Opinion ID: 2629666
Heading Depth: 3
Heading Rank: 2

Heading: The Provision Requiring Payment of Half of a Punitive Damages Award to the State, AS 09.17.020(j), Is Facially Constitutional.

Text: Under AS 09.17.020(j), successful plaintiffs who receive any type of punitive damages must pay half of that award to the state treasury. [69] The plaintiffs challenge AS 09.17.020(j) under three different constitutional theories: (1) substantive due process, (2) the takings clause, and (3) the right to a jury trial. Each of these theories will be discussed in turn.
The plaintiffs argue that the provision requiring payment of half of a punitive damages award to the State violates substantive due process. Arguing that cases will occur in which the State's conduct would make it unjust for it to receive half of the punitive damages, plaintiffs proffer the following: The state is a defendant along with several private parties. All defendants act in a manner which meets the appropriate legal standard for an award of punitive damages. Despite the state's florid and blameworthy behavior, it benefits from the wrongdoings of its co-tortfeasors to the extent of 50% of the punitive damages award. The superior court held that AS 09.17.020(j) does not violate substantive due process rights. We have held that [s]ubstantive due process is denied when a legislative enactment has no reasonable relationship to a legitimate governmental purpose. [70] Punitive damages are assessed as a deterrent to prevent future harm to the public, and setting aside a portion of the damages collected for the public's use is reasonably related to the deterrence goal. [71] Nevertheless, the plaintiffs claim that it is unjust that the practical effect of AS 09.17.020(j) is to cut in half all punitive damages awards assessed against the State, since in all such cases the State will get half of the award back via AS 09.17.020(j). However, the effect of AS 09.17.020(j) is consistent with the rule that punitive damages may not be awarded against governmental entities [including the State] in the absence of explicit statutory authorization. [72] Since punitive damages can only be awarded against the State in specific situations authorized by statute, the legislature may further limit punitive damages awards through another statute, AS 09.17.020(j).
The plaintiffs also argue that AS 09.17.020(j) violates the federal and Alaska Takings Clauses. The plaintiffs claim that a punitive damages judgment is a property interest that is subject to the Takings Clause, and cannot be subject to a forced contribution. Alaska Statute 09.17.020(j) does not effect a taking unless the statute affects a property interest in punitive damages that has already vested. If AS 09.17.020(j) is construed as a cap on punitive damages, limiting them before they are awarded to successful plaintiffs, no constitutional problem exists. This construction of AS 09.17.020(j) is consistent with the legislature's power to limit or abolish punitive damages, [73] as well as with decisions from other courts that have considered the issue. [74] So construed, AS 09.17.020(j) does not effect an unconstitutional taking.
The plaintiffs also argue that AS 09.17.020(j) violates the right to a trial by jury under article 1, section 16 of the Alaska Constitution. The plaintiffs simply claim that the forfeiture provision, like the damages caps discussed earlier, unconstitutionally interferes with the jury's calculation of damages, a matter within the exclusive province of the jury. This issue is resolved by our earlier conclusion that the damages caps under AS 09.17.010 and .020 do not violate the right to a trial by jury. Like those statutes, AS 09.17.020(j) limits punitive damages; as we held above, a policy-based statutory limitation on damages does not violate the right to a jury trial because it does not constitute a re-examination of the factual issue of damages.