Opinion ID: 2629666
Heading Depth: 1
Heading Rank: 6

Heading: Alaska's Takings Clause

Text: The apparent lack of a tenable purpose underlying the forfeiture statute feeds directly into the issue of taking. Alaska's takings clause prohibits the taking of private property for public purposes without fair compensation: Private property shall not be taken or damaged for public use without just compensation. [40] The forfeiture statute's tacit premise seems to be that the state has an automatic stake in all punitive damages awards because those awards serve the public interest. But this premise is staggeringly overbroad, for it essentially posits that plaintiffs who sue individually for punitive damages become de facto public servants who donate their efforts and half their causes of action to the state. Yet Alaska's constitution forbids state government from wielding this kind of absolute power over its citizens: whether its actions affect property in the form of land, money, a legal cause of action, or personal services, the state may not confiscate private property without notice, due process, and just compensation. [41] And under AS 09.17.020(j), the state's fifty-percent share of a punitive damages award is undeniably somebody's propertyproperty that the state obtains by legislative compulsion. It seems necessary to ask, then, where the legislature derives this power to authorize state confiscation of judgments awarding punitive damages in civil actions between private parties. The plurality opinion tries to duck the issue of confiscation by proclaiming subsection.020(j) to be merely a cap that limits damages  before  they are awardedan approach evidently premised on the tacit assumption that a punitive damages cap of this kind would raise no constitutional problems. [42] Yet the plurality's approach generates more problems than it resolves. To begin with, it is unrealistic to characterize subsection .020(j) as a provision that simply creates a punitive damages cap. An ordinary damages cap merely limits a plaintiff's recovery: it neither takes from the defendant nor gives to the state, as does subsection .020(j). Moreover, in AS 09.17.020(f)a provision that appears shortly before subsection .020(j)the tort reform act already imposes an express cap on punitive damages; [43] to read subsection (j) as placing a second cap on top of the first cap thus carries us into a Seussian realm. [44] And to construe subsection .020(j) as a cap that occurs before the plaintiff receives an award of damages flies in the face of the subsection's plain language. Alaska Statute 09.17.020(j) allows a forfeiture to occur only when a person receives an award and further commands that 50 percent of the award be deposited into the general fund. [45] By specifying the source of forfeiture as the award and by defining an award to be both something that a person receives and something that can be deposited into the general fund, the statute's language unequivocally contemplates a transfer of funds to the state that will occur only when the defendant becomes obliged to make actual payment to the plaintiffan event that necessarily follows entry of judgment in the plaintiff's favor. Although these arguments identify important textual flaws in the plurality opinion's attempt to characterize subsection .020(j) as a mere damages cap, those flaws pale in comparison to the opinion's flawed premise that a cap of this kind would avoid constitutional problems. For even if we conceptualize the statutory forfeiture of punitive damages as an event that merely caps the plaintiff's recovery because it occurs before money changes hands from the defendant to the plaintiff, the forfeiture still is a taking. In approving the punitive damages forfeiture statute, the plurality opinion essentially adopts the state's reasoning that a jury's award of punitive damages is merely a factual finding that has no actual significance until a court order gives it legal effect. [46] This reasoning splits an award into two separate components, both of which are necessary before the award becomes binding: a finding of fact, which ordinarily falls within the province of the jury, and a formal order by the court that implements the jury's factual finding and gives it significance as a matter of law. But this dichotomy fails to avoid the forfeiture statute's basic takings problem: while the dichotomy changes the identity of the owner whose property is taken, it does nothing to alter the fact that the statute authorizes an uncompensated state taking of private property. For if the jury's verdict is merely a factual finding that cannot by itself vest damages in the plaintiff, then neither can it legally divest the defendant of any property interest. And while courts may have authority to negate improper factual findings by declining to implement any legally impermissible aspect of a jury's verdict, they surely have no raw legal power to dispose of property without a proper factual basisthat is, when the jury returns a partly unauthorized verdict, courts have no authority to preempt the jury's factfinding role by commanding a disposition of property that the jury has neither specifically addressed nor authorized as a matter of fact in its verdict. Nor can a punitive damages verdict in a dispute between private litigants properly be characterized as a general finding of fact that broadly authorizes a defendant's punishmentthe kind of finding that might enable a judge to divest the defendant of property without heeding the jury's desire to award it to the plaintiff. A verdict awarding punitive damages is personalized: it is the product of a deliberative process that translates the seriousness of a particular plaintiff's injuries and the outrageousness of a specific defendant's conduct into a monetary sum that reflects the jury's felt need both to reward and to punish. Under subsection .020(j), the jury is not asked to award anything to the state; nor does it determine how much the state might deserve. Its verdict takes money from a particular defendant and gives it to a specific plaintiff; it settles each party's private rights and responsibilities only in relation to the other's. It no more obliges the defendant to pay money to anyone but the plaintiff than it entitles the plaintiff to receive money from anyone but the defendant. And the private process that leads to this verdict requires neither participating party to surrender its rights against other parties. It follows that if a court declines to give part of a verdict for punitive damages legal effect for extrinsic policy reasons, the unawarded part of the money must remain the defendant's. If the jury finds as a matter of fact that the plaintiff deserves a certain sum as punitive damages, a law may properly allow the court to effectuate only part of this finding. But if the verdict includes no express finding that the state deserves part of the money, there is no factual predicate that allows the court to go beyond declining to implement the impermissible part of the jury's verdict and that enables it instead to divert half the plaintiff's award to the state. Regardless of whether we conceptualize a verdict as vesting a property interest in the plaintiff or leaving it in the defendant, then, an order awarding half the verdict to the state necessarily results in an impermissible taking. After all, the state has no greater authority to summarily confiscate a defendant's money than a plaintiff's. Neither the state nor the plurality opinion suggests a plausible way around this conceptual problem, and none is readily apparent. Indeed, AS 09.17.020(j)'s theoretical underpinnings seem impossible to square with our traditional system of justice. Alaska's courts offer a public forum for resolving a vast array of private and public disputes. Within this forum, the tort system allows individual litigants to resolve disputes involving private harms between themselves, without calling on the state to intervene on behalf of either party. Most of these private disputes raise few if any issues of substantial concern to state government. Even when these cases include claims for punitive damages, the conduct at issue typically falls below prevailing thresholds for state regulation or is subject to government regulation through separate administrative, civil, or criminal channels. For this reason, even though all awards of punitive damages involve a theoretical element of public harm and serve to protect the general welfare, few will implicate the kind of particularized governmental concerns that are needed to trigger a participatory state interest or to support a formal state claim to the proceeds at issue. Indeed, it is precisely because our system invites individual litigants to advance the common good through private initiative that the state can have no automatic or presumptive claim to the pot when a civil judgment for punitive damages is entered between private parties. To be sure, the state does have a compelling interest in the system of punitive damages as a whole; and to that extent the legislature unquestionably has broad power to define and limit both the circumstances under which punitive damages can be awarded and the amounts of damages that can be recovered. But this systemic interest alone gives the state no legitimate stake in any part of a specific award that falls within established legal limits and issues from a lawful judicial proceeding between private litigants. Moreover, though the legislature may have plenary authority to regulate punitive damages, [47] that authority alone cannot justify AS 09.17.020(j)'s deeply flawed summary forfeiture mechanism. While the legislature may choose to reduce or completely eliminate a plaintiff's right to collect punitive damages from a defendant through a civil proceeding, it may not exercise this zero-sum power in a one-sided manner: that is, it may not reduce the plaintiff's right to collect punitive damages without correspondingly expanding the defendant's right not to pay; it may not substitute the state for the plaintiff who recovers the verdict, while leaving intact the defendant's duty to pay. Because this effectively adds a new party to the action and creates a new right of recovery, the affected parties are entitled to notice, due process, and an opportunity to defend against the state's claim. It seems to me, then, that AS 09.17.020(j)'s forfeiture provision necessarily takes money without just compensation. There is simply no room in between a jury's verdict for a particular plaintiff and a court's entry of judgment on that verdict where the state can receive without takingno such thing as an immaculate reception. Either the state confiscates the defendant's money while it still belongs to the defendant or it usurps the plaintiff's cause of action by taking from the award after it vests in the plaintiff. One way or the other, the automatic forfeiture works an impermissible taking. Because no interest asserted by the state justifies summary state forfeiture of either party's property, I would hold that AS 09.17.020(j) is invalid. [48] I therefore dissent.