Legislature(2003 - 2004)

05/03/2004 08:17 AM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
    CSHB 549(JUD)am-UNSOLICITED COMMUNICATION:AIRCRAFT CRASH                                                                
                                                                                                                              
MS. VANESSA TONDINI, staff to  Representative McGuire, sponsor of                                                               
HB  549,  told  members  this bill  prohibits  an  attorney  from                                                               
contacting passengers  or their families  in the aftermath  of an                                                               
aviation  accident for  45  days. She  noted  that attorneys  are                                                               
bound by  rules of professional  conduct; Rule 7.3  is applicable                                                               
to this type of conduct. That rule states:                                                                                      
                                                                                                                                
     Attorneys  shall  not  solicit  by in  person  or  live                                                                    
     telephone   contact    special   employment    from   a                                                                    
     prospective client, with whom  the lawyer has no family                                                                    
     or prior  professional relationship when  a significant                                                                    
     motive  for  the  lawyer's doing  so  is  the  lawyer's                                                                    
     pecuniary gain.                                                                                                            
                                                                                                                                
She  explained the  reason behind  Rule 7.3  is that  prospective                                                               
clients  who are  feeling overwhelmed  may find  it difficult  to                                                               
evaluate  all  alternatives  with   reasoned  judgment  after  an                                                               
accident. Those  situations are fraught  with the  possibility of                                                               
undue influence  or intimidation.  However, even though  Rule 7.3                                                               
has  been in  place  for some  time, it  has  not controlled  the                                                               
"feeding  frenzy" that  takes  place in  the  aftermath of  awful                                                               
accidents. The  federal government  tried to correct  the problem                                                               
by passing  the Aviation  Disaster and  Family Assistance  Act in                                                               
1996.  That  law  mandated that  air  carriers  provide  specific                                                               
support to  families of  those injured  or killed  and prohibited                                                               
unsolicited contact  by attorneys for  30 days. In 2000  that law                                                               
was  amended to  expand the  scope to  include associate  agents,                                                               
employees, or other representatives  of attorneys and it expanded                                                               
the time  frame to 45 days.  She pointed out that  enforcement of                                                               
the federal  law requires action  by the Civil  Aeronautics Board                                                               
or  the U.S.  Attorney General.  The penalty  for a  violation is                                                               
close to  a $1,000  fine. Currently,  little enforcement  of this                                                               
law takes  place and  there is debate  about whether  the federal                                                               
law  is enforceable  against attorneys  who violate  it regarding                                                               
accidents  that  happen  entirely   within  Alaska.  She  thought                                                               
everyone would agree that passengers  and their families are very                                                               
vulnerable  to  pressure  by  others   in  the  aftermath  of  an                                                               
accident, especially in  rural Alaska. She pointed  out that this                                                               
bill will apply  only to flights that take  place entirely inside                                                               
of Alaska.                                                                                                                      
                                                                                                                                
MS. TONDINI  indicated that CSHB  549(JUD)am merely  codifies the                                                               
federal  law  except  that  a  reference  to  the  air  carrier's                                                               
attorney has been  added to make it clear that  all attorneys are                                                               
to   refrain  from   making  contact.   The   main  reason   that                                                               
Representative McGuire  included a criminal sanction  in the bill                                                               
is  because  she   felt  a  civil  financial   penalty  would  be                                                               
inadequate because  the contingency  fees for  representing these                                                               
clients are  high. In addition,  people are hesitant to  file bar                                                               
complaints against their  neighbors in small towns,  just as they                                                               
would be  hesitant to file a  civil claim.  Also,  the Alaska Bar                                                               
Association will take  notice of a criminal case. The  crime is a                                                               
class A  misdemeanor with  a fine of  $100,000 or  the attorney's                                                               
legal fee, whichever is greater.                                                                                                
                                                                                                                                
TAPE 04-60, SIDE A                                                                                                            
                                                                                                                                
MS. TONDINI further explained that  CSHB 549(JUD)am only prevents                                                               
attorneys  from making  initial  contact; a  client can  initiate                                                               
contact at any time.                                                                                                            
                                                                                                                                
10:00 a.m.                                                                                                                      
                                                                                                                                
CHAIR SEEKINS  asked if the  definition of an  "attorney" include                                                               
an agent or representative of an attorney.                                                                                      
                                                                                                                                
MS. TONDINI  said it does on  page 1, line 10,  and in subsection                                                               
(b).                                                                                                                            
                                                                                                                                
CHAIR  SEEKINS  said  he  wanted   it  on  the  record  that  the                                                               
definition of  attorney extends  to anyone  who is  soliciting on                                                               
the attorney's behalf as well. He then took public testimony.                                                                   
                                                                                                                                
MS.  MARCIA   DAVIS,  ERA  Aviation,  stated   support  for  CSHB
549(JUD)am.                                                                                                                     
                                                                                                                                
SENATOR FRENCH  asked Ms. Davis if  she has ever settled  a claim                                                               
that happened on an ERA flight and, if so, when.                                                                                
                                                                                                                                
MS. DAVIS said ERA has settled.  When ERA is contacted by someone                                                               
who claims to  have suffered an injury during a  flight, ERA asks                                                               
the person  to submit medical  bills, which it  pays immediately.                                                               
If  the person  asks for  extraneous damages,  such as  lost work                                                               
time, ERA  pays those as  well if they seem  reasonable. However,                                                               
if ERA  believes the person  is trying  to take advantage  of the                                                               
situation,  ERA  tries  to  settle   those  cases  fairly,  which                                                               
sometimes  involves offering  additional air  transportation. She                                                               
said she  cannot think of  any cases  in which the  passenger was                                                               
dissatisfied with  how the claim  was resolved when ERA  was able                                                               
to  deal with  the  claim directly.  However,  in instances,  for                                                               
example, where a person had a  bumpy flight out of Bethel and had                                                               
an attorney write a letter,  those situations have not gone well,                                                               
primarily because  the individual did  not intend to sue  but was                                                               
encountered by a lawyer. Individuals have admitted that.                                                                        
                                                                                                                                
MR.  ART WARBELOW,  Warbelow Air  Adventures,  stated support  of                                                               
CSHB 549(JUD)am.                                                                                                                
                                                                                                                                
MR.  BRUCE  McGASSON, Grant  Aviation,  stated  support for  CSHB
549(JUD)am.                                                                                                                     
                                                                                                                                
MR.   ED  GRAEGER,   ALG  Insurance,   stated  support   of  CSHB
549(JUD)am.                                                                                                                     
                                                                                                                                
SENATOR OGAN asked  if people who got a bruise  on a bumpy flight                                                               
actually file claims.                                                                                                           
                                                                                                                                
MR. GRAEGER replied:                                                                                                            
                                                                                                                                
     Unfortunately, what we do  see is attorney solicitation                                                                    
     of  claims for  very minor  injuries and  that's what's                                                                    
     part  of eating  into capacity  and cost  for providing                                                                    
     liability  coverage for  the  various  air carriers  in                                                                    
     Alaska  is  that  minor  matters  are  getting  pursued                                                                    
     aggressively  by counsel  and it  affects, over  a long                                                                    
     period of time, the  costs of providing perhaps, larger                                                                    
     limits  for people  who are  more  deserving with  more                                                                    
     serious injuries. So, our interest  in this is to avoid                                                                    
     unnecessary  solicitation  of  minor  matters  so  that                                                                    
     greater capacity  can be available  to respond  to more                                                                    
     serious injuries.                                                                                                          
                                                                                                                                
He told members  ALG Insurance covers the full  gamut of aviation                                                               
carriers.                                                                                                                       
                                                                                                                                
SENATOR FRENCH  asked Ms. Tondini  if the attorney  general would                                                               
be nervous about filing a civil complaint against a lawyer.                                                                     
                                                                                                                                
MS. TONDINI  said she does not  know that "nervous" is  the right                                                               
word  but she  does not  believe civil  suits would  be filed  as                                                               
aggressively  as criminal  suits  would be.    She said  everyone                                                               
agrees  such  conduct on  an  attorney's  part  is wrong  so  the                                                               
penalty in the bill is strong enough to be worth enforcement.                                                                   
                                                                                                                                
SENATOR FRENCH noted  that he asked, at a prior  hearing, to hear                                                               
from people who have been harassed by attorneys.                                                                                
                                                                                                                                
MS. TONDINI  deferred to the aviation  representatives to discuss                                                               
some of  those situations, however  they would not  release names                                                               
to her because of privacy concerns.                                                                                             
                                                                                                                                
MS. DAVIS  related a current case  in which a nose  wheel snapped                                                               
off on a  landing outside of Bethel. Although no  one was injured                                                               
at the scene,  all passengers were brought to  Bethel for medical                                                               
care  as a  safety precaution.  ERA offered  the passengers  free                                                               
tickets.  A  passenger  told  an   ERA  employee  that  a  lawyer                                                               
contacted  him and  a friend  afterward. The  passenger told  the                                                               
lawyer he had  no intention of suing but the  friend succumbed to                                                               
pressure from the lawyer and is  now pursuing a claim for damages                                                               
for emotional trauma.  She said it is difficult to  get people to                                                               
talk about  their neighbors  who are  sometimes the  lawyers. She                                                               
noted that ERA  does not file bar complaints because  that is one                                                               
of the  last things  it would want  to do while  in the  midst of                                                               
litigation and trying  to settle. In addition,  it is problematic                                                               
from a public relations aspect.                                                                                                 
                                                                                                                                
CHAIR SEEKINS noted that he  would hold CSHB 549(JUD)am until the                                                               
next day and adjourned the meeting at 10:13 a.m.                                                                                

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