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Evans v. State (8/30/2002) sp-5618
Evans v. State (8/30/2002) sp-5618
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
BETTY EVANS, on her own )
behalf and on behalf of her ) Supreme Court No. S-9313
minor son, DAVID "BUDDY" )
KUTCH, JR.; SHARON CROSS, on ) Superior Court No.
her own behalf and on behalf ) 4BE-98-32 CI
of her minor daughter, )
LARONSIA CROSS; RAYMOND ) O P I N I O N
NEALY, SR.; and LILLIAN A. )
WOOD, ) [No. 5618 - August 30, 2002]
)
Appellants, )
)
v. )
)
STATE OF ALASKA, )
)
Appellee. )
______________________________)
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District, Bethel,
Charles R. Pengilly, Judge.
Appearances: Robert H. Wagstaff and Wm.
Grant Callow, Anchorage, for Appellants.
Gary M. Guarino, Assistant Attorney General,
Anchorage, Bruce M. Botelho, Attorney
General, Juneau, and Ronald W. Lorensen,
Simpson, Tillinghast, Sorensen, Lorensen &
Longenbaugh, Juneau, for Appellee. Amy S.
Gurton, Robertson, Monagle & Eastaugh, P.C.,
Juneau, for Amicus Curiae Alaska State
Hospital and Nursing Home Association. Roger
F. Holmes, Anchorage, for Amicus Curiae
Alaska State Chamber of Commerce.
Before: Fabe, Chief Justice, Eastaugh,
Bryner, and Carpeneti, Justices. [Matthews,
Justice, not participating.]
FABE, Chief Justice.
BRYNER, Justice, with whom CARPENETI,
Justice, joins, dissenting in part.
CARPENETI, Justice, dissenting in part.
I. INTRODUCTION
This appeal is a challenge to the 1997 tort reform
legislation enacted by the Alaska Legislature in chapter 26, SLA
1997. The plaintiffs, all injured parties contemplating tort
actions, asked the superior court for a declaratory judgment that
this legislation is void under the Alaska Constitution. However,
the superior court granted summary judgment to the State and
refused to grant the relief sought by the plaintiffs. We affirm
the trial court's decision that the legislation is facially
constitutional.
II. FACTS AND PROCEEDINGS
In 1997 the Alaska Legislature enacted legislation
including tort reform provisions, in chapter 26, SLA 1997. The
legislation was later codified into various sections of the
Alaska Statutes and became effective on August 7, 1997. It
included many new tort law provisions, including caps on
noneconomic and punitive damages,1 a requirement that half of all
punitive damages awards be paid into the state treasury,2 a ten-
year "statute of repose,"3 a modified tolling procedure for the
statute of limitations as applied to minors,4 comparative
allocation of fault between parties and non-parties,5 a revised
offer of judgment procedure,6 and partial immunity for hospitals
from vicarious liability for some physicians' actions.7
The appellants, all allegedly injured persons who have
filed or plan to file tort actions, filed this action seeking a
declaratory judgment that all of chapter 26, SLA 1997 is void
under the Alaska Constitution. The case was assigned to Superior
Court Judge Charles R. Pengilly. The plaintiffs and the State
filed opposing motions for summary judgment. The Alaska State
Chamber of Commerce and the Alaska Hospital Association filed
amicus briefs in support of the legislation. The superior court
heard oral argument on these motions, and subsequently granted
the State's motion for summary judgment and denied the
plaintiffs' motion in all respects, upholding all of chapter 26,
SLA 1997. The plaintiffs appeal this decision.
III. STANDARD OF REVIEW
This appeal requires us to review a grant of summary
judgment; this review is de novo.8 We will affirm summary
judgment if there are no genuine issues of material fact and if
the moving party is entitled to judgment as a matter of law.9
When making this determination, we will draw all reasonable
inferences in favor of the non-moving party.10 This appeal raises
constitutional issues, which are issues of law subject to de novo
review.11
IV. DISCUSSION
In this appeal, the plaintiffs challenge seven
provisions within chapter 26, SLA 1997: (1) the cap on
noneconomic and punitive damages under AS 09.17.010 and .020; (2)
the requirement that half of all punitive damages awards be paid
to the State under AS 09.17.020(j); (3) the comparative
apportionment of damages under AS 09.17.080; (4) the revised
offer of judgment procedure under AS 09.30.065; (5) the
limitations tolling procedure under AS 09.10.070(a)(2) and .140;
(6) the partial tort immunity for hospitals under AS 09.65.096;
and (7) the "statute of repose" under AS 09.10.055.
In addition to the specific challenges above, the
plaintiffs claim that the entire act is unconstitutional under
the "one subject" rule of article II, section 13 of the Alaska
Constitution. The plaintiffs also claim that, once all of these
constitutional infirmities are exposed, nothing in chapter 26,
SLA 1997 remains severable, and that therefore, the entire act
must be struck as unconstitutional. These two final issues will
be addressed in Part IV.H of this opinion.
Before these provisions are discussed in turn, we note
that these are facial challenges. The plaintiffs do not complain
of specific application of the challenged statutes to tort
actions brought by the plaintiffs. Instead, the plaintiffs seek
a declaratory judgment "in order that they may better determine
how to proceed" with their contemplated tort actions. The result
we reach in this opinion might be different if we were presented
with challenges to the law as applied in a particular case.
Therefore, our ruling is limited to the facial import of the
challenged provisions of chapter 26, SLA 1997.
A. The Caps on Noneconomic and Punitive Damages Under AS
09.17.010 and .020 Are Facially Constitutional.
Chapter 26, SLA 1997 modified AS 09.17.010 to place a
cap on the amount of noneconomic damages that may be awarded in
tort actions "for personal injury and wrongful death."12 The new
AS 09.17.010 lists specific claims for which noneconomic damages
shall be recoverable and specifies financial limits for damage
awards for each claim. Availability of noneconomic damages is
first limited to "compensation for pain, suffering,
inconvenience, physical impairment, disfigurement, loss of
enjoyment of life, loss of consortium, and other nonpecuniary
damage."13 These damages are further limited in amount to
$400,000 or $8,000 multiplied by the injured person's life
expectancy in years, whichever is greater, for each single injury
or death.14 When the damages are awarded for "severe permanent
physical impairment or severe disfigurement," the cap is extended
to $1,000,000 or, in the alternative, $25,000 multiplied by the
injured person's life expectancy in years, whichever is greater.15
Chapter 26, SLA 1997 also modified AS 09.17.020(f)-(h)16
to limit the amount of punitive damages in most cases to three
times compensatory damages, or $500,000, whichever is greater.17
If the defendant knowingly caused the injuries for financial
gain, the cap is expanded to four times compensatory damages,
four times the amount of financial gain, or $7,000,000, whichever
is greater.18 A different cap applies when the action is against
an employer to recover damages for an unlawful employment
practice prohibited by AS 18.80.220; in that case the cap is
$200,000 if the employer has fewer than 100 employees in Alaska,
$300,000 for 100-200 employees, $400,000 for 200-500 employees,
and $500,000 for 500+ employees.19
The plaintiffs claim that the caps on noneconomic and
punitive damages violate six provisions of the Alaska
Constitution: (1) the right to a jury trial; (2) the right to
equal protection; (3) the right to substantive due process; (4)
the separation of powers; (5) the right of access to the courts;
and (6) the ban on "special legislation." Each of these
arguments will be addressed in turn.
1. The damages caps do not infringe on the right to a
trial by jury.
The plaintiffs' first argument concerning the damages
caps is that the caps constitute a violation of the right to
trial by jury granted by article I, section 16 of the Alaska
Constitution and the Seventh Amendment to the United States
Constitution. The plaintiffs argue that the calculation of
damages is the exclusive province of the jury -- subject to the
judicial power of remittitur -- and that the legislature has
unconstitutionally invaded this province by enacting the damages
caps. The superior court rejected the plaintiffs' argument and
held that the damages caps did not invade the province of the
jury.
We have not previously examined the scope and extent of
the right to a trial by jury under article I, section 16 of the
Alaska Constitution.20 However, the language of the Alaska
Constitution's trial by jury provision mirrors the language of
the Seventh Amendment to the United States Constitution,21 and
proposals to create a right to trial by jury with different
language were rejected during the Alaska Constitutional
Convention.22
We agree with the reasoning employed by the Third
Circuit Court of Appeals, which interpreted the Seventh Amendment
to the United States Constitution to allow damages caps. In
Davis v. Omitowoju, the court held that a damages cap did not
intrude on the jury's fact-finding function, because the cap was
a "policy decision" applied after the jury's determination, and
did not constitute a re-examination of the factual question of
damages.23
Other state courts have similarly interpreted trial by
jury provisions to allow damages caps. In Pulliam v. Coastal
Emergency Services of Richmond, Inc.,24 and Etheridge v. Medical
Center Hospitals,25 the Virginia Supreme Court drew a distinction
between the jury's exclusive province of fact-finding, and the
legislature's power to alter the law that applied to the jury's
determination: "Once the jury has ascertained the facts and
assessed the damages . . . the constitutional mandate is
satisfied, [and] it is the duty of the court to apply the law to
the facts."26 That is, the Virginia court held that the jury has
the power to determine the plaintiff's damages, but the
legislature may alter the permissible recovery available under
the law by placing a cap on the award available to the plaintiff.27
Eight other courts have upheld damages caps using the same or
similar reasoning.28
We agree with Davis, Pulliam, and the other decisions
that have held that damages caps do not violate the
constitutional right to a trial by jury.29 The decision to place
a cap on damages awarded is a policy choice and not a re-
examination of the factual question of damages determined by the
jury. Therefore, the damages caps under AS 09.17.010 and .020 do
not violate article I, section 16 of the Alaska Constitution or
the Seventh Amendment to the United States Constitution.30
2. The damages caps do not constitute a denial of
equal protection.
The plaintiffs claim that the damages caps constitute a
violation of equal protection because two classes of successful
tort plaintiffs are treated differently: (1) those who receive
"full" compensation, and (2) those who do not, because "full"
compensation would be in excess of the caps.
To analyze the right to equal protection under article
I, section 1 of the Alaska Constitution, we apply a three-part
"sliding scale" test:
[W]e first determine the importance of the
individual interest impaired by the
challenged enactment. We then examine the
importance of the state interest underlying
the enactment, that is, the purpose of the
enactment. Depending upon the importance of
the individual interest, the equal protection
clause requires that the state's interest
fall somewhere on a continuum from mere
legitimacy to a compelling interest.
Finally, we examine the nexus between the
state interest and the state's means of
furthering that interest. Again depending
upon the importance of the individual
interest, the equal protection clause
requires that the nexus fall somewhere on a
continuum from substantial relationship to
least restrictive means.[31]
Under this test we must weigh the relative importance
of the plaintiff's interest and the State's interest. If the
plaintiff's interest is not very important, the State need only
show that its objectives were "legitimate"; if the plaintiff's
interest is important, the State must show a "compelling" state
interest. If the State demonstrates a sufficiently strong
interest, it must also show the required "nexus" or "fit" between
its regulations and its objectives. Depending on the importance
of the plaintiff's interest, the State may have to show a
different degree of "fit" along a continuum of possibilities. If
the plaintiff's interest is not very important, this fit must be
merely "a substantial relationship between means and ends";
however, if the plaintiff's interest is very important, the
regulation must be the least restrictive means available to
achieve the objective.32 We will apply each of the three steps of
this analysis in turn.
a. The plaintiffs' interests in unlimited
damages are economic interests.
The plaintiffs characterize their interests in
unlimited damages in two different ways. The plaintiffs first
claim that they have a "right to full redress" -- the right to
have their damages fully determined by a jury, and that this
right is impaired by artificial damages caps that impair the
jury's ability to do this. Secondly, the plaintiffs claim that
the damages caps infringe on the rights of rural Alaskans --
because the damages caps are uniform throughout the state and $1
"does not go as far [in rural Alaska] as in urban Alaska."
As for the first characterization, the plaintiffs claim
that their interest in unlimited damages is related to their
interest in access to the courts, and is therefore an important
interest requiring "strict scrutiny," placing a greater burden on
the State to justify its regulation.
The right of access to the courts is an important
interest requiring enhanced scrutiny; however, that right is
impaired only by state action that actually limits or blocks
access to the courts.33 The damages caps at issue here do not
actually limit access to the courts; rather, they simply limit a
plaintiff's recovery in civil court.
The plaintiffs' interests in unlimited damages are
merely economic, as the superior court correctly determined. As
we held in Reid v. Williams34 and Gilmore v. Alaska Workers'
Compensation Board,35 restrictions on the types or amounts of
damages that a plaintiff can pursue in court only infringe upon
economic interests. Such economic interests do not count as
"important" interests under our equal protection analysis.36
b. The State's "tort reform" objectives are
legitimate.
The next step in our equal protection analysis focuses
on the adequacy of the State's objectives underlying the
regulation. Since we have determined that the plaintiffs'
interests in unlimited damages are merely economic, the State's
objectives need only be "legitimate" -- not "compelling" -- to
justify the State's action.37 The superior court held that the
legislature's stated goals underlying the damages caps are
"plainly legitimate."
The plaintiffs claim that the State's objectives in
enacting the damages caps were not legitimate, because chapter
26, SLA 1997 as a whole was enacted to deal with problems that do
not actually exist: a dramatic increase in personal injury and
malpractice cases, "runaway juries," and out-of-control damages
awards.
The legislative goals underlying the damages caps, as
well as the rest of chapter 26, SLA 1997, are explicitly stated
in chapter 26, section 1, SLA 1997. Specifically, section 1
states that the legislation was intended to (1) discourage
frivolous litigation and decrease the costs of litigation;38 (2)
stop "excessive" punitive damages awards in order to foster a
"positive" business environment;39 (3) control the increase of
liability insurance rates;40 (4) encourage "self-reliance and
independence by underscoring the need for personal
responsibility";41 and (5) reduce the cost of malpractice
insurance for professionals.42
In our past decisions, we have accepted as legitimate
very similar legislative goals. In McConkey v. Hart, we
considered the constitutionality of a statute that limited the
accrual of prejudgment interest for victims of particular torts,
including the medical malpractice plaintiff in that case.43 The
purposes of the statute in McConkey were very similar to those
expressed by the legislature here, and we noted the legitimacy of
such "tort reform" objectives: "Reducing health care costs and
encouraging the provision of health care services are legitimate
goals which can reasonably be thought to be furthered by lowering
the amount of medical malpractice judgments."44 Similarly, in
Reid v. Williams, we noted that the stated purpose of
"alleviat[ing] the medical malpractice insurance crisis" was a
legitimate legislative goal.45
We decline the plaintiffs' invitation to second-guess
the legislature's factual findings. After examining various
evidence and testimony, the legislature found that there were
problems with tort litigation that needed to be solved, including
frivolous litigation, excessive damages awards, and increased
costs for malpractice and other liability insurance.46 The
plaintiffs, pointing to other contrary evidence, ask us to
independently review this conclusion and find that the evidence
instead showed that these problems did not really exist. The
plaintiffs ask us to delve into questions of policy formulation
that are best left to the legislature. As we have noted
previously, "[i]t is not a court's role to decide whether a
particular statute or ordinance is a wise one; the choice between
competing notions of public policy is to be made by elected
representatives of the people."47
c. The nexus between the legislative objectives
and the damages caps is adequate.
Finally, we must evaluate the nexus or "fit" between
the legislature's goals and the means employed to achieve those
goals. Because we have already established that the plaintiffs'
interests are economic and are therefore at the "low end" of the
"sliding scale," the fit required here is minimal and there must
only be a "substantial relationship" between the legislative
objectives and the damages caps.48 The superior court found that
the nexus was adequate, noting that "the causal connection
between a limitation on the size of awards for noneconomic
damages and lower insurance premiums hardly requires
elaboration."
The plaintiffs contend that there is no "substantial
relationship," and they make essentially two arguments to support
this conclusion. First, they claim that there is no evidence of
any connection between the damages caps and the legislative goals
underlying chapter 26, SLA 1997. The plaintiffs claim that "the
record is devoid of any evidence" that the damages caps would
have a positive effect on insurance rates and frivolous
litigation.
Second, the plaintiffs claim that the uniformity of the
damages caps across the state has no substantial relationship to
the legislature's goals. The plaintiffs claim that the caps
discriminate against rural Alaskans because those Alaskans should
receive adjusted damages in light of their higher cost of living.
The plaintiffs argue that the failure to adjust for cost of
living has no "substantial relationship" to the legislature's
objectives.
The record indicates that the legislature considered at
least some evidence tending to show that damages caps, as well as
the other provisions of chapter 26, SLA 1997, could have a
positive effect on the legislature's objectives. For example,
some industry representatives testified that chapter 26, SLA 1997
would "improv[e] the business climate" by lowering business
costs.49 Several insurance company representatives claimed that
liability insurance rates would go down if a damages cap were to
be enacted; one representative included statistics that tended to
show that in California, where similar tort reforms have been
enacted, insurance premiums have in fact gone down.50 Small
business owners and representatives of health care organizations
testified, respectively, that chapter 26, SLA 1997 would have a
positive impact on liability insurance rates51 and malpractice
insurance rates.52 Finally, evidence was submitted supporting the
conclusion that the availability of high punitive damages awards
tended to lengthen litigation in civil suits generally.53
The legislature was also presented with contrasting
testimony -- notably, from the Governor's Advisory Task Force on
Civil Justice Reform. The Task Force Report concluded that
damages caps would not have a clear effect on frivolous
litigation or insurance rates. The legislature apparently
weighed the competing evidence and decided that the evidence in
favor of creating the damages caps justified enacting the caps.
The plaintiffs allege that much of the evidence
presented to the legislature was false or misleading and they
invite us to examine contrasting evidence and impeachment
evidence, arguing that the legislature should not be allowed "to
do whatever it wishes regardless of the factual basis for
legislative action." However, that weighing of the evidence is a
task that is properly left to the legislature. The "substantial
relationship" requirement was met in this case.
We must also briefly address the plaintiffs' second
argument -- that the uniformity of the caps across the state is
unconstitutional, because that uniformity is not fairly and
substantially related to the legislative goals of tort reform.
The plaintiffs did not provide any authority to support their
argument. However, at least one other court has refused to find
an equal protection violation merely because a law has a
different economic impact on urban and rural residents of a
state.54 There is also no violation of equal protection merely
because the damages caps do not provide for cost of living
adjustments.
3. The damages caps do not infringe on substantive
due process rights.
The plaintiffs also argue that the damages caps violate
their substantive due process rights. However, this argument
fails because we have already found that the damages caps do not
violate equal protection. As recognized by the superior court,
our substantive due process test is a more deferential version of
the equal protection test already discussed. We explained in
State v. Niedermeyer that "[s]ubstantive due process is denied
when a legislative enactment has no reasonable relationship to a
legitimate governmental purpose."55 Our equal protection test is
similar but less deferential: because the plaintiffs' interests
are economic, the State had to show that the regulation had a
"fair and substantial" relationship to a legitimate state
objective. Because we found that there was a fair and
substantial relationship, there is necessarily a reasonable
relationship as well. Therefore, the damages caps do not deny
substantive due process.
4. The damages caps do not violate the separation of
powers.
The plaintiffs also claim that the damages caps violate
the principle of the separation of governmental powers, as that
principle is defined by article IV, section 1 of the Alaska
Constitution. The plaintiffs argument is that the power of
remittitur -- the power to reduce damages by altering a jurys
findings of fact -- is an exclusive power of the judiciary that
cannot be usurped by the legislature. The damages caps allegedly
usurp this power by remitting damages automatically to fixed
levels. The superior court rejected this argument, and stated
that "[t]his claim relies upon an even weaker and more outlandish
assumption than the others that precede it: that, for some
reason, damages fall within the exclusive province of the court
system." The superior court noted that the legislatures action
was better characterized as the "modification and limitation of
causes of action," which is "an activity that falls squarely
within the legislatures competence, and one that is properly
reserved for members of the voting public speaking through their
legislators."
The damages caps cannot violate the separation of
powers, because the caps do not constitute a form of remittitur.
We agree with the reasoning of the federal court that decided
Franklin v. Mazda Motor Corp., interpreting Maryland law.56 In
Franklin, the court considered the constitutionality of a
noneconomic damages cap under the Maryland Constitution. The
court held that the damages cap did not violate the separation of
powers, because the power of the legislature to modify or abolish
the common law "necessarily includes the power to set reasonable
limits on recoverable damages in causes of action the legislature
chooses to recognize."57 At least six other courts have reached
similar conclusions.58 We agree with these authorities, and
decline to follow other authorities that stand for the contrary
proposition,59 because the legislature does in fact have the power
to alter common law remedies,60 and that is what the legislature
has done in enacting the damages caps. This alteration is not
remittitur because it is a general alteration applied to all
cases, and is not case- and fact-specific like remittitur.
5. The damages caps do not infringe on the right of
access to the courts.
The plaintiffs also argue that the damages caps
infringe upon their constitutional right of meaningful access to
the courts, as guaranteed by the due process clause in article I,
section 7 of the Alaska Constitution. The plaintiffs' argument
here is similar to arguments made earlier in the equal protection
and substantive due process contexts. Their argument is that the
right of meaningful access includes a "right to an adequate
remedy," and that the damages caps infringe upon this right
because, for some plaintiffs, adequate compensation would be an
amount in excess of the caps. The superior court rejected this
argument.
In Bush v. Reid, we recognized a constitutional "right
of access" under the due process clause in article I, section 7
of the Alaska Constitution.61 In In re K.A.H., we stated that the
right of access is infringed when there are "direct impediments
to court access."62 We held in that case that Alaska Rule of
Professional Conduct 1.8(e), which prohibits lawyers from loaning
money to their clients for living expenses, does not infringe on
the right of access because this rule does nothing to impede
actual access to the courts: "nothing in Rule 1.8(e) expressly
prohibits plaintiffs from filing suit or requires plaintiffs to
pay for court access."63 And in Peter v. Progressive Corp.,64 we
considered whether the imposition of fees to retain a master
infringes on the right of access; we stated that an imposition of
fees may violate the right of access if the fees are
"prohibitively high," but that reasonable fees will not infringe
on the right of access.65
The damages caps are not like the restraints considered
in K.A.H. and Peter because the caps do not impede actual access
to the courts. Moreover, the damages caps do not violate the
right of access because they are not so drastic so as to
eliminate the tort remedies that they modify.66 Therefore, the
damages caps do not violate the right of access to the courts.
6. The damages caps do not violate the ban on
"special legislation."
The plaintiffs also claim that the damages caps violate
the ban on "special legislation" under article II, section 19 of
the Alaska Constitution. Article II, section 19 states that
"[t]he legislature shall pass no local or special act if a
general act can be made applicable." The plaintiffs claim that
the damages cap constitutes a prohibited "special act."
The plaintiffs' contention fails, because our test for
whether a provision violates the "ban on special legislation" is
identical to the equal protection test already discussed.67 That
is, "special legislation" is constitutional as long as it bears a
"fair and substantial relationship" to legitimate state
objectives.68 We have already held that a fair and substantial
relationship exists.
B. The Provision Requiring Payment of Half of a Punitive
Damages Award to the State, AS 09.17.020(j), Is
Facially Constitutional.
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.
1. Alaska Statute 09.17.020(j) does not constitute a
violation of substantive due process rights.
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).
2. Alaska Statute 09.17.020(j) does not effect a
taking without just compensation under the United
States and Alaska Constitutions.
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.
3. Alaska Statute 09.17.020(j) does not violate the
right to a trial by jury.
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.
C. The Comparative Apportionment of Damages Provision, AS
09.17.080, Is Facially Constitutional.
Alaska Statute 09.17.080 is a comparative negligence
statute that requires the finder of fact to assign a percentage
share of responsibility for damages to each responsible party and
non-party, and mandates that liability for damages must be
apportioned between the responsible parties in accordance with
their percentage of responsibility. Specifically, AS
09.17.080(a) requires the fact-finder to assign fault percentages
to all parties to the suit, as well as to non-parties released
from liability or "responsible for the damages." However,
potentially responsible non-parties are not included within the
apportionment of fault if the parties had a "sufficient
opportunity" to join them but "chose not to" do so.75 Under AS
09.17.080(c) and (d), the court must then determine each party's
equitable share of the damages and enter judgment in accordance
with that party's percentage of fault. The statute provides:
(c) The court shall determine the award
of damages to each claimant in accordance
with the findings and enter judgment against
each party liable. The court also shall
determine and state in the judgment each
party's equitable share of the obligation to
each claimant in accordance with the
respective percentages of fault as determined
under (a) of this section. . . .
(d) The court shall enter judgment
against each party liable on the basis of
several liability in accordance with that
party's percentage of fault.
No judgment is entered against non-parties; the allocation is
used only as "a measure for accurately determining the
percentages of fault of a named party."76 Chapter 26, SLA 1997
added the requirement that fault be assigned to all non-parties
"responsible for the damages."77
The plaintiffs challenge the allocation of fault to non-
parties on two grounds: They claim that (1) it is a violation of
due process because it is void for vagueness, and (2) it violates
the plaintiffs' substantive due process rights. These arguments
will be considered in turn.
1. The allocation of fault to non-parties provision
is not void for vagueness.
We have recognized that a law is "void for vagueness"
and violates due process when it "either forbids or requires the
doing of an act in terms so vague that men of common intelligence
must necessarily guess at its meaning and differ as to its
application."78
The plaintiffs claim that AS 09.17.080(a) contains
ambiguities that render it unconstitutionally vague. Each of
these alleged ambiguities will be separately discussed in turn.
First, the plaintiffs claim that the statute requires
that the fact-finder assign a fault percentage to every person
that is alleged to be responsible for the damages. The
plaintiffs imply that there is an ambiguity because the language
of the statute seems to require that no such person may be
assigned a percentage of zero.
We reject this argument. The language of AS
09.17.080(a) does not state or imply that a percentage of zero
cannot be assigned.79 The plaintiffs do not provide any
legislative history to counter the plain and unambiguous language
of AS 09.17.080(a), which does not preclude a percentage of zero
from being assigned.80
The other ambiguities claimed by the plaintiffs arise
from the exception in AS 09.17.080(a)(2) that excludes some non-
parties from the allocation of fault. As the superior court
noted, the general rule, or "presumption," established by the
statute is that all parties and non-parties "responsible for the
damages" may be assigned a fault percentage. However, there are
exceptions to that general rule: fault may not be allocated to
any non-party that (1) is identified as "potentially
responsible," (2) is not protected by the statute of repose, and
(3) is a person or entity that the parties had a "sufficient
opportunity" to join, but "chose not to."
[T]he court . . . shall instruct the jury to
answer special interrogatories or, if there
is no jury, shall make findings, indicating .
. . the percentage of the total fault that is
allocated to each claimant, defendant, third-
party defendant, person who has been released
from liability, or other person responsible
for the damages, unless
[1] the person was identified as a
potentially responsible person,
[2] the person is not a person
protected from a civil action under AS
09.10.055, and
[3] the parties had a sufficient
opportunity to join that person in the action
but chose not to.[81]
The State, while urging us to affirm this "common
sense" interpretation of the statute, also observes that, under
the statute, a non-party can only be included in the allocation
of fault if (1) the defendant identifies the non-party as someone
who the defendant will argue is at fault, and (2) the defendant
shows that the person could not be joined. This is also correct.
In order to include a non-party in the fault allocation, a
defendant must identify the non-party as someone who the
defendant will argue is at fault, because otherwise that non-
party cannot be a "person responsible for the damages" under the
general rule of AS 09.17.080(a)(2). And, even if the defendant
argues that a non-party was at fault, that non-party cannot be
included in the allocation of fault if there was a "sufficient
opportunity" to join that non-party, because a "sufficient
opportunity" to join triggers the exception in AS 09.17.080(a)(2)
defining non-parties that cannot be assigned an allocation of
fault.82 The statute states that there is a "sufficient
opportunity" to join when the non-party is "(A) within the
jurisdiction of the court; (B) not precluded from being joined by
law or court rule; and (C) reasonably locatable."83 Thus, as the
State correctly maintains:
[A]s finally enacted . . . [AS 09.17.080]
allows the allocation of fault to a non-party
only if certain conditions are met. The
defendant first has to identify the person as
someone the defendant will argue is at fault.
While no method of identification is
specified, the procedures in the Alaska Rules
of Civil Procedure will govern this
identification. Next, the defendant will
have to show that the person could not be
added as a third-party defendant either
because that person is outside the
jurisdiction of the court or because by law
or court rule the person cannot be named as a
party. Thus, a defendant who wishes to
allocate fault to a person must add the
person as a party if the defendant is legally
able to do so.[84]
(Citations omitted.)
The plaintiffs claim that the first and third
components of the exception in AS 09.17.080(a)(2) are ambiguous.
First, the plaintiffs claim that the statute does not define
sufficiently the term "potentially responsible person." The
plaintiffs claim that this term is ambiguous because it is
unclear who is responsible for identifying potentially
responsible persons, what the standard of proof is, or what the
procedure should be for such an identification.
The plaintiffs also claim that the third component of
the exception is ambiguous. The plaintiffs impliedly argue that
it is possible that a non-party could be identified as a
potentially responsible party without the defendant's knowledge -
- and that therefore this third condition may not apply to that
defendant because the defendant did not have the knowledge
required to "choose" not to join the non-party. The plaintiffs
also claim that the exception may create an ambiguous duty to try
to ascertain potentially responsible persons, and that the phrase
"sufficient opportunity to join" is not clear.
There is no unconstitutional ambiguity in the exception
contained in AS 09.17.080(a)(2). It is true that AS
09.17.080(a)(2) does not define the term "potentially responsible
person." However, this does not create an unconstitutional
ambiguity. The identification of "potentially responsible
persons" can be made by any party and will be managed by the
trial court. Our rule-making process will provide further
guidance if such guidance is needed.
The third component of the exception, including the
phrase "sufficient opportunity to join," is also not
unconstitutionally ambiguous. The exception does not implicitly
or explicitly create any duties -- it simply creates an exception
to the general rule that all responsible non-parties will be
assigned a fault percentage.
Our conclusion that AS 09.17.080(a) does not contain
unconstitutional ambiguities is supported by our prior decisions
in Lazy Mountain Land Club v. Matanuska-Susitna Borough Board of
Adjustment & Appeals,85 and Williams v. State, Department of
Revenue.86 In Lazy Mountain, we stated that there are "three
principal considerations in determining whether a statute is
unconstitutionally vague": (1) whether the statute operates to
inhibit the exercise of First Amendment rights, (2) whether the
statute gives adequate notice of what conduct is prohibited, and
(3) whether there has been a history or a strong likelihood of
uneven application.87 In Williams, a workers' compensation
claimant was denied benefits and claimed that the governing
statute defining "injury" was unconstitutionally vague.88 We
noted in Williams that the three Lazy Mountain factors had
"little or nothing to do" with the situation in Williams:
These factors obviously have little or
nothing to do with the present case. First
Amendment rights are not involved[;] the
statutes in question prohibit no conduct; and
the statutes give rise to neither
prosecutorial action in a criminal context
nor a civil enforcement action where a
litigant may be at risk of losing an
important right because the litigant's
conduct did not meet a certain standard.[89]
We rejected the vagueness challenge in Williams,
because "the statute merely set[] a dividing line between
instances where compensation is payable and those where it is
not."90 We noted that "a lower degree of exactitude is required
for civil [as opposed to criminal] statutes," and that a reading
of the entire statute clarified the meaning of the challenged
terms.91
Similarly, AS 09.17.080(a) merely sets a dividing line
between non-parties who may be assigned a fault percentage and
those who may not. Also, first amendment rights are not
involved, AS 09.17.080 prohibits no conduct, and the statute does
not give rise to criminal liability or possible civil enforcement
where "a litigant may be at risk of losing an important right
because the litigant's conduct did not meet a certain standard."92
And the language of AS 09.17.080(a) is "not so conflicting and
confused that it cannot be given meaning in the adjudication
process."93 The ambiguities identified by the plaintiffs do not
make AS 09.17.080(a) unconstitutionally vague.
2. The allocation of fault to non-parties does not
violate the plaintiffs' substantive due process
rights.
The plaintiffs also argue that AS 09.17.080 violates
their substantive due process rights because it forces plaintiffs
to defend responsible non-parties who may share in the fault
allocation but who by definition will not appear at trial to
defend themselves. Plaintiffs would have an interest in
defending these non-parties because an allocation of fault to non-
parties would reduce the amount of damages recoverable from the
defendants.
The superior court rejected the plaintiffs' argument,
holding that the "empty chair" problem does not give rise to a
constitutional violation, and stated that it is "inevitable" that
someone will be disadvantaged by the presence of "empty chairs"
in multi-party tort cases. The superior court noted that under a
system of "joint and several liability" (the former system in
Alaska), the defendants are prejudiced because they face the risk
of paying more than their fair share of damages, and must sue
other co-defendants for contribution to remedy the situation.
Under the AS 09.17.080 comparative negligence scheme, plaintiffs
are prejudiced because they risk getting less than their fair
share of compensation. The superior court noted that the choice
between a system which disadvantages defendants and a system
which disadvantages plaintiffs is a "pure public policy" choice
that was made by the legislature and is not one that is
"vulnerable to constitutional attack."
We have held that "[s]ubstantive due process is denied
when a legislative enactment has no reasonable relationship to a
legitimate governmental purpose."94 The only relevant authorities
cited by the parties are two Montana Supreme Court decisions,
Plumb v. Fourth Judicial District Court, Missoula County95 and
Newville v. State, Department of Family Services,96 in which the
court applied a substantive due process standard identical to our
own.97 The Montana court considered two versions of a Montana
comparative negligence statute mandating that fault be allocated
to responsible non-parties and that party liability for damages
be reduced accordingly. In Newville, the court struck down the
first version of the statute because it "unreasonably mandate[d]
an allocation of percentages of negligence to non-parties without
any kind of procedural safeguard."98 That is, even though the
comparative negligence statute was enacted for a valid
governmental purpose, the statute was not reasonably related to
that purpose because it "arbitrarily and unreasonably" prejudiced
plaintiffs who risked diminished recovery if they did not defend
non-party defendants.99
In the later Plumb decision, the Montana Supreme Court
again implied that the allocation of fault to non-parties would
be constitutional if there were adequate procedural safeguards.100
The court considered the next version of the comparative
negligence statute passed by the Montana legislature as a
response to Newville.101 In the second statute, the legislature
created some procedural safeguards, but the court stated in Plumb
that these safeguards were not enough to make the statute
constitutional.102 The second statute included requirements that
(1) the defendant had the burden to show non-party liability; (2)
the non-party defense had to be affirmatively pled; and (3) the
non-party had to be notified that it was being blamed for the
injuries.103 The court held that these procedural safeguards were
constitutionally insufficient because they did not provide the
non-party with an opportunity to appear and defend itself;
without this opportunity, "nonparties are likely to be assigned a
disproportionate share of liability, and [the plaintiff's]
recovery is likely to be reduced."104
Newville and Plumb are distinguishable from this appeal
because AS 09.17.080(a) contains safeguards that adequately
address the Montana Supreme Court's concerns. Alaska Statute
09.17.080(a) does not allow allocation of fault to non-parties if
the three conditions of its exception are all met: if (1) the non-
party is identified as potentially responsible, (2) the non-party
is not protected by AS 09.10.055, and (3) the parties had a
sufficient opportunity to join the non-party but did not do so.
This exception provides the "opportunity" for the non-party to
appear and defend itself that the Montana statute lacked because
under AS 09.17.080(a), a defendant must join any potentially
responsible non-parties as long as there is a "sufficient
opportunity" to do so, or else no fault will be apportioned to
non-parties. Because of these procedural protections, AS
09.17.080(a) is reasonably related to a legitimate governmental
purpose and does not violate substantive due process.105
D. The Offer of Judgment Procedure, AS 09.30.065, Is
Facially Constitutional.
Alaska Statute 09.30.065, the offer of judgment
procedure, penalizes parties who receive an offer of judgment for
some sum, refuse that offer, and win a judgment after trial that
is less favorable than the offered sum by five percent or more.106
The penalty is that the offeree is required to pay all costs and
between thirty percent and seventy-five percent of the offeror's
attorney's fees, depending on when the offer was made.107 The 1997
legislation altered but did not create this scheme.108
The plaintiffs challenge the entire statute, claiming
that it is unconstitutional. The plaintiffs claim that AS
09.30.065 violates both (1) the right of access to the courts,
and (2) the right to a jury trial. These contentions will be
addressed in turn.
1. Alaska Statute 09.30.065 does not violate the
right of access to the courts.
The plaintiffs claim that AS 09.30.065 violates their
right of access to the courts, guaranteed by article I, section 7
of the Alaska Constitution because "in some circumstances it
renders victorious plaintiffs penniless." The plaintiffs discuss
a hypothetical example, in which a plaintiff who recovers almost
the same amount at trial as was contained in a defendant's offer
is greatly punished because she is forced to pay the defendant's
attorney's fees. The superior court rejected this argument,
stating that it was a "frivolous policy argument."
As we noted earlier in this opinion, in our past
decisions considering the right of access to the courts, we have
been concerned with impediments to actual access to the courts.109
We decline to expand the right of access to prohibit an offer of
judgment scheme. We note that this is consistent with the United
States Supreme Court's rejection of a similar challenge to
Federal Rule of Civil Procedure 68 in Marek v. Chesny, in which
the Court noted that "[m]erely subjecting civil rights plaintiffs
to the settlement provision of Rule 68 does not curtail their
access to the courts, or significantly deter them from bringing
suit."110
2. Alaska Statute 09.30.065 does not violate the
right to a trial by jury.
The plaintiffs also recast the preceding argument under
the rubric of the right to a trial by jury, claiming that the
disincentive provided by AS 09.30.065 and the accompanying
"chilling effect" is so great that it effectively deprives some
plaintiffs of their right to a jury trial.
We have held that a party is entitled to a jury trial
if the right to a jury trial was preserved by the enactment of
article I, section 16 of the Alaska Constitution -- that is,
there is such a right in suits "at law" where the plaintiff seeks
damages.111 Without citing any authorities, the plaintiffs ask us
to hold that the right to a jury trial also includes the right to
be free from financial disincentives that might persuade the
parties not to seek the jury trial to which they are entitled.
We decline to do so.
E. The Limitations Tolling Procedure for Minors, Defined
by AS 09.10.140, Is Facially Constitutional.
Alaska Statute 09.10.140 tolls the two-year statute of
limitations for tort actions. The parties dispute both the
meaning and constitutionality of AS 09.10.140 as it applies to
minors.
The plaintiffs contend that AS 09.10.140 treats two
different classes of minor personal injury plaintiffs
differently: (1) those less than eight years of age at the time
of injury, and (2) those older than eight years of age at the
time of injury. The plaintiffs claim that AS 09.10.070(a) and
09.10.140(c) together provide that those plaintiffs injured
before their eighth birthday have until their tenth birthday to
file a personal injury action, while those injured after their
eighth birthday are treated more favorably, since their claims
are tolled until they reach the age of majority.
The State claims that these statutes do not treat
minors over the age of eight at the time of injury more
favorably. The State contends that the tolling provisions of AS
09.10.140 only apply to minors under the age of eight at the time
of injury. Therefore, minors over the age of eight at the time
of injury have two years after their injury in which to file
suit, like all other tort plaintiffs.
When interpreting the language of a statute, we
normally give unambiguous language its plain meaning.112 We may
also rely on legislative history as a guide to interpretation,
"[b]ut the 'plainer the language of a statute, the more
convincing contrary legislative history must be' to interpret a
statute in a contrary manner."113
At the outset, it is important to bear in mind that
three separate but interrelated sections of AS 09.10 govern the
time limits for a minor to sue for personal injury: (1) AS
09.10.070, (2) AS 09.10.140, and (3) AS 09.10.055. In order to
understand the purpose and effects of section .140, it is vital
to consider how sections .140 and .055 interact and how both
relate to section .070.
The first of these provisions, AS 09.10.070, creates a
general two-year statute of limitations for various causes of
action, including personal injury actions.
The second provision, AS 09.10.140, overrides the first
by tolling the two-year personal injury statute in certain cases.
Subsection .140(a) broadly exempts all minors, including those
with potential personal injury claims, from all statutes of
limitation established in AS 09.10, including section .070's two-
year personal injury limit. The period of tolling under this
subsection continues throughout the years of minority, and when
minors reach majority at age eighteen, subsection (a) gives them
two years to sue, regardless of the nature of their cause of
action. But subsection .140(c) carves out an exception to these
broad tolling provisions. Focusing narrowly on minors who have
potential personal injury claims and are less than eight years
old when injured, it specifies that subsection .140(a) will toll
section .070's two-year time bar as to these minors only until
they reach their eighth birthday.
The third provision, AS 09.10.055, overrides the second
(section .140's tolling provision) by establishing a ten-year
time limit for all personal injury actions, including actions by
all minors. Subsection .055(a) thus specifies that,
notwithstanding subsection .140(a)'s provision tolling the
statute of limitations for minors, no person may commence a
personal injury action more than ten years after the last act
that causes injury. Subsection .055(b) goes on to establish a
number of exceptions to the statute of repose, describing
situations in which subsection .055(a)'s ten-year time bar will
not apply. Two exceptions are important here.
First, paragraph .055(b)(3) specifies that the ten-year
limit never applies if a shorter period of limitation attaches:
This section does not apply if
. . . .
(3) a shorter period of time for
bringing the action is imposed under another
provision of law.
This exception makes section .070's usual two-year time limit for
personal injury claims controlling if it would otherwise apply;
the exception thereby clarifies that section .055 operates as a
statute of repose, setting outer limits for commencing personal
injury actions, even when the statute of limitations would allow
them.
Second, paragraph .055(b)(5) establishes a discovery
rule governing injured minors that tolls the period of repose
based on the reasonable perceptions of their parents or
guardians:
This section does not apply if
. . . .
(5) the facts that would constitute
accrual of a cause of action of a minor are
not discoverable in the exercise of
reasonable care by the minor's parent or
guardian.
As can be seen, this discovery provision treats all injured
minors equally and does not depend on the date of injury.114
The interplay of the foregoing provisions sheds
considerable light on subsection .140(c)'s purpose. In drawing a
line between minors who are injured before and those injured on
or after their eighth birthdays, subsection .140(c) tacitly
acknowledges both the underlying purpose of subsection .140(a)'s
tolling provision and the overriding effect of section .055's
statute of repose.
By tolling section .070's two-year statute of
limitations until a child reaches majority, subsection .l40(a)
seeks to enable injured minors to age to majority without losing
their claims, so that they will be able sue on their own instead
of through their parents or guardians. But this purpose can not
be attained when minors are injured before reaching their eighth
birthdays. An injured minor who is less than eight years old
must wait more than ten years before reaching majority. Since
the ten-year outer limit of the statute of repose specifically
overrides subsection .140(a)'s provision tolling the two-year
statute of limitations for personal injury claims, the statute of
repose will always bar these children from suing in their own
right unless their claims fall within one of the exceptions
contained in the statute of repose itself. But in that event,
subsection .055(b) specifies that subsection .055(a) will no
longer cancel subsection .140(a)'s tolling provisions -- which
will once again govern the minors' claims.115
In short, subsection .140(c) simply separates those
children for whom tolling the statute of limitations would
preserve the ability to sue as adults from those whose ability to
sue on their own will necessarily depend on exceptions included
in the statute of repose.
The line itself is logical, then. And once the line is
drawn, there is good reason for subsection .140(c)'s disparate
treatment of younger minors: The ten-year limit imposed by the
statute of repose will eventually require all minors who are
under eight years old when injured (provided that they do not
fall within one of the statute's exceptions, in which event their
claims are tolled) to sue through their parents or guardians; if
these minors ultimately must sue through their parents or
guardians, then it serves no useful purpose, and only encourages
stale claims, to let their parents or guardians wait ten years
before commencing an action.
Thus, subsection .140(c)'s disparate treatment of
minors under the age of eight is rationally based and furthers
legitimate state interests.
F. The Provision Granting Partial Tort Immunity to
Hospitals, AS 09.65.096, Is Facially Constitutional.
Alaska Statute 09.65.096 grants partial immunity to
hospitals for actions taken by emergency room physicians who are
not employees but are rather independent contractors.116 Under AS
09.65.096, hospitals are responsible only for exercising
reasonable care in granting and reviewing privileges to practice
in the hospital. Hospitals are not otherwise responsible for
actions taken by emergency room physicians who are independent
contractors, as long as the hospital provides notice,117 and the
physicians have prescribed levels of malpractice insurance.118
Alaska Statute 09.65.096 was created in response to our
decision in Jackson v. Power, in which we held that hospitals
have a non-delegable duty to provide non-negligent care in their
emergency rooms, and that hospitals cannot avoid respondeat
superior liability by making their emergency room doctors
"independent contractors."119
The plaintiffs challenge AS 09.65.096 on one basis --
they claim that the statute is a violation of substantive due
process. The plaintiffs claim that the legislature's
modification of the common law, as it was interpreted in Jackson,
is a violation of substantive due process because the
legislature's action is in violation of "sound public policy."
Specifically, the statute is allegedly against public policy
because it is a "legislatively imposed exculpatory clause
inserted in an adhesion contract" -- the contract formed when a
patient is forced to go to an emergency room.
However, the plaintiffs' argument fails because the
legislature was free to override our decision in Jackson v.
Power. Our decision in Jackson was based on our interpretation
of the common law.120 As we have stated previously, the
legislature has the power to modify the common law.121 Indeed,
this principle is itself enshrined in AS 01.10.010, which states
that the law to be applied by courts is "the common law not
inconsistent with the Constitution of the State of Alaska or the
Constitution of the United States or with any law passed by the
legislature of the State of Alaska." (Emphasis added.)
Therefore, the legislature was well within its rights to enact AS
09.65.096.
G. The Statute of Repose, AS 09.10.055, Is Facially
Constitutional.
The statute of repose, AS 09.10.055, imposes a ten-year
limitations period, in addition to the two-year statute of
limitations under AS 09.10.140, for actions for personal injury,
death, or property damage. Even if the two-year limitations
period of AS 09.10.140 is tolled, the ten-year period of AS
09.10.055 may separately bar an action.
Specifically, under AS 09.10.055, actions must be filed
within ten years after the earlier of (1) "substantial
completion" of construction that allegedly caused the injury, or
(2) the last act alleged to have caused the personal injury.122
There are exceptions for certain types of injuries,123 and the
limitations period is tolled during a period in which a "foreign
body" upon which a cause of action is based remains undetected in
a plaintiff's body.124 Chapter 26, SLA 1997 altered the statute of
repose, which formerly applied only to actions based on injuries
in connection with improvements to real property,125 and shortened
the period from fifteen to ten years.126
The plaintiffs offer two arguments to challenge the
constitutionality of the statute of repose: (1) the statute
violates equal protection; and (2) the statute violates due
process because it overturns the "discovery rule." These
arguments will be discussed in turn.
1. The statute of repose does not violate equal
protection.
The plaintiffs claim that the statute of repose
constitutes a violation of equal protection because it treats two
classes of minor plaintiffs differently. Minors who are less
than eight years old at the time of injury will have their claims
barred before they reach the age of majority under the statute of
repose, while minors who are more than eight years old at the
time of injury will have their claims barred after they reach the
age of majority. The plaintiffs claim that this constitutes
differential treatment of similarly situated minors because the
first group of minors must rely on others to bring suit on their
behalf, if suit is to be brought before the claim is lost.
However, we need not subject AS 09.10.055 to equal
protection analysis because the plaintiffs have failed to make
the threshold showing necessary for an equal protection violation
claim. As we stated in Matanuska-Susitna Borough School District
v. State, "[w]here there is no unequal treatment, there can be no
violation of the right to equal protection of law," and "we need
not subject the challenged laws to sliding scale scrutiny."127 The
statute of repose does not treat minors differently: It subjects
all minors, as well as all other plaintiffs in actions for
personal injury, death, or property damage, to a ten-year
limitations period. As the plaintiffs imply, the statute does
have an effect on the tolling for minors imposed by AS
09.10.140(a). Under AS 09.10.140(a), discussed earlier in this
opinion, the normal two-year limitations period is tolled until
the plaintiff reaches the age of majority. Alaska Statute
09.10.055 limits this tolling for plaintiffs injured before the
age of eight by barring their actions ten years after the injury
when they have not yet reached the age of majority. However,
this is not differential treatment since the ten-year statute of
repose applies to all plaintiffs. Instead, the legislature
simply made a policy decision to create a separate statute of
repose in addition to the statute of limitations.128
2. The statute of repose does not violate due
process.
The plaintiffs also claim that the statute of repose
violates due process by effectively abolishing our "discovery
rule," which provides that the statute of limitations does not
start running until the plaintiff discovers, or reasonably should
discover, the existence of all of the elements of his cause of
action.129 In some cases a plaintiff might not discover a cause of
action until after the ten-year limitations period in the statute
of repose has run, and therefore the claim would be lost before
the discovery rule could operate to fully toll the limitations
period under AS 09.10.070(a). The plaintiffs argue that this is
a violation of due process because it departs from the common
law. We reject this argument. The discovery rule is a common
law rule created by this court, and is not based on any
constitutional principles.130 As noted earlier in this opinion,
the legislature is free to modify or abolish common law rules.131
Therefore, to the extent that AS 09.10.055 limits the traditional
discovery rule,132 the legislature had the power to do so in
enacting the statute.
H. Chapter 26, SLA 1997 Does Not Violate the "One Subject"
Rule of Article II, Section 13 of the Alaska
Constitution.
In addition to all of the facial challenges to specific
components of the tort reform legislation considered above,
plaintiffs claim that all of chapter 26, SLA 1997 is
unconstitutional because it violates the "one subject" rule of
article II, section 13 of the Alaska Constitution.
We have stated that legislation will not violate the
"one subject" rule as long as it embraces a single general
subject:
To determine if a bill is confined to one
subject, all that is necessary is that the
act should embrace some one general subject;
and by this is meant, merely, that all
matters treated . . . should fall under some
one general idea, be so connected with or
related to each other, either logically or in
popular understanding, as to be part of, or
germane to, one general subject.[133]
The purpose of the one-subject rule is to prevent legislative
"log-rolling" -- the practice of "deliberately inserting in one
bill several dissimilar or incongruous subjects in order to
secure the necessary support for passage of the measure."134 The
plaintiffs argue that chapter 26, SLA 1997 violates the one
subject rule because its provisions are "scattered" and do not
embrace a common subject.
However, we have also stated that "what constitutes one
subject for purposes of article II, 13 is broadly construed,"
and that only a "substantial and plain" violation of the one
subject rule will lead us to strike down legislation on this
basis.135 In past decisions, this court and the court of appeals
have considered legislation that was in some cases very broad:
We have held in each case that the legislation was within one
subject, such as "land" or "the criminal law."136 We have only
struck down legislation once on this basis, in a unique situation
wholly unrelated to the circumstances of this appeal.137 Even
though the provisions of chapter 26, SLA 1997 concern different
matters, they are all within the single subject of "civil
actions."138
V. CONCLUSION
For the reasons stated above, we reject the plaintiffs'
facial challenges and hold that the challenged provisions of
chapter 26, SLA 1997 are facially constitutional under the Alaska
and United States Constitutions.139 We therefore AFFIRM the
superior court's decision as to all elements of chapter 26, SLA
1997.
BRYNER, Justice, with whom CARPENETI, Justice, joins, dissenting
in part.
I disagree with those parts of the plurality opinion
that would uphold the 1997 tort reform act's noneconomic damages
cap and punitive damages forfeiture provision. In my view, the
cap on noneconomic damages violates Alaska's jury trial and equal
protection clauses, and the provision requiring plaintiffs to
forfeit half their awards of punitive damages to the state
violates substantive due process and the takings clause.
Although the plurality opinion has limited impact and leaves
these points open to future consideration,1 I think that they are
sufficiently important to require me to explain my reasons for
disagreeing.
The Noneconomic Damages Cap Is Unconstitutional.
Jury Trial
Although cases from other states are split on the
issue,2 I think that the better-reasoned cases support the
conclusion that AS 09.17.010's cap on noneconomic damages
violates the right to a jury trial under the Alaska
Constitution.3 Construing constitutional provisions that are
textually and historically similar to Alaska's, courts in Kansas,
Oregon, Washington, and Alabama have held that noneconomic
damages caps violate a plaintiff's right to a jury trial.4 These
courts observe that the jury's function has traditionally
included determining the amount of damages a plaintiff should
actually receive; and since the demand for damages itself
triggers the right to a jury trial under their constitutional
provisions, these courts reason that, regardless of whether the
jury's decision is technically characterized as a finding of fact
or conclusion of law, "[i]t would be illogical . . . to find that
a jury, empaneled because monetary damages are sought, could not
then fully determine the amount of damages suffered."5
In contrast, the cases relied on by the plurality
opinion -- chiefly Davis,6 Pulliam,7 and Etheridge,8 are
readily distinguishable. The two Virginia opinions -- Pulliam
and Etheridge interpret a unique provision of the Virginia
constitution stating that a "trial by jury is preferable to any
other";9 moreover, they draw heavily on the status of the right
to a jury trial under Virginia law when that state adopted its
constitution in the late 1700s.10 And the federal case -- Davis
-- bases its decision on the Seventh Amendment's reexamination
clause;11 yet the Alaska Constitution's jury trial provision
contains no reexamination clause, and the Seventh Amendment has
no application in state-court civil jury cases.
Accordingly, I would follow the well-reasoned decisions
in Kansas, Oregon, Washington, and Alabama and would hold that
Alaska's noneconomic damages cap violates the Alaska
Constitution's guarantee of a jury trial.
Equal Protection
Despite the strength of the plaintiffs' argument that
the damages cap deprives them of their constitutional right to a
jury trial, it seems to me that their argument under Alaska's
equal protection clause12 provides an even more compelling basis
for holding the damages cap unconstitutional.
Many state cases addressing challenges to damages caps
have considered equal protection arguments; these cases are about
evenly split, and their outcome usually centers on what level of
equal protection scrutiny the court chooses to apply to the
issue. Almost all courts that have upheld damages caps against
equal protection challenges have done so under the lowest level
of scrutiny: the "rational basis" test, which asks only if the
legislature might have had any logical reason for adopting the
cap.13 Conversely, cases that have applied heightened, mid-level
equal protection scrutiny have uniformly declared noneconomic
damages caps invalid, concluding that the caps run aground on the
mid-level scrutiny test's means-to-end-fit requirement; these
cases typically ask whether a substantial or legitimate
legislative reason actually existed for adopting a cap and
whether the adopted cap actually bears a close and substantial
relationship to the legislature's underlying interest.14
In the present case, the plurality opinion describes
the interest asserted by the plaintiffs as an interest in
"unlimited damages"; the plurality then dismisses this interest
as "merely economic" -- too trifling to deserve anything but the
lowest level of constitutional scrutiny.15
But in truth the plaintiffs assert a considerably more
fundamental and focused interest: their interest in a civil
justice system that affords all similarly situated negligence
victims an equal opportunity to seek full compensation for their
injuries. To be sure, this interest can be characterized as
economic. Yet it is hardly the selfish and unbounded interest in
"unlimited damages" that the plurality opinion ascribes to the
plaintiffs. Rather, the asserted interest is properly limited to
personal injuries that the legislature has expressly recognized
to be real and that plaintiffs can prove that they actually
suffered.
Furthermore, despite the plurality opinion's contrary
assumption, Alaska's test of equal protection does not
automatically relegate all economic interests to low-level
scrutiny.16 Instead, because it incorporates a pure sliding-
scale approach, Alaska's equal protection test eschews such rigid
categories and recognizes "a continuum of available levels of
scrutiny." In this continuum, the importance of any particular
interest -- whether economic or not -- is a relative matter to be
judged by realistically applying "an adjustable 'uniform-
balancing' test" that considers the overall importance of the
specific interest at issue in relation to other societal
interests.17 And notably, in applying this test on prior
occasions, this court has not hesitated to identify some economic
interests as ranking sufficiently high in the continuum of
societal interests to deserve close scrutiny.18
Here, when considered against a backdrop of other
imaginable economic interests, the plaintiffs' specific interest
in access to the courts to seek full recovery for their actual
injuries easily qualifies as an important economic interest.
Whether labeled "a mere economic interest" or an interest
implicating plaintiffs' constitutional right of access to the
courts, then, this interest deserves considerably more scrutiny
under Alaska's sliding-scale test than the minimal glance that
the plurality chooses to give it.19
Persuasive decisions from other states strongly support
this conclusion. Courts considering equal protection challenges
to damages caps often identify two offensive features -- one
involving disparate treatment of tortfeasors and the other
involving disparate treatment of negligence victims. First, a
noneconomic damages cap like Alaska's treats wrongdoers
disparately by requiring those who negligently cause minor or
modest injuries to pay fully, while allowing those who inflict
the most serious injuries to pay only partial damages.20 Second
-- and worse, I submit -- the cap treats victims of negligence
disparately by allowing those who suffer slight or modest
personal injuries to recover their full measure of damages, while
forcing those who suffer the most serious injuries to accept only
partial damages and to absorb the rest of the loss themselves.21
In finding that this form of disparity compels
heightened scrutiny, the Utah Supreme Court stressed that low-
level equal protection review is particularly "inappropriate when
dealing with a fundamental principle of American law that victims
of wrongful or negligent acts should be compensated to the extent
that they have been harmed."22 Similarly, in deciding to use mid-
level scrutiny to review a damages cap challenged under the New
Mexico constitution's equal protection clause, the New Mexico
Supreme Court explained,
these classifications effect a substantial
injustice in this case. The classifications
infringe an individual's important interest
to be compensated fully for his injuries,
especially when, as is alleged in the instant
case, they are a result of no fault of his
own. This interest, in our view, certainly
is amply important and substantial to justify
the invocation of at least the heightened,
intermediate test instead of the minimum
rationality test. We are persuaded also that
the class of tort victims affected by the
damage cap is "sensitive" enough to the
injustice wrought to warrant applying the
heightened test. Consequently, we take the
intermediate approach and analyze the
constitutional challenge in this case under
heightened scrutiny.[23]
Yet even if we reject these thoughtful assessments and
choose to apply the lowest level of scrutiny permitted under
Alaska's equal protection clause, a correct application of
Alaska's sliding-scale test would still compel the conclusion
that the plaintiffs' equal protection challenge is meritorious.
As already noted, other courts that have rejected equal
protection challenges to damages caps have invariably used the
highly deferential "rational basis" test. This test asks a
single hypothetical question: whether the legislature might have
had any legitimate reason to act; if any legitimate interest is
conceivable, the challenged statute is valid.24 But in Isakson
v. Rickey,25 Alaska expressly repudiated this formulation of the
rational basis standard, choosing to replace its single
hypothetical question with a twofold inquiry that requires courts
to determine, first, whether a legitimate objective for
legislative action actually existed and, second, whether the
specific legislation adopted bears a close and substantial
relationship to the underlying state interest.26
In State v. Erickson, we expressly incorporated
Isakson's standard as the test that defines the lowest level of
scrutiny permissible under Alaska's sliding-scale equal
protection analysis.27 Thus, even assuming that the plaintiffs'
economic interests in this case implicate only the lowest
possible level of scrutiny on Alaska's sliding scale, our equal
protection standard still requires us to consider two issues:
First we must ask whether the legislature actually sought to
further a legitimate goal in adopting a noneconomic damages cap;
second, if we decide that it did, we then must determine whether
the legislatures chosen means -- the statute at issue -- bears a
substantial relationship to its ostensible purpose. This latter
determination requires us to undertake a narrow evaluation of
"the state's interest in the particular means employed to further
its goals."28 Thus, as Justice Rabinowitz emphasized in Kenai
Peninsula Borough v. State, Alaska's sliding-scale test is
especially demanding in cases at the lower end of the equal
protection spectrum: "On several occasions we have . . .
explained that where there is no fundamental right at stake, the
equal protection clause of the Alaska Constitution imposes a
stricter standard than its federal counterpart."29
In the present case, the plurality opinion fails to
apply this more rigorous test. While acknowledging the correct
standard, the plurality effectively applies a rational basis
test, finding that the damages cap passes both parts of Alaska's
equal protection test -- the legitimate state interest
requirement and the substantial relationship requirement --
solely because the damages cap might serve the legislature's
general tort reform goals: "The record indicates that the
legislature considered at least some evidence tending to show
that damages caps . . . could have a positive effect on the
legislature's objectives."30
Although the plurality's rational basis analysis
certainly identifies a potentially legitimate state interest, it
falls short of complying with Alaska's low-level scrutiny test in
two ways: by neglecting to ask whether the rational purpose that
the plurality has identified was a goal that the legislature
actually sought to advance by enacting the damages cap and, more
important, by neglecting to look for a fair and substantial means-
to-end fit between the damages cap and the legislature's
ostensible goal -- that is, by failing to examine "the state's
interest in the particular means employed to further its
goals."31
The plurality opinion likewise ignores the case law of
other states: virtually every case that has applied this narrower
means-to-end-fit test has concluded that damages caps are
unconstitutional. Almost all states besides Alaska use a
conventional, three-tier equal protection analysis. Because that
analysis applies the deferential, rational basis test at the
lowest level of scrutiny, the means-to-end-fit test these other
states use for mid-level scrutiny is functionally identical to
the standard required under Alaska's sliding-scale test for low-
level scrutiny. As the plurality opinion itself acknowledges in
describing Alaska's test, "[a]t the low end of the sliding scale,
we have held that a substantial relationship between means and
ends is constitutionally adequate."32 Compare this, for example,
to the mid-level standard of scrutiny described by the New Mexico
Supreme Court in requiring the state to demonstrate that a
challenged damages cap had "a substantial relationship to a
legitimate or important governmental purpose."33 Applying this
standard to a noneconomic damages cap that was similar to
Alaska's, the New Mexico court found itself "unable to fathom" a
substantial relationship between the cap and any conceivably
legitimate or important purpose.34
New Mexico's description of the applicable standard
typifies the formulation of mid-level scrutiny applied by other
courts using a conventional three-tier approach to equal
protection review. And as already noted, courts that have
applied mid-level scrutiny instead of the rational basis test
have almost invariably concluded that damages caps violate the
test's means-to-end-fit requirement.
Because these cases apply a standard identical to
Alaska's lowest level of constitutional scrutiny, they should
guide our decision in the present case. As they explain, the
arbitrary nature of the means-to-end fit under this test is
apparent:
[I]t is not enough that the statute as a
whole might tend to serve the asserted
purpose. Each statutory classification
"'must be reasonable, not arbitrary, and must
rest upon some ground of difference having a
fair and substantial relation to the object
of the legislation, so that all persons
similarly circumstanced shall be treated
alike.'"
There is no logically supportable reason
why the most severely injured malpractice
victims should be singled out to pay for
special relief to medical tortfeasors and
their insurers. The idea of preserving
insurance by imposing huge sacrifices on a
few victims is logically perverse. Insurance
is a device for spreading risks and costs
among large numbers of people so that no one
person is crushed by misfortune. In a
strange reversal of this principle, the
statute concentrates the costs of the worst
injuries on a few individuals.
. . . .
Such arbitrary treatment cannot be
justified with reference to the purpose of
the statute. Without speculating on the
wisdom of the possible alternatives, it is
plain that the Legislature could have
provided special relief to health care
providers and insurers without imposing these
crushing burdens on a few arbitrarily
selected victims.[35]
In the present case, the state offers nothing to
justify the seemingly absolute disconnect between the
legislature's stated tort reform goals -- reducing insurance
costs, discouraging frivolous claims, and preventing excessive
verdicts -- and the particular means it chose to attain those
goals when it enacted the damages cap. Nor does the plurality
opinion discuss -- or even acknowledge -- this breach of Alaska's
particularized nexus requirement.
Because I see no substantial relation between the
specific means chosen by the legislature and the legitimate ends
it ostensibly sought to achieve, I would conclude that the
noneconomic damages cap violates Alaska's equal protection clause
-- even assuming that the plaintiffs' economic interests are so
unimportant as to qualify only for the lowest allowable level of
scrutiny under the Alaska Constitution.36
The Punitive Damages Forfeiture Statute Is Invalid.
I further believe that the plurality opinion fails to
make a persuasive case for upholding AS 09.17.020(j)'s punitive
damages forfeiture requirement.
Substantive Due Process
The plurality opinion accepts without any meaningful
analysis the state's position that the forfeiture statute is
minimally rational -- and thus passes muster under the
substantive due process requirement -- because it serves as a
general "deterrent to prevent future harm."37 But the state's
general deterrence goal fails to withstand even minimal, rational
basis scrutiny.
Of course nobody questions the truth of the general
proposition that punitive damages do in fact deter future public
harm. But this undisputed deterrent effect cannot itself justify
the challenged forfeiture provision, for an award of full
punitive damages to the plaintiff serves to deter future harm as
fully as an award that splits the punitive damages between the
state and the plaintiff. The legislature's mandate to award half
the jury's verdict to the state thus results in no greater
deterrence than awarding the entire verdict to the plaintiff.
(In fact, as discussed more fully below, the forfeiture provision
results in less deterrence by discouraging future punitive
damages claims.) Because the deterrent effect of punitive
damages flows from taking money away from wrongdoing defendants,
a statute designating who gets that money bears no logical
relation to the stated goal of enhanced deterrence.
The plurality's reliance on general deterrence of
public harm thus begs the key question: What legitimate
objective did the legislature have for replacing the existing
law, which achieved general deterrence by awarding full punitive
damages to the plaintiff, with a forfeiture provision that
achieved no greater deterrence but required the plaintiff to
surrender half the award to the state? The plurality opinion
offers no answer to this question. The legislature, however, did
suggest another objective as being legitimate: Its statement of
purposes in the 1997 tort reform act incorporates as a goal the
need to discourage frivolous claims.38 The state tacitly
espouses this goal by citing cases from other jurisdictions that
cite the discouragement of frivolous claims as a justification
for similar forfeiture statutes.39 But this goal fares even
worse under scrutiny than the goal of general deterrence.
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.
Alaska's Takings Clause
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 pluralitys 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 subsections 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 jurys 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.
CARPENETI, Justice, dissenting in part.
I agree with Justice Bryner that the 1997 tort reform
act's noneconomic damages cap and punitive damages forfeiture
provisions are unconstitutional. I write separately because I
would also hold that the limitations tolling procedure, as it
applies to minors under eight years of age, is unconstitutional.
Alaska Statute 09.10.070(a) states the general rule
that the limitations period for tort actions is two years.
Alaska Statute 09.10.140 provides that this period will be tolled
for minors until they reach the age of majority, which is
eighteen years of age.1 The parties dispute both the meaning and
constitutionality of AS 09.10.140.
1. AS 09.10.140 creates two classes of child personal injury
plaintiffs.
The court correctly sets out the parties' positions:
The plaintiffs contend that AS 09.10.140 treats two classes of
child personal injury plaintiffs differently, treating those
younger than eight years of age at the time of injury less
favorably than those older than eight years of age at the time of
injury. The plaintiffs claim that AS 09.10.070(a) and
09.10.140(c) together provide that the younger children have
until their tenth birthday to file a personal injury action,
while the older children are treated more favorably, since they
have until their twentieth birthday to file an action.
The state rejects this view, contending that the
tolling provisions of AS 09.10.140 only apply to children under
the age of eight at the time of injury. Therefore, in the
state's view, children over the age of eight at the time of
injury have two years after their injury in which to file suit,
like all other tort plaintiffs.
I agree with the court's observation in today's opinion
that
[w]hen interpreting the language of a
statute, we normally give unambiguous
language its plain meaning.112 We may also
rely on legislative history as a guide to
interpretation, "but the 'plainer the
language of a statute, the more convincing
contrary legislative history must be' to
interpret a statute in a contrary manner."113
[2]
______________________
112 See In re Johnstone, 2 P.3d 1226,
1231 (Alaska 2000).
113 Id. (quoting Ganz v. Alaska
Airlines, Inc., 963 P.2d 1015, 1019 (Alaska
1998)).
While today's opinion nowhere explicitly says so, it
flatly rejects the state's view. It is correct to do so, because
the state's interpretation is impossible to reconcile with the
unambiguous language of AS 09.10.140. Alaska Statute 09.10.140
creates a tolling provision for the two-year statute of
limitations in AS 09.10.070(a). Alaska Statute 09.10.140
contains a general rule and an exception. The general rule, in
AS 09.10.140(a), tolls the statute of limitations for all
children until they reach the age of majority, which is eighteen
years of age:
Except as provided under (c) of this section,
if a person entitled to bring an action
mentioned in this chapter is at the time the
cause of action accrues . . . under the age
of majority . . . the time of [the
plaintiff's minority] . . . is not a part of
the time limit for the commencement of the
action.
This general rule existed in former AS 09.10.140.3 Chapter 26,
SLA 1997 modified this tolling procedure with an exception to the
general rule, now codified in AS 09.10.140(c).4 As AS
09.10.140(a) states, the tolling for the plaintiffs minority
applies "except as provided under [AS 09.10.140](c)." Alaska
Statute 09.10.140(c) provides:
In an action for personal injury of a person
who was under the age of eight years at the
time of the injury, the time period before
the person's eighth birthday is not a part of
the time limit imposed under AS 09.10.070(a)
for commencing the civil action.
The unambiguous language of subsection (c) indicates that it
applies to personal injury plaintiffs who were "under the age of
eight years at the time of the injury," and creates a different
tolling rule for these plaintiffs. For those plaintiffs under
the age of eight at the time of injury, the statute of
limitations is only tolled until those plaintiffs reach the age
of eight. Therefore, AS 09.10.140 distinguishes between children
and creates two different classes of minor personal injury
plaintiffs: (i) those who were under the age of eight at the
time of injury; and (ii) those who were eight years old or older
at the time of injury. Children under the age of eight at the
time of injury have until their tenth birthday to file suit,
while children over the age of eight at the time of injury have
until their twentieth birthday, subject to the statute of
repose.5
2. The tolling provision in AS 09.10.140 violates equal
protection.
The plaintiffs contend that AS 09.10.140 violates equal
protection, because it creates two classes of child personal
injury plaintiffs who are treated differently.6
As noted earlier in the court's opinion,7 under our
equal protection test the relative importance of the plaintiff's
interest and the state's interest are weighed. If the
plaintiff's interest is not very important, the state need only
show that its objectives were "legitimate"; if the plaintiff's
interest is important, the state must show a "compelling" state
interest. If the state can meet this part of the test, to
satisfy the next part the state must show the required "nexus" or
"fit" between its regulations and its objectives. The required
nexus depends on the importance of the plaintiff's interest, and
a continuum of possibilities exists. If the plaintiff's interest
is not very important, this fit must be merely "a substantial
relationship between means and ends"; however, if the plaintiff's
interest is very important, the regulation must be the least
restrictive means available to achieve the objective.8
Alaska Statute 09.10.140 clearly fails the third part
of this analysis, because even if the plaintiffs' interests are
unimportant, and the state's interest is compelling, there is no
substantial relationship between AS 09.10.140 and the
legislature's goals. The state only offers one legislative goal
underlying AS 09.10.140 -- the state claims that the statute was
enacted "to provide finality and to protect the courts and
defendants from the difficulties and unfairness of litigating
stale claims." But as noted earlier, AS 09.10.140 treats two
classes of minors differently.
To take the most dramatic example, a personal injury
plaintiff who was injured one day before her eighth birthday has
only until her tenth birthday to file suit before her claim is
barred; however, a plaintiff who was injured one day after her
eighth birthday has ten years in which to file suit before the
claim is barred, and will be able to make the decision herself.
The state has not supplied any reasons for why these two classes
of children should be treated differently, and a review of the
legislative history reveals no discussion of any possible
rationale. The required nexus does not exist here, because the
differential treatment of these two groups of children has no
substantial relationship to the goal of "provid[ing] finality and
protect[ing] the courts and defendants from the difficulties and
unfairness of litigating stale claims."
While the state is unable to justify the disparate
treatment of children below eight years of age and those eight
and above at the time of injury, the court purports to find a
justification in the statute of repose, AS 09.10.055. But
reading the statute of repose in conjunction with section .140
creates two more classes of minors: those minors who are given
the opportunity to file suit themselves and those minors who must
rely on a parent or guardian to take action on their claims. The
court's opinion does not view this distinction among minors as
problematic and finds the line drawn in subsection .140 logical:
It serves to separate those children for whom the statute of
repose would block the child's ability to make the decision as an
adult from those who, because they were within ten years of
adulthood when injured, would be able to decide for themselves.
I would find the individual injured child's interests -
- the interest in being able to make the decision whether to sue
for oneself, as a competent adult -- to be quite important. I
would also find that the state has a legitimate interest in
minimizing stale claims. But even assuming that the plaintiffs'
interests here are unimportant, there is not a substantial
relationship between the classification of children and the
state's goals. The importance of being able to file suit on
one's own, rather than being forced to rely on a third-party --
parent or guardian -- is sufficient to justify tolling AS
09.10.070's limit for children above the age of eight. While
potential tortfeasors would be subject to a longer period in
which they may be subject to suit for children under eight, that
increased length would be, at most, eight years. There is no
justification offered by the state to support this
differentiation when the impact on children under the age of
eight is considered. Further, the court's suggestion that the
statute of repose furnishes a sufficient reason is unpersuasive.
It is unpersuasive for three reasons: First, this
classification works a perverse twist. Those children who are
unlikely to realize that they have a potential claim, the
youngest, are those that receive the least protection of the
laws. The closer a child is to reaching the age of majority, the
more likely that he or she is better able to understand the basic
workings of the legal system and any potential claims he or she
may have. By giving these older children more time to realize
their potential claims, but denying the same right to younger
children, today's decision compromises the rights of younger
children. At age eight, when the statute of limitations begins
running under the court's view, these children will have barely
graduated from their Big Wheels. Such a child is absolutely
dependent upon a parent or guardian to protect his or her rights.
Conversely, a fifteen- or sixteen-year-old, who may well have at
least an inkling of the need to sue to protect one's rights, has
additional years to consider the matter: the statute of
limitations will not begin to run until that child's eighteenth
birthday and will not expire until the twentieth. To deprive the
younger children of their claims while protecting the claims of
those children who are better able to understand their situation
and to articulate their thoughts creates an impermissible divide
within the group of injured children.
Second, today's decision utterly ignores what the law
has, in other respects, historically recognized: that children,
by definition, are in their formative years.9 If any group can
lay strong claim to the need for additional time to assess the
effects of physical, emotional, and other types of injury, surely
it is young children. Yet in consigning the youngest injured
children to a two-year limitations period, the court deprives
them and their parents or guardians of an important opportunity
to fully know the extent of the injured children's injuries.
Finally, in hypothesizing that the effect of the
statute of repose provides a justification for the disparate
treatment of injured children, the court ignores that the statute
of repose treats other persons under disability differently than
it treats children. Alaska Statute 09.10.140(a) tolls the
statute of limitations for both the disability of mental
incompetence and the disability of minority. But the statute of
repose, AS 09.10.055, provides only that the statute applies
"[n]otwithstanding the disability of minority described under AS
09.10.140(a),"10 making no mention of the disability of mental
incompetence. No reason appears why those people suffering from
a mental disability are not subject to the same statute of repose
as children under the age of eight are. This failure is
especially anomalous given that there is a definite time at which
children will be relieved of their disability whereas those
suffering from incompetency may never be relieved of their
disability. In these circumstances, the courts reliance on the
statute of repose to justify the disparate treatment of injured
children seems problematic.
For these reasons, I would find the tolling provision
for children, when read in conjunction with the statute of
repose, to be a deprivation of equal protection for injured
children under the age of eight and, therefore, unconstitutional.
_______________________________
1 See AS 09.17.010, .020; ch. 26, 9-10, SLA 1997.
2 See AS 09.17.020(j); ch. 26, 10, SLA 1997.
3 See AS 09.10.055; ch. 26, 5, SLA 1997.
4 See AS 09.17.140; ch. 26, 7-8, SLA 1997.
5 See AS 09.17.080; ch. 26, 11-13, SLA 1997.
6 See AS 09.30.065; ch. 26, 16-17, SLA 1997.
7 See AS 09.65.096; ch. 26, 30, SLA 1997.
8 See State v. Alaska Civil Liberties Union, 978 P.2d
597, 603 (Alaska 1999).
9 See Moore v. Allstate Ins. Co., 995 P.2d 231, 233
(Alaska 2000); Alaska Civil Rule 56(c).
10 See id.
11 See Alaska Civil Liberties Union, 978 P.2d at 603.
12 See ch. 26, 9, SLA 1997. The 1997 legislation revised
a previous $500,000 cap, created by the legislature in 1986. See
former AS 09.17.010 (1986). We never addressed the
constitutionality of the former $500,000 cap.
13 AS 09.17.010(a).
14 See AS 09.17.010(b).
15 AS 09.17.010(c).
16 See ch. 26, 10, SLA 1997.
17 