- Exemplary damages punish; they aren't compensation. They require clear and convincing proof of fraud, malice or gross negligence, and a unanimous jury (§41.003).
- They're capped at the greater of 2× economic damages plus non-economic damages up to $750,000, or $200,000 (§41.008(b)).
- The cap doesn't apply to certain felonies, including intoxication assault and intoxication manslaughter (§41.008(c)).
When exemplary damages are available
Under Chapter 41, a claimant must prove by clear and convincing evidence that the harm resulted from fraud, malice or gross negligence. The jury must be unanimous on liability for exemplary damages and on the amount. The claimant must also win damages other than nominal damages (§41.004).
Gross negligence (§41.001(11)) means an act or omission that, viewed objectively, involves an extreme degree of risk, considering the probability and magnitude of potential harm, of which the actor had actual, subjective awareness but nevertheless proceeded with conscious indifference to the rights, safety or welfare of others.
Examples raised in truck cases
- A carrier that knowingly dispatches a driver who is over their hours or has a suspended CDL
- Ignoring repeated out-of-service brake violations
- Falsifying logs or destroying evidence
- A driver who was intoxicated
Whether conduct actually meets the gross-negligence standard depends on the evidence. Courts review these awards closely.
The cap formula
Exemplary damages against a defendant can't exceed the greater of:
- two times the economic damages, plus an amount equal to the non-economic damages found by the jury, not exceeding $750,000; or
- $200,000.
| Economic | Non-economic | Cap |
|---|---|---|
| $100,000 | $300,000 | $200,000 + $300,000 = $500,000 |
| $500,000 | $1,000,000 | $1,000,000 + $750,000 = $1,750,000 |
| $20,000 | $30,000 | $200,000 (the minimum cap is higher than $40,000 + $30,000) |
Other rules in Chapter 41
- Definitions (§41.001): economic and non-economic damages are defined here. See truck accident damages in Texas.
- Medical expenses (§41.0105): recovery is limited to amounts actually paid or incurred.
- Employer liability: holding an employer liable for exemplary damages because of an employee's conduct generally requires the employer's own involvement, such as authorizing or ratifying the conduct.