining                                                              
Company and  president of  the Council  of Alaska Producers,  said                                                              
he  would  be  speaking  on  behalf   of  the  Council  of  Alaska                                                              
Producers.  He said  he hopes  SB 97 can  be passed  in some  form                                                              
during   this  session.   He  recognizes   that  public   interest                                                              
litigation can be  necessary at times, but the  resources industry                                                              
is heavily  burdened with  extensive state,  federal and,  in some                                                              
cases, local permitting  requirements. The permitting  process can                                                              
take   years    to   complete   and   includes    public   hearing                                                              
opportunities,  public comment  opportunities, and  administrative                                                              
review  by  the commissioners  of  the  agencies. The  process  of                                                              
administrative appeals  following the permit process  is very time                                                              
consuming and  costly to  both the agencies  and the  industry. He                                                              
agreed with  Senator Ogan that the  big issue for industry  is not                                                              
so much  the cost of reimbursement  of attorney's fees  for public                                                              
interest  litigants,  but  the   cost  and  time  associated  with                                                              
getting through  the process.  Once a company  gets to the  end of                                                              
the  permitting  process, it  cannot  be  assured the  process  is                                                              
complete because a  decision can be appealed to  the court system.                                                              
If SB 97 has  the potential to reduce the cost  of litigation, and                                                              
the time and  cost it takes to  begin development, it  can be very                                                              
beneficial  to   industry  without  any  increased   risk  to  the                                                              
environment.                                                                                                                    
                                                                                                                                
SENATOR  OGAN asked  Mr.  Heig if  he  would like  to  see a  more                                                              
linear  process of  jumping through  the hoops  so that a  company                                                              
knows when it is done with the permit process.                                                                                  
                                                                                                                                
MR. HEIG said  Greens Creek just  spent two years to get  to "hoop                                                              
A"  in the  environmental  impact  statement (EIS)  process.  This                                                              
week it will  go out for its  draft EIS. From here on  out, Greens                                                              
Creek will  work within specified  time periods for  the remainder                                                              
of  the   federal  permitting  process.   The  state   is  working                                                              
concurrently  with that time  schedule on  solid waste  permit and                                                              
other  issues. At  the end  of this  process, in  January of  next                                                              
year, Greens Creek  expects to go through the  appeals process. He                                                              
said it  is important  for Greens  Creek to know  it can  reach an                                                              
end goal and bring an operation into development.                                                                               
                                                                                                                                
SENATOR OGAN  asked how much money  Greens Creek has spent  so far                                                              
to obtain permits and to do core samples.                                                                                       
                                                                                                                                
TAPE 03-26, SIDE B                                                                                                              
                                                                                                                                
MR. HEIG  explained the Greens Creek  permit application is  for a                                                              
30  acre expansion  to  its existing  facility.  He estimated  the                                                              
total  cost  over the  last  couple  of  years  to be  between  $1                                                              
million and $1.5 million.                                                                                                       
                                                                                                                                
SENATOR OGAN  asked Mr. Heig to  estimate the total  cost assuming                                                              
an appeal takes place and that SB 97 is not enacted.                                                                            
                                                                                                                                
MR. HEIG  said he expects the  actual costs to decrease  this year                                                              
because of the  structured time period to take  public comment and                                                              
wait  for a  record of  decisions.  If Greens  Creek  goes into  a                                                              
court  proceeding  next  January,  the  cost will  depend  on  the                                                              
length of  time and  the legal costs.  He said  that will  cost at                                                              
least $500,000.                                                                                                                 
                                                                                                                                
SENATOR OGAN  surmised that Greens  Creek could spend at  least $2                                                              
million and then  face litigation that potentially  could kill the                                                              
project.                                                                                                                        
                                                                                                                                
MR. HEIG  said Greens Creek will  run out of tailings  capacity in                                                              
March  of 2005.  Construction  to build  a  new tailings  facility                                                              
will  take  one  season.  If it  loses  next  year's  construction                                                              
season  because of  an appeal,  Greens  Creek could  be forced  to                                                              
shutdown in early 2005 until the process is completed.                                                                          
                                                                                                                                
SENATOR OGAN asked the amount of Greens Creek's annual payroll.                                                                 
                                                                                                                                
MR. HEIG answered about $25 million.                                                                                            
                                                                                                                                
1:57 p.m.                                                                                                                     
                                                                                                                                
MS.  PAM  LABOLLE,  President  of  the  Alaska  State  Chamber  of                                                              
Commerce, stated  support for SB  97. She told members  the Alaska                                                              
State Chamber worked  very hard to bring Court Rule  82 into being                                                              
and believes it  is fair to all. Under Rule 82,  if the prevailing                                                              
party  is the  defendant,  it recovers  20  to 30  percent of  the                                                              
attorney  fees incurred,  the rationale being  that it  encourages                                                              
settlement and  provides partial  compensation to parties  who are                                                              
forced  to litigate  to defend  their rights.  The Alaska  Supreme                                                              
Court's public  interest  litigant policy  has watered down  Civil                                                              
Rule  82.  It provides  an  incentive  to  file even  weak  claims                                                              
because the  public interest litigant  suffers no  economic burden                                                              
if it loses.                                                                                                                    
                                                                                                                                
MS. LABOLLE  maintained that  public interest  litigants  will not                                                              
be  treated unfairly  under SB  97;  they will  simply be  treated                                                              
like all other  Alaskans. Public interest litigants  have the same                                                              
opportunity  to   participate  during  the  process   of  creating                                                              
administrative  rulings. They  have  the right  to participate  in                                                              
drafting  legislation and  to participate  in all hearings  before                                                              
an agency.  However,  once an agency  or the  legislature  makes a                                                              
decision,  public  interest  litigants have  special  rights  that                                                              
other Alaskans do not have.                                                                                                     
                                                                                                                                
She said  the Alaska Chamber of  Commerce is a  private non-profit                                                              
organization.  It   deems  itself  to  be  the   voice  of  Alaska                                                              
business, which  is a public  interest. The business  interests in                                                              
the state  provide  most of the  non-government  jobs and  most of                                                              
the economic  engine. Yet,  the three times  the Chamber  has sued                                                              
during her  tenure, the Chamber  was not deemed a  public interest                                                              
litigant.   She  said,  as   a  previous   witness  stated,   that                                                              
experience  can  be  very  chilling. The  Chamber  has  to  decide                                                              
whether  a case  is worth  pursuing  if it  might have  to pay  30                                                              
percent of the  attorney's fees of the other  party. Members pitch                                                              
in $25  to $100 if  they believe a  case is important  enough. The                                                              
Chamber has  had to  play by  the rules  like all other  Alaskans.                                                              
The Chamber  feels that since  public interest litigants  have the                                                              
right to  participate in  every other  step of  the process  on an                                                              
equal footing with  other Alaskans, it should also  be on an equal                                                              
footing when using the court system.                                                                                            
                                                                                                                                
SENATOR FRENCH  asked Ms.  LaBolle if  she favors eliminating  the                                                              
public interest litigant doctrine altogether.                                                                                   
                                                                                                                                
MS. LABOLLE  said she does; the  Chamber feels that Court  Rule 82                                                              
provides a level playing field and applies to all Alaskans.                                                                     
                                                                                                                                
CHAIR SEEKINS took teleconference testimony.                                                                                    
                                                                                                                                
MR.  PAUL  LAVERTY  told  members  he  is  a  self-employed  civil                                                              
engineer   who   brought   suit  against   the   Alaska   Railroad                                                              
Corporation (ARRC)  in 2000 for the illegal [award]  of a contract                                                              
that  awarded 1  million tons  of  gravel to  a private  Anchorage                                                              
corporation.  No  public testimony,  notice  or bid  occurred  for                                                              
that contract  on the  open market.  In bringing  the lawsuit,  he                                                              
brought  the ARRC's  board  of directors'  attention  to the  fact                                                              
that this  was something it needed  to look into. He  also brought                                                              
it   to   the   attention   of   former   Senator   Loren   Leman,                                                              
Representative   Kay  Brown  and   Representative  Terry   Martin.                                                              
Representative Martin  served on the Legislative  Budget and Audit                                                              
(LBA) Committee  at the time and  requested an audit be  done. The                                                              
committee issued  audit number 08-4547-96 that upheld  some of Mr.                                                              
Laverty's concerns about the legality of the contract.                                                                          
                                                                                                                                
MR. LAVERTY  told members  that after the  audit was  released, he                                                              
again contacted the  three legislators asking them  to forward the                                                              
report  to  the  attorney  general   for  action  to  nullify  the                                                              
contract.  When that  did not occur,  he filed  the lawsuit  after                                                              
much soul  searching because he was  not sure whether he  would be                                                              
liable  for attorney's  fees. After  his suit  rolled through  the                                                              
entire process,  he was deemed to  be a public  interest litigant;                                                              
therefore, his attorney was awarded his fees.                                                                                   
                                                                                                                                
MR. LAVERTY said  that SB 97 would preclude citizens  like himself                                                              
from  bringing forth  actions  against  state agencies  that  have                                                              
complete disregard  for their internal  procurement rules  and the                                                              
Alaska Constitution.  He  urged members to  think before  limiting                                                              
private   citizens'  abilities   to  bring   action  against   the                                                              
government  after  they have  made  every  attempt to  remedy  the                                                              
situation outside of court. He stated opposition to SB 97.                                                                      
                                                                                                                                
2:10 p.m.                                                                                                                     
                                                                                                                                
MS. NANCY  WAINWRIGHT, an  Anchorage attorney,  said she  believes                                                              
whatever  decision   the  committee  makes  should   be  based  on                                                              
accurate information.  She cautioned  that the assistant  attorney                                                              
general  might have  provided the  committee  with some  erroneous                                                              
facts.  She  said  she  is  the   attorney  that  represented  the                                                              
individual plaintiff  - it  was not a well-funded  group -  in the                                                              
Prince William  Sound tanker farm  lawsuit. She took that  case as                                                              
part   of  her   pro-bono   requirements   for  the   Alaska   Bar                                                              
Association. This individual  was deemed to be an  indigent and he                                                              
was a  fisherman who  was severely  impacted  by the Exxon  Valdez                                                              
oil spill.  He took a  sincere interest  in trying to  make things                                                              
better for the  future rather than to seek recriminations.  He and                                                              
numerous  other administrative  appellants,  including the  Kodiak                                                              
Island Borough,  the City of  Cordova, and numerous  fishermen and                                                              
fishing groups,  began a long  saga of  trying to get  through the                                                              
Department  of Environmental  Conservation's (DEC)  administrative                                                              
appeals  process.  By the  time  the  decision was  rendered,  the                                                              
tanker  plans had  expired. She  pointed out  that although  there                                                              
were  84  points  on  appeal  listed  for  the  court,  only  five                                                              
substantive  issues  and  three procedural  issues  were  briefed.                                                              
Because  the plans  had expired,  the court found  the case  moot.                                                              
Therefore,  the assistant  attorney general's  statement that  her                                                              
client did not prevail on any issues is not exactly accurate.                                                                   
                                                                                                                                
MS.  WAINWRIGHT said  were it  not for  her client  and the  other                                                              
appellant's actions,  there would be no protection  for the Copper                                                              
River delta  with specific plans to  respond to an oil  spill. The                                                              
use of  state-of-the-art  tractor tugs was  negotiated during  the                                                              
time  of  this appeal.  They  escort  the  tankers and  are  world                                                              
renowned  in  their  effectiveness.  Sensitive  areas  inside  and                                                              
outside  of  Prince  William  Sound that  need  special  plans  to                                                              
protect them because  of their unique configurations  would not be                                                              
protected. Those  are the kinds  of issues this single  individual                                                              
pursued all of the  way to the Supreme Court. She  felt it is very                                                              
misleading for the  assistant attorney general to  suggest that by                                                              
listing  certain issues  on  appeal, which  is  just a  procedural                                                              
step,  and  not   carrying  those  forward  in   a  brief  somehow                                                              
justifies   eliminating  public   interest  litigant   status  for                                                              
everyone.                                                                                                                       
                                                                                                                                
MS. WAINWRIGHT said  she has practiced law in Alaska  for 16 years                                                              
and believes  it is  very important that  this committee  be given                                                              
accurate facts  upon which to  base this very important  decision.                                                              
She thanked members and offered to answer questions.                                                                            
                                                                                                                                
SENATOR THERRIAULT  asked if the  lower court determined  that her                                                              
fees should not be paid.                                                                                                        
                                                                                                                                
MS.  WAINWRIGHT said  that  is correct  and  the  court made  that                                                              
determination because  the case was found to be moot  so there was                                                              
no prevailing  party  in that sense.  However,  the court  did say                                                              
her client prevailed  on certain issues but none  of significance.                                                              
That is what has been appealed to the Supreme Court.                                                                            
                                                                                                                                
MR.  ALAN  JOSEPH,  Association   of  Village  Council  Presidents                                                              
(AVCP), told  members that  the AVCP sent  a letter  in opposition                                                              
to SB  97 and  HB 145. He  gave the  following highlights  of that                                                              
letter.                                                                                                                         
                                                                                                                                
Public  interest   litigant  protections  are   important  because                                                              
people are  able to bring lawsuits  on matters in which  they have                                                              
no direct  financial stake. These  bills will make it  much harder                                                              
to  challenge public  land and  wildlife decisions  made by  state                                                              
agencies that undermine the [Native] way of life.                                                                               
                                                                                                                                
A  recent amendment  to  SB 97  offered  in the  Senate  Resources                                                              
Committee makes  the bill  even worse.  That amendment  would make                                                              
the lifting of  public interest litigant protections  apply to all                                                              
public  interest lawsuits,  whether  they  involve state  resource                                                              
agencies or not.                                                                                                                
                                                                                                                                
The  consequences will  be devastating  for  rural Native  people.                                                              
For  instance,  two  lawsuits  are pending  in  the  Alaska  Court                                                              
System:  Kasillie  vs. State,  an  equal protection  lawsuit,  and                                                              
Alaska Intertribal  Council vs. State, an equal  police protection                                                              
lawsuit.  The  AVCP  believes  the  individual  residents  of  its                                                              
region show  great courage  by stepping  forward as plaintiffs  in                                                              
these lawsuits.   They are complex  lawsuits that require  a great                                                              
amount of  attorney time. Currently  the plaintiffs  are protected                                                              
by their  public interest  litigant status  should their  lawsuits                                                              
prove unsuccessful.  SB 97 will  do away with that  protection and                                                              
leave the  plaintiffs exposed  to the  risk of  having to  pay the                                                              
state's legal  fees and  they would lose  everything they  own. It                                                              
is  likely that  passage  of these  bills  will discourage  people                                                              
from filing  any lawsuits against the  state at all.   AVCP thinks                                                              
that  is the  intent of  this legislation.  These  bills were  put                                                              
forth by  the DOL in  an effort to  intimidate those who  stand up                                                              
to  them  in court.  The  AVCP  finds  it highly  ironic  that  an                                                              
administration  that wants  to cut government  is putting  forward                                                              
legislation that  is designed to  coerce people into  not standing                                                              
up to abuses by the government.                                                                                                 
                                                                                                                                
MR. JOSEPH  said although  proponents of  this legislation  say it                                                              
will  even the  playing field,  the  rich and  well-to-do will  be                                                              
able  to   obtain  high  priced   attorneys  to   represent  their                                                              
interests  in court  and  they usually  do  because  they have  an                                                              
economic incentive  to bring these  lawsuits. In  contrast, public                                                              
interest  litigants  do  not  have a  financial  interest  in  the                                                              
outcome of the lawsuits.                                                                                                        
                                                                                                                                
CHAIR  SEEKINS  announced  that   with  no  further  questions  or                                                              
testimony,  SB 97 would  be held  in committee  and that  he would                                                              
close public testimony.  He then announced an at-ease  for several                                                              
minutes.                                                                                                                        

Document Name Date/Time Subjects