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North Dakota Punitive (Exemplary) Damages: Cap and Rules (2026)

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Independently fact-checked against primary sources (last audited October 19, 2026). · 23 primary sources cited on this page. How we verify our legal content

North Dakota Punitive (Exemplary) Damages: Cap and Rules (2026)

North Dakota allows punitive damages, which its statutes call exemplary damages, only in non-contract cases where the defendant is shown by clear and convincing evidence to be guilty of oppression, fraud, or malice (N.D.C.C. 32-03.2-11(1)). Under the general cap, the award may not exceed two times the compensatory damages or $250,000, whichever is greater (32-03.2-11(4)), and the complaint cannot ask for exemplary damages when the case is filed.

A 2025 law, effective August 1, 2025, changed the standard from "actual malice" to "malice," now defined to include a reckless disregard of the rights of another. 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 North Dakota state law on exemplary (punitive) damages in civil cases: N.D.C.C. chapter 32-03.2 and the other statutes and court decisions named below. It does not cover compensatory or noneconomic damages in medical malpractice cases (see North Dakota medical malpractice law), wrongful-death procedure, deadlines and beneficiaries (see North Dakota wrongful death law), federal claims, or every statute that authorizes exemplary or multiplied damages for a particular claim beyond those named here.

Does North Dakota allow punitive damages?

Yes, as exemplary damages, which is the same remedy under another name. Section 32-03.2-11, "When court or jury may give exemplary damages," provides in subsection 1:

"In any action for the breach of an obligation not arising from contract, when the defendant has been guilty by clear and convincing evidence of oppression, fraud, or malice, the court or jury, in addition to the actual damages, may give damages for the sake of example and by way of punishing the defendant."

Three limits are built into that sentence: the claim may not arise from contract, the conduct must be oppression, fraud, or malice, and the proof must be clear and convincing.

Minors and persons of unsound mind. "A minor or person of unsound mind cannot be subjected to exemplary damages unless at the time of the act the minor or person of unsound mind was capable of knowing that it was wrongful" (32-03-08).

What must be proven

Oppression, fraud, or malice. Since the 2025 amendment, chapter 32-03.2 defines malice in section 32-03.2-01(2):

North Dakota punitive damages laws: trial testimony in injury cases

"'Malice' means: a. A direct intention to injure another; or b. A reckless disregard of the rights of another and any consequences."

Clear and convincing evidence, twice. The conduct must be shown by clear and convincing evidence (32-03.2-11(1)), and the amount must be supported the same way. Under 32-03.2-11(5), "the finder of fact shall find by clear and convincing evidence that the amount of exemplary damages awarded is consistent with the following principles and factors":

  • "Whether there is a reasonable relationship between the exemplary damage award claimed and the harm likely to result from the defendant's conduct as well as the harm that actually has occurred";
  • "The degree of reprehensibility of the defendant's conduct and the duration of that conduct"; and
  • any of these factors on which evidence is presented: the defendant's awareness of and any concealment of the conduct; the profitability of the wrongful conduct to the defendant and the desirability of removing that profit and having the defendant also sustain a loss; and criminal sanctions imposed on the defendant for the same conduct, "to be taken into account if offered in mitigation of the exemplary damage award."

Employers and other principals. Under 32-03.2-11(8), exemplary damages may be awarded against a principal because of an agent's act "only if at least one of the following is proved by clear and convincing evidence to be true": the principal or a managerial agent authorized the doing and manner of the act; the agent was unfit and the principal or a managerial agent was reckless in employing or retaining the agent; the agent was employed in a managerial capacity and was acting in the scope of employment; or the principal or managerial agent ratified or approved the doing and manner of the act.

How the standard changed in 2025, and Zander v. Morsette

Senate Bill 2290 of the 2025 Legislative Assembly amended sections 32-03.2-01 and 32-03.2-11, "relating to when a court or jury may give exemplary damages." The Senate passed it 45 to 0 and the House 88 to 5. It replaced the words "actual malice" in section 32-03.2-11 with "malice," added the definition of malice quoted above, and removed from subsection 9 a condition tied to a prior impaired-driving conviction within five years.

Senate Bill 2290 took effect August 1, 2025. The act does not declare itself retroactive, and N.D.C.C. 1-02-10 provides that "no part of this code is retroactive unless it is expressly declared to be so."

The earlier wording was the subject of Zander v. Morsette, 2021 ND 84. In that case the district court had allowed the plaintiffs to add a punitive damages claim against an intoxicated driver. The North Dakota Supreme Court disagreed, stating at paragraph 32:

"The law requires a finding of more than reckless conduct; it requires sufficient evidence to support a finding that a preponderance of the evidence demonstrates conduct with a state of mind evincing an intent to harm or injure another person. ... Although Morsette's conduct while intoxicated can be characterized as grossly negligent or extremely reckless, there are no special circumstances, such as an intent to injure or personal ill will toward the Plaintiffs, to support a finding of actual malice."

The court concluded that the district court abused its discretion by allowing the claim. Zander applied the "actual malice" wording that the 2025 amendment replaced; the current definition of malice includes "a reckless disregard of the rights of another and any consequences."

One statute outside chapter 32-03.2 still uses the older term: in a civil action for financial exploitation of a vulnerable adult, "if the financial exploitation of the vulnerable adult by the perpetrator involved oppression, fraud, deception, or actual malice, the court may award exemplary damages in accordance with section 32-03.2-11" (50-25.2-11.1(3)).

Is there a cap on punitive damages in North Dakota?

Yes. Section 32-03.2-11(4) provides:

"If the trier of fact determines that exemplary damages are to be awarded, the amount of exemplary damages may not exceed two times the amount of compensatory damages or two hundred fifty thousand dollars, whichever is greater; provided, however, that no award of exemplary damages may be made if the claimant is not entitled to compensatory damages. In a jury trial, the jury may not be informed of the limit on damages contained in this subsection. Any jury award in excess of this limit must be reduced by the court."

Nothing in section 32-03.2-11 lifts this limit. The impaired-driving rule in subsection 9 lets the trier of fact consider exemplary damages against a driver; it does not change the amount allowed under subsection 4.

Statutes with their own measures. Some statutes for particular claims set their own amounts:

  • Trade secret misappropriation. "If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not exceeding twice any award made under subsection 1" (47-25.1-03(2)).
  • Bad faith assertions of patent infringement. The private right of action in chapter 51-36 allows "exemplary damages in an amount equal to fifty thousand dollars or three times the total of damages, costs, and fees, whichever is greater" (51-36-06).
  • Abortion without informed consent. An action against the person who performed an abortion without the informed consent the chapter requires is for "ten thousand dollars in punitive damages and treble whatever actual damages the plaintiff may have sustained"; for an attempted abortion, five thousand dollars in punitive damages and treble actual damages (14-02.1-03.2).
  • Unreleased mortgages and liens. An owner of a mortgage or lien on real property who fails to execute or deliver a discharge or enter a satisfaction as required is liable for "all damages sustained as a result of the refusal and exemplary damages of one hundred dollars" (35-01-27).
  • Shoplifting. An adult who commits theft from a merchant is civilly liable for the retail value of the merchandise "plus exemplary damages of not more than two hundred fifty dollars," costs and reasonable attorney's fees (51-21-05).

Does North Dakota take part of the award?

No general statute does. Section 32-03.2-11 sets the standard, the procedure and the cap, and it directs no part of an exemplary award to the state or to a fund.

How the claim is pleaded and tried

No exemplary damages in the complaint. Under 32-03.2-11(1), "upon commencement of the action, the complaint may not seek exemplary damages." After filing, a party may move to amend the pleadings. The motion "must allege an applicable legal basis for awarding exemplary damages and must be accompanied by one or more affidavits or deposition testimony showing the factual basis for the claim," and the opposing party may respond with its own affidavits or deposition testimony. If the court finds "that there is sufficient evidence to support a finding by the trier of fact that a preponderance of the evidence proves oppression, fraud, or malice, the court shall grant the moving party permission to amend." Amended pleadings relate back to the start of the action for purposes of tolling the statute of limitations.

Separate phases on request. "If either party so elects, the trier of fact shall first determine whether compensatory damages are to be awarded before addressing any issues related to exemplary damages" (32-03.2-11(2)). Evidence relevant only to exemplary damages is not admissible in the proceeding on liability for compensatory damages.

No net worth evidence. North Dakota bars wealth evidence on the amount: "Evidence of a defendant's financial condition or net worth is not admissible in the proceeding on exemplary damages" (32-03.2-11(3)).

Arbitration. An arbitrator "may award punitive damages or other exemplary relief if such an award is authorized by law in a civil action involving the same claim and the evidence produced at the hearing justifies the award under the legal standards otherwise applicable to the claim" (32-29.3-21(1)).

Post-trial review. Under 32-03.2-12, motions "for review of the reasonableness of an award, and for setting the amount of exemplary damages" go to the judge who presided over the trial and "must be made within ten days of the jury verdict, or order of the court"; if so made, "judgment may not be entered until the motion has been ruled on."

The U.S. Supreme Court's due-process limits on the size of punitive awards also apply to North Dakota 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.

Drunk and drugged driving

Section 32-03.2-11(9) provides that in "a civil action involving a motor vehicle accident resulting in bodily injury, it is sufficient for the trier of fact to consider an award of exemplary damages against the driver under the motion procedures provided in subsection 1 if clear and convincing evidence indicates that the accident was caused by a driver who was operating or in physical control of a motor vehicle":

  • "With an alcohol concentration of at least eight one-hundredths of one percent by weight";
  • under the influence of a controlled substance, "unless a drug that predominantly caused impairment was used only as directed or cautioned by a practitioner who legally prescribed or dispensed the drug to the driver";
  • under the influence of alcohol and having refused to take a test required under chapter 39-20; or
  • under the influence of a volatile chemical listed in section 19-03.1-22.1.

At a trial where exemplary damages will be considered, "evidence that the driver has been convicted of violating section 39-08-01 or an equivalent statute or ordinance is admissible into evidence." The 2025 amendment removed the earlier prior-conviction condition from this subsection. The motion procedure in subsection 1 and the cap in subsection 4 still apply. For the rest of a crash claim, see North Dakota car accident law.

Bars and liquor licensees. If a retail licensee is found liable under 5-01-06.1 "and exemplary damages are sought, the finder of fact may consider as a mitigating factor that the licensee provided to an employee alcohol server training that addressed intoxication, drunk driving, and underage drinking" (5-01-06.1(1)).

Products, drugs and medical devices

Federal compliance defense. Under 32-03.2-11(6), exemplary damages "may not be awarded against a manufacturer or seller" if the product's manufacture, design, formulation, inspection, testing, packaging, labeling and warning complied with federal statutes or federal safety regulations existing when the product was produced, or with premarket approval or certification by a federal agency. The defense does not apply under subsection 7 if the plaintiff proves by clear and convincing evidence that the manufacturer or seller knowingly, and in violation of agency regulations, withheld or misrepresented material information required to be submitted to the agency, or made an illegal payment to a federal agency official to secure approval.

FDA-approved drugs and devices. Section 19-02.1-26, "Limitation on exemplary damages," bars exemplary damages against the manufacturer or seller of an FDA-approved product or device, but not where clear and convincing evidence shows that the defendant withheld or misrepresented required material information, made an illegal payment to an FDA official, "failed to use reasonable care to comply with the food and drug administration regulations concerning the manufacture of, or the investigation and correction of defects in design or manufacture of, a medical device" causing the harm, "made a significant or knowing departure from official food and drug administration requirements," or "acted with conscious disregard for human safety."

Government, charities and other protected defendants

The State. "The state may not be held liable, or be ordered to indemnify a state employee held liable, for punitive or exemplary damages" (32-12.2-02(2)). The State's duty to indemnify its employees covers claims and judgments "except for claims or judgments for punitive damages" (32-12.2-03(4)).

North Dakota punitive damages laws: damages caps and court filings

Political subdivisions. "A political subdivision may not be held liable, or be ordered to indemnify an employee held liable, for punitive or exemplary damages" (32-12.1-03(2)). Section 32-12.1-04(3) provides that political subdivision "employees may be liable for punitive or exemplary damages"; an employee acting within the scope of employment is personally liable only for reckless, grossly negligent, willful or wanton conduct, which the plaintiff must show by clear and convincing evidence.

Charitable organizations. Under 32-03.3-02(2), a charitable organization covered by chapter 32-03.3 "may not be held liable, or be ordered to indemnify an employee held liable, for punitive or exemplary damages." Chapter 32-03.3 covers nonprofit organizations whose primary purpose is relief of poor, disabled, underprivileged, or abused persons, support of youth and youth programs, or the prevention of abuse to children and vulnerable adults (32-03.3-01(1)). The version of 32-03.3-02 that takes effect after June 30, 2029 keeps the same bar on punitive or exemplary damages.

Long-term care facilities. A long-term care facility, facility employee or facility contractor that in good faith implements or complies with chapter 50-10.3 "may not be held civilly liable for damages, including punitive damages," for acts or omissions related to implementing that chapter; the protection "does not apply to any act or omission that constitutes gross negligence or willful or wanton misconduct" (50-10.3-06).

Human rights complaints. "Neither the department nor an administrative hearing officer may order compensatory or punitive damages under" chapter 14-02.4 (14-02.4-20).

Does insurance pay punitive damages in North Dakota?

Under 26.1-32-04, "an insurer is not liable for a loss caused by the willful act of the insured, but the insurer is not exonerated by the negligence of the insured or of the insured's agents or others."

In Continental Casualty Co. v. Kinsey (N.D. 1993), the North Dakota Supreme Court read that statute as one that "generally exempts insurance carriers from liability for punitive damages or any other losses incurred by an insured because of his intentionally wrongful conduct." It held, however, that an insurer whose malpractice policy expressly promised to pay punitive damages had to pay them, up to the policy limits, and could then seek indemnity from the insured, whose liability rested on intentional acts of fraud and deceit.

Wrongful death cases

North Dakota's wrongful death statute tells the jury to "give such damages as it finds proportionate to the injury resulting from the death to the persons entitled to the recovery" (32-21-02). That section does not mention exemplary damages. Federal district court decisions applying North Dakota law have divided on the question: Johnson v. International Harvester Co. (D.N.D. 1980) held that punitive damages could not be recovered under the wrongful death statute, while Puppe v. A.C. and S., Inc. (D.N.D. 1990) held that, after the North Dakota Supreme Court's decision in Hopkins v. McBane (1988), they may be. Federal district court rulings do not bind North Dakota state courts. Under the survival statute, no claim "except for breach of promise, alienation of affections, libel, and slander, abates by the death of a party" (28-01-26.1). Who may sue and the deadlines are on the North Dakota wrongful death page.

North Dakota exemplary damages at a glance

QuestionNorth Dakota ruleSource
What they are calledExemplary damagesN.D.C.C. 32-03.2-11
When availableBreach of an obligation not arising from contract32-03.2-11(1)
Conduct standardOppression, fraud, or malice (malice includes reckless disregard of the rights of another, since August 1, 2025)32-03.2-11(1); 32-03.2-01(2)
Burden of proofClear and convincing, for the conduct and for the amount32-03.2-11(1), (5)
PleadingNot in the complaint; motion to amend with affidavits or deposition testimony32-03.2-11(1)
General capGreater of 2 times compensatory damages or $250,000; no award without compensatory damages32-03.2-11(4)
Claim-specific measuresTwice the damages award for willful and malicious trade secret misappropriation; greater of $50,000 or 3 times damages, costs and fees for bad faith patent assertions; up to $250 for shoplifting; $10,000 ($5,000 if attempted) plus treble actual damages for an abortion without informed consent; $100 for an undischarged mortgage or lien47-25.1-03(2); 51-36-06; 51-21-05; 14-02.1-03.2; 35-01-27
State shareNo general statute32-03.2-11
Separate trialOn either party's election32-03.2-11(2)
Net worth evidenceNot admissible on exemplary damages32-03.2-11(3)
Impaired driversTrier of fact may consider exemplary damages on clear and convincing proof of listed impairment; cap still applies32-03.2-11(9), (4)
Employer liabilityOnly on one of four listed showings, by clear and convincing evidence32-03.2-11(8)
GovernmentState and political subdivisions not liable32-12.2-02(2); 32-12.1-03(2)
InsuranceInsurer not liable for a loss caused by the insured's willful act; an express promise to cover punitive damages was enforced, with indemnity against the insured26.1-32-04; Continental Casualty Co. v. Kinsey (N.D. 1993)

Recent changes

The main change is 2025 Senate Bill 2290, which amended sections 32-03.2-01 and 32-03.2-11: it replaced "actual malice" with "malice," defined malice to include a reckless disregard of the rights of another and any consequences, and removed the prior-conviction condition from the impaired-driving rule in subsection 9. It took effect August 1, 2025, and does not declare itself retroactive (see N.D.C.C. 1-02-10). The cap in subsection 4 and the pleading, bifurcation and net worth rules were not changed by that bill.

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

Last updated: 2026-10-18.

Frequently Asked Questions

Does North Dakota allow punitive damages?

Yes, under the name exemplary damages. N.D.C.C. 32-03.2-11(1) allows them in an action for the breach of an obligation not arising from contract when the defendant is shown by clear and convincing evidence to be guilty of oppression, fraud, or malice.

Is there a cap on punitive damages in North Dakota?

Yes. Under 32-03.2-11(4), exemplary damages may not exceed two times the compensatory damages or $250,000, whichever is greater, and the court reduces any jury award above that limit. A few statutes for particular claims set their own measures, such as twice the damages award for willful and malicious trade secret misappropriation (47-25.1-03(2)).

What does malice mean for North Dakota exemplary damages?

Since the 2025 amendment by Senate Bill 2290, effective August 1, 2025, N.D.C.C. 32-03.2-01(2) defines malice as a direct intention to injure another, or a reckless disregard of the rights of another and any consequences. The statute previously used the words actual malice.

Are punitive damages available against a drunk driver in North Dakota?

Under 32-03.2-11(9), in a motor vehicle accident resulting in bodily injury, the trier of fact may consider exemplary damages against the driver, through the subsection 1 motion procedure, if clear and convincing evidence shows the driver had an alcohol concentration of at least 0.08 or was impaired as the statute lists. The cap in subsection 4 still applies.

Can a complaint ask for exemplary damages in North Dakota?

Not when the action begins. Under 32-03.2-11(1), a party must move to amend the pleadings later, with affidavits or deposition testimony, and the court grants permission if the evidence could support a finding by a preponderance of the evidence of oppression, fraud, or malice.

Does North Dakota take part of a punitive damages award?

No general statute does. Section 32-03.2-11 sets the standard, procedure and cap for exemplary damages but directs no part of an award to the state or a fund.

Are punitive damages available against the state or a city in North Dakota?

No. The State may not be held liable for punitive or exemplary damages (32-12.2-02(2)), and neither may a political subdivision (32-12.1-03(2)). Neither may be ordered to indemnify an employee held liable for them, although 32-12.1-04(3) provides that political subdivision employees may be liable for punitive or exemplary damages; an employee acting within the scope of employment is personally liable only for reckless, grossly negligent, willful or wanton conduct, shown by clear and convincing evidence.

Updates

Independently fact-checked against the cited primary sources

Sources and References

  1. N.D.C.C. 32-03.2-11: When court or jury may give exemplary damages (chapter 32-03.2)(ndlegis.gov).gov
  2. N.D.C.C. 32-03-08: When minor or incompetent subjected to exemplary damages(ndlegis.gov).gov
  3. 2025 Senate Bill 2290 (enrolled), amending N.D.C.C. 32-03.2-01 and 32-03.2-11(ndlegis.gov).gov
  4. Zander v. Morsette, 2021 ND 84 (N.D. 2021)(www.courtlistener.com)
  5. N.D.C.C. 50-25.2-11.1: Civil remedy for financial exploitation(ndlegis.gov).gov
  6. N.D.C.C. 47-25.1-03: Damages (trade secrets)(ndlegis.gov).gov
  7. N.D.C.C. 51-36-06: Private right of action (bad faith assertion of patent infringement)(ndlegis.gov).gov
  8. N.D.C.C. 51-21-05: Civil remedy against adult shoplifters or the parent of a minor shoplifter(ndlegis.gov).gov
  9. 26 U.S.C. 104: Compensation for injuries or sickness(www.govinfo.gov).gov
  10. N.D.C.C. 5-01-06.1: Claim for relief for fault resulting from intoxication(ndlegis.gov).gov
  11. N.D.C.C. 19-02.1-26: Limitation on exemplary damages(ndlegis.gov).gov
  12. N.D.C.C. 32-12.2-02 and 32-12.2-03: Liability of the state(ndlegis.gov).gov
  13. N.D.C.C. 32-12.1-03 and 32-12.1-04: Liability of political subdivisions, personal liability of employees(ndlegis.gov).gov
  14. N.D.C.C. 32-03.3-02: Liability of charitable organizations(ndlegis.gov).gov
  15. N.D.C.C. 50-10.3-06: Liability(ndlegis.gov).gov
  16. N.D.C.C. 14-02.4-20: Relief(ndlegis.gov).gov
  17. N.D.C.C. 32-21-02: Measure of recovery (death by wrongful act)(ndlegis.gov).gov
  18. N.D.C.C. 28-01-26.1 (survival of claims)(ndlegis.gov).gov
  19. North Dakota Legislative Council: Effective dates of 2025-26 legislation(ndlegis.gov).gov
  20. N.D.C.C. 1-02-10: Code not retroactive unless so declared(ndlegis.gov).gov
  21. N.D.C.C. 26.1-32-04: Willful act exonerates insurer, negligence does not(ndlegis.gov).gov
  22. Continental Casualty Co. v. Kinsey, 499 N.W.2d 574 (N.D. 1993)(courtlistener.com)
  23. N.D.C.C. 32-29.3-21: Remedies, fees and expenses of arbitration proceedings(ndlegis.gov).gov
  24. Puppe v. A.C. and S., Inc. (D.N.D. 1990)(courtlistener.com)
  25. N.D.C.C. 14-02.1-03.2: Civil damages for performance of abortions without informed consent(ndlegis.gov).gov
  26. N.D.C.C. 35-01-27: Discharge of mortgage or lien on real property, penalty(ndlegis.gov).gov
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