Litigation Reform: Accountability for Anti-Development Lawsuits
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Alaskans have seen it happen many times. A new economic development project – be it a mine, an oil exploration well or a timber sale – receives its required permits or governmental reviews. Just before ground‐breaking or start‐up, an anti‐development group files a lawsuit and asks the judge for an injunction to stop the project until the lawsuit is resolved.
Often, the judge grants the injunction. Project investors experience delays. Jobs are put on hold, in many cases after workers have already been hired and are ready to report to work. Local contractors who have planned their season or their entire year around the project are left idle. Legal expenses are incurred. All this cost, delay and disappointment occur regardless of whether or not the lawsuit is ultimately found to have any merit.
In all too many cases, the lawsuit has no merit. Or, the government permitting agency has to modify a study or perform some additional paperwork to comply with the ultimate finding. In any case, the project normally goes ahead after months or even years of delay.
Representative Eric Feige, along with numerous co‐sponsors in the House and two co‐sponsors in the Senate (see list to the left), is seeking to increase accountability for this type of damaging legal mischief. Last year, he introduced House Bill 168, "An Act requiring the amount of the security given by a party seeking an injunction or order vacating or staying the operation of a permit affecting an industrial operation to include an amount for the payment of wages and benefits for employees and payments to contractors and subcontractors that may be lost if the industrial operation is wrongfully enjoined."
Introducing this important bill, Rep. Feige filed this sponsor statement:
“Over the past years there have been several cases where courts have issued injunctions or stays against companies engaged in the development of resource extraction and other construction projects. These court actions have had the effect of delaying worthwhile projects and curtailing employment within the state of Alaska. Thousands of jobs have not come to fruition and economic development of the states resources have been hindered. More often than not, the litigation has failed or has had an extremely limited effect in hand with the stated objectives of the original suit. The overall objective is not often what is stated in the suit but merely to delay a project or prevent it from coming to fruition.
HB 168 seeks to impose a penalty on frivolous suits. By requiring a bond to be posted in the event of a stay or injunction, the cost to the party bringing the suit is increased. Under current law the cost to bring a public litigant lawsuit against a project is in effect zero. There is very little risk in bringing a suit. All the risk currently is borne by the defendants. This bill seeks to level the legal playing field without infringing on any parties right to bring a legitimate issue to court.”
HB168 passed the House with a strong bi‐partisan majority in early April of 2012.
Only five House members voted against the bill. Those five were: Rep. Doogan, Rep. Gara, Rep. Gardner, Rep. Guttenberg, Rep. Kerttula, and Rep. Miller.
House Bill 168 is a clarifying issue. Legislators who are willing to see frivolous environmental lawsuits stop important economic development projects in Alaska voted No. Contact these House members and ask them to explain their votes.
In the Senate, HB168 was heard by the Senate Labor and Commerce committee. Chairman Dennis Egan allowed the bill to move out of committee. Senators Linda Menard and Cathy Giessel gave it a “Do Pass” recommendation, while Senators Egan, Davis and Paskvan gave it “No Recommendation.” The bill was sent along to its second committee of referral, Senate Judiciary.
Senate Judiciary Chairman, Hollis French, did not allow the bill to move out of his committee.
Had he done so, it would have been eligible for a floor vote and possible passage into law. Contact Senator French and ask him why he failed to move this important bill.