Ruling limits State’s power in punitive damages

Ruling limits State’s power in punitive damages
By Ater Wynne,
Oregon Law Firm,

Oregon Supreme Court limits State’s power to share in punitive damages verdict
The Oregon Supreme Court today curtailed Oregon’s “split recovery” law, in a case in which Ater Wynne successfully represented the plaintiff

Since 1987, Oregon has had a “split recovery” statute that requires part of any punitive damage award to be paid to the State’s crime victim compensation fund. Currently, ORS 31.735 provides that the State is a “judgment creditor” as to 60 percent of a punitive damages “verdict.” Oregon Supreme Court concluded that the State can’t prevent the plaintiff and defendant from entering into a settlement that reduces or eliminates the State’s share, if that settlement occurs after the verdict and before entry of a judgment.

In Patton v. Target Corp., the jury awarded compensatory and punitive damages to plaintiff in an employment discrimination case in federal court. The plaintiff and defendant then entered into a settlement that did not include payment to the State, and at the parties’ request the trial court entered a judgment of dismissal. The State intervened, seeking to undo the settlement and dismissal. The trial court refused the State’s request, and the case was appealed to the Ninth Circuit, which certified the issue of state law to the Oregon Supreme Court. The Supreme Court held that the State as a “judgment creditor” has no enforceable interest in a verdict and cannot veto a settlement that occurs before judgment.

Ater Wynne attorney and Northwest Litigation Blog editor Lori Irish Bauman handled the appeal for plaintiff. See our earlier coverage of Oregon’s split recovery statute here.

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