Legislature(2003 - 2004)

04/30/2003 01:48 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         HB 249-RESTRAINT OF TRADE: ATTY FEES AND COSTS                                                                     
                                                                                                                                
CHAIR SEEKINS announced HB 249 to be up for consideration.                                                                      
                                                                                                                                
REPRESENTATIVE  LESIL  MCGUIRE,  sponsor   of  HB  249,  said  it                                                               
clarifies provisions  of the Alaska  anti-trust act  with respect                                                               
to attorney's  fees and  costs that are  awarded to  a prevailing                                                               
party  in an  anti-trust case.  Alaska  Civil Rule  82(A) is  the                                                               
prevailing rule  for attorney's  fees in the  state of  Alaska in                                                               
all civil  actions. That rule  states that, "Except  as otherwise                                                               
provided  by law  or agreed  to  by the  parties, the  prevailing                                                               
party  in  a   civil  case  shall  be   awarded  attorney's  fees                                                               
calculated under this rule."                                                                                                    
                                                                                                                                
REPRESENTATIVE MCGUIRE  stated that she thought  Alaska's law was                                                               
fair in that when parties  enter into litigation, they know there                                                               
is  the potential,  if  they lose  the case,  for  having to  pay                                                               
attorney's fees and  likewise for the other side.  She thought it                                                               
makes sense  to ask the parties  to take a hard  look before they                                                               
enter into  litigation to make  sure the  case is based  on sound                                                               
law  and  principles -  otherwise  they  might  have to  pay  the                                                               
prevailing parties' costs  and fees. This has  not been clarified                                                               
in the area  of anti-trust. Current law states  that a successful                                                               
plaintiff may  recover at least  partial attorney's fees  and, in                                                               
some  circumstances,   may  recover  full  attorney's   fees  (AS                                                               
45.50.576(a). The act as it  exists now, does not expressly state                                                               
how, if  at all, this  statutory provision is intended  to affect                                                               
the right of a successful  anti-trust defendant. HB 249 clarifies                                                               
that the  rule that is  applicable to  all civil cases  in Alaska                                                               
will be applied to anti-trust litigation.                                                                                       
                                                                                                                                
She  said  that her  committee's  research  has showed  that  the                                                               
courts  have been  heading in  that direction.  It is  consistent                                                               
with another  area of  law, consumer  protection in  unfair trade                                                               
practices cases.  That provision is governed  under AS 45.50.537,                                                               
where the Legislature sought to  address it specifically the same                                                               
way as  Rule 82(a) that says,  if you are a  successful plaintiff                                                               
in  a consumer  protection and  unfair trade  practice case,  you                                                               
shall  recover   full  and  reasonable  attorney's   fees  and  a                                                               
successful  defendant shall  recover partial  attorney's fees  in                                                               
accordance  with standard  court rules.  There is  precedence for                                                               
the legislature acting in specific areas of the law.                                                                            
                                                                                                                                
REPRESENTATIVE MCGUIRE  said some objections were  addressed with                                                               
an amendment and  she called their attention to page  1, lines 14                                                               
- page 2, which clarifies, because  of a pending lawsuit, that if                                                               
you are a member of a  class action anti-trust suit, you can't be                                                               
held personally liable. She explained  that Rule 23 is an opt-out                                                               
rule and because of  that, you can be a member  of a class action                                                               
lawsuit and  not even be aware  of it. It would  be inappropriate                                                               
to hold any person liable.                                                                                                      
                                                                                                                                
She said  there was considerable  discussion about  the effective                                                               
date, which  did pass. She  emphasized that when  the Legislature                                                               
seeks to clarify an area of  the law they believe is appropriate,                                                               
as  in this  case, it  should  be done  clearly, effectively  and                                                               
immediately. To say that it  won't be effective immediately sends                                                               
a convoluted message to the court.                                                                                              
                                                                                                                                
MR. JEFF FELDMAN, attorney  representing Trident Seafoods, stated                                                               
that this is a fair bill.  Alaska anti-trust law is modeled after                                                               
the federal  law that  has no  Rule 82. He  supported it  for the                                                               
reasons  already  stated.  Alaska's  anti-trust  statute  doesn't                                                               
specifically address  what happens  to prevailing  defendants and                                                               
leaves them essentially  litigation orphans. They are  one of the                                                               
few special  classes of  litigants where  if you  defend yourself                                                               
and  win, if  you can  convince a  jury the  case was  wrongfully                                                               
brought, you  alone are  not granted any  relief unless  you bear                                                               
the cost of  that case without any compensation.  "People who are                                                               
in that position think it's unfair."                                                                                            
                                                                                                                                
SENATOR FRENCH asked if there is no recovery of attorney's fees                                                                 
if the plaintiffs  don't prevail at all and no  other monies have                                                               
been collected from the defendants throughout the litigation.                                                                   
                                                                                                                                
MR. FELDMAN replied that is correct.                                                                                            
                                                                                                                                
CHAIR SEEKINS  asked Mr. Feldman if  in Alaska a person  could be                                                               
part of a class action  lawsuit without having assessed the risks                                                               
and rewards of being involved in the action.                                                                                    
                                                                                                                                
MR. FELDMAN  replied that's not  supposed to happen, but  it does                                                               
work out  that way. When the  court certifies a class,  the class                                                               
counsel is directed  to send notices to the  class members. Those                                                               
notices go out, but a lot of people don't pay attention to them.                                                                
                                                                                                                                
CHAIR SEEKINS questioned  the fact that a person could  be a part                                                               
of a  lawsuit without knowing it  the same as he  could receive a                                                               
magazine subscription  by not returning  a card saying  he didn't                                                               
want it.                                                                                                                        
                                                                                                                                
MR. FELDMAN  explained that  Alaska is an  opt-out state  and the                                                               
opt-out rate is  very low in class action  lawsuits, because most                                                               
people  don't  pay attention.  If  it  were opt-in,  most  people                                                               
wouldn't take the time to opt in, either.                                                                                       
                                                                                                                                
SENATOR FRENCH asked if the Miller's Reach case is class action.                                                                
                                                                                                                                
MR. FELDMAN said it is.                                                                                                         
                                                                                                                                
REPRESENTATIVE CARL MOSES said he  attempted to amend the bill so                                                               
it wouldn't affect a judicial  proceeding that is happening right                                                               
now.  "You don't  change  the rule  in the  middle  of the  game,                                                               
particularly  when there  are a  number of  defendants that  have                                                               
settled out of court to the tune of over $40 million."                                                                          
                                                                                                                                
SENATOR  ELLIS  said he  remembers  discussing  pending cases  in                                                               
committees, but there was a different standard on the floor.                                                                    
                                                                                                                                
SENATOR THERRIAULT read section 111  that says any matter waiting                                                               
adjudication in the  court should not be debated  or discussed in                                                               
a legislative body.                                                                                                             
                                                                                                                                
REPRESENTATIVE  MOSES reiterated  that decisions  have been  made                                                               
based  on what  the rule  is today  and yesterday.  The decisions                                                               
might have been otherwise if the rule was different.                                                                            
                                                                                                                                
CHAIR SEEKINS  said he  would hold CSHB  249(JUD) am  for further                                                               
review.                                                                                                                         

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