Determining the Amount of Exemplary/Punitive Damages

In California, a claim for punitive damages is broken down into two phases. The first phase is generally the trial to determine the liability of the defendant and the amount of compensatory damages that should be paid.

The second phase is the determination of what exemplary/economic damages should be paid. The amount of punitive damages that can be ordered does depend, in part, on the ability of the defendant to pay the award. The main focus of a punitive damage award is to punish the defendant for misconduct and to deter future misconduct. The aim is to punish the defendant – not to destroy the defendant.

The burden is generally on the plaintiff to present evidence about the defendant’s ability to pay a punitive damage award – by presenting evidence about the defendant’s financial condition.

California Code 3295 sets forth the evidence that can be introduced, after liability has been established. The evidence includes:

  • The profits the defendant has gained by virtue of the wrongful course of conduct of the nature and type shown by the evidence.
  • The financial condition of the defendant.

Plaintiffs normally seek discovery, once liability is clear, to help verify the defendant’s ability to pay a punitive damage assessment. Plaintiffs can, according Section 3295 of the California Code:

  • “Subpoena documents or witnesses to be available at the trial for the purpose of establishing the profits or financial condition” of the defendant
  • The defendant may be required to identify documents in the defendant s possession which are relevant and admissible for that purpose and the witnesses employed by or related to the defendant who would be most competent to testify to those facts.

The evidence is presented to the same trier of fact (normally, the jury that heard the original liability claim for compensatory damages).

Claims for exemplary/punitive damages cannot include a specific dollar amount. A plaintiff can’t demand a million dollars. A plaintiff can introduce assets to show a defendant’s net worth is much more than a million dollars.

The experienced plaintiffs lawyers at the California Law Offices of Stephen Danz and Associates, understand how to prove compensatory damages and how to submit evidence of a defendant’ financial worth in punitive damage cases. For help with all aspects of your employee rights claim, call us at 877-789-9707 or use our online contact form to schedule an appointment.