§ 41.001.Definitions

Thirteen definitions, and several of them are the substantive law of Texas punitive damages rather than mere drafting conveniences.

"Gross negligence" is the one that decides most cases. It means an act or omission which, viewed objectively from the standpoint of the actor at the time of its occurrence, involves an extreme degree of risk considering the probability and magnitude of the potential harm, and of which the actor has actual, subjective awareness of the risk involved but nevertheless proceeds with conscious indifference to the rights, safety, or welfare of others.

Both halves are required. An objective element — extreme risk, not merely unreasonable risk — and a subjective one — the defendant knew. A defendant who should have known but did not is negligent, not grossly negligent, however dangerous the conduct was.

"Malice" is narrower than its ordinary meaning: a specific intent by the defendant to cause substantial injury or harm to the claimant. Ill will, spite, or indifference is not enough; the definition requires intent to cause the harm.

"Clear and convincing" means the measure of proof producing in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations. It sits above the preponderance standard that governs ordinary civil claims.

"Fraud" means fraud other than constructive fraud — the shortest definition in the section and an important limit. Constructive fraud, which requires no intent to deceive, does not support exemplary damages.

The damages taxonomy runs through the whole chapter. Economic damages compensate actual economic or pecuniary loss. Noneconomic damages cover pain and suffering, mental anguish, loss of consortium, disfigurement, physical impairment, loss of companionship and society, inconvenience, loss of enjoyment of life, and injury to reputation. Compensatory damages means both together. Exemplary damages are awarded as a penalty or punishment and are neither economic nor noneconomic — the definition says so expressly, which is what keeps them outside the compensatory categories the cap formula uses.

"Net worth" — added in 2015 alongside the discovery gate — means total assets minus total liabilities on a date determined appropriate by the trial court.