We recently came across a post on a Bricker & Eckler blog, about a recent Ohio Supreme Court case, Havel v. Villa St. Joseph, 963 N.E.2d 1270 (Ohio 2012), upholding the constitutionality of an Ohio statute imposing mandatory bifurcation in punitive damages cases. Havel held, after considerable back and forth:
"[The statute] does not violate the Ohio Constitution and is constitutional because it is a substantive law that prevails over a procedural rule. Inherent in our conclusion is rejection of the argument that dicta contained in Sheward [an infamous anti-tort reform decision], which described the former version of [the statute] as governing a procedural matter. . . . Sheward never considered the bifurcation question we confront in this case. Thus, we are not required to follow out-of-context dicta as precedent."
Havel, 963 N.E.2d 1279 (quoting and following Arbino v. Johnson & Johnson, 880 N.E.2d 420, 443 (2007)). That’s an excellent result, but by addressing the issue in this way the Court did not have to pass on a more fundamental question that we’ve been pondering, which is whether a plaintiff has any constitutional right punitive damages in the first place.
In that regard, the Bricker post helped us out. In discussing Havel, it mentioned that “Ohio’s caps on punitive damages have been upheld as constitutional (in Arbino v. Johnson & Johnson).” There’s that decision again. Arbino seemed like a pretty good place to start looking for an answer to the basic constitutional question, so we took a look. Sure enough, Arbino turned out to be a recent example of what we’ve now come to conclude is a virtually universal rule that, until a judgment in an individual case is actually entered, there is no “vested right” to pursue a claim for punitive damages. Nor for that matter is elimination of a punitive damages remedy a “taking.” Basically, punitive damages are a form of punishment, not compensation, to which no constitutional right attaches. As the Ohio Supreme Court stated in Arbino:
"[R]egulation of punitive damages is discretionary and that states may regulate and limit them as a matter of law without violating the right to a trial by jury. . . . [P]unitive damages are not compensation for injury. Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence. The purpose of punitive damages is not to compensate a plaintiff, but to punish and deter certain conduct."
880 N.E.2d at 441 (citations and quotation marks omitted).
As it turned out, Arbino is hardly alone. Here’s what some other state supreme courts have said on the issue:
Indiana:
"[A] party has no prejudgment property interest in a punitive damages award. . . . [T]here is no vested property right in an award of punitive damages. . . . [U]nder either the federal or the [state constitution] 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 . . . to deter and punish wrongdoers."
Cheatham v. Pohle, 789 N.E.2d 467, 474 (Ind. 2003) (citations and quotation marks omitted).
Oregon:
"[A] plaintiff has no right or entitlement to punitive damages as a remedy . . . and, as a result, the jury has complete discretion not to award punitive damages, even if a plaintiff successfully proves all elements of a claim. Consequently, before entry of a final judgment, a plaintiff . . . always has had, at most, an expectation of such an award. . . . A vested right must be something more than a mere expectation based upon the anticipated continuance of existing laws; it must have become a title legal or equitable to the present or future enjoyment of property. We therefore hold that...
