ATTORNEYS FOR APPELLANT
Thomas J. Lantz
David W. Paugh
David W. Stone
Indiana Trial Lawyers Association
ATTORNEYS FOR APPELLEE
Andrew M. Auersch
Timothy J. OConnor
ATTORNEYS FOR STATE OF INDIANA
Scott A. Kreider
David L. Steiner
James B. Martin
Deputy Attorneys General
John C. Trimble
Anthony M. Eleftheri
A. Richard M. Blaiklock
Insurance Institute of Indiana
SUPREME COURT OF INDIANA
DORIS CHEATHAM, )
Appellant (Plaintiff Below), ) Indiana Supreme Court
) Cause No. 40S01-0209-CV-471
) Indiana Court of Appeals
MICHAEL POHLE, ) Cause No. 40A01-0010-CV-329
Appellee (Defendant Below). )
APPEAL FROM THE JENNINGS SUPERIOR COURT
The Honorable Carl Taul, Special Judge
Cause No. 40D01-9803-CP-143
ON PETITION FOR TRANSFER
May 30, 2003
Indianas punitive damages allocation statute provides that an award of punitive damages is
to be paid to the clerk of the court, and the clerk is
to pay seventy-five percent of it to the States Violent Crime Victims Compensation
Fund and twenty-five percent to the plaintiff. We hold the statute does
not create an unconstitutional taking of property. Nor does it place a
demand on an attorneys particular services in violation of the Indiana Constitution.
Factual and Procedural Background
After Doris Cheatham and Michael Pohle divorced in 1994, Pohle retained photographs he
had taken of Cheatham in the nude as well as photos of the
two engaged in a consensual sexual act. In early 1998, Pohle made
photocopies of the photographs, added Cheathams name, her work location and phone number,
her new husbands name, and her attorneys name, and proceeded to distribute at
least sixty copies around the small community where both he and Cheatham still
lived and worked. Cheatham sued, alleging invasion of privacy and intentional infliction
of emotional distress, and the jury awarded her $100,000 in compensatory damages and
$100,000 in punitive damages.
Indiana Code section 34-51-3-6, enacted in 1995, provides:
(a) Except as provided in IC 13-25-4-10, when a judgment that includes a
punitive damage award is entered in a civil action, the party against whom
the judgment was entered shall pay the punitive damage award to the clerk
of the court where the action is pending.
(b) Upon receiving the payment described in subsection (a), the clerk of the
(1) pay the person to whom punitive damages were awarded twenty-five percent (25%)
of the punitive damage award; and
(2) pay the remaining seventy-five percent (75%) of the punitive damage award to
the treasurer of state, who shall deposit the funds into the violent crime
victims compensation fund established by IC 5-2-6.1-40.
Ind. Code § 34-51-3-6 (1998).
I. Punitive Damages in Indiana
Although Cheatham did not raise any constitutional issue in the trial court, she
appealed the judgment on two grounds. She argues that the statute violates
the Takings Clauses found in both the Indiana Constitution and the Fifth Amendment
of the United States Constitution. She also contends that the statute demands
an attorneys particular services without just compensation in violation of Article I, Section
21 of the Indiana Constitution and that the statute imposes a tax upon
her and her attorney in violation of Article X, Section 1 of the
Pohle cross-appealed, arguing that Indiana does not recognize the tort of Public Disclosure
of Private Facts, and that the trial court erred when it allowed the
jury to return a punitive damages award without instructing it to consider Pohles
The Court of Appeals addressed the merits of Cheathams claims and found that
there was no taking in violation of the Fifth Amendment, but concluded that
the statute violates Article I, Section 21 of the Indiana Constitution by placing
a demand on an attorneys particular services without just compensation. Cheatham v.
Pohle, 764 N.E.2d 272, 277 (Ind. Ct. App. 2002). The Court of
Appeals rejected Pohles cross-appeal on the ground that the issues were first raised
in a post-trial motion to correct error, and were not preserved for appeal.
Id. at 274-75, n. 1. After the Court of Appeals decision,
the State filed a motion to intervene, requested party status, and tendered a
petition for rehearing. The Court of Appeals granted the motion to intervene,
but denied rehearing. Cheatham v. Pohle, 2002 Ind. App. LEXIS 1110 (May
28, 2002). We granted the States petition to transfer.
We summarily affirm the Court of Appeals holding that Pohle preserved no issue
for appeal. The only remaining issues are Cheathams challenges to the constitutionality
of the punitive damages allocation statute. These present only questions of law.
In assessing the claim that the allocation statute takes property without just compensation,
it is essential to understand the nature of a claim for punitive damages.
The purpose of punitive damages is not to make the plaintiff whole
or to attempt to value the injuries of the plaintiff. Rather, punitive
damages, sometimes designated private fines or exemplary damages, have historically been viewed as
designed to deter and punish wrongful activity. As such, they are quasi-criminal
in nature. Cacdac v. West, 705 N.E.2d 506, 510 (Ind. Ct. App.
1999) (punitive damages may be awarded upon a showing of a
of mind or willful and wanton misconduct); Mitchell v. Stevenson, 677 N.E.2d 551,
564 (Ind. Ct. App. 1997); see also Smith v. Wade, 461 U.S. 30,
59 (1983) (Rehnquist, J., dissenting) (citing Huber v. Teuber, 10 D.C. 484, 490
(1877)); Felix Forte, Joinder of Civil and Criminal Relief in Indiana, 7 Notre
Dame Law. 499, 501 (1932).
As a matter of federal law, state legislatures have broad discretion in authorizing
and limiting the award of punitive damages, just as they do in fashioning
criminal sanctions. BMW of N. Am. Inc. v. Gore, 517 U.S. 559,
568 (1996). Victims in a criminal case have no claim to benefit
from criminal sanctions. United States v. Newman, 144 F.3d 531, 538 (7th
Cir. 1998) (criminal law imposes punishment on behalf of all of society, but
equitable payments of restitution inure only to specific victims of criminal conduct and
do not possess a similarly punitive character); Charlton T. Howard III, Note: Booth
v. Maryland Death Knell for the Victim Impact Statement?, 47 Md. L.
Rev. 701, 738, n. 93 (1988) (the purpose of criminal punishment is to
of society as a whole, not the individual
Tison v. Arizona, 481 U.S. 137, 149 (1987))
Linda Curtis, Damage Measurements for
Bad Faith Breach of Contract: An Economic Analysis, 39 Stan. L. Rev. 161,
178 (1986) (for punishment and deterrence purposes,
are more appropriate since
they cannot provide a windfall to victims). For the same reason, it
has been consistently held that civil plaintiffs have no right to receive punitive
damages. Durham v. U-Haul Intl, 745 N.E.2d 755, 762 (Ind. 2001); Reed
v. Central Soya Co., 621 N.E.2d 1069, 1076 (Ind. 1993); Travelers Indem. Co.
v. Armstrong, 442 N.E.2d 349, 362-63 (Ind. 1982); Indiana & Michigan Electric Co.
v. Terre Haute Industries, Inc., 507 N.E.2d 588, 611-12 (Ind. Ct. App. 1987);
Miller Pipeline Corp. v. Broeker, 460 N.E.2d 177, 185 (Ind. Ct. App. 1984);
Farm Bureau Mut. Ins. Co. v. Dercach, 450 N.E.2d 537, 541 (Ind. Ct.
To the extent punitive damages are recoverable, they are a creature of the
common law. Forte v. Connerwood Healthcare, Inc., 745 N.E.2d 796, 800 (Ind.
2001); Forte, 7 Notre Dame Law. at 501. As we have repeatedly
held in other contexts, the legislature is free to create, modify, or abolish
common law causes of action. McIntosh v. Melroe, 729 N.E.2d 972, 977
(Ind. 2000); Martin v. Richey, 711 N.E.2d 1273, 1283 (Ind. 1999). And,
as a matter of federal constitutional law, no person has a vested interest
or property right in any rule of common law. Munn v. Illinois, 94
U.S. 113, 134 (1876). As a result, the General Assembly is free
to eliminate punitive damages completely, as other states have done, and also has
wide discretion in modifying this quasi-criminal sanction. Indeed, several jurisdictions have chosen
not to recognize punitive damages as an acceptable award in any form.
Indiana, like several other states, has chosen an intermediate groundpermitting juries to award
punitive damages and thereby inflict punishment on the defendant, but placing restrictions on
the amount the plaintiff may benefit from the award. The facts warranting
punitive damages must be established by clear and convincing evidence. Ind. Code
§ 34-51-3-2 (1998). Whether punitive damages may be awarded is usually a
question of fact.
Reed, 621 N.E.2d at 1076.
In sum, Indiana law recognizes a right to assert a claim to be
compensated for a cognizable wrong and to recover on that claim to the
extent the law allows. But a number of consequences flow from the
fundamentally different nature of a claim to punitive damages. The financial condition
of the defendant is relevant, Hibschman Pontiac, Inc. v. Batchelor, 266 Ind. 310,
317, 362 N.E. 845, 849 (1977), which it would not be if the
goal were to compensate the plaintiff, as opposed to deterring or punishing the
See footnote Proof is required by a clear and convincing standard rather
than a preponderance of the evidence standard. I.C. § 34-51-3-2 (1998).
For our purposes, the essential point is that because punitive damages do not
compensate the plaintiff, the plaintiff has no right or entitlement to an award
of punitive damages in any amount. Unlike a claim for compensatory damages,
the trier of fact is not required to award punitive damages even if
the facts that might justify an award are found.See footnote
Hibschman Pontiac, Inc.,
266 Ind. at 317, 362 N.E. at 849.
II. Claims Under State and Federal Taking Clauses
Article I, Section 21 of the Indiana Constitution includes a prohibition against the
taking of property without just compensation. The Fifth Amendment to the United
States Constitution includes the same proscription, and applies to the states through the
Fourteenth Amendment. Chicago Burlington & Quincy RR. Co. v. Chicago, 166 U.S.
226, 238-39 (1897). This Court ordinarily resolves questions that arise under the
Indiana Constitution by examining the language of the text in the context of
the history surrounding its drafting and ratification, the purpose and structure of our
constitution, and case law interpreting the specific provisions. Richardson v. State, 717
N.E.2d 32, 38 (Ind. 1999) (quoting Ind. Gaming Commn v. Moseley, 643 N.E.2d
296, 298 (Ind. 1994)). We look initially to the language of the
Constitution. McIntosh, 729 N.E.2d at 983. Insofar as the Takings Clauses
are concerned, the federal and state constitutions are textually indistinguishable. The federal
Takings Clause of the Fifth Amendment reads nor shall private property be taken
for public use, without just compensation, and the Article I, Section 21 of
the state constitution reads no persons property shall be taken by law, without
just compensation. There are subjects, notably double jeopardy and search and seizure,
where the two constitutions have similar or identical language but have received different
treatment by the courts.
Here, however, there is no difference in the
terms taken or property found in both constitutions, and the courts have treated
these issues as identical. B & M Coal Corporation v. United Mine
Workers of America, 501 N.E.2d 401, 406 (Ind. 1986) (deciding, under both Article
I, Section 21 and the Fifth Amendment simultaneously, that a taking had occurred).
Accordingly, the following discussion addresses both the state and federal Takings Clauses.
Both Article I, Section 21 of the Indiana Constitution and the federal Takings
Clause provide that no persons property shall be taken by law, without just
compensation. Only property is protected from taking under either clause. It
has long been recognized that an accrued cause of action may be a
property right. Dague v. Piper Aircraft Corp., 275 Ind. 520, 529, 418
N.E.2d 207, 213 (Ind. 1981); Gnerlich v. Gnerlich, 538 N.E.2d 285, 288 (Ind.
Ct. App. 1989). If the law recognizes a wrong, an injured person
has the right to be compensated for an injury. But it is
equally well settled in Indiana and elsewhere that no one has a right
to recover punitive damages, however outrageous the conduct of the offender. Durham
v. U-Haul Intl, 745 N.E.2d 755, 764 (Ind. 2001); Orkin Exterminating Co. v.
Traina, 486 N.E.2d 1019, 1022 (Ind. 1986); see also Gordon v. State, 608
So.2d 800, 801 (Fla. 1992); State v. Moseley, 436 S.E.2d 632, 634 (Ga.
1993); Shepherd Components, Inc. v. Brice Petrides-Donohue & Assoc., Inc., 473 N.W.2d 612,
619 (Iowa 1991).
Specifically, any interest the plaintiff has in a punitive damages award is a
creation of state law. The plaintiff has no property to be taken
except to the extent state law creates a property right. Board of
Regents v. Roth, 408 U.S. 564, 577 (1972). The Indiana legislature has
chosen to define the plaintiffs interest in a punitive damages award as only
twenty-five percent of any award, and the remainder is to go to the
Violent Crime Victims Compensation Fund. The award to the Fund is not
the property of the plaintiff. Nor is her prejudgment claim a property
interest. Rather, the claim she had before satisfaction was, pursuant to statute,
a claim to only one fourth of any award of punitive damages.
As a result, there is no taking of any property by the statutory
directive that the clerk transfer a percentage of the punitive damages award to
A claim for punitive damages can be sustained only if it is accompanied
by a viable claim for compensatory damages. Sullivan v. Am. Cas. Co.,
605 N.E.2d 134, 140 (Ind. 1992); Allstate Ins. Co. v. Axsom, 696 N.E.2d
482, 485 (Ind. Ct. App. 1998); Bright v. Kuehl, 650 N.E.2d 311, 317
(Ind. Ct. App. 1995). Cheatham thus claims that an award for punitive
damages is connected to a claim for actual damages. From this, Cheatham
reasons that because she has a right to compensatory damages, she must have
a right to punitive damages as well. This confuses necessary preconditions with
sufficient ones. To be sure, a claim for compensatory damages is a
prerequisite to a claim for punitive damages, but it does not follow that
it is adequate to confer a right to that claim.
Several states have statutes that allocate punitive damages to the state in some
form similar to the Indiana version. BMW of N. Am., Inc., 517
U.S. at 616, App. to Opinion of Ginsburg, J. (Ginsburg, J., dissenting); Charles
F.G. Parkinson, Note: A Shift in the Windfall: An Analysis of Indianas Punitive
Damages Allocation Statute and the Recovery of Attorneys Fees Under the Particular Services
Clause, 32 Val. U. L. Rev. 923, 928 (1998). Of the state
courts that have addressed the issue, only the Colorado Supreme Court has found
an unconstitutional taking of property, while statutes in Alaska, Oregon, Georgia, Florida and
Iowa have been upheld.
Evans v. State, 56 P.3d 1046, 1058 (Alaska 2002), held that Alaska Statute
section 09.17.020(j) (2002), which allocates fifty percent of a punitive damages award to
the state general fund, does not effect a taking because it amounts to
a cap on the amount of punitive damages that may be awarded before
any award is rendered to a plaintiff. The Alaska Supreme Court determined
that such a cap is consistent with the legislatures power to limit or
abolish punitive damages. In DeMendoza v. Huffman, 51 P.3d 1232, 1247 (Or.
2002), the Oregon Supreme Court found that Oregon Revised Statute section 18.540 (2001),
which allocates sixty percent of punitive damages awards to the state, also does
not effect a taking because a party has no prejudgment property interest in
a punitive damages award. Mack Trucks v. Conkle, 436 S.E.2d 635, 639
(1993), also found that Georgia Code Annotated section 52-12-5.1(e)(2) (1989), allocating seventy-five percent
of punitive damages in a product liability case to the state, does not
amount to a taking because the societal interest in deterrence of wrongful conduct
is better served this way and the benefit belongs to society as a
whole. In Gordon v. State and State v. Moseley, the Florida and
Georgia Supreme Courts both found as we do that there is no vested
property right in an award of punitive damages. The Florida court found
Florida Statute Annotated section 768.73(2)(b) (Supp. 1986) to be constitutional. Gordon, 608
So.2d at 802. It also upheld subsection 768.73(4), providing that attorneys fees,
if payable from the judgment, shall, to the extent that they are based
on the punitive damages, be calculated based only on the portion of the
judgment payable to the claimant. Id. In Shepherd Components, the Iowa
Supreme Court held that under Iowa Code section 668.1(2)(b) (1989), there is no
vested right to an award of punitive damages. Id. at 619.
Cheatham relies on Kirk v. Denver Pub. Co., 818 P.2d 262 (Colo. 1991),
for the proposition that the statutory requirement that a portion of the punitive
damages judgment be paid to the state victims fund constitutes an unconstitutional taking.
We do not agree with the rationale in Kirk, and also conclude
that the Colorado statute addressed in that case is materially different from the
Indiana version. The Colorado statute required that the plaintiff, after having received
the full judgment from the defendant, pay thirty percent of the proceeds into
a general state fund. Id. at 263. The statute at issue
in Kirk thus purported to vest the states interest in the award only
after the judgment had been paid to the plaintiff. Id. at 266.
The Colorado Supreme Court took the view that the state therefore had
no interest in the award before it was paid to the plaintiff and
the award became vested property of the plaintiff. The effect of the
statute was thus viewed as a taking of property received by the plaintiff.
To avoid this issue, the Indiana statute provides that the defendant pays
the entire amount of the punitive damages award to the clerk of the
court who then distributes twenty-five percent of the award to the plaintiff.
Until this occurs, the plaintiff receives nothing from the judgment of punitive damages.
We also disagree with the underlying rationale of Kirk, which cited Webbs Fabulous
Pharmacies, Inc. v. Beckwith, 449 U.S. 155 (1980), for its conclusion that the
Colorado statute amounted to a taking of the plaintiffs private property. In
Beckwith, the U.S. Supreme Court held that because interest earned on an interpleader
fund was incidental to the claimants ownership in that account, the government could
not deprive the claimant of that interest without initiating an unconstitutional taking in
violation of the Fifth Amendment. Id. at 162. The case stands
for the proposition that the right to receive interest on ones property is
ones property. But for the reasons already discussed, under either the federal
or the Indiana Takings Clause, there is no property right in a claim
for punitive damages. Rather, consistent with their punitive nature, punitive damages are
akin to a fine exacted by the government of Indiana to deter and
punish wrongdoers. Requiring payment of this fine to a victim compensation fund
rather than awarding it to a private citizen is well within the state
Finally, Cheatham contends that the statute has the following deficiencies and therefore constitutes
a taking for four different reasons:
(1) the statute does not expressly address the issue of whether or how
a punitive damages award may be compromised;
(2) it does not address how payments of a judgment in installments are
to be allocated between compensatory and punitive damages;
(3) it does not address whether the plaintiff is the only mechanism to
enforce a judgment, and if that occurs, whether or how the plaintiff is
to be compensated; and,
(4) it encourages an attorney to break obligations to the client by reducing
the fee incentive.
The first three of these are answered by the absence of any property
right in the judgment. If there is none, there is no unconstitutional
taking, irrespective of the resolution of these other issues. The last contention
presents no issue of substance. Many legal doctrines serve to reduce the
potential recovery by a civil plaintiff. The lawyer and the client get
to play the hand the legislature deals them, no more and no less.
If the claim is for compensatory damages plus one fourth of any
punitive damages award, the fee agreement and the expectations of both lawyer and
client must adjust accordingly.
III. Uniform and Equal Taxation
Cheatham argues that the statute imposes a tax on her and her attorney
in violation of Article X, Section 1 of the Indiana Constitution. We
disagree. Article X, Section 1 provides: The General Assembly shall provide, by
law, for a uniform and equal rate of property assessment and taxation and
shall prescribe regulations to secure a just valuation for taxation of all property,
both real and personal. Only the taxation of property is governed by
this constitutional provision. For the reasons stated above, Cheatham has no property
interest in the punitive damages award. If Cheatham has no interest, whatever
claim her attorney has to be compensated by her is a matter of
contract between her and the attorney. The law defines the interest Cheatham
had, and her attorneys rights can be no greater than hers. We
find no serious Article X, Section 1 issue presented by section 34-51-3-6.
IV. Demand on Particular Services
Unlike the Fifth Amendment, in addition to its Takings Clause, Article I, Section
21 of the Indiana Constitution also provides that no persons particular services
shall be demanded, without just compensation. This provision applies only if both
a persons particular services are rendered and they have been demanded by the
State. Cheatham contends that the effect of the statute is to demand
her attorneys particular services without just compensation in violation of this provision.
We agree that the attorneys services are particular as that term appears in
the Indiana Constitution. Bayh v. Sonnenburg, 573 N.E.2d 398 (Ind. 1991), provided
us with the following test to determine whether there has been a state
demand of particular services: (1) particular services were performed, (2) on the States
demand, (3) without just compensation. Id. at 411. There is no
dispute that attorneys services may be particular services within the meaning of this
provision. Sholes v. Sholes, 760 N.E.2d 156, 162 (Ind. 2001); Webb v.
Baird, 6 Ind. 13 (1854). To be considered particular, services must be
(1) historically compensated, and (2) something required of a party as an individual,
as opposed to something required generally of all citizens. Bayh, 573 N.E.2d
at 415-16. An attorneys services in a specific lawsuit meet that standard.
Sholes, 760 N.E.2d at 162-63. But we find no demand in
this arrangement. Cheatham engaged her attorney and the attorney agreed to represent
her, all with no state intervention of any kind. In order for
there to be a state demand on a persons particular services, there must
be the threatened use of physical force or legal process that leads that
person to believe that they have no choice but to submit to the
will of the State. Bayh, 573 N.E.2d at 417. Here the
attorney was free to accept or reject representing Cheatham on whatever terms the
two would agree.
There is no express or implied requirement in the statute that any attorney
represent any specific plaintiff. Nor does Cheatham have a right to an
attorney in any case where punitive damages may arise. Sholes, 760 N.E.2d
at 165. And no attorney may be compelled to represent a plaintiff
to pursue punitive damages without compensation. Id. at 164. Nor is
there any requirement that attorneys represent clients without receiving a fee. The
statute limits the amount of the clients recovery. If the parties have
a contingent fee contract that operates as a percentage of all amounts recovered
by the plaintiff, it may serve to reduce the amount on which the
attorney calculates the fee. But that presents no constitutional issue. In
the first place, any effect of the statute on the fee is attributable
to the fact that Cheatham and her attorney agreed to that arrangement.
Second, even if, as a practical matter, a fee based on a percentage
of all recovery is the only available arrangement, the statute places no demand
on the attorneys services.
In Gorka v. Sullivan, 671 N.E.2d 122 (Ind. Ct. App. 1996), the Court
of Appeals held that there was no state demand on the services of
transportation carriers. In that case, the State requested the services of transportation
carriers and offered them a contract outlining the fees they would receive for
transporting Medicaid recipients. Id. at 131. The court held that the
offering of the contract did not constitute a demand of the carriers services,
but was instead a request that the carriers had the option to accept
or deny, so there was no unconstitutional demand. Id. The same
is true here. Indiana Code section 34-51-3-6 is merely a limitation on
the amount of recovery from a punitive damages award permitted to a plaintiff.
If the decision is made to pursue punitive damages, attorneys and their
clients do so with the statutory framework in place to restrain the value
to them of any recovery. The statute makes no mention of attorneys
or attorneys fees and there is no implication that attorneys services to anyone
have been demanded or requested by this statute.
In sum, section 34-51-3-6 became effective in 1995. Cheatham and her attorney
had notice of this statute when the suit against Pohle was filed in
1998. The attorneys fees were subject to that obstacle just like all
other potential barriers to success in a contingent fee contract.
Section 34-51-3-6 does not exact a taking of private property or place a
demand on any attorney to undertake any representation. As a result, any
judgment for an amount awarded as punitive damages is subject to the allocation
required by section 34-51-3-6. The judgment of the trial court is affirmed.
SHEPARD, C.J., and SULLIVAN, J., concur. DICKSON, J., dissents with separate opinion,
in which RUCKER, J., concurs.
DICKSON, J., dissenting.
The punitive damages scheme enacted in 1995 sought to modify Indiana's common law
regarding punitive damages by capping the maximum amount of a punitive damage award
at three times the amount of compensatory damages or $50,000, whichever is greater,
and by requiring seventy-five percent of the final award to be allocated for
use by the Violent Crime Victims' Compensation Fund. Ind. Code §§ 34-51-3-5,
-6. To facilitate these objectives, this scheme requires that the statutory cap
and allocation be concealed from every jury considering a claim for punitive damages.
I.C. § 34-51-3-3. There is no statutory requirement that the state
pay any legal fees related to its share of the punitive damage award.
In declaring that the allocation required by Indiana Code § 34-51-3-6 does not
constitute a taking of private property in violation of the Takings Clauses of
our federal and state constitutions, the majority relies primarily upon its contention that
punitive damage plaintiffs have no property right in a judgment awarding punitive damages.
I disagree. A person's property interest in a judgment vests upon
the entry of that judgment by the trial court, not upon the eventual
payment of the judgment by the judgment debtor.
A judgment is a court's "final determination of the rights and obligations of
the parties in a case." Black's Law Dictionary 846 (7th ed. 1999).
A judgment for money is property. Wilson v. Brookshire, 126 Ind.
497, 506, 25 N.E. 131, 134 (1890); Haynes v. Contat, 643 N.E.2d 941,
943 (Ind. Ct. App. 1994); Browning v. Walters, 616 N.E.2d 1040, 1047 (Ind.
Ct. App. 1993). I agree with the majority that a plaintiff's prejudgment
claim of punitive damages is not a property interest, but I contend that
it becomes a vested property interest upon the entry of a final judgment.
The constitutional limitations upon the power of the legislature to interfere with
rights established by a judgment have long been protected:
It is not within the power of a legislature to take away rights
[that] have been once vested by a judgment. Legislation may act on
subsequent proceedings, may abate actions pending, but when those actions have passed into
judgment the power of the legislature to disturb the rights created thereby ceases.
McCullough v. Virginia, 172 U.S. 102, 123-24, 19 S.Ct. 134, 142, 43 L.Ed.
382, 390 (1898).
At the conclusion of the trial in this case, the jury here returned
a verdict in favor of Doris Cheatham awarding her $100,000 in compensatory damages
and $100,000 in punitive damages. The trial court thereafter entered judgment "in
favor of the Plaintiff Doris Cheatham and against the Defendant Michael Pohle in
the amount of Two Hundred Thousand ($200,000.00) Dollars." Record at 88.
Upon this entry by the trial court, the judgment became the property of
Doris Cheatham. I am convinced that Indiana's statutory punitive damage scheme, which
attempts thereafter to confiscate this property at the point the judgment is paid,
inescapably violates the Takings Clauses in both the Fifth Amendment to the United
States Constitution ("nor shall private property be taken for public use, without just
compensation") and Article 1, Section 21, of the Indiana Constitution ("No person's property
shall be taken by law").
Because I disagree with the majority's belief that Cheatham's judgment is not property,
I likewise reject its resulting conclusion that the Indiana punitive damage statute does
not violate the Uniform and Equal Taxation Clause, Article 10, Section 1 of
the Indiana Constitution. With respect to the Cheatham's claim that the statutory
scheme violates Article 1, Section 21, of the Indiana Constitution, which prohibits the
State from demanding the particular services of her attorney without just compensation, I
agree and would adopt the analysis and conclusions of Judges Najam, Sharpnack, and
Riley of our Court of Appeals. Cheatham v. Pohle, 764 N.E.2d 272,
277-81 (Ind. Ct. App. 2002).
RUCKER, J., concurs.
In Nebraska punitive damages are constitutionally prohibited. Distinctive Printing and Packaging
Co. v. Cox, 443 N.W.2d 566, 574 (Neb. 1989). In Louisiana, Massachusetts,
New Hampshire, and Washington, punitive damages are permitted only if expressly authorized by
statute. La. Civ. Code Ann. art. 2315 (West 1997); Billiot v. BP
Oil Co., 617 So. 2d. 28, 29-30 (La. Ct. App. 1993); Mass. Gen.
Laws Ann. ch. 106, § 1-106 (West 1998); N.H. Rev. Stat. Ann. §
507:16 (1986); Wash. Rev. Code Ann. § 64.34.100(1) (West 1994).
Taber v. Hutson, 5 Ind. 322, 324-25 (1854), originally took the view
that the jury may not consider the wealth of the defendant, but this
is not the case in recent times. State Farm Auto. Ins. Co.
v. Campbell, No. 01-1289, slip op. at 17 (Apr. 7, 2003).
Consistent with the view that punitive damages are quasi-criminal in nature, punitive
damages in Indiana were long viewed as imposing impermissible double jeopardy. Eddy
v. McGinnis, 523 N.E.2d 737, 740 (Ind. 1988) (citing Taber, 5 Ind. at
325); Koerner v. Oberly, 56 Ind. 284, 286-87 (Ind. 1877)); Gosnell v. Indiana
Soft Water Serv., Inc., 503 N.E.2d 879, 880 (Ind. 1987). This common
law doctrine was changed by statute in 1984. I. C. § 34-24-3-3
See Richardson v. State, 717 N.E.2d 32 (Ind. 1999) (double jeopardy); Brown
v. State, 653 N.E.2d 77 (Ind. 1995) (search and seizure).