Punitive damages in California are governed by Civil Code section 3294. They are available only where the plaintiff proves by clear and convincing evidence that the defendant acted with oppression, fraud, or malice. They punish the defendant rather than compensate the plaintiff, and they are awarded in a small minority of injury cases.
B&D Injury Law Group handles serious injury claims across California. This article explains what “exemplary damages” means, the conduct that qualifies, how these claims are actually tried, and the constitutional limits on the size of an award.
Exemplary and Punitive Mean the Same Thing
California’s statute is captioned “Exemplary Damages” and the two terms are used interchangeably. Section 3294(a) provides that in an action for breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.
Two features of that sentence matter. The clear and convincing standard appears in the statute itself rather than as a judicial gloss, and it is a materially higher bar than the preponderance standard that governs ordinary negligence. And the section applies only to non-contract obligations, which is why punitive damages are unavailable for ordinary breach of contract.
The Three Categories of Conduct
Section 3294(c) defines each term.
Malice means conduct intended by the defendant to cause injury to the plaintiff, or despicable conduct carried on by the defendant with a willful and conscious disregard of the rights or safety of others.
Oppression means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.
Fraud means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant, with the intention of depriving a person of property or legal rights or otherwise causing injury.
The recurring word is “despicable,” and it does real work. Ordinary negligence does not qualify. Even gross negligence, standing alone, generally does not. What distinguishes a punitive damages case is usually evidence that someone knew of a specific danger and proceeded anyway.
In injury practice, the fact patterns that most often support a claim include drunk driving, a company that knew of a defect and continued selling the product, a property owner who ignored repeated warnings about a known hazard, and deliberate concealment of a danger.
When a Company Is on the Hook for an Employee
Section 3294(b) limits corporate exposure. An employer is not liable for punitive damages based on an employee’s acts unless the employer had advance knowledge of the employee’s unfitness and employed him with a conscious disregard of the rights or safety of others, or authorized or ratified the wrongful conduct, or was personally guilty of oppression, fraud, or malice.
For a corporate employer, that knowledge, authorization, ratification, or wrongful act must be on the part of an officer, director, or managing agent.
The definition of managing agent is narrower than people expect. White v. Ultramar, Inc. (1999) 21 Cal.4th 563 held that managing agents are employees who exercise substantial independent authority and judgment in their corporate decision-making, such that their decisions ultimately determine corporate policy. Supervisory status alone is not enough, and neither is authority to hire and fire. A shift supervisor’s knowledge generally will not be attributed to the corporation for this purpose; a regional vice president’s may be.
Wrongful Death and Survival Actions
This area is frequently stated incorrectly, and the distinction matters to families.
In a pure wrongful death claim, punitive damages are not recoverable. Code of Civil Procedure section 377.61 provides that damages may be awarded that under all the circumstances may be just, but may not include damages recoverable under section 377.34. California courts have long held that punitive damages are unavailable in a wrongful death action.
In a survival action, brought by the decedent’s personal representative on the decedent’s own cause of action, punitive damages are expressly allowed. Section 377.34(a) states that recoverable damages include any penalties or punitive or exemplary damages that the decedent would have been entitled to recover had the decedent lived.
There is also a narrow exception that cuts across the wrongful death rule. Civil Code section 3294(d) permits punitive damages in an action based on a death resulting from a homicide for which the defendant has been convicted of a felony, whether or not the decedent died instantly. So the accurate statement is that punitive damages are unavailable in an ordinary wrongful death claim, subject to the felony homicide exception.
One related development families should know: the window allowing recovery of a decedent’s pre-death pain and suffering in a survival action closed for cases filed on or after January 1, 2026. That change affects pain and suffering specifically. It does not affect the separate statutory authorization for punitive damages in survival actions.
How These Claims Are Actually Tried
Civil Code section 3295 shapes the procedure, and it is written to protect defendants from having their finances aired prematurely.
Under section 3295(c), there is no pretrial discovery of a defendant’s profits or financial condition unless the court permits it. To obtain that order, the plaintiff must show on a noticed motion that there is a substantial probability of prevailing on the punitive damages claim. Such an order is not a determination on the merits and cannot be mentioned at trial.
Under section 3295(d), the court must, on any defendant’s application, bifurcate the trial. Evidence of a defendant’s financial condition is excluded until the jury has returned a verdict awarding actual damages and found the defendant guilty of malice, oppression, or fraud. The same jury then hears the financial evidence and decides the amount.
One drafting rule catches people off guard: section 3295(e) provides that no claim for exemplary damages shall state an amount. A complaint does not, and cannot, demand a specific punitive figure.
How Large Can an Award Be?
California has no statutory cap on punitive damages. The limits come from federal due process.
BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), established three guideposts: the degree of reprehensibility of the misconduct, the disparity between the actual or potential harm and the punitive award, and the difference between the award and the civil penalties authorized in comparable cases.
State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003), added ratio guidance. The Court observed that few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process, that an award more than four times compensatory damages might approach the constitutional line, and that when compensatory damages are substantial, a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit.
California applies this framework. Simon v. San Paolo U.S. Holding Co. (2005) 35 Cal.4th 1159 adopted the single-digit approach, treats ratios significantly above 9 or 10 to 1 as suspect absent special justification, and confirmed that constitutional excessiveness is reviewed independently on appeal.
These are guideposts, not a cap. It would be wrong to say California limits punitive damages to nine times compensatory damages, and equally wrong to promise any multiple.
Insurance Usually Will Not Pay Them
This is the practical reality that shapes settlement. California public policy generally bars insurers from indemnifying punitive damages assessed against an insured for the insured’s own conduct. In PPG Industries, Inc. v. Transamerica Ins. Co. (1999) 20 Cal.4th 310, the court held that an insured may not shift to its insurance company, and ultimately to the public, the payment of punitive damages awarded as a result of the insured’s intentional, morally blameworthy behavior. Insurance Code section 533 supplies a statutory hook, providing that an insurer is not liable for a loss caused by the willful act of the insured.
The consequence is that a punitive award must come from the defendant’s own assets. Against a defendant with limited means, a large punitive verdict may be uncollectible. Against a well-capitalized corporate defendant, the prospect changes the negotiation entirely.
What are exemplary damages in California?
Exemplary damages, also called punitive damages, are awarded under Civil Code section 3294 to punish a defendant and deter similar conduct, rather than to compensate the plaintiff. They require clear and convincing evidence of oppression, fraud, or malice.
Can I get punitive damages in a car accident case?
Only where the conduct rises above negligence. Ordinary carelessness, and usually even gross negligence, will not support a claim. Drunk driving is the most common fact pattern in which punitive damages are sought in a collision case.
Are punitive damages available in a wrongful death case?
Not in an ordinary wrongful death claim. They are available in a survival action brought on the decedent’s own cause of action, and Civil Code section 3294(d) creates a narrow exception where the defendant was convicted of a felony homicide.
Is there a cap on punitive damages in California?
There is no statutory cap. Federal due process limits apply, and the U.S. Supreme Court has indicated that few awards exceeding a single-digit ratio to compensatory damages will survive review, with a lower ratio expected where compensatory damages are already substantial.
Will the defendant’s insurance cover punitive damages?
Generally no. California public policy and Insurance Code section 533 bar indemnifying punitive damages for the insured’s own willful conduct, which means such an award must be paid from the defendant’s own assets.
If your case involves conduct that goes beyond carelessness, that should be assessed early, because the discovery rules differ. Learn more about personal injury claims, read about wrongful death cases and product liability claims, or contact B&D Injury Law Group for a free consultation.
This article is provided for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Every case is different and past results do not guarantee a similar outcome. If you have been injured, speak with a licensed attorney about your specific situation.