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The Oregon Supreme Court today issued its decision in Patton v. Target Corp, SC S057752 (November 12, 2010), see here, holding that the State has no right to prevent a settlement to protect its statutory interest in a punitive damages verdict.

Normally, the State gets 60% of any punitive damages judgment, ORS 31.735(1)(b), and “upon the entry of a verdict including an award of punitive damages, the Department of Justice shall become a judgment creditor as to the punitive damages portion of the award.” ORS 31.735(1) (emphasis added). The “entry” of a verdict occurs when the court accepts the signed verdict form and files it with the clerk of the court at the end of trial.

It was an open and very contentious question whether the State could hold up a settlement based on its “interest as a judgment creditor” if a “judgment”—different from a verdict—had not been entered before the settlement was reached between the parties. Reading the statute on its face, the Oregon Supreme Court held that there was no statutory mechanism for enforcing any interest of the State’s prior to the actual entry of a judgment. In other words, the State cannot be a “judgment creditor” before there is a judgment, and there is no way to enforce an interest in a verdict.

This was the case despite the fact that the Legislature apparently intended to stop the practice of settlements after verdicts for punitive damages. The statute’s language just doesn’t accomplish that task, no matter how one twists and turns.