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Remedies Outline
Remedies Outline
I.
Introduction
A. What is a Remedy Court enforcement of rights. Blackstone (scholar of American
jurisprudence) said that every right withheld must have a remedy. There is no injury if
there is no redress. A right is meaningless if it doesnt have a remedy.
B. 3 Basic Remedies:
a. Remedies at Law (damages)
Damage law gives every person a choice: to behave as you should or pay
damages. Normally compensatory, but can be used as a social regulator
(torts usually, not K).
b. Remedies in Fairness (equity). Some included rescission and restitution here.
Developed from Chancery Court from England. When a claim didnt fit a writ
but you still had an argument in fairness.
c. Declaratory Remedies
In a sense, not a remedy at all. It is a declaration of the court saying what
someones rights are.
C. Procedure
a. Usually one court hears both damages and equity (except DE)
b. The court decides whether the litigant has been wronged under the substantive
law that governs primary rights and duties; it conducts its inquiry in accordance
with procedural law.
c. Courts are required to classify remedies as either substantive or procedural
when state claims are heard in federal court and when federal claims are tried in
state court.
d. Erie doctrine: State law for substantive, but Fed law for procedural. No federal
common law remedies. SupCt has held that the measure of recovery is
substantive.
II.
Damages
A. REMEDIES AT LAW
a. Compensatory Damages to put the P back in their rightful position [torts] or
promised position [contracts] {2 approaches: What is P out of pocket? OR
What is substitution value FMV? Can be different}
i.
Rightful Position
o US v. Hatahley (page 11)
The fundamental principle of damages is to restore the injured
party as nearly as possible to the position he would have been in
*but for* the wrong.
Judge cannot arbitrarily award damages. There has to be some
reasonable way of calculating the amount. Dont have to be
precise, but must have some basis in fact.
o Corrective justice Plaintiff should not be made to suffer because of
wrongdoing, and if we restore P back to her rightful position, she will
not suffer. (Aristotle, p. 16)
o Efficiency a new approach to the rightful position rule.
Scholarly approach rather than practical approach.
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Calculating Value
Sept. 11th Litigation case:
Rule: NY Courts follow the "lesser of two" rule when
property has been destroyed. A Pl whose property has
been injured may recover the lesser of the diminution of
the property's market value OR its replacement cost.
Each is a proper way to measure lost property, thereby
affording full compensation to the owner, and avoiding
uneconomical efforts. (no windfall)
- One exception to this rule is "special property." The test
for valuing special property without market value:
1. Improvements must be unique and specially built
for the specific purpose
2. Specific use for the improvement
3. No market for the type of property and no sales
of property
4. Improvement must be an appropriate
improvement at the time of the taking and its use
must be economically feasible and reasonably
expected to be replaced. (emhasized by prof.)
i.
ii.
Due Process
1. Punitives can be over turned on procedural grounds lack of
jurisdiction. NC cant punish for issues in SC
2. Punitives can be over turned on substantive grounds have to limit
damages to harm to that P, not other Ps. (Scalia and Thomas do not
believe there is any such thing as substantive DP).
iii.
Ratio
Many states have tightened BOP to clear and convincing
evidence. Yet most have applied caps or ratios. General ratio is
1:1 (actual to punitives).
Exxon v. Baker - a single digit maximis appropriate in all but the
most exceptional cases. when compensatory damages are
substantial, then a lesser ratio can reach the outer-most limit of
due process guarantee (p. 224).
Remedial statutes - With small damages cases (civil rights, etc.)
its more expensive to bring the litigation than the damages
amount. To encourage people to bring these cases for their
social value, many statutes have doubled and trebled damages.
(remedial/statutory ratio).
iv.
v.
c. Nature of relief
i.
Preventative seeks to prevent harm rather than compensate for
harm already suffered. Seeks to maintain P in rightful position and
not make worse off.
ii.
Prophylactic creates a type of due process. More broad and
instructive to D than preventative inj. Ex. SEC can impose an
injunction on a person from ever trading again if found to have
committed fraud. Close relationship between prophylaxis and
statutes.
iii.
Reparative compensatory type of injunction, issued after the wrong.
Backed up by contempt power. Ex. D performed a wrong and
threatened to do it again, court can issue reparative and preventative
injunction. If nothing to be forbidden, go for damages. {Undo harm.
Or redo Election results from example in EE}
iv.
Specific Performance really similar to an injunction, but its really
not. More like an order enforcing a K. Requires a person to do
exactly what they said they would do. Lies on the idea of uniqueness
of the thing. Cannot go out into the market and buy a substitute
performance. If there is a market, then money damages is an
adequate remedy. EXCEPTION personal services are not subject to
SP. Limited by the 13th Amendment. Use an injunction for that
scenario.
d. Procedural Aspect of Relief FRCP 65 (p. 459)
i.
Temporary Restraining Order (TRO) designed to prevent irreparable
harm that will occur before a preliminary injunction hearing can be
held. Only appropriate when there is no other adequate remedy at
all. Can be ex parte if atty can show that notice couldnt be given.
Not appealable because there are no findings of fact and conclusions
of law. Can become moot.
ii.
Preliminary injunction Only on notice to adverse party. Meant to be
temporary until there can be a full hearing on the merits. If there
have been findings of fact and conclusions of law, then a prelim
hearing is appealable. Keeps the status quo until a more permanent
solution can be determined.
1. Courts must engage in balancing:
a. Probability of success on the merits vs. irreparable harm to
either side during wait.
iii.
Permanent injunction final judgment on the merits, appealable.
e. Contempt Power solely at the discretion of the court. Can be criminal or civil
i.
Criminal contempt Willful violation of a court order. The key is
willfulness.
ii.
Civil contempt 2 types:
1. Compensatory failure to comply has created some injury to
protected party
2. Coercive protected party brings violation to courts attention and
asks the court to force them to submit (penalties and fines).
f.
ii.
iii.
iv.
Fraud for telling buyers they could get a dock permit when
sellers already held permit. P received a double recovery: an
injunction that makes them whole, plus damages to compensate
them for the loss of the right the injunction guarantees.
On remand, P had to choose which remedy they wanted:
compensatory damages or the injunction.
P could keep punitive damage because it was not compensatory,
and therefore not duplicative.
HOWEVER, can get injunction to prevent future harm, and
compensatory damages for past harm.
g. Constitutionality of injunctions
i.
Ayotte v. Planned Parenthood (p. 273) the rightful position principle
1. Court will try to limit the solution to the problem (ripeness)
2. Court will refrain from rewriting state law
3. Court cannot use its remedial power to circumvent the intent of the
legislature. (They do this all the time; should they invalidate the
whole statute or just certain part of it?)
ii.
Statutes can pass statutes to give the standing requirement. Ex.
Civil Rights of Institutionalized Persons Act establishes the standing
for AGs to bring constitutional cases.
III.
Declaratory Judgments an action to simply declare rights between parties. Noncompensatory and non-coercive. If you cant show irreparable harm, an injunction
might not be the right remedy. No contempt power, only can use to help prove your
case if right is violated.
a. Contract cases often used to AVOID a compensatory action. Gets rights settled so
you dont have to sue. Must have an assertion of rights, a challenge by D, and
ripeness. This is the controversy.
b. Constitutional cases
i. Article III, sec. 2 - judicial power extends only to "case and controversy".
ii. N, C, & St. L Railway v. Wallace P thinks taxes are unconstitutional, yet the
worst thing P could do is not pay the taxes. Sought a DJ on the determination
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of his valuable legal rights. Must show with specificity what their harm will
be in they don't get the DJ.
c. Uniform Declaratory Judgment Act SC has adopted.
i. The federal act explicitly gives the courts the power to declare rights of any
interested party, whether or not further relief is sought.
ii. Fed cts cannot decide status, State courts can. Ex. Married.
d. Scarecrow Patent cases:
i. Party acts in a way that infringes on patent. Instead of suing for infringement,
they threaten a suit against infringor. This infringor can be bullied into
abandoning or paying licensing fees. A way around this is for the infringor to
bring a DJ action. (See Cardinal Chemical v. Morton Int., p. 570)
e. Preclusion
i. Collateral estoppels (issue preclusion) if a party is involved in a proceeding,
that party is stopped from relitigating the same issue. DJ is issue preclusive
in subsequent litigation with respect to rights/issues already decided.
ii. Claim preclusion is different. A request for further relief is not barred because
it was not included in original request for DJ. Ex. Seek DJ and win, later sue for
damages.
f.
IV.
Other Damages
A. Restitution think in terms of unjust enrichment. Also called quasi-contract. Where
there is an enforceable K, you are bound by those terms. Not applicable if K has been
established. (Punitives not available in rest.) (similar to rightful position because it
restores things to the status quo ante) (social policy dont want D to profit from wrong
act)
a. Very much like money damages. It is the Cause of Action that puts it in equity
court. (Ex. Easier to prove restitution than conversion or fraud)
b. Restitution is based on Ds gain, not Ps loss. Based on benefit received by
D.
c. Recovery:
i. Mistake - A recipient who commits a wrong without fault, typically without
being on notice that he is doing anything wrong, is not liable for
consequential damages. (See Blue Cross p. 619)
ii. Ill-gotten gains: Disgorgement of profits a remedy imposed upon the D
which is more than injury to P.
1. Must show an intentional act. Therefore the elements of tort.
Different than Sauer case, there was no intentional act. (See EE p.
254 for examples)
2. P must show:
a. D earned a profit from the fraud
b. Causation
c. Amount of profit (NO requirement to show what D did with
profit)
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a.
It is now common practice to use the lodestar as a crosscheck on the POF award. ethical imperative because the
court acts as a fiduciary to the class.
b. Common approaches to cross-check:
i. Multi-factor test compare time/labor, complexity and
difficulty of case, quality of representation, benefit
obtained for class, risks.
ii. Benchmark percentages, 20, 25, 30% - court cant
know whats reasonable.
iii. Market Mimicking Approach market price for legal
services, in light of the risk of nonpayment and the
normal rate of comparison
c. Court concludes that the best way to determine the
reasonableness of a fee award is to assess what the fee
arrangement would have been had it been determined by an
open, competitive process at the outset. (auction of right to
be counsel).
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