Court Opinion

ID: 5151447
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:57:35.434151+00
Date Added: 2024-06-11T08:25:04.767775
License: Public Domain

BRYNER, Justice,
with whom CARPENETI, Justice, joins, concurring and dissenting.
I join in Part II of Justice Matthews's opinion, which holds that AS 09.60.080 re*723quired the state's fifty-percent share of punitive damages under AS 09.17.020(j) to be determined after deducting the contingent fee due Anderson's attorney from the total amount of her punitive damages award. I write separately here to address the remaining issues: whether AS 09.17.020(j) is constitutional and whether the state was entitled to a share of Anderson's prevailing-party fee award.
I. Constitutional Issues
The takings-clause and due-process issues raised in this appeal mirror the issues addressed in our evenly divided opinion in Evans v. State.1 I adhere to my dissenting opinion in Evans2 and see no need to repeat my views here. My comments below address new points advanced in today's dispositional opinion.
A. Takings
The dispositional opinion reasons that AS avoids takings-clause problems because it merely redefines a plaintiff's cause of action for punitive damages before it accrues: "[Als the state points out, unlitigated claims only become property when they accrue, and a claim cannot accrue before the events that give rise to it occur."3 Because Anderson's punitive damages claim acerued after subsection .020(J) was enacted, the opinion concludes, AS 09.17.020(j) took no vested property interest from Anderson.
But as my dissent in Evans points out, AS 09.17.020(j) neither redefines nor regulates the permissible seope of unlitigated punitive damages claims; instead, subsection .020(J) attempts to alter the plaintiff's property rights only after the plaintiff's claim accrues and is fully litigated, after the claim proves successful, and after the plaintiff "receives an award." 4 In fact, the statute unequivocally disclaims any intent to assign the state an interest in unacerued and unlitigated claims, expressly stating that it "does not grant the state the right to file or join a civil action to recover punitive damages." 5
Subsection .020(J)'s attempt to divest plaintiffs of property after they litigate their claims and receive their awards effectively takes the fruits of their labor,6 which readily distinguishes this statute from a provision that would give the state a share of unac-crued and unlitigated claims.
B. Substantive Due Process
My dissent in Evans discussed two supposed justifications for AS 09.17.020(J) and concluded that the statute's forfeiture provision violates substantive due process because it serves no rational purpose.7 The disposi-tional opinion offers two refined justifications for the statute, but in my view neither withstands rational basis serutiny.
The first proposed justification posits that subsection .020(J) might offer "incentives" to *724reduce punitive damages claims and promote settlements.8 Yet as the Evans dissent points out, the only way that subsection (J) discourages punitive damages claims is by punishing any claimant who files a meritorious claim, successfully pursues it to completion, and receives a factually accurate and lawfully authorized judgment.9 Because any tendency that the statute might have to discourage abuse of the law emerges purely as a side effect of its direct command to punish all punitive damages claimants who successfully exercise their constitutional right to due process, its "incentives" are perverse and irrational."10 Incentives of this kind fail to meet even the minimal test of substantive due process.11
As a second justification, the dispositional opinion proposes that subsection .020() increases state revenues.12 But surely the state's unquenchable thirst for money does not by itself justify snatching a private litigant's purse. Just as cost savings alone do not sustain otherwise arbitrary state action,13 so revenue earning is not, in itself, a legitimate legislative purpose.14 Although the dis-positional opinion suggests that the state does have a valid interest-apart from pure revenue generation-in taking a share of privately won punitive damages judgments,15 I think that the dissent in Evans adequately addresses this notion and correctly rejects it as unfounded.16
II. State's Right to Share in Anderson's Fee Award
As its final point, the state briefly argues, without citing any authority, that the trial court should have awarded it a portion of Anderson's prevailing-party attorney's fee award. The state reasons that "if the allocation statutes are to be interpreted to require the payment of attorney's fees by the State, then they should also be interpreted to permit the State to recover a portion of the attorney's fees award, particularly where there is an enhanced award ... [under Civil Rule 68] of actual fees as in this case."
But our interpretation of AS 09.60.080 does not "require the payment of attorney's fees by the State." As we recognize in Part II of Justice Matthews's opinion, AS 09.60.080 sets out a specific formula for calculating the *725state's share of a plaintiff's punitive damages award in contingent-fee cases. The statute's plain language fixes that share at fifty percent of the plaintiff's net punitive damages award after applying the terms of the contingent-fee agreement. By specifying this exclusive method of calculation, AS 09.60.080 simply defines the state's share of a plaintiffs punitive damages in contingent-fee cases. The statute imputes no payment of fees to the state and allows no other adjustment.
This straightforward interpretation of AS 09.60.080 also squares with the plain language of AS 09.17.020(j), the provision that establishes the state's right to share in private awards of punitive damages. Subsection .020(j) specifically allocates to the state a share from the plaintiffs "award of punitive damages," thus implicitly denying the state access to any other part of the judgment, whether directly or by offset. At the same time, subsection .020(J) explicitly denies the state any right to participate as a party in the punitive damages action.17 Because the state consequently shares none of the ordinary risks and benefits of a party, subsection .020() undereuts the theory that AS 09.60.080 envisions a state contribution of fees that would entitle the state to an offset.18
And in actuality, of course, the state pays no real or constructive fees; only the plaintiff pays. Under AS provisions creating the state's interest in punitive damages and AS 09.60.080's provisions defining that interest, the state acquires its property interest only after the plaintiff's contingent fee is calculated and paid. Because the state has no property interest in a plaintiff's award of punitive damages until the plaintiffs contingent fees are calculated and deducted as required in AS 09.60.080, the state can lose nothing before its share of the punitive damages award is fixed under that statute.19 Accordingly, there is no realistic basis for treating the state's share of damages under section .080 as if it were the remnant of some larger, preexisting property right that has been cut down by a forced contribution to the plaintiff's payment of contingent fees. Simply put, the state cannot lose property before it acquires property; and here, section .080 defines the state's complete property right.
Because AS 09.60.080's definition of the state's share of punitive damages in contingent-fee cases implies no state payment of plaintiff's fees, the superior court correctly denied the state's claim for an offset from Anderson's fee award under Civil Rule 68.

. Evans ex rel. Kutch v. State, 56 P.3d 1046 (Alaska 2002).

. Id. at 1075-79 (Bryner, Justice, dissenting).

. Maj. Op. at 714.

. AS (emphasis added); see Evans, 56 P.3d at 1077 (Bryner, Justice, dissenting):
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," [subsection .020(G)'s] language unequivocally contemplates a transfer of funds to the state that will occur ouly when the defendant becomes obliged to make actual payment to the plaintif-an event that necessarily follows entry of judgment in the plaintiff's favor.

. AS 09.17.020G).

. Cf. Delisio v. Alaska Superior Court, 740 P.2d 437, 440 (Alaska 1987) (citing Coffeyville Vitrified Brick & Tile v. Perry, 69 Kan. 297, 76 P. 848, 850 (1904)) (recognizing that labor is property under the takings clause). And in any event, the dispo-sitional opinion's unlitigated-claim rationale fails to explain how a jury award to the plaintiff can morph into a judgment for the state without becoming an unconstitutional taking of the defendant's property when the state is not a party to the proceedings that produce the award and the defendant has no opportunity to defend against the state's claim to the property. See Evans, 56 P.3d at 1077-78. After all, we have previously recognized that even when a statute commands civil forfeiture of property whose owner engages in criminal conduct, due process requires notice to the owner and an opportunity to defend against the state's claim to the property. See, eg., Waiste v. State, 10 P.3d 1141, 1145 (Alaska 2000).

. Evans, 56 P.3d at 1075-76.

. Maj. Op. at 715-16.

. See Evans, 56 P.3d at 1076:
Because the state receives its fifty-percent share of punitive damages under AS 09.17.020(j) only if the jury's award of punitive damages withstands scrutiny by the trial judge and is upheld on appeal, the actual source of forfeiture under the statute will always consist of punitive damages that have been conclusively established to be factually and legally justified. While purporting to target frivolous and excessive claims, then, the forfeiture statute paradoxically does just the opposite: it attacks only meritorious judgments, supposedly deterring abusers of the punitive damages system solely by punishing legitimate users. As a deterrent to frivolous claims, then, this regime is worse than irrational; it is perverse.

. Id.

. Moreover, the dispositional opinion's promise of early settlements seems wholly speculative and unrealistic. As vividly illustrated by today's case-where the defendants rejected a reasonable pretrial settlement offer in favor of pressing a defense that the jury found meritless-there is no rational basis to predict, on the whole, that AS 09.17.020() will encourage more flexibility by plaintiffs than intransigence on the part of defendants.

. Maj. Op. at 716.

. See, eg., Herrick's Aero-Auto-Aqua Repair Serv. v. State, Dep't of Transp. & Pub. Facilities, 754 P.2d 1111, 1114 (Alaska 1988) (finding under equal protection analysis that cost savings, without more, cannot justify selective enforcement of state regulations).

. Of course raising revenues through taxation is undeniably a legitimate power that our constitution gives to state government. See Alaska Const., art. IX, § 1. And in certain respects, AS 09.17.020() arguably has the effect of a tax on punitive damages. Nevertheless, the statute does not create a tax and so is not governed by the constitutional constraints that define the state's power of taxation. See Alaska Const., art. IX, §§ 2-4. Since the fact that the state might have power to achieve a result through lawful means cannot justify its efforts to achieve a similar result through unlawful action, the state's ability here to raise comparable revenues through a properly enacted tax on punitive damages affords no shelter to AS 09.17.020(G).

. Maj. Op. at 716-17.

. See Evans, 56 P.3d at 1078-79.

. See AS 09.17.020(G) (''This subsection [establishing the fifty-percent punitive damages forfeiture] does not grant the state the right to file or join a civil action to recover punitive damages.").

. Even if the language of these statutes were ambiguous, we would be obliged to construe them narrowly, in favor of Anderson since we have long held that statutes in derogation of the common law should be construed narrowly so as to effect the least possible change in the common law. University of Alaska v. Shanti, 835 P.2d 1225, 1228 n. 5 (Alaska 1992) (citing Hugo v. City of Fairbanks, 658 P.2d 155, 161 (Alaska App. 1983) and Monteville v. Terrebonne Par. Con. Gov't, 567 So.2d 1097, 1100 (La.1990)). Before the legislature enacted AS 09.17.020(), Alaska common law allowed plaintiffs to recover punitive damages without contributing any share of their awards to the state. See, eg., Veco, Inc. v. Rosebrock, 970 P.2d 906, 922 (Alaska 1999) (quoting Bridges v. Alaska Hous. Auth., 375 P.2d 696, 702 (Alaska 1962)). Because AS 09.17.020(j) unquestionably abridges the common law, it must be interpreted narrowly.

. For example, if these statutes gave the state an unspecified share of all punitive damages awards, the state would have no better ground to claim fifty percent of a plaintiff's gross punitive damages award than it would to claim fifty percent of the net award-nothing in the law otherwise grants the state a better claim to one share than the other, and, since it is not a party to the action, the state would have done nothing to earn either. See AS 09.17.020().