An issue that seems to be arising with increasing frequency is whether the defendant must plead applicability of a cap on punitive damages in its answer. We have already explained why the argument that the cap is an affirmative defense that must be pleaded is specious.
The Texas Supreme Court agreed with that position in 2015, holding in Zorilla v. Aypco Construction II, L.L.C. that “[t]he exemplary damages cap does not bear the characteristics of an affirmative defense” because “it does not require proof of any additional fact to establish its applicability.” The court further explained that “[b]ecause the statutory cap on exemplary damages automatically applies and its scope is delineated by statute, there is little concern that plaintiffs will be genuinely surprised by its application in any given case.”
In contrast, the court held, plaintiffs must plead and prove that an exception to the cap applies. “In the absence of a plea and proof of cap-busting conduct, the exemplary damages cap applies as a matter of law.”
The issue remains open in a few states that have enacted cap statutes, but if the Texas Supreme Court’s decision is any indication, the argument that a defendant should have to plead applicability of a cap is unlikely to get much traction.
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