Personal Injury Law
Can states cap punitive damage awards?
Yes, state legislatures can pass laws that limit the amount of punitive damages. Several states have such a statute that provides that punitive damages are limited to a certain fixed amount or within a certain percentage of compensatory damages. For example, North Carolina’s law provides that punitive damages are limited to $250,000, or three times the amount of compensatory damages, whichever is greater.
North Carolina General Statutes Annotated (N.C.G.S.A.) § 1D-25 provides:
(a) In all actions seeking an award of punitive damages, the trier of fact shall determine the amount of punitive damages separately from the amount of compensation for all other damages.
(b) Punitive damages awarded against a defendant shall not exceed three times the amount of compensatory damages or two hundred fifty thousand dollars ($250,000), whichever is greater. If a trier of fact returns a verdict for punitive damages in excess of the maximum amount specified under this subsection, the trial court shall reduce the award and enter judgment for punitive damages in the maximum amount.
(c) The provisions of subsection (b) of this section shall not be made known to the trier of fact through any means, including voir dire, the introduction into evidence, argument, or instructions to the jury.
This means that if a jury awards $50,000 in compensatory damages, then the maximum amount of punitive damages is the capped limit of $250,000. However, if a jury awarded $500,000, then the maximum amount of punitive damages would $1.5 million (three times the compensatory damage award).