Punitive Damages Against a Manufacturer

Most money in a defective product case is compensation: medical bills, lost earnings, and pain and suffering. Punitive damages are different. They are awarded, if at all, to punish a wrongdoer for the conduct that harmed the plaintiff and to discourage similar conduct in the future (CACI 3945). California sets a high bar for them, and that bar is higher still when the defendant is a company rather than a person.

This guide explains what has to be proven, whose conduct counts inside a manufacturer, how the trial is usually split into phases, and how a jury decides the amount. It does not describe any verdict; every case turns on its own evidence.

How does a punitive damages claim work, step by step?

The case must rest on a wrong outside of contract. Punitive damages are available in an action for the breach of an obligation not arising from contract (Civil Code 3294(a)). Strict liability and negligence claims for a defective product qualify; a warranty claim alone may not.
The complaint asks for punitive damages without naming a number. No claim for punitive damages may state an amount (Civil Code 3295(e)).
The company's finances stay closed at first. Pretrial discovery of the defendant's profits or financial condition is not allowed unless the court finds a substantial probability that the plaintiff will prevail on the punitive damages claim (Civil Code 3295(c)).
Liability and the punitive question are tried. The jury decides whether the product was defective and caused harm, and whether the plaintiff proved malice, oppression or fraud by clear and convincing evidence (CACI 3946).
Company involvement is proven. For a corporation, the conduct must have been committed, authorized or ratified by an officer, director or managing agent (Civil Code 3294(b); CACI 3945).
Financial evidence comes in only after that finding. On the defendant's request, evidence of its profits or financial condition is kept out until the jury awards actual damages and finds malice, oppression or fraud, and it is then presented to the same jury (Civil Code 3295(d)).
The jury decides the amount, if any. It weighs reprehensibility, the relationship to the plaintiff's harm, and the defendant's financial condition, and it is not required to award anything (CACI 3949).

What do the key words mean?

Term	What it means	Source
Malice	Conduct intended to cause injury, or despicable conduct carried on with a willful and conscious disregard of the rights or safety of others	Civil Code 3294(c)(1)
Oppression	Despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights	Civil Code 3294(c)(2)
Fraud	An intentional misrepresentation, deceit or concealment of a material fact known to the defendant, intended to deprive a person of property or legal rights or otherwise cause injury	Civil Code 3294(c)(3)
Despicable conduct	Conduct so vile, base or contemptible that reasonable people would look down on and despise it	CACI 3945
Knowing disregard	Being aware of the probable dangerous consequences of one's conduct and deliberately failing to avoid them	CACI 3945
Managing agent	An employee who exercises substantial independent authority and judgment in corporate decisionmaking, so that the employee's decisions ultimately determine corporate policy	CACI 3945
Clear and convincing evidence	Proof that persuades the jury it is highly probable that a fact is true	CACI 201

What kind of conduct by a manufacturer can qualify?

The part of the definition that speaks to safety is malice in its second form: despicable conduct carried on with a willful and conscious disregard of the safety of others (Civil Code 3294(c)(1)). The jury instruction explains that a company acts with knowing disregard when it is aware of the probable dangerous consequences of its conduct and deliberately fails to avoid them (CACI 3945).

A decision the Judicial Council quotes under CACI 3946 says malice does not require an actual intent to harm, and that it may be proved either directly or by implication through indirect evidence from which the jury draws inferences. Another quoted decision, from the California Supreme Court, adds an important limit: absent an intent to injure, malice requires more than a willful and conscious disregard of the plaintiff's interests; the additional component of despicable conduct must also be found.

In practice, the evidence in a product case can come from the company's own records: what it knew about failures or injuries, when it knew, what its engineers proposed, and what its decision makers chose to do. A product can be defective without any of this. Strict liability, as our guide on manufacturing defects, design defects and failure to warn explains, does not require proof that the company was careless at all, while punitive damages require proof of much more than carelessness.

Whose conduct counts inside a company?

A corporation acts through people, so the statute limits whose conduct can expose it to punitive damages. 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 (Civil Code 3294(b)). The jury instruction lets the plaintiff prove that such a person committed the conduct, authorized it, or knew of it and adopted or approved it afterward (CACI 3945).

Title alone does not decide who is a managing agent. A decision quoted under CACI 3945 says the question does not necessarily hinge on a person's level in the corporate hierarchy but on the degree of discretion the person has in making decisions. Another quoted decision says that supervising employees, even many of them, does not by itself make someone a managing agent; the key is authority to change or establish corporate policy.

These findings, too, must be made by clear and convincing evidence, according to a decision quoted under CACI 3945. In a product case, that can mean showing that the decisions about a design, a warning or a recall were made or approved at the level where company policy is set.

How does the jury decide the amount?

There is no fixed formula, and the jury is not required to award punitive damages. If it does, it considers three things (CACI 3945 and 3949):

How reprehensible the conduct was, including whether it caused physical harm, whether the defendant disregarded the health or safety of others, whether the plaintiff was financially weak or vulnerable and the defendant took advantage, whether the conduct involved a pattern or practice, and whether the defendant acted with trickery or deceit.
Whether there is a reasonable relationship between the amount of punitive damages and the plaintiff's harm.
The defendant's financial condition: what amount is needed to punish and discourage future wrongful conduct. The jury may not increase the award above an otherwise appropriate amount merely because the defendant has substantial financial resources.

Constitutional limits apply. The jury may not use punitive damages to punish the defendant for harm to people who are not parties, though harm to others can bear on how reprehensible the conduct was (Directions for Use, CACI 3945). A United States Supreme Court decision the Judicial Council quotes under CACI 3945 says that, in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process. A California Supreme Court decision quoted under the same instruction says the purpose of punitive damages is to deter, not to destroy, and that evidence of the defendant's financial condition is essential to support an award.

Can the store or distributor face punitive damages too?

Only for its own conduct. A store can be strictly liable for selling a defective product without having done anything wrong, as our guide on suing the seller of a defective product explains. Punitive damages are different: the jury weighs the factors separately for each defendant (CACI 3949), and evidence of profit and financial condition is admissible only as to a defendant found liable and guilty of malice, oppression or fraud (Civil Code 3295(d)).

What changes the answer?

The claim is only for breach of warranty. A decision quoted under CACI 3945 says punitive damages are not supported by a verdict based on breach of contract, even where the breach was willful, fraudulent or malicious.

The injured person died. In a survival action brought for the person who died, the recoverable damages include punitive damages the person would have been entitled to recover had they lived (Code of Civil Procedure 377.34(a)). Our guide on what changed in 2026 for survival claims explains the rest of that claim.

The manufacturer is your employer. Workers' compensation is generally the only remedy against an employer, with narrow exceptions (Labor Code 3602); see injuries from a defective machine at work.

The company has already paid punitive damages for the same conduct. The Judicial Council's notes to CACI 3945 say earlier punitive awards for the same conduct are relevant to how much is needed to punish and deter.

The conduct happened in another state. The jury may not use evidence of out-of-state conduct to punish a defendant for action that was lawful where it occurred, according to a decision quoted in the notes to CACI 3945.

The defect was in a vehicle. The same rules apply to auto makers and part suppliers; see a defective car part as the cause of a crash.

What could this look like? An example

For example, imagine a Healdsburg homeowner who falls when the hinge lock on a new folding ladder gives way. In the lawsuit, the manufacturer's internal records show that its customer service team logged many similar failures, that an engineer proposed a stronger lock, and that the company's vice president of product, who sets design policy for the ladder line, decided to keep the old design and add no warning.

The homeowner asks for punitive damages without stating an amount. At trial, the jury first decides whether the ladder was defective and caused his injuries, and whether he proved by clear and convincing evidence that a managing agent acted with a willful and conscious disregard of safety that was despicable. Only if the jury says yes does it hear evidence of the company's financial condition and decide whether to award an amount, and how much, using the reprehensibility, relationship and financial condition factors. If the decision had been made by a line supervisor with no policy authority, the company could still owe compensation, but the punitive claim would face the managing-agent problem. This example is made up to show how the rules fit together; it says nothing about any real case.

What mistakes do people make about punitive damages?

Expecting punitive damages in every product case, when they require proof far beyond a defect.
Stating a dollar figure for punitive damages in the complaint, which the law prohibits.
Relying only on a warranty claim, which cannot support punitive damages on its own.
Focusing on what a low-level employee knew, without connecting the decision to an officer, director or managing agent.
Discarding recall letters, emails or other company communications that may show what the manufacturer knew and when.

What should I do this week?

Keep the product, its packaging, manual and any warnings exactly as they are.
Save every letter, email, recall notice or message you received from the company, and note the date of each.
Write down anything a company representative told you about the product or similar problems.
Get medical care and keep the records, since compensatory damages come first in any case.
Check your filing deadline in our guide to California personal injury deadlines; for an injury that appeared later, see deadlines for a product injury that shows up later.
Ask a lawyer to evaluate the compensatory claim first; any punitive claim depends on it.

Frequently asked questions

Is there a cap on punitive damages in California?

Civil Code 3294 does not set a dollar cap. The jury instructions say there is no fixed formula (CACI 3945), and constitutional due process limits, including the ratio discussed above, apply to the size of an award.

Can I get punitive damages if the company was only careless?

No. Carelessness supports compensation, not punishment. Malice requires either an intent to injure or despicable conduct with a willful and conscious disregard of others' rights or safety (Civil Code 3294(c)(1)).

Will the jury hear how much money the company has?

Only after it has awarded actual damages and found malice, oppression or fraud, if the company asks to delay that evidence (Civil Code 3295(d)). The plaintiff bears the burden of proving the defendant's financial condition, according to a decision quoted under CACI 3945.

Do punitive damages replace pain and suffering?

No. They are awarded in addition to actual damages (Civil Code 3294(a)). Our guide on how pain and suffering is valued covers the compensatory side.

Where would this be decided?

If a case filed here goes to trial, a jury in Sonoma County Superior Court would decide it. Our page on Sonoma County Superior Court in an injury case explains the stages. Our guide on how long a personal injury case takes covers timing.

Can a settlement include punitive damages?

A settlement resolves the whole claim, including any punitive claim, for whatever amount the parties agree to. How a settlement is paid out is covered in our guide on what comes out of a personal injury settlement.

If a company's choices about a product led to your injury, contact Young Law Group today at (707) 343-0556 or through our contact page for a free consultation about your claim.

Can I get punitive damages against a manufacturer in California?