§ 41.003.Standards for Recovery of Exemplary Damages

The gateway to punitive damages in Texas, and it has two independent locks.

The first is the standard of proof. Exemplary damages may be awarded only if the claimant proves by clear and convincing evidence that the harm results from fraud, malice, or gross negligence. Subsection (b) adds that the burden may not be shifted to the defendant and may not be satisfied by evidence of ordinary negligence, bad faith, or a deceptive trade practice.

That last clause forecloses a common argument. Proving a defendant acted in bad faith, or violated the DTPA, does not carry the claimant to exemplary damages; the three named culpable states are the only routes.

The second lock is unanimity, and Texas is unusual in it. Exemplary damages may be awarded only if the jury was unanimous in regard to finding liability for and the amount of exemplary damages. Texas civil juries otherwise reach verdicts by agreement of ten of twelve. On this question alone, all twelve must agree — and on the number, not merely on liability.

Agreeing that punishment is warranted is easier than agreeing on a figure. Requiring unanimity on the amount is a substantial constraint, and it explains why exemplary awards are less common than the pleadings suggest.

Subsection (e) prescribes the instruction verbatim. In every case where the issue is submitted, the charge must include: "You are instructed that, in order for you to find exemplary damages, your answer to the question regarding the amount of such damages must be unanimous."

Subsection (c) governs statutory claims. Where the claimant relies on a statute that creates a cause of action and authorises exemplary damages in specified circumstances or with a specified culpable mental state, the damages may be awarded only on clear and convincing proof of those circumstances or that mental state.