Limits on Punitive Damages

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What Are Punitive Damages?

Punitive damages, sometimes also called exemplary damages, are awarded by a court as a form of 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. Some states have a specific cap on the amount of punitive damages available in a given case. Other states limit punitive damages to “reasonable” amounts based on the value of the entire case and other factors.

What Proof do I need to Receive Punitive Damages?

Punitive damages are only reserved for special cases where defendants behave very badly, for example committing fraud or acting maliciously. Now, in most states, a plaintiff must prove that a defendant did a very wrongful act through clear and convincing evidence. In other words, a plaintiff must show that it is substantially more likely than not that this behavior occurred. Some states also require proof that the defendant knew or was conscious of their reckless behavior.

Most states use the “complicity rule” when assessing punitive damages; thus, any person or entity liable for punitive damages must have given permission for or participated in another person’s reckless behavior in order to be liable for that behavior.

Limits on Punitive Damages

Many states cap the amount of punitive damages that can be awarded.  Some states set a ratio between the amount of actual damages in the case and the amount of punitive damages. For example, in Missouri, a defendant cannot be awarded more than five times the actual damages or $500,000, whichever is greater. Note that in many states, no punitive damages may be awarded if there are no other damages in the case.

Other states focus on the ability of the defendant to pay based on their income or net worth. For example, in Montana, punitive damages cannot exceed $1,000,000 or 3 times the defendant’s net worth, whichever is less. Even where the cap is not based on the defendant’s income, it is a factor in determining the amount of damages in some states.

Finally, the United States Supreme Court has set a limit on punitive damages. Punitive damages cannot exceed a 10:1 ratio. In other words, punitive damages cannot be more than 10 times the initial award given. For example, if the trial court or jury awards $100,000 in recovery, the court must give less than $1,000,000 in punitive damages. The only exception is if the case was extremely egregious or shocking to the court. 

These limits exist because punitive damages are a form of punishment, and so must be used fairly. They also exist to reform tort law, making it more difficult for plaintiffs to seek exorbitant damages for wrongful acts and making the legal system more predictable.

Other Limits

Many states require that a certain portion of a punitive damages award to go to a special state fund rather than to a plaintiff. This both helps fund state activities and ensures that the sum is more of a punishment to the defendant than a reward for the plaintiff. For example, Utah requires that 50% of all punitive damages over $20,000 be paid to the state fund.

The Availability of Punitive Damages

Some states severely limit punitive damages. These states only allow punitive damages where laws have been passed to make them available in specific circumstances. Washington is a good example of this; while punitive damages are generally not allowed, they are available in suits for malicious harassment and many other particular types of cases.

Punitive Damages in Federal Cases

Punitive damages are also available in some Federal Cases. They have been awarded in a variety of civil rights, employment discrimination, police brutality, and other cases. As in the states, the damages may not be “grossly excessive.” Some federal cases involve very large amounts of money (for example, $500 million dollars in an Exxon Valdez oil spill case), and so what is considered “excessive” may be a lower ratio to actual damages, such as 1:1.

Punitive Damages in State Cases

Below is a table that lists the limits to punitive damages in each of the 50 states and the District of Columbia. It also lists the evidentiary standard used in each of the states to prove that the conduct in the case warrants punitive damages. For example, the table shows that in Alabama, a plaintiff can receive up to three times actual damages in a case, or $150,000, whichever is greater. However, that plaintiff must prove the kind of extreme wrongdoing that warrants punitive damages through clear and convincing evidence.  The table also shows that there are almost no punitive damages available in Nebraska.

Please remember that the information in this table is subject to change and may not be complete. For the most current information available about a case in your state, please consult a lawyer.

General Cap on Damages
Notes and Exceptions to Cap
Clear and Convincing Evidence?  
Greater of 3x damages / $150K
Higher for bodily injury, different rule if small business defendant
Greater of 3x damages / $500K
Higher if motivated by financial gain, different if unlawful employment suit
No cap; cannot be “excessive”
Defendant must act with an “evil hand” guided by an “evil mind”
Greater of 3x damages / $250K, not to exceed $1M
No cap if intentional harm is done
No cap; must bear “reasonable relationship” to other damages
Defendant’s financial situation is taken into account as well
May not exceed award for compensatory damages
Award may be higher if the behavior continues
Cap is often cost of litigation less taxable cost or two times damages
Caps vary greatly in Connecticut by type of case
No cap
No cap unless grossly excessive
Greater of 3x damages/ $500K
No cap for intentional harm, higher cap if for financial gain
Maximum of $250K
No cap for torts by intoxicated defendant or product liability
No cap, must be reasonable
Greater of 3x damages/$250K
No more than 3x damages
Not available in legal or medical malpractice cases
Greater of 3x damages/$50K
No cap
Lesser of annual gross income of defendant/$5M
Cap higher where profitability of bad act exceeds the limit
No cap
Punitive damages generally not allowed, cap varies
Limited by statute to some specific types of cases
No cap
No cap; cannot be “excessive”
Punitive damages generally not allowed, but no cap where allowed
Limited by statute to some specific types of cases
Only exemplary damages available;  caps in some cases
Exemplary damages must be compensatory in nature, not punitive
N/A,preponderance of the evidencefor exemplary damages cases
No cap, cannot be “excessive”
May not exceed certain figures relative to defendant’s income
No cap where defendant was under influence or committed felony
Greater of 5x damages/ $500k
No cap if defendant felony or if MO is plaintiff, or in some housing cases
Less of $10m or 3% of defendant’s net worth
No punitive damages available
State allows treble damages in some specific cases
N/A,preponderance of the evidencefor treble damages cases
Greater of 3x damages / $300k
No cap for some insurance and housing cases, toxic waste cases, defamation, defective product
New Hampshire
 “Liberal compensatory damages” allowed in egregious cases, punitive damages generally not allowed
Limited by statute to some specific types of cases
New Jersey
Greater of 5x damages / $350k
No cap for discrimination, sex abuse, DUI injury, bias crimes, AIDS testing disclosure
New Mexico
No cap
Clear and convincing evidence is required in defamation cases
New York
No cap
Unclear (disagreement between NY courts)
North Carolina
Greater of 3x damages / $250k
North Dakota
Greater of 2x damages/ $250k
No cap, cannot be arbitrary
Greater of amt. equal to damages / $100 k
If defendant acted intentionally, cap is much higher
No cap
No general cap
Some types of cases have specific cap, others 3x damages
Rhode Island
No general cap
Some types of cases have specific cap, others 3x damages
South Carolina
Greater of 3x damages / $500k
Cap higher if defendant commits felony or acts for financial gain
South Dakota
No cap
Greater of 2x damages/ $500k
No limit if defendant under influence or acted intentionally to harm
No cap, cannot be “manifestly unjust”
Some statutes cap damages in specific cases
No cap
Lower evidence standard for DUI injury cases
No cap
Some statutes provide treble damages rather than no cap
Cannot exceed $350k
Punitive damages generally not allowed, caps vary by case type
Limited by statute to certain types of cases
West Virginia
No cap set by statute
Maximum ratio of 5x damages in some cases (per court decision)
Greater of 2x damages / $200k
Not applicable in some DUI injury cases
No cap

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: 09-30-2016 02:56 PM PDT

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