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 Indiana Legislature's authority.
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 Cheatham's name, her work location and phone number, her new husband's name, and her attorney's 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 court shall:
(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.
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.
Does the statute requiring that 75% of punitive damage awarded be paid to the state treasury constitutes a taking?
The highest appellate court found that civil plaintiffs had no absolute right to receive punitive damages, as they were a creature of the common law. The Indiana Legislature was free to create, modify, or abolish common law causes of action. Although the State paid no part of the attorney's fee, there was no State demand for the attorney's services. The attorney was not required to represent his client in the instant action if the attorney did not want to. No attorney could be compelled to pursue a punitive damage claim. There was no unconstitutional taking of 75 percent of the wife's punitive damages award because a lawyer and a client took the hand that the legislature dealt them, no more and no less. The statute did not require the attorney to provide services to the State without just compensation.