California Civil Code § 3294 allows a plaintiff to recover punitive damages in cases where the defendant acted with oppression, fraud or malice. The plaintiff needs to prove this by way of clear and convincing evidence.
The full text of the statute reads as follows:
3294. (a) In an action for the 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.
(b) An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.
(c) As used in this section, the following definitions shall apply:
(1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.
(2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.
(3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.
(d) Damages may be recovered pursuant to this section in an action pursuant to Chapter 4 (commencing with Section 377.10) of Title 3 of Part 2 of the Code of Civil Procedure based upon a death which resulted from a homicide for which the defendant has been convicted of a felony, whether or not the decedent died instantly or survived the fatal injury for some period of time. The procedures for joinder and consolidation contained in Section 377.62 of the Code of Civil Procedure shall apply to prevent multiple recoveries of punitive or exemplary damages based upon the same wrongful act.
(e) The amendments to this section made by Chapter 1498 of the Statutes of 1987 apply to all actions in which the initial trial has not commenced prior to January 1, 1988.
Legal Analysis
California Civil Code 3294 CC permits plaintiffs who win civil trials to recover punitive damages (“exemplary damages”) in addition to compensatory damages if the defendant acted in an way that is:
- oppressive,
- fraudulent, or
- malicious.
Therefore, making an innocent mistake is not enough to warrant punitive damages. The defendant must have acted in a way that is truly shocking.
Example: Lexie has a dairy allergy, and she gets sick from a vegan restaurant which knowingly served her food containing dairy. She may have a case for punitive damages because the restaurant’s “vegan” branding was fraudulent.
So, whereas compensatory damages are meant to make plaintiffs whole, punitive damages are intended to punish the defendant. In some cases, punitive damages can be far greater than compensatory damages.
In respondeat superior cases where employers are sued for the wrongdoings of an employee, the court cannot award punitive damages unless the employer knew of the employee’s unfitness or ratified their conduct. If the employer is a corporation, then an officer, director, or managing agent must have known about the unfitness in order for the employer to be liable for punitive damages.
Before a court may award punitive damages, it must find clear and convincing evidence that the defendant was guilty of oppression, fraud, or malice. Clear and convincing is a higher standard of proof than “by a preponderance of the evidence,” which is the bar in most civil cases.1
Under CC 3294, a judge can award punitive damages if the defendants’ actions qualify as oppression, fraud, or malice.