Legislature(2003 - 2004)
04/30/2003 01:48 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.