Let the Great Ax Fall – Exemplary Damages in 2019, 11th Annual Damages in Civil Litigation

11th Annual Damages in Civil Litigation, State Bar of Texas, 2019

“Punishment is Justice for the Unjust.”

Augustine of Hippo

No element of recovery is so hard fought for, so feared, so leveraged, and so easily lost as exemplary damages. This paper will outline the status of punitive damages in Texas in 2019 and, we hope, will provide the practitioner a simple and easy reference to delve into the convoluted world of punitive damages as it applies to the everyday trial practice in Texas.

In civil litigation, the dominant purpose is to compensate the aggrieved. To place the victim back to their pre-tort condition; restitutio in integrum. However, punitive damages arose in common law as a supplementary sanction in exceptional cases where compensatory damages do not provide sufficient levels of deterrence and retribution. Jason Taliadoros, The
Roots of Punitive Damages at Common Law: A Longer History, 64 Clev. St. L. Rev. 251 (2016).

Known by various names, including exemplary, penal, retributory, or vindictive damages, punitive damages are damages “over and above those necessary to compensate the plaintiff.” Id. “Punitive damages are awarded for three main reasons: (1) to punish the defendant and provide retribution, (2) to act as a deterrent to the defendant and others minded to behave in a similar way, and (3) to demonstrate the court’s disapproval of such conduct.” Id.

From the earliest Texas cases in which exemplary damages were recognized, extraordinarily reprehensible conduct has been required. Demarest, The History of Punitive Damages in Texas, 28 S. Tex. L. Rev. 535 (1987). Possibly the first such case in Texas was Graham v. Roder, 5 Tex. 141 (1849), in which the Texas Supreme Court held:

“Where either of the elements of fraud, malice, gross negligence, or oppression mingle in the controversy, the law, instead of adhering to the system or even the language of compensation, adopts a wholly different rule. It permits the jury to give what it terms punitory, vindictive, or exemplary damages; in other words, blends together the interests of
society and the aggrieved individual, and gives damages not only to recompense the sufferer, but to punish the offender. This rule seems settled in England and the general jurisprudence of this country.”

Id. at 149.

Two years later, the Supreme Court again approved the recovery of exemplary damages if the injury was “tainted with fraud, malice, or willful wrong.” Cole v. Tucker, 6 Tex. 266, 268 (1851). Except for some fluctuations in the definition of “gross negligence,” culminating in the Supreme Court’s decision in Burk Royalty Co. v. Walls, 616 S.W.2d 911 (Tex. 1981), the prerequisites are essentially the same today. Ingleside v. Kneuper, 768 S.W.2d 451, 454-55 (Tex. App.—Austin 1989, writ denied).