Montana Punitive Damages Laws: Cap, Proof and State Share (2026)

Montana allows punitive damages by statute. A judge or jury may award them "for the sake of example and for the purpose of punishing a defendant" when the defendant has been found guilty of actual fraud or actual malice, every element must be proved by clear and convincing evidence, and Montana Code Annotated 27-1-220(3) caps an award at $10 million or 3% of the defendant's net worth, whichever is less, except in class action lawsuits. The Montana Supreme Court has not decided whether that cap is constitutional.

Montana also takes half of larger awards: since 2023, the judge divides any punitive award over $200,000 equally between the prevailing party and the state general fund (27-1-221(9)). For how other states compare, see punitive damages laws by state.

Information last verified on 2026-10-18. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Montana state law on punitive damages in civil cases: Montana Code Annotated 27-1-220 and 27-1-221 and the other statutes named below. It does not cover compensatory or noneconomic damages in medical malpractice cases (see Montana medical malpractice law), wrongful-death procedure, deadlines and beneficiaries (see Montana wrongful death law), federal claims, or every statute that authorizes punitive or multiplied damages for a particular claim beyond those named here.

Does Montana allow punitive damages?

Yes, by statute. Montana Code Annotated 27-1-220(1), the section on when punitive damages are allowed and their limitation, provides:

"Except as otherwise expressly provided by statute and subject to subsection (3), a judge or jury may award, in addition to compensatory damages, punitive damages for the sake of example and for the purpose of punishing a defendant."

Not in contract cases. Under 27-1-220(2)(a), "unless otherwise expressly provided by statute, punitive damages may not be recovered in any action arising from: (i) contract; or (ii) breach of contract." Subsection (2)(b) adds that this bar "does not prohibit recovery of punitive damages in a products liability action or an action arising under 33-18-201," the section prohibiting unfair claim settlement practices.

Minors and persons of unsound mind. A minor or person of unsound mind "is not liable in exemplary damages unless at the time of the act the person was capable of knowing that it was wrongful" (27-1-711); 41-1-201 states the same rule for minors.

What must be proven

Actual fraud or actual malice. Section 27-1-221(1) allows "reasonable punitive damages" when "the defendant has been found guilty of actual fraud or actual malice." The statute defines both terms.

"A defendant is guilty of actual malice if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the plaintiff and: (a) deliberately proceeds to act in conscious or intentional disregard of the high probability of injury to the plaintiff; or (b) deliberately proceeds to act with indifference to the high probability of injury to the plaintiff." (27-1-221(2))

Actual malice therefore has two parts: knowledge or intentional disregard of facts creating a high probability of injury, and a deliberate decision to proceed anyway, either in conscious or intentional disregard of that probability or with indifference to it.

Under 27-1-221(3), a defendant is guilty of actual fraud if the defendant "(a) makes a representation with knowledge of its falsity; or (b) conceals a material fact with the purpose of depriving the plaintiff of property or legal rights or otherwise causing injury." Subsection (4) adds that actual fraud "exists only when the plaintiff has a right to rely on the representation of the defendant and suffers injury as a result of that reliance," and that the contract definitions of fraud in Title 28, chapter 2, do not apply.

Burden of proof. "All elements of the claim for punitive damages must be proved by clear and convincing evidence" (27-1-221(6)). The statute defines that standard as "evidence in which there is no serious or substantial doubt about the correctness of the conclusions drawn from the evidence. It is more than a preponderance of evidence but less than beyond a reasonable doubt." Liability for punitive damages "must be determined by the trier of fact, whether judge or jury" (27-1-221(7)).

Is there a cap on punitive damages in Montana?

Yes. Section 27-1-220(3) provides:

"An award for punitive damages may not exceed $10 million or 3% of a defendant's net worth, whichever is less. This subsection does not limit punitive damages that may be awarded in class action lawsuits."

The limit is whichever of the two figures is lower, and it does not apply in class action lawsuits.

The Montana Supreme Court has not decided whether the cap is constitutional. In Masters Group International, Inc. v. Comerica Bank (Mont. 2015), the district court in Silver Bow County had invalidated the cap; the Supreme Court vacated the punitive award on other grounds and said it did "not reach whether ... the District Court erred ... by invalidating Montana's cap on punitive damages."

Statutes with their own limits. Some Montana statutes for particular claims set their own measure:

• Alcohol-furnishing claims. In a civil action under 27-1-710, "the total liability for punitive damages may not exceed $250,000" (27-1-710(11)).
• Bad faith patent assertions. A plaintiff who prevails in an action under 30-13-151 through 30-13-154, the sections on bad faith assertion of patent rights, may be awarded "punitive damages in an amount equal to three times the total of compensatory damages and costs and fees" (30-13-154(3)).
• Election deepfakes (2025). In an action by a candidate or political party under 13-35-803 for a violation of 13-35-802, which the plaintiff must establish by clear and convincing evidence, a plaintiff who alleges and proves actual damages may recover them "and up to $10,000 in punitive damages" (13-35-803(4), (5), enacted by Chapter 541, Laws of 2025).
• Illegal gambling losses. A person who recovers losses at illegal gambling in a civil action may also recover "exemplary damages of no less than $500 and no more than $5,000" (23-5-131(2)).

The Uniform Trade Secrets Act, by contrast, provides only that "if willful and malicious misappropriation exists, the court may award exemplary damages" (30-14-404(2)); that subsection states no multiplier or ceiling of its own.

Does Montana take part of the award?

Yes, for awards over $200,000. Section 27-1-221(9) was added by Chapter 658, Laws of 2023:

"(a) The judge shall divide the award of punitive damages equally between the prevailing party and the state and shall enter judgment accordingly."

The rest of subsection (9) sets out how the division works:

• The prevailing party must give written notice of the judgment to the state through the attorney general (9)(b).
• The costs of litigation related to the punitive award may be deducted from the full award (9)(c).
• Reasonable attorney fees related to the punitive award may then be deducted from the full award, "but attorney fees deducted from the state's share may not exceed 20% of the state's share of the award of punitive damages after costs" (9)(d).
• The state's award "must be deposited in the general fund" (9)(e).
• The state has no right to intervene except to enforce or execute a judgment entered in its favor (9)(f).
• Subsection (9) "does not apply to an award of punitive damages of $200,000 or less" (9)(g).

A separate 2025 statute applies to actions under 30-25-203 against content providers over child sexual abuse material: the punitive and statutory damages are apportioned for each violation, with 15%, 20% or 40% going to a state department depending on who brought the action and whether a victim is identified (30-25-204(4)).

The jury "may not be advised of the requirements under subsection (9)" (27-1-221(10)), and subsections (9) and (10) "do not apply to actions in which the state is a party" (27-1-221(12)).

How the claim is pleaded and the amount decided

No punitive request in the first pleading. Under 27-1-221(5), "a request for an award of punitive damages may not be contained within an initial pleading filed by a party with the court." After the initial pleading is filed and discovery has commenced, a party may move to amend to assert the claim, with affidavits and documentation; the opposing party may respond in kind. The court "may not allow a party to assert a claim for punitive damages unless the affidavits and supporting documentation submitted by the party seeking punitive damages set forth specific facts supported by admissible evidence adequate to establish the existence of a triable issue on all elements of a punitive damages claim."

Liability first, amount second. Under 27-1-221(8)(a), evidence of "a defendant's financial affairs, financial condition, and net worth is not admissible in a trial to determine whether a defendant is liable for punitive damages." When the jury finds a defendant liable, "the amount of punitive damages must then be determined by the jury in an immediate, separate proceeding," and in that proceeding the defendant's financial affairs, financial condition and net worth "must be considered." Subsection (11) states that the section is not intended to alter the Montana Rules of Civil Procedure governing discovery of a defendant's financial affairs, financial condition and net worth.

Judicial review. The judge "shall review a jury award of punitive damages, giving consideration to each of the matters listed in subsection (8)(b)": the nature and reprehensibility of the defendant's wrongdoing; its extent; the defendant's intent in committing the wrong; its profitability, if applicable; the amount of actual damages awarded by the jury; the defendant's net worth; previous punitive or exemplary awards against the defendant based on the same wrongful act; potential or prior criminal sanctions based on the same wrongful act; and "any other circumstances that may operate to increase or reduce, without wholly defeating, punitive damages." "If after review the judge determines that the jury award of punitive damages should be increased or decreased, the judge may do so" (27-1-221(8)(c)). The judge must state the reasons in findings of fact and conclusions of law, both after reviewing a jury award and when the judge makes the award (27-1-221(8)(b), (c)).

Two-thirds verdict. Neither 27-1-220 nor 27-1-221 requires a unanimous jury on punitive damages. Article II, section 26 of the Montana Constitution provides: "In all civil actions, two-thirds of the jury may render a verdict, and a verdict so rendered shall have the same force and effect as if all had concurred therein."

The U.S. Supreme Court's due-process limits on the size of punitive awards also apply to Montana verdicts; the punitive damages hub explains them. Under federal law, the income tax exclusion for damages received on account of personal physical injuries does not cover punitive damages (26 U.S.C. 104(a)(2)); the personal injury settlement amounts guide covers taxes.

Claim-specific rules

Consumer protection act claims. In a consumer's individual action under the Unfair Trade Practices and Consumer Protection Act, "the court may not award punitive damages but may, in its discretion, award up to three times the money damages in the amount of any ascertainable loss of money or property sustained, if actual damages do not exceed $100,000" (30-14-133(1)(a)).

Bars and alcohol furnishing. Beyond the $250,000 limit, 27-1-710(11) provides that "service to a visibly intoxicated consumer is not enough to assess punitive damages against the person or entity furnishing the alcoholic beverage to the consumer. Conduct must be shown that meets the criteria in 27-1-221." For the rest of a crash claim, see Montana car accident law.

Insurer claims handling. Section 27-1-220(2)(b) keeps punitive damages available in an action arising under 33-18-201, and 33-18-242, the section on the independent cause of action and its burden of proof, provides: "Exemplary damages may also be assessed in accordance with 27-1-221."

Wrongful discharge. Under 39-2-905(3), "the employee may recover punitive damages otherwise allowed by law if it is established by clear and convincing evidence that the employer engaged in actual fraud or actual malice in the discharge of the employee in violation of 39-2-904 (1)(a)."

Utility wildfire claims (2025). Section 69-2-303, enacted by Chapter 681, Laws of 2025, provides that an electric facilities provider "may not be assessed punitive damages unless there is a showing, by clear and convincing evidence, that the electric facilities provider's actions were grossly negligent or intentional." Its acts or omissions "may not be considered grossly negligent if the electric facilities provider substantially followed its wildfire mitigation plan with respect to the place of ignition," and the availability of punitive damages "is otherwise subject to the provisions of 27-1-220 and 27-1-221" (69-2-303(5)(d)).

Defamation by the media. "In order to claim punitive damages because of any defamatory publication in or broadcast on any newspaper, magazine, periodical, radio or television station, or cable television system, the defamed person shall first give those alleged to be responsible or liable for the publication or broadcast a reasonable opportunity to correct the defamatory matter" (27-1-818). Under 27-1-821, if it appears at trial that the publication or broadcast was made under honest mistake, a correction timely published or broadcast without comment, in a position and type as prominent as the alleged libel (or, for a broadcast, at the same time of day and of at least equal duration), is a defense against the recovery of punitive damages. See Montana defamation laws.

Human rights and housing discrimination. An administrative order after a finding of discrimination "may not require the payment of punitive damages," except as provided in 49-2-510 (49-2-506(2)). In a housing discrimination action under 49-2-510, the court may award punitive damages if the party complained against "has been adjudicated in a civil or formal administrative proceeding to have engaged in a similar discriminatory practice in violation of 49-2-305" (49-2-510(6)).

Wrongful death and survival. Montana's wrongful death action (27-1-513) and survival action (27-1-501) "must be combined in one legal action, and any element of damages may be recovered only once" (27-1-501(2)). Those sections do not themselves say whether punitive damages are recoverable in each action. The Montana Supreme Court has noted that damages recovered by the personal representative in the survival action may include punitive damages (Swanson v. Champion International Corp., Mont. 1982). Who may sue and the deadlines are on the Montana wrongful death page.

Government defendants

Section 2-9-105 provides: "The state and other governmental entities are immune from exemplary and punitive damages." In contract claims, the state "is liable in respect to any contract entered into in the same manner and to the same extent as a private individual under like circumstances, except the state of Montana is not liable for punitive damages" (18-1-404(1)(a)).

Does insurance pay punitive damages in Montana?

Only when the policy expressly says so. Section 33-15-317(1), headed "Insurance coverage of punitive damages," provides: "Insurance coverage does not extend to punitive or exemplary damages unless expressly included by the contract of insurance."

If an insurer becomes insolvent, the guaranty association's "covered claim" does not include any amount "awarded as punitive or exemplary damages" (33-10-102).

Montana punitive damages at a glance

Recent changes

The general cap in 27-1-220 was last amended in 2003 (Chapter 457, Laws of 2003). The most significant recent change is Chapter 658, Laws of 2023, which amended 27-1-221 and added the equal division with the state of punitive awards over $200,000. In 2025, Chapter 541 enacted 13-35-803, which allows up to $10,000 in punitive damages in election deepfake actions; Chapter 525 enacted 30-25-204, which sends part of the punitive and statutory damages in actions over child sexual abuse material to a state department; and Chapter 199 amended 30-14-133, the consumer protection act damages section, which bars punitive damages in a consumer's individual action. Chapter 681 enacted 69-2-303, with its clear and convincing gross negligence or intentional conduct standard for punitive damages against electric facilities providers in wildfire claims. Both 27-1-220 and 27-1-221 appear in the 2025 edition of the Montana Code Annotated without a 2025 amendment.

Related pages

• Punitive damages laws by state
• Montana wrongful death law
• Montana car accident law
• Montana defamation laws

This article provides general legal information about Montana punitive damages law as of 2026-10-18. It is not legal advice. For advice about a specific situation, contact a lawyer licensed in Montana.

Last updated: 2026-10-18.

Frequently Asked Questions

Does Montana allow punitive damages?

Yes. Under Mont. Code Ann. 27-1-220 and 27-1-221, a judge or jury may award reasonable punitive damages in addition to compensatory damages when the defendant has been found guilty of actual fraud or actual malice, proved by clear and convincing evidence. They are generally not recoverable in contract or breach-of-contract actions unless a statute expressly provides otherwise.

Is there a cap on punitive damages in Montana?

Yes. Under 27-1-220(3), a punitive award may not exceed $10 million or 3% of the defendant's net worth, whichever is less, but that limit does not apply to class action lawsuits. The Montana Supreme Court has not decided whether the cap is constitutional. Some statutes set their own limits for particular claims, such as $250,000 in total punitive liability in alcohol-furnishing claims under 27-1-710(11).

Does Montana take part of a punitive damages award?

Yes, for awards over $200,000. Under 27-1-221(9), the judge divides the punitive award equally between the prevailing party and the state, after litigation costs and reasonable attorney fees may be deducted, and the state's share is deposited in the general fund. The rule does not apply to awards of $200,000 or less or to actions in which the state is a party. A separate 2025 statute sends 15%, 20% or 40% of the punitive and statutory damages in actions over child sexual abuse material under 30-25-203 to a state department (30-25-204(4)).

What is actual malice under Montana punitive damages law?

Under 27-1-221(2), a defendant is guilty of actual malice if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the plaintiff and deliberately proceeds to act in conscious or intentional disregard of, or with indifference to, that high probability of injury.

Does insurance cover punitive damages in Montana?

Only if the policy says so. Mont. Code Ann. 33-15-317(1) provides that insurance coverage does not extend to punitive or exemplary damages unless expressly included by the contract of insurance.

Are punitive damages available against the state or a local government in Montana?

No. Under 2-9-105, the state and other governmental entities are immune from exemplary and punitive damages, and 18-1-404(1)(a) provides that the state is not liable for punitive damages in contract claims.

Does a Montana jury have to be unanimous to award punitive damages?

Neither 27-1-220 nor 27-1-221 requires unanimity. Article II, section 26 of the Montana Constitution provides that in all civil actions two-thirds of the jury may render a verdict.

Are punitive damages available in a Montana bar or alcohol-furnishing case?

Under 27-1-710(11), total punitive liability in an alcohol-furnishing claim under that section may not exceed $250,000, service to a visibly intoxicated consumer is not enough by that fact alone, and the conduct must meet the criteria in 27-1-221.