1.1                          A bill for an act 
  1.2             relating to civil actions; providing that a portion of 
  1.3             punitive damage awards be given to the crime victims 
  1.4             reparations board; imposing limits on punitive damage 
  1.5             awards in certain cases; providing for intervention by 
  1.6             the attorney general; providing for the recovery of 
  1.7             attorney fees and expenses by prevailing parties in 
  1.8             certain cases; amending Minnesota Statutes 1994, 
  1.9             sections 549.191; 549.20, by adding subdivisions; and 
  1.10            549.21. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1994, section 549.191, is 
  1.13  amended to read: 
  1.14     549.191 [CLAIM FOR PUNITIVE DAMAGES; ATTORNEY GENERAL.] 
  1.15     Subdivision 1.  [GENERAL.] Upon commencement of a civil 
  1.16  action, the complaint must not seek punitive damages.  After 
  1.17  filing the suit a party may make a motion to amend the pleadings 
  1.18  to claim punitive damages.  The motion must allege the 
  1.19  applicable legal basis under section 549.20 or other law for 
  1.20  awarding punitive damages in the action and must be accompanied 
  1.21  by one or more affidavits showing the factual basis for the 
  1.22  claim.  At the hearing on the motion, if the court finds prima 
  1.23  facie evidence in support of the motion, the court shall grant 
  1.24  the moving party permission to amend the pleadings to claim 
  1.25  punitive damages.  For purposes of tolling the statute of 
  1.26  limitations, pleadings amended under this section relate back to 
  1.27  the time the action was commenced. 
  1.28     Subd. 2.  [NOTICE; INTERVENTION BY ATTORNEY GENERAL.] A 
  2.1   motion to amend the pleadings to claim punitive damages must be 
  2.2   served upon the attorney general, in addition to the parties to 
  2.3   the action.  The attorney general may intervene as a matter of 
  2.4   right in any civil action where punitive damages are sought and 
  2.5   may argue for or against the appropriateness of a punitive 
  2.6   damage award in light of the factors and public policy 
  2.7   considerations under section 549.20.  If the motion is not 
  2.8   served on the attorney general or the attorney general does not 
  2.9   intervene, the limitations under section 549.20, subdivision 6, 
  2.10  apply. 
  2.11     Sec. 2.  Minnesota Statutes 1994, section 549.20, is 
  2.12  amended by adding a subdivision to read: 
  2.13     Subd. 6.  [LIMIT ON PUNITIVE DAMAGE AWARDS; EXCEPTION.] The 
  2.14  amount of punitive damages that may be awarded with respect to 
  2.15  each party in a civil action may not exceed the greater of 
  2.16  $250,000 or three times the actual damages awarded to the 
  2.17  party.  The court may not inform the jury of the existence of 
  2.18  the limitation in this subdivision.  This subdivision does not 
  2.19  apply if the attorney general intervened in the action under 
  2.20  section 549.191, subdivision 2. 
  2.21     Sec. 3.  Minnesota Statutes 1994, section 549.20, is 
  2.22  amended by adding a subdivision to read: 
  2.23     Subd. 7.  [DISTRIBUTION OF PUNITIVE DAMAGE 
  2.24  AWARDS.] Twenty-five percent of the amount awarded with respect 
  2.25  to each party for punitive damages must be entered as a judgment 
  2.26  for that party and 75 percent must be entered as a judgment for 
  2.27  the state.  If the attorney general did not intervene in the 
  2.28  action, the court administrator shall notify the attorney 
  2.29  general of the entry of a judgment on behalf of the state under 
  2.30  this subdivision.  Money recovered for the state under this 
  2.31  subdivision must be credited in a separate account known as the 
  2.32  crime victims reparations account.  Money in the account may be 
  2.33  appropriated to the commissioner of public safety for crime 
  2.34  victims services by the crime victims reparations board.  The 
  2.35  court may not inform the jury of the provisions of this 
  2.36  subdivision. 
  3.1      Sec. 4.  Minnesota Statutes 1994, section 549.21, is 
  3.2   amended to read: 
  3.3      549.21 [REIMBURSEMENT FOR CERTAIN COSTS IN CIVIL ACTIONS.] 
  3.4      Subdivision 1.  [ACKNOWLEDGMENT IN PLEADINGS.] The parties 
  3.5   by their attorneys in any civil action shall attach to and make 
  3.6   a part of the pleading served on the opposite party or parties a 
  3.7   signed acknowledgment stating that the parties acknowledge that 
  3.8   costs, disbursements, and reasonable attorney and witness fees 
  3.9   may be awarded to the opposing party or parties pursuant 
  3.10  to subdivision 2 this section. 
  3.11     Subd. 1a.  [MANDATORY AWARD OF COSTS AND ATTORNEY 
  3.12  FEES.] (a) In all civil actions not involving unintentional 
  3.13  torts, the court shall award the party that prevails with 
  3.14  respect to a claim out-of-pocket costs, disbursements, 
  3.15  reasonable attorney fees, and reasonable witness fees and 
  3.16  consultant expenses attributable to the claim.  An award of 
  3.17  attorney fees may not exceed: 
  3.18     (1) the actual cost incurred by the nonprevailing party for 
  3.19  attorney fees in connection with the claim; or 
  3.20     (2) if no cost was incurred by the nonprevailing party due 
  3.21  to a contingency fee agreement or because no attorney was 
  3.22  retained, a reasonable cost that would have been incurred by the 
  3.23  nonprevailing party for fees on an hourly basis for services in 
  3.24  connection with the claim. 
  3.25     (b) The court may reduce or eliminate an award of attorney 
  3.26  fees under paragraph (a) only if the court finds special 
  3.27  circumstances, on the record, that make the award of attorney 
  3.28  fees unjust. 
  3.29     Subd. 2.  [DISCRETIONARY AWARD OF COSTS AND ATTORNEY FEES.] 
  3.30  In addition to the awards required under subdivision 1a, upon 
  3.31  motion of a party, or upon the court's own motion, the court in 
  3.32  its discretion may award to that party out-of-pocket costs, 
  3.33  disbursements, reasonable attorney fees, and reasonable witness 
  3.34  fees and consultant expenses if the party or attorney against 
  3.35  whom costs, disbursements, reasonable attorney and witness fees 
  3.36  are charged acted in bad faith; asserted a claim or defense that 
  4.1   is frivolous and that is costly to the other party; asserted an 
  4.2   unfounded position solely to delay the ordinary course of the 
  4.3   proceedings or to harass; or committed a fraud upon the court.  
  4.4   An award under this section shall be without prejudice and as an 
  4.5   alternative to any claim for sanctions that may be asserted 
  4.6   under the rules of civil procedure.  Nothing herein shall 
  4.7   authorize the award of costs, disbursements or fees against a 
  4.8   party or attorney advancing a claim or defense unwarranted under 
  4.9   existing law, if it is supported by a good faith argument for an 
  4.10  extension, modification, or reversal of the existing law.