Punitive Damages

There are three types of damages that can be awarded in a civil case. The most common is compensatory, which is meant to make a party whole. There is also nominal damages which is meant to demonstrate that one side in fact acted improperly, but there are no compensatory damages to award (an example is if there is a minor trespass onto someone’s property that didn’t result in actual damage, in that case a $1 nominal damages award might be appropriate). The third kind of damages that can be awarded is punitive.

You hear about punitive damages often because they can result in huge awards against corporations. The reason for this is because punitive damages are meant to be as the title suggests, a punishment for the defendant. However, the notoriety of punitive damages far outstrips is usage in court. It is difficult to get punitive damages awarded as they are not appropriate in most circumstances.

Punitive damages can only be awarded if the plaintiff proves through clear and convincing evidence that the defendant’s wrongful action was committed with malice, oppression, or fraud. Each of those terms have specific definitions (See California Civil Code section 3294).

The defendant acted with malice if the conduct was despicable (so vile, base, or contemptible that it would be looked down on and despised by a reasonable person) and was done with the willful and knowing disregard of the rights or safety of another. So, if someone got completely drunk and then operated a motor vehicle, it could be argued that it was done with malice and therefore they could be subject to punitive damages.

The defendant acted with oppression if the conduct was despicable and subjected the plaintiff to cruel and unjust hardship in knowing disregard of their rights. An extreme example of this might be a rape victim suing their rapist in civil court.

The defendant acted with fraud if the defendant intentionally misrepresented or concealed a material fact and did so intending to harm the plaintiff. An example of this would be the Bernie Madoff case where he continued to collect money from investors and promised returns that he knew were impossible because he was actually pocketing the money.

If the plaintiff can prove that the defendant acted with either malice, oppression, or fraud, then the jury can award punitive damages which themselves can greatly outsize the compensatory damages depending on the case.