2015 ORS 31.735¹
Distribution of punitive damages
  • notice to Department of Justice
  • order of application

(1) Upon the entry of a verdict including an award of punitive damages, the Department of Justice becomes a judgment creditor as to the amounts payable under paragraphs (b) and (c) of this section, and the punitive damage portion of an award shall be allocated as follows:

(a) Thirty percent is payable to the prevailing party. The attorney for the prevailing party shall be paid out of the amount allocated under this paragraph, in the amount agreed upon between the attorney and the prevailing party. However, in no event may more than 20 percent of the amount awarded as punitive damages be paid to the attorney for the prevailing party.

(b) Sixty percent is payable to the Attorney General for deposit in the Criminal Injuries Compensation Account of the Department of Justice Crime Victims’ Assistance Section, and may be used only for the purposes set forth in ORS chapter 147. However, if the prevailing party is a public entity, the amount otherwise payable to the Criminal Injuries Compensation Account shall be paid to the general fund of the public entity.

(c) Ten percent is payable to the Attorney General for deposit in the State Court Facilities and Security Account established under ORS 1.178 (State Court Facilities and Security Account), and may be used only for the purposes specified in ORS 1.178 (State Court Facilities and Security Account) (2)(d).

(2) The party preparing the proposed judgment shall assure that the judgment identifies the judgment creditors specified in subsection (1) of this section.

(3) Upon the entry of a verdict including an award of punitive damages, the prevailing party shall provide notice of the verdict to the Department of Justice. In addition, upon entry of a judgment based on a verdict that includes an award of punitive damages, the prevailing party shall provide notice of the judgment to the Department of Justice. The notices required under this subsection must be in writing and must be delivered to the Department of Justice Crime Victims’ Assistance Section in Salem, Oregon within five days after the entry of the verdict or judgment.

(4) Whenever a judgment includes both compensatory and punitive damages, any payment on the judgment by or on behalf of any defendant, whether voluntary or by execution or otherwise, shall be applied first to compensatory damages, costs and court-awarded attorney fees awarded against that defendant and then to punitive damages awarded against that defendant unless all affected parties, including the Department of Justice, expressly agree otherwise, or unless that application is contrary to the express terms of the judgment.

(5) Whenever any judgment creditor of a judgment which includes punitive damages governed by this section receives any payment on the judgment by or on behalf of any defendant, the judgment creditor receiving the payment shall notify the attorney for the other judgment creditors and all sums collected shall be applied as required by subsections (1) and (4) of this section, unless all affected parties, including the Department of Justice, expressly agree otherwise, or unless that application is contrary to the express terms of the judgment. [Formerly 18.540; 2011 c.597 §311; 2011 c.689 §1]

Note: Section 3, chapter 689, Oregon Laws 2011, provides:

Sec. 3. The amendments to ORS 31.735 (Distribution of punitive damages) by section 1 of this 2011 Act apply only to causes of action that arise on or after the effective date of this 2011 Act [August 2, 2011]. [2011 c.689 §3]

(formerly 18.540)

Notes of Decisions

Jury instruc­tion based on this sec­tion which told jury that award of punitive damages would be distributed among prevailing party and their attorney and Criminal Injuries Compensa­tion Account, injected into jury delibera­tion factors not properly considered in deciding whether to award punitive damages and amount thereof. Honeywell v. Sterling Furniture Co., 99 Or App 94, 781 P2d 379 (1989), modified 310 Or 206, 797 P2d 1019 (1990)

Allowing recovery of attorney fees under this pro­vi­sion does not preclude recovery under ORS 646.638 (Civil action by private party) (3). Honeywell v. Sterling Furniture Co., 310 Or 206, 797 P2d 1019 (1990)

State's entitle­ment to share of punitive damages award applies to award made in federal case arising under state law. DeMendoza v. Huffman, 334 Or 425, 51 P3d 1232 (2002)

Because plaintiff has no inherent right or interest in punitive damages award, claim by state to share of award does not violate pro­vi­sions of Oregon Constitu­tion re­gard­ing remedy for injury, trial by jury, reexamina­tion of factual determina­tion by jury, taking of prop­erty or taxa­tion. DeMendoza v. Huffman, 334 Or 425, 51 P3d 1232 (2002)

Require­ment that state be listed as judg­ment creditor for share of punitive damages award does not impermissibly intrude on judicial func­tions. DeMendoza v. Huffman, 334 Or 425, 51 P3d 1232 (2002)

State's statutory share of punitive damages award is not taking of prop­erty or imposi­tion of excessive fine in viola­tion of United States Constitu­tion. Engquist v. Oregon Depart­ment of Agriculture, 478 F3d 985 (9th Cir. 2007)

State has standing to enforce state interest in award of punitive damages. MAN Aktiengesellschaft v. DaimlerChrysler AG, 218 Or App 117, 179 P3d 675 (2008)

Consent of Depart­ment of Justice is not prerequisite to post-verdict, pre-judg­ment settle­ment between parties. Patton v. Target Corpora­tion, 349 Or 230, 242 P3d 611 (2010); Patton v. Target Corpora­tion, 627 F3d 1304 (9th Cir. 2010)

Only after court has entered judg­ment awarding punitive damages does state have right as judg­ment creditor to enforce that por­tion of award to be allocated to state for deposit in Criminal Injuries Compensa­tion Account. Williams v. RJ Reynolds Tobacco Company, 351 Or 368, 271 P3d 103 (2011)

State's interest in por­tion of punitive damages award to be allocated to state for deposit I Criminal Injuries Compensa­tion Account arises by opera­tion of law in any case in which punitive damages are awarded, without regard to nature of underlying litiga­tion. Williams v. RJ Reynolds Tobacco Company, 351 Or 368, 271 P3d 103 (2011)

Where estate entered into agree­ment with its attorneys that attorneys would receive 40 percent of gross amount collected from estate's ac­tion filed against corpora­tion and estate received punitive damages award, and attorneys represented estate in sub­se­quent related matter against state that resulted in an­oth­er money award to estate, fee cap in this sec­tion applies only to punitive damages award from first ac­tion and not to all moneys received by estate. Williams v. Gaylord, 268 Or App 107, 341 P3d 202 (2014), Sup Ct review denied

Law Review Cita­tions

26 WLR 755 (1990); 38 WLR 477 (2002); 46 WLR 449 (2010)

  • California Punitive Damages Blog, Oct 27, 2009
    “In a pre­vi­ous post we reported that the Ninth Circuit had certified the following ques­tion to the Oregon Supreme Court: When a jury has returned a verdict that includes an award of punitive damages under Oregon law...”

1 Legislative Counsel Committee, CHAPTER 31—Tort Actions, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors031.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 31, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano031.­html (2015) (last ac­cessed Jul. 16, 2016).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.