Punitive Damages in Texas: When and How They Apply

Serious injuries can change lives in a flash, and the fallout often extends far beyond hospital bills. Since 1996, the Law Office of Shane R. Kadlec has helped families in Houston understand their rights after a crash, workplace incident, or medical mistake. 

Today, we take a close look at punitive damages in Texas, explaining when they are available and how a jury decides the amount. If you have any questions after reading, please remember that our team offers a free consultation.

Defining Punitive Damages in Texas

Punitive damages, also known as exemplary damages, are monetary awards intended to punish egregious conduct. They are not tied to a victim’s lost wages or pain but instead aim to send a clear message that particular behavior will not be tolerated. In Texas, Chapter 41 of the Civil Practice and Remedies Code spells out the rules governing these awards.

Because the purpose is punishment, the standard for obtaining punitive damages is much stricter than for ordinary negligence. 

A claimant must prove conduct so extreme that ordinary caution or simple mistakes do not explain it. Transitional note: Understanding this higher bar requires examining the specific legal grounds Texas recognizes.

Legal Grounds for Awarding Punitive Damages

Texas law allows punitive damages only when a plaintiff demonstrates, through clear and convincing evidence, that harm resulted from fraud, malice, or gross negligence. “Clear and convincing” sits between a criminal standard of beyond a reasonable doubt and a civil standard of more likely than not, so the proof must be strong.

Fraud

Fraud involves intentionally deceiving someone and causing harm. A classic example is a company that conceals a dangerous product flaw, knowing that injuries are likely to occur as a result. To recover punitive damages on this ground, you must show the defendant knew the truth, meant to mislead, and your injury grew directly from that lie.

Malice

Malice is a specific intent to cause substantial harm. Road rage assaults, deliberate workplace sabotage, or intentional assaults fall here. Evidence can include eyewitness accounts, incriminating messages, or prior threats that reveal the defendant’s state of mind.

Gross Negligence

Gross negligence sits between simple carelessness and intentional harm. The plaintiff must show two things:

• An act or omission involved an extreme degree of risk, considering both the likelihood and severity of the possible harm.
• The defendant was aware of that risk yet acted with conscious indifference to the safety of others.

Putting an overloaded eighteen-wheeler on the road despite failed brake inspections is a good illustration. The trucking company is usually aware of the danger but chooses to take a risk rather than address the problem.

Real Life Texas Examples

In Waffle House, Inc. v. Cathie Williams, a Texas appellate court upheld a jury’s verdict against Waffle House for negligent supervision and retention, sexual harassment, and constructive discharge of former employee Cathie Williams.

Williams successfully sued Waffle House after experiencing sexual harassment from a coworker, Eddie Davis, which Waffle House management failed to address despite her complaints. The jury found that Waffle House’s negligence in supervising Davis led to Williams’s constructive discharge (meaning she was forced to resign due to intolerable working conditions).

The appellate court affirmed the jury’s findings, concluding there was sufficient evidence to support that Waffle House acted with “conscious indifference” to Williams’s complaints. The court also upheld the significant compensatory and punitive damages awarded to Williams, though the punitive damages were reduced due to state law caps. Waffle House’s appeal, which challenged the sufficiency of evidence and the exclusion of particular testimonies, was rejected on all grounds.

The Legal Process for Pursuing Punitive Damages

Because the stakes are high, Texas applies special procedural rules. A plaintiff must first win compensatory damages, even if the amount is only one dollar. Punitive damages cannot stand on their own.

At the defense’s request, the court can separate the trial into two phases. In the first, jurors decide liability and compensatory damages. Only if the defendant is found liable does the case move to a second phase focused on punitive damages. Texas also requires a unanimous jury verdict for both the right to punitive damages and the amount of punitive damages.

Factors Influencing the Amount of Punitive Damage Awards

After liability is established, jurors consider several statutory factors when determining the dollar amount. These include:

• The nature of the wrong and how offensive the conduct is to community standards.
• The defendant’s degree of blame and whether the act was isolated or part of a pattern.
• The gap between the defendant’s net worth and the harm caused ensures the award stings, but it is not a financial death sentence for minor actors.

A reckless multinational may face a far larger award than an individual with limited assets, even if the underlying act is similar.

Limitations on Punitive Damage Awards in Texas

Texas caps most punitive damages, striking a balance between punishment and predictability for businesses and insurers. The cap equals the greater of:

Texas Punitive Damage Caps (Section 41.008)
Formula A	Two times the economic damages PLUS non-economic damages up to $750,000
Formula B	$200,000 flat amount
Which Applies?	The larger of Formula A or Formula B becomes the maximum award
Key Exception	No cap when the harm results from certain felony conduct committed knowingly and intentionally, such as intoxication manslaughter or aggravated assault

Jurors are never told about these caps, so they focus solely on facts. After the verdict, the judge adjusts the number if needed to fit the statutory ceiling.

The Crucial Role of a Personal Injury Attorney

Punitive damages often turn on subtle evidence of intent or conscious indifference. Lawyers dig for internal emails, prior safety complaints, or financial records that reveal the defendant ignored known hazards. They also prepare expert witnesses who can explain why the conduct was far outside normal risk.

The threat of a punitive award can place leverage on the defendant during settlement talks. Insurers are aware that a finding of gross negligence is reported to the public and can impact future claims, stock prices, or licensing. 

A seasoned attorney uses this pressure to push for a fair settlement while staying ready for trial if the offer falls short.

Seeking Justice? Contact the Law Office of Shane R. Kadlec

Our firm has spent nearly three decades holding careless and reckless actors accountable in Houston and across Texas. We combine thorough investigation with courtroom skill to maximize every category of damages, including punitive damages when the facts support their application.

Feel free to call us at 281-643-2000 to discuss your situation. You can also visit our contact page to schedule a complimentary consultation. We are ready to listen, answer your questions, and outline a strategy that protects your future.