(a) In an action in which a claim of punitive damages is presented to the fact finder, the fact finder shall determine, concurrently with all other issues presented, whether punitive damages shall be allowed by using the standards set out in (b) of this section. If punitive damages are allowed, a separate proceeding under (c) of this section shall be conducted before the same fact finder to determine the amount of punitive damages to be awarded.
(b) The fact finder may make an award of punitive damages only if the plaintiff proves by clear and convincing evidence that the defendant's conduct
(1) was outrageous, including acts done with malice or bad motives; or
(2) evidenced reckless indifference to the interest of another person.
(c) At the separate proceeding to determine the amount of punitive damages to be awarded, the fact finder may consider
(1) the likelihood at the time of the conduct that serious harm would arise from the defendant's conduct;
(2) the degree of the defendant's awareness of the likelihood described in (1) of this subsection;
(3) the amount of financial gain the defendant gained or expected to gain as a result of the defendant's conduct;
(4) the duration of the conduct and any intentional concealment of the conduct;
(5) the attitude and conduct of the defendant upon discovery of the conduct;
(6) the financial condition of the defendant; and
(7) the total deterrence of other damages and punishment imposed on the defendant as a result of the conduct, including compensatory and punitive damages awards to persons in situations similar to those of the plaintiff and the severity of the criminal penalties to which the defendant has been or may be subjected.
(d) At the conclusion of the separate proceeding under (c) of this section, the fact finder shall determine the amount of punitive damages to be awarded, and the court shall enter judgment for that amount.
(e) Unless that evidence is relevant to another issue in the case, discovery of evidence that is relevant to the amount of punitive damages to be determined under (c)(3) or (6) of this section may not be conducted until after the fact finder has determined that an award of punitive damages is allowed under (a) and (b) of this section. The court may issue orders as necessary, including directing the parties to have the information relevant to the amount of punitive damages to be determined under (c)(3) or (6) of this section available for production immediately at the close of the initial trial in order to minimize the delay between the initial trial and the separate proceeding to determine the amount of punitive damages.
(f) Except as provided in (g) and (h) of this section, an award of punitive damages may not exceed the greater of
(1) three times the amount of compensatory damages awarded to the plaintiff in the action; or
(2) the sum of $500,000.
(g) Except as provided in (h) of this section, if the fact finder determines that the conduct proven under (b) of this section was motivated by financial gain and the adverse consequences of the conduct were actually known by the defendant or the person responsible for making policy decisions on behalf of the defendant, it may award an amount of punitive damages not to exceed the greatest of
(1) four times the amount of compensatory damages awarded to the plaintiff in the action;
(2) four times the aggregate amount of financial gain that the defendant received as a result of the defendant's misconduct; or
(3) the sum of $7,000,000.
(h) Notwithstanding any other provision of law, in an action against an employer to recover damages for an unlawful employment practice prohibited by AS 18.80.220 , the amount of punitive damages awarded by the court or jury may not exceed
(1) $200,000 if the employer has less than 100 employees in this state;
(2) $300,000 if the employer has 100 or more but less than 200 employees in this state;
(3) $400,000 if the employer has 200 or more but less than 500 employees in this state; and
(4) $500,000 if the employer has 500 or more employees in this state.
(i) Subsection (h) of this section may not be construed to allow an award of punitive damages against the state or a person immune under another provision of law. In (h) of this section, “employees” means persons employed in each of 20 or more calendar weeks in the current or preceding calendar year.
(j) If a person receives an award of punitive damages, the court shall require that 50 percent of the award be deposited into the general fund of the state. This subsection does not grant the state the right to file or join a civil action to recover punitive damages.
(k) In a civil action in which an employer is determined to be vicariously liable for the act or omission of an employee, punitive damages may not be awarded against the employer under principles of vicarious liability unless (1) the employer or the employer's managerial agent (A) authorized the act or omission and the manner in which the act was performed or omission occurred; or (B) ratified or approved the act or omission after the act or omission occurred; or (2) the employee (A) was unfit to perform the act or avoid the omission and the employer or the employer's managerial agent acted recklessly in employing or retaining the employee; or (B) was employed in a managerial capacity and was acting within the scope of employment. In this subsection, “managerial agent” means a management level employee with the stature and authority to exercise control, discretion, and independent judgment over a certain area of the employer's business and with some power to set policy for the employer.
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