Synopsis of Rule of Law. A plaintiff has no right or entitlement to an award of punitive damages, because punitive damages awards are creatures of the common law and states have wide discretion in modifying or eliminating them as no person has an interest or property right in any rule of common law.
Issue. Â Whether the statute requiring that 75% of any punitive damage award be paid to the state treasury constitutes a taking within the meaning of the 5th Amendment and of the US Constitution and/or violates the Indiana State Constitution?
No, punitive damages are a windfall to the plaintiff and not a property right.
Discussion. Given that the purpose of a punitive damage award is to deter and punish wrongful activity, and is not an attempt to value the injuries of plaintiff or make the plaintiff whole, civil plaintiffs is not entitled to receive punitive damages. Unlike compensatory damages, a trier of fact is not required to award punitive damages, regardless of whether such award is merited. A plaintiff’s interest in a punitive damages award is strictly a creation of state law, and a plaintiff would have no property to be taken except to the extent that state law creates a right in property.
Here, Indiana chose to define the property right as 25% of any punitive damage award, and so there is no taking of any property by virtue of the provision mandating a transfer of a percentage of the award to the violent crimes fund.
Most states find that allocating punitive damages does not constitute a taking, but the court notes that the Colorado Supreme Court has found an unconstitutional taking of property.