The cap formula: CPRC § 41.008

Texas caps "exemplary damages" (the technical name for punitive damages in TX) under a specific formula in Tex. CPRC § 41.008.

Tex. CPRC § 41.008(b)
"Exemplary damages awarded against a defendant may not exceed an amount equal to the greater of: (1)(A) two times the amount of economic damages; plus (B) an amount equal to any noneconomic damages found by the jury, not to exceed $750,000; or (2) $200,000."

The cap is the greater of:

  • Option A: 2 × economic damages, PLUS non-economic damages up to $750,000
  • Option B: Flat $200,000 minimum

Three worked examples:

Example 1: Modest economic damages, large non-economic

Economic damages: $50,000. Non-economic damages: $500,000.

Option A: (2 × $50,000) + $500,000 = $600,000

Option B: $200,000

Exemplary damages cap: $600,000

Example 2: Heavy economic damages

Economic damages: $1,000,000. Non-economic damages: $300,000.

Option A: (2 × $1,000,000) + $300,000 = $2,300,000

Option B: $200,000

Exemplary damages cap: $2,300,000

Example 3: Pure non-economic case

Economic damages: $0. Non-economic damages: $1,500,000.

Option A: (2 × $0) + $750,000 (capped) = $750,000

Option B: $200,000

Exemplary damages cap: $750,000

What triggers punitive damages

Compensatory damages are awarded for negligence. Punitive damages require something more — a higher level of culpability.

Under Tex. CPRC § 41.003(a), exemplary damages may only be awarded if the claimant proves by clear and convincing evidence that the harm resulted from:

  1. Fraud — intentional misrepresentation
  2. Malice — defined in § 41.001(7) as a specific intent to cause substantial injury or harm
  3. Gross negligence — defined in § 41.001(11) as an act or omission involving an extreme degree of risk where the actor had actual subjective awareness of the risk but proceeded with conscious indifference

"Clear and convincing evidence" is a higher standard than the "preponderance" standard for ordinary negligence — but lower than "beyond a reasonable doubt." It's the same standard used in fraud, parental termination, and some other elevated-culpability proceedings.

The unanimous jury requirement

Texas requires unanimous jury findings on certain exemplary damages issues — under Tex. CPRC § 41.003(d):

  • The jury must unanimously find the predicate culpability (fraud, malice, or gross negligence) by clear and convincing evidence
  • The jury must unanimously find the amount of exemplary damages

This is different from ordinary civil findings, which in Texas typically require only 10 of 12 jurors to agree. The unanimity requirement raises the practical bar for exemplary damages and makes them harder to obtain — particularly in close cases.

When the cap doesn't apply

The exemplary damages cap is removed entirely in specific circumstances under CPRC § 41.008(c). The cap does NOT apply to exemplary damages awarded in cases where the conduct underlying the award was a felony under specifically listed sections of the Texas Penal Code, including:

  • Murder
  • Capital murder
  • Aggravated kidnapping
  • Aggravated assault
  • Sexual assault and aggravated sexual assault
  • Aggravated robbery
  • Trafficking of persons
  • Drunk driving causing death (intoxication manslaughter)
  • Continuous sexual abuse
  • Continuous trafficking
  • Certain Penal Code § 22 offenses against children

This is particularly important in drunk driving wrongful death cases, where intoxication manslaughter is a felony — the cap is lifted and the jury can award unlimited punitive damages. This is one of the most powerful tools in serious DUI fatality cases.

It's also important in cases involving sexual assault by a defendant who can be sued civilly (such as institutional defendants — schools, churches, employers — whose employees committed assault), and in violent crime cases generally.

Other procedural requirements

A few other procedural rules that affect exemplary damages:

Bifurcated trial — § 41.009

On motion by the defendant, the court must bifurcate the trial into a liability/compensatory phase and a separate exemplary damages phase. The defendant's financial condition (relevant to the amount of exemplary damages) is not introduced until after the predicate finding has been made.

Insurance coverage

Most Texas liability insurance policies exclude coverage for exemplary damages tied to intentional or grossly negligent conduct. This means the defendant typically pays exemplary damages personally — adding leverage to settlement.

Vicarious liability — § 41.005

An employer is generally not vicariously liable for exemplary damages based on an employee's gross negligence, unless the employer authorized or ratified the conduct, the employee was in a managerial capacity, or the employer was grossly negligent in employing the actor.

How NM differs

For comparison: New Mexico has no statutory cap on punitive damages in standard tort cases. NM punitive damages are awarded under a similar "clear and convincing" standard for "willful, wanton, malicious, fraudulent, oppressive, or done in bad faith" conduct (NM Uniform Jury Instructions).

In drunk-driving wrongful death cases that span the TX-NM border, the analysis can favor filing in NM (where punitives are uncapped) over TX (where the cap applies). For other intentional-misconduct cases, NM's broader uncapped exposure also tilts the analysis.

That said: practical recovery on punitive damages also depends on the defendant's ability to pay and the availability of insurance. A massive punitive verdict against an uncollectible defendant is paper.

★ The Cap Doesn't Always Apply

And we know when it doesn't.

In drunk-driving fatalities, aggravated assaults, and certain felony-level cases, the exemplary damages cap is lifted. These cases can be among the highest-value injury claims in Texas. We've handled them and know what's required to make the case stick.

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