32-03.2-11. When court or jury may give exemplary damages
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. Upon commencement of the
action, the complaint may not seek exemplary damages. After filing the suit, a party
may make a motion to amend the pleadings to claim exemplary damages. 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. The party opposing the motion may respond with affidavit or
deposition testimony. If the court finds, after considering all submitted evidence, 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 the pleadings to claim exemplary damages. For purposes
of tolling the statute of limitations, pleadings amended under this section relate back to
the time the action was commenced.
2. 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. Evidence relevant only to the claim for exemplary damages is not
admissible in the proceeding on liability for compensatory damages. If an award of
compensatory damages has been made, the trier of fact shall determine whether
exemplary damages are to be awarded.
3. Evidence of a defendant's financial condition or net worth is not admissible in the
proceeding on exemplary damages.
4. 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.
5. In order for a party to recover exemplary damages, 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:
a. 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;
b. The degree of reprehensibility of the defendant's conduct and the duration of that
conduct; and
c. Any of the following factors as to which evidence is presented:
(1) The defendant's awareness of and any concealment of the conduct;
(2) The profitability to the defendant of the wrongful conduct and the desirability
of removing that profit and of having the defendant also sustain a loss; and
(3) Criminal sanctions imposed on the defendant for the same conduct that is
the basis for the exemplary damage claim, these to be taken into account if
offered in mitigation of the exemplary damage award.
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:
a. Federal statutes existing at the time the product was produced;
b. Administrative regulations existing at the time the product was produced that
were adopted by an agency of the federal government which had responsibility to
regulate the safety of the product or to establish safety standards for the product
pursuant to a federal statute; or
c. Premarket approval or certification by an agency of the federal government.
7. The defense in subsection 6 does not apply if the plaintiff proves by clear and
convincing evidence that the product manufacturer or product seller:
a. Knowingly and in violation of applicable agency regulations withheld or
misrepresented information required to be submitted to the agency, which
information was material and relevant to the harm in question; or
b. Made an illegal payment to an official of the federal agency for the purpose of
securing approval of the product.
8. Exemplary damages may be awarded against a principal because of an act by an
agent only if at least one of the following is proved by clear and convincing evidence to
be true:
a. The principal or a managerial agent authorized the doing and manner of the act;
b. The agent was unfit and the principal or a managerial agent was reckless in
employing or retaining the agent;
c. The agent was employed in a managerial capacity and was acting in the scope of
employment; or
d. The principal or managerial agent ratified or approved the doing and manner of
the act.
9. 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:
a. With an alcohol concentration of at least eight one-hundredths of one percent by
weight;
b. 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;
c. Under the influence of alcohol and refused to take a test required under chapter
39-20; or
d. Under the influence of a volatile chemical as listed in section 19-03.1-22.1.
At the trial in an action in which the trier of fact will consider an award of exemplary
damages, evidence that the driver has been convicted of violating section 39-08-01 or
an equivalent statute or ordinance is admissible into evidence.
