Limits on Punitive Damages

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What Are Punitive Damages?

Also called exemplary damages, punitive damages are awarded by a court as a punishment to the wrongdoer. They often serve as a means to deter others from engaging in the same wrongful actions. Punitive damages may be awarded in special cases when someone commits an act that is particularly wanton, malicious, evil, violent, or fraudulent.

Punitive damages are not awarded in every civil case and most states have strict regulations that limit punitive damages. Even when punitive damages are awarded, there may be caps that limit the punitive damages so the damages do not amount to 2 to 3 times the amount of the actual damages suffered by the plaintiff.

Limits on Punitive Damages

Most states put a limit on punitive damages because the plaintiff has already received other types of damages, and there is a concern that juries may award too much money to certain plaintiffs.

Many states place caps on punitive damages in order to limit the plaintiff’s damages. These caps are designed to limit punitive damages to no more than 2 to 3 times the amount of actual compensatory damages that the plaintiff suffered.

Monetary Limitations

Many states have caps on the amount of punitive damages. Alabama, Alaska, and Florida impose a punitive damage limit of $500,000 or 3 times compensatory damages. Virginia and New Jersey limit punitive damages to $350,000 or 5 times compensatory damages. Georgia, North Carolina, North Dakota, have a punitive damage limit of $250,000 or 2-3 times compensatory damages.

The California Supreme Court held that a reasonable range is between 3 and 10 times compensatory damages.

The U.S. Supreme Court limited punitive damages to a 1:1 ratio with compensatory damages in a maritime case involving the Exxon Valdez oil spill.

When Punitive Damages Are Not Available

Some states and some types of cases do not allow punitive damages. The states that have completely outlawed punitive damages are Louisiana, Massachusetts, Nebraska, New Hampshire, and Washington.

State law may limit which types of cases allow punitive damages. For example, in California, punitive damages can only punish defendant’s conduct in the particular case at hand, not for all other possible cases of wrongdoing.

Additionally, punitives are not awarded for breach of contract cases.

Other Limitations

Other states, such as Texas, Indiana, and Nevada, have more complicated provisions. For example, in Texas punitive damages must be awarded by a unanimous jury. Also, a number of states apportion some of the punitive award to a state fund, for the benefit of a society that has been wronged. 

Do I need to Hire a Lawyer?

There are many nuances to the law of punitive damages. A personal injury lawyer can help you understand whether you have a claim that warrants punitive damages. Working with an attorney can help ensure that you use all remedies available in your situation.

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Last Modified: 09-02-2014 04:15 PM PDT

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