Opinion ID: 2627837
Heading Depth: 2
Heading Rank: 1

Heading: The State's Interest in a Punitive Damages Award Attaches when a Verdict Is Returned.

Text: The first sentence of AS 09.17.020(j) grants the State a right to fifty percent of any punitive damages award, and the second sentence provides that the subsection does not grant the state the right to file or join a civil action to recover punitive damages. Taken as a whole, this subsection is most sensibly interpreted to mean that before a verdict is returned, the State may not intervene in a claim seeking punitive damages; however, once a verdict for punitive damages is returned, the State's interest in punitive damages comes into existence and the State may intervene to protect this interest. A number of reasons support this reading. Variations of the word award are used throughout AS 09.17.020 to refer to a verdict [8] or to a verdict as adjusted by a cap on damages. [9] Thus, in subsection .020(j) the phrase [i]f a person receives an award of punitive damages refers to the receipt of a verdict and any adjustment of it necessitated by one of the cap subsections, and not to receipt of a judgment nor, as Reust also suggests, receipt of money paid pursuant to a judgment. We stated in Reust I: [I]t appears that the state should always be permitted to intervene when there is any dispute about how a punitive damages award is to be allocated. [10] Because this observation was made in the context of an intervention request that was made before a judgment was entered, it supports the conclusion we reach today. It is hard to think that any other rule would make sense. If by the device of a post-verdict settlement a plaintiff could eliminate the need to recognize the State's interest in punitive damages, such settlements would almost always be accomplished and the State would almost never receive its share of punitive damages. The interpretation advocated by Reust would, in other words, make subsection .020(j) nearly meaningless. In Reust I we indicated that the purposes of subsection .020(j) were to reduce the incentive for plaintiffs to pursue punitive damages claims and encourage pretrial settlements, since the state only shares in punitive damages when an award is made. [11] We also took note of the purpose of [i]ncreasing state revenues by allocating a portion of punitive damages awards to the state based on the analogy between such awards and civil and criminal fines that underlies subsection.020(j). [12] These purposes would be frustrated, rather than achieved, if we were to adopt Reust's position.