What Are Punitive Damages in California Litigation?

Punitive damages are not intended to compensate a plaintiff but to punish and deter defendants that engage in particularly egregious conduct.  Punitive damages are defined as, “damages awarded in addition to actual damages when the defendant acted with recklessness, malice, or deceit.”  Black’s Law Dictionary 396 (7th ed. 2000).   To obtain punitive damages, the plaintiff must prove by, “clear and convincing evidence,” that the defendant engaged in, “oppression, fraud, or malice.”  California Civil Code § 3294(a); see Judicial Council of Calif., Civ. Jury Instr. (CACI) No. 3940-3949; Judicial Council of Cali., Civ. Jury Instr. (CACI) No. VF-3900-3904 (2023).

The decision to award punitive damages and the amount ultimately assessed is made by the judge or jury.  The amount of the punitive damages assessed against a defendant is designed to be a public embarrassment and deter the reputation of the conduct.  The California Supreme Court has adopted several factors the jury must consider when awarding punitive damages.  Adams v. Murakami, (1991) 54 Cal. 3d 105, 111 (When assessing  punitive damages, the jury must consider all three (3) factors.  And, the amount of punitive damages must be reasonable in light of each factor.).   The factors are:

• The nature of the defendant’s acts in light of the whole record.  The more reprehensible the act, the greater the appropriate punishment, assuming other factors are equal.  Wayte v. Rollins Int’l, Inc., (1985) 169 Cal. App. 3d 1, 21;
  • The United States Supreme Court has adopted factors in deterring whether punitive damages awards comport with constitutional due process. These factors include whether:
    • The harm caused was physical rather than economic, which may include emotional and mental harm;
    • The conduct evinced an indifference to or reckless disregard for the health and safety of others, even if only to the plaintiff;
    • The target of the conduct was financially vulnerable;
    • The conduct involved repeated actions or was a single incident; and,
    • The harm was the result of intentional malice, trickery, or deceit, rather than merely being an accident. State Farm Mut. Auto. Ins. Co. v. Campbell, (2003) 538 U.S. 408, 419; Gober v. Ralphs Grocery Co., (2006) 137 Cal. App. 4th 204, 219-222;
• The amount of compensatory damages awarded to the plaintiff. In general, although an act may be quite reprehensible, it ordinarily does not justify a disproportionately high amount of punitive damages if the actual harm suffered by the plaintiff and others is small.  Finney v. Lockhart, (1950) 35 Cal. 2d 161, 164; Brewer v. Second Baptist Church, (1948) 32 Cal. 2d 791, 802; and,
• The wealth of the defendant.  The function of deterrence and punishment requires that the amount of punitive damages inflict some financial discomfort on the defendant.  Adams v. Murakami, (1991) 54 Cal. 3d 105, 109-116.