Class 1 - 01-10
Types of remedies 1. Compensatory - as if never had been wronged (retrospective) 2. Preventative - prevent harm before it happens a. coercive - injunction (most important type of coercive) - personal command from courts ordering a litigant to do or to refrain from doing some specific thing b. declaratory - authoritatively resolve disputes about the parties’ rights but do not end in a personal command (Owner owns land, not opposing litigant). Resolves the issue but there is no injunction 3. Restitutionary - Restores to Plaintiff all that Defendant gained at Plaintiff’s expense. 4. Punitive - to punish for deliberate wrongdoing (stealing lumber knowing someone else owns it). Taking lumber one mistakenly believes is his own - even if done so negligently - is not punishable by punitive damages. Only if it is intentional can there be punitive damages. 5. Ancillary - Ancillary damages are designed in aid of other remedies. Attorneys fees and litigation costs, for example. Writ of execution is another example - sheriff seizing D’s property to sell it to pay P. Or, any money owed to D will just be paid directly to P. These are all ancillary damages are awarded for collection purposes. Monetary/legal v. Equitable remedies Can only have an equitable remedy if a Legal remedy would not be adequate MONEY FIRST - Legal (monetary) remedies - Damages - compensatory and punitive are most common. - Equitable (non-monetary) remedies - injunctions and specific performance This distinction gets murky with restitution damages Prevenative/Prospecive versus Compensatory/Retrospective Remedies Perventative Remedies - 2 types - Coercive remedies - court orders party to do something or not to do something - ex., injunctions - the most important coercive remedy - a personal command from a court to litigants, ordering them to do or to refrain from doing some specific thing. Ex., neighbor must stay off owner’s land. - Declaratory remedies - binding adjudication that establishes the rights and other legal relations (liabilities) without providing for or ordering enforcement (in the case at bar Ex., alleged patent infringer brings action to “clean the air” about IP rights. Justice** wtf? A Practical focus on the “bottom line” A debate over whether laws have any moral force in the absence of remedies
Substitutionary relief - also known as specific relief à “law” v. “equity” “Another view of remedies taxonomy” Specific relief injunctions, specific performance (Contract Law) Restitution of Property Restitution of Specific Sum of Money (i.e., refund). Rightful position principle - compensatory remedies At most basic level, harmed for $10k. He should receive $10k - no over or under compensation Easy in principle, but a lot harder in practice As Hatahley (1958) p. 11; (case in first reading - rich, but short case/excerpt from case) demonstrates) Appellate Court says the fundamental principle of damages IS: to put the injured party nearly as possible to the position the party would have been but for the wrong. - Expectation = Restitution Damage in this case. Class 2 - 01-12 Closer look at U.S. v. Hatahley (1958) - The Rightful Position and issues that arise. You can have multiple principles in tension w/ one another e.g., cruel and unusual punishment vs. deterrence; or rightful position v. economic efficiency Hatahley Fundamental principle of damages is the rightful position - Indian Livestock Case - what’s the value of the livestock?? Rare, unique, livestock, and where would they have been had the livestock not have been seized unlawfully? App. Ct. didn’t approve of what trial court did because they applied an erroneous rule when finding the value of the animals, w/out consideration for condition, age, or sex of the animals. Mechanics of compensation - e.g., district court’s approach in Hatahley - We create a default rule to pay $ to plaintiff - Losses are easiest to calculate when we can assign a $ value - But there are problems - Hatahley court faced the question of how to value horses/livestock, difficulties of travel, missed religious ceremonies, and emotional distress How do we value horses and livestock? And what were the challenges in coming up with a number in Hatahley? - Different ages, conditions, and sexes; they were special animals without a “normal” market
value - Even if we can quantify it accurately, it could cost far more to actually take the time and resources to actually quantify it - Maybe an estimate is the best we can do under the circumstances - but estimates will inevitably result in under- or overcompensation Assuming we actually care (from a Plaintiff’s perspective, he may not) about such a large price tag for D, how might we approach the problem? Social Justice - super-compensatory? Law and Economics - efficient behavior, maximization of social _______
IN RE SEPTEMBER 11TH LITIGATION - Silverstein purchased 99-year leases on four of the WTC buildings in July, 2001. - Sept, 2001, they fell. - Sued airlines, airport security companies, and the operator of Boston’s Logan Airport, alleging that “but for” their negligence, the terrorists wouldn’t have been able to enter the aircrafts they hijacked. - Sought $16.2 billion - the alleged replacement value of towers one, two, four, and five. Silverstein (’s companies) (WTCP) paid $491 mil. at closing. Rest of consideration - 99-years of payments with a present value of $2.595 billion. * WTCP was (net) valued at $2.84 billion. Originally built for “the single object of preserving . . . The economic well=-being of the northern New Jersey-New York metropolitan area” . . . This was in the public interest. - Cost $1 billion to build. LESSER-OF-TWO RULE New York follows the lesser-of-two rule - a plaintiff whose property has been injured may recover the less of the diminution of the property’s market value or its replacement cost. This rule applies even when the property in question has been completely destroyed. BUT . . . SPECIAL PROPERTY EXCEPTION - Lido Beach Test - Properties without market value (towers??) 1. The improvement must be unique and must be specially built for the specific purpose for which it swas designed; 2. There must be a specific use for which the improvement is designed and the improvement
Court: NO! That price (aforementioned fair market value) includes rental money. contemplated. Claim is w/out merit. suitable only to the owner.
Then WTCP wants damages for tenants not paying their rents. Price paid to port authority included the value of anticipated rentals. regardless of how it’s measured. This test is NOT whether there are. or were. special unique aspects to the property. . is $3. but rather Whether the use to which the property is put at the time of the tort is a unique use. Price paid reflected the present value and of those rental streams that were destroyed. The market value of the towers is the measure of recovery for their destruction. v.9 billion. D argues they can’t be held responsible in tort. natural. repair. Palsgraf. NOT: remote or indirectly related ONLY: direct. There must be no market for the type of property and no sales of property for such use. and proximate. and is included in the already-decided fair market value (not specialty value). RR Co. or expected. AND foreseeable. and 4. Seeks this amount over and above the value of the destroyed buildings. AND PROXIMATE RESULT of his actions. Court: D is NOT responsible for damages which are remote from the wrong or indirectly related to it. 3. 2001. . and without a fair market value **Fair market value for the towers was determined two months prior when the lease was signed! **
P then argues: entitled to recover cost of contractual obligations to “rebuild. That the property would be rented out was considered when the contract (the 99-year lease) was made. not from the use of the property at the time of the injury (given these specific facts). WTCP cannot recover twice. and replace” the buildings. the new buildings represent radical improvements and differences and CANNOT be considered replacement structures within the meaning of the contract.any special or different burden flows from the contract. . restore. and that EVEN IF THEY COULD.must be so specially used.
. . Argues the present value of lost rentals since Sept 11. Long Isl. and those that the parties would have foreseen. The 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. NATURAL. or expected. Tortfeasor is responsible only for injuries that are the DIRECT. contemplated.
The court appeared to accept this claim in principle. it would be completely different. Replacement value . but dismissed it for lack of any evidence of the value of the towers in [the year] 2100. -. 49 U. v.Y. Acts. (p.in the case that it continues to completely collapse which would result in much greater replacement (or repair?) value. the Air Transportation Safety and System Stabilization Act limit’s the liability of each defendant to its insurance coverage. . Real Prop.go back and find it)
. Class 3 Notes .C.” Schonfeld v.44 has an analysis Trinity Church Cracks . §40101 P also sought to recover the residual value of the towers at the end of the 99-year lease. for market values can flucuate rapidly.or replacement in kind.S. is the ‘best evidence’ of its market value. There would be no question as to whether there would be future damage and what that damage would be. 2001 is a short enough time lapse to presume equivalent market value. Generally. discounted at present value.what do you do when there is no fair market value (FMV)? Risk of under-compensation versus over-compensation Present value (and one more line in the powerpoint that is a remedy issue in the case -. proof may be introduced to overcome the presumption.N. there is potential future damage . neither being under any compulsionto buy or to sell and both having reasonable knowledge of relevant facts. 2001 . But the main problem herein is that there is not really a fair market value. .damage in old stone church If it just completely fell all at once.Jan-17 Efficient Breach .Sept.. §833 (2008) provies that the holder of a life estate or a term of years can recover the value of the reversion and hold that recovery in trust for the owner of the reversion. Hilliard (2000).” U. negotiated by the parties at arm’s length. But here.July.S.p.22) The fair market value of a property is “the price at which the property would change hands between a willing buyer and a willing seller. Cartwright (1973). “a recent sale price for the subject asset.IV. Also. However.
and that the court would award replacement cost as the measure of damages Reliance and expectation .. the question is what = “rightful position” . or something Question is whether the buyer is entitled to his actual loss of profit or the difference between the
.default remedy is putting the party in the position they would have occupied but-for breach . Reliance .and in particular.(additional) trinity church issues: Assume that if the church had been totally destroyed. they woul rebuild it with a substantially similar structure.costs incurred by the promisee (but not necessarily paid to the promisor). Thomas Rice-selling case. the injured party has a right to damages based on his reliance interest Less any cost that the party in breach can prove . to put another way: put the non-breaching party in the position they would have been had they performed Neri v. (Generally less than expectation interest.§38 restatement (3d) of Restitution and u\Unjust Enrichment (published 2011) (we discuss this later in the course).selling boat case .e.it’s a lost sale?? Tongish v. how do or should we choose between the “expectation interest” and the “reliance interest” 3 damage interesting Expectation . Retail Marine Corp. but more than restitution) Rest. I. to her “rightful position” . changes made/costs incurred “in [reasonable] reliance” on the contract.actual Day 3 stuff Value as measure of rightful position . of K 2d 349 Uncertainty as a limitation on damages As an alternative to the measure of damages state ed in 347. (1972) . .putting the party in the position she (objectively) would have been in had the contract been performed.or.of course. Which do we choose? . .the fundamental principle of damages is to restore the injured party. Reliance damages are often easier to prove r. Of Contracts 2d §349 Restitution . as nearly as possible.
unpredictable .probably mentioned in above notes . compensatory damages for harm that so frequently results . but not tort . general. Expectation interest remains the dominant and preferred measure of damages in contract law. 1982) Breach of warranty
Summary 1.damages that law presumes to follow from type of wrong complained of. Choice of a cause of action matters .clauses excluding consequential damages w/in the contract .Punitive damages in tort but not in contract 2.encourages litigiousness .default limitations on conract damages . Singer (1980)
. direct damages is artificial and confusing Why it matters .many lawyers and judges still think of remedies in these terms.legislatures use the dinstinction in statutes .market price and the contract price.foreseeability .something else .UCC says so
Chatlos Systems v. General damages . . Problems qith consequential damages .author is probably right that the dinstinctions b/w consequential. Held: court awards buyer contract-market damages rather than lost profits Reason . Blacks law definition Consequential damages . . NCR (3d Cir. specifically.Lost profits in contracts.hard to define Other problems w/ consequential damages .don’t flow directly and immediately from an injurious act but that result indirectly from the act Basic rationale: permitting consequential damages is just the logical extension of the but-for rightful position principle.parties use the distinction in contracts . Meinrath v.
If a limitation or exclusion of consequential damages is not unconscionable when K is made. Master Engraving Co. Inc.
. 64-65.Class 4 Notes . must it be held unenforceable if the limited remedies provided in the contract do not achieve their intended purpose? UCC is inconclusive regarding this issue. v.64). Pennzoil (1987).” Is the remedy limited to this? 1) Freedom of Contract (is in UCC §2-719) 2) Right to limit or exclude consequential damages (§2-719) 3) insistence upon minimum adequate remedies to redress a breach of contract (Comment 1. Issue: whether the UCC permit’s the enforcement of a contractual exclusion of consequential damages where the buyer’s limited remedy authorized in the contract of sale has failed to achieve its essential purpose. p. including the seller’s breach. The remedy limitation clause in the contract was less than “put Plaintiff where he would have been but-for the breach. LIMITS ON DAMAGES Kearney & Trecker Corp. §2-719). cause the consequential damage exclusion to be inconsistent with the intent and reasonable commercial expectations of the parties that invalidation of the exclusionary clause would be appropriate under the Code. Pennzoil sought to replace getty’s low value reserves w/ reserves of a much higher value. Next. But the Court doesn’t buy Texaco’s argument.. Replacement cost is speculative / uncertain (p. The code only provides that when a limited remedy fails of its essential purpose.” (§2-719(2)) Court’s Conclusion: §2-719 does not require the invalidation of an exclusion of consequential damages when limited contractual remedies fail of their essential purpose. Rest of arguments are clearly stated (and most underlined) in text on pp.. Texaco urges that the jury’s use of the replacement cost model resulted in a gross overstatement of Pennzoil’s loss because a. “remedy may be had as provided in this act.62 There is an obligation of “good faith and fair dealing” (in this jurisdiction).01-19 Texaco. v. It is only when the circumstances of the transaction.
section 33 assured Interface that.” Truck Rent-A-Center. Because s.”). (1977). in the event of default. “A clause which provides for an amount plainly disproportionate to real damage is not intended to provide fair compensation but to secure performance by the compulsion of the very disproportion. Interface is entitled to retain the deposit. however. and parties renegotiated the lease In the renegotiated contract. TWA would bear at least some responsibility for the cost of the overhauls. TWA would owe termination value of 12. Thus.Jan-24
. Puritan Farms 2nd. actual damages would be approx. . would reap a windfall well above actual harm sustained.000 that it owed to TWA and to retain that sum as a “maintenance deposit” to be returned to TWA w/out interest upon .4 mil. .In re Trans World Airplines.” Id. A promisor would be compelled. out of fear of economic devastation. .(continuing class four discussion) . of the injury that Interface would incur if TWA terminated the lease early. the law is: “contractual provisions fixing damages in the event of breach will be sustained if the amount liquidated bears a reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation.478. per (termination value minus one month’s rent). and that condition was never satisfied. New York public policies are “firmly set again the imposition of penalties or forfeitures for which there is no statutory authority. Inc. Inc. (1998).5 mil. Public policy is intended to avoid this type of penalty (see Truck Rent-A-Center. the return of the deposit was conditioned on TWA’s performance . one month’s rent per plane. in the event of early termination. .Under their clause. Court affirms the District Court’s order holding that the liquidated damages provision contained in the lease is unenforceable.If TWO were to breach with one month left on lease. Important / Relevant Holding: Accordingly.5 million. Another section of the lease authorized Interface to withhold 1. minus the resale value at that time. p. ex ante.74 TWA leased two plains from Interface Group. .” Effect of liquidated damages clause in their Contract is this: .33 reflected a reasonable estimate. Precedent Rule: “a liquidated damages provision has its basis in the principle of such compensation for loss. Accordingly. s. Per plane.33. TWA expressly agreed that the liquidated-damage clause was enforceable. Under s. Rent payments missed. Essentially. which says. But Also..33 didn’t constitute an unenforceable penalty under NY law. Inc. plus 12. v. Class 5 . TWA would owe 5. to continue performance and his promisee.
as by limiting the buyer’sr remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts. The Court held that liquidated damages clause of the contract gave the non-breaching party the choice of recovering either actual or liquidated damages. §2-719(1): Subject to the provisions of subsections 2 and 3 of this section and of the preceding section on liquidation and limitation of damages: (a) the agreemend may provide for remedies in addition to or in substitution for those provided in this article and may limit or alter the measure of damages recoverable under this article. therefore.81 No.5 million. NI Gas converted naphtha into natural gas. U. 2-719(1)(b) does not govern the liquidated damages clause in the contract with ECI. limitation of REMEDIES falls under 2-
. eased price controls on natural gas.involves anticipatory breach of three grain supply contracts which contained liquidated damages clauses. Gas co. NI Gas quit buying naphtha and2 this case resulted. and natural gas became cheaper from drillers and pipline companies. Liquidation or limitation of damages is governed by 2-718. resulting in a jury award of $305. promised to buy 56 million barrels of naphtha from Energy Coop over ten years. NI Gas argues: trial court erred in denying its motion for summary judgment on the liquidated damages clause and in striking the liquidated damages defense. This Court: A liquidated damages clause which provides an agreed upon formula for calculating the amount of money damages owed in the event of non-performance is NOT a limitation on a remedy. Energy Cooperative. in which case it is the sole remedy.S. ECI also relies on §2-719(1)(b) of the UCC in arguing that the liquidated damages clause does not provide the exclusive measure of damages unless it is expressly agreed to be exclusive and labeled as such. v. A liquidated damages clause does not limit a remedy but instead provides an argeed upon measure of damages. Wairau . Ill. Inc. it has the option of seeking actual damages. P’s claimed to have the option of seeking actual damages since the liquidated damage clauses were not declared to be exclusive as allegedly required by 2-719(1). Court rejected this. (1984). and (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive. Ray Farmers Union Elevator Co. Therefore. NI Gas argues that 2-719 applies only to contract provision which limit a remedy. ECI says it has not made a demand for liquidated damages and. p. v.Northern Illinois Gas Co. And ECI chose to pursue actual damages. holding: a liquidated damages clause is NOT a remedy within the portent of 2-719.
then the restrictions of 2-719(1)(b) would arguably apply to a liquidated damages clause. v. “subject to” 2-718. To establish damages.” Court holds that for plaintiffs to recover treble damages on account of §7 violations. Court decided that the jury had not been properly charged and that therefore a new trial was required. . it decided that “an essential predicate” for the district court’s grant of equitable relief was the jury verdict. Court reverses Trial Court’s order striking the liquidated damages defense. Court of appeals reversed the judgment and remanded the case for further rpoceedings. instead. We see no reason to impose restraints of 2-719(1)(b). To establish a violation. But 2-719 is subject to 2718. The only cross reference b/w the two sections is found in 2-719. they must
Brunswick Corp.” §4 provides reble damages to “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws.3 mil. respondents sought to prove tht because of its size. petitioner had the capacity to lessen competition in the markets it had entered by driving smaller competitors out of business. . thereby denying respondents an anticipated increase in market shares. or to tend to create a monopoly. The concepts are separate and distinct. the equitable decree should be vacated as well. Petitioner acquired and operated many bowling centers since 1965. 2-718 were made subject to 2-719.” Both sides petitioned for writs of cert. Jury verdict for $2.118 Petitioner is bowling equipment manufacturer.§7. Divestiture was simply inappropriate.p. Pueblo Bowl-o-Mat (1977) . To answer this question. respondents’ profits would have increased. equitable relief “should be restricted to preventing those practices by which a deep pocket market entrant harms competition . which proscribes mergers whose effect “may be substantially to lessen competition. Petitioner only brings the issue “whether antitrust damages are available where the sole injury alleged is that competitors were continued in business.” Only injury is that the competitor bowling alleys stayed in business. Also.719. indicating that any restriction on the right to liquidate damages by agreement is contained in 2-718 and nowhere else. And it concluded that in any event. respondents attempted to show that had petitioner allowed the defaulting centers to close. If. Brunswick’s was granted. -. we look to ant merger and treble-damages provisions of the Clayton Act.
and is not restricted to proof of damage in antitrust suits. Backpay awarded only until the day of the finding of the new evidence that would have allowed firing -. . which is o say injury of the type the antitrust laws were intended to prevent and that flows from that which make defendants’ acts unlawful. The principle is an ancient one. Defendant made calculations of damages difficult.
Bigelow v. Hazeltine Research.” Zenith Radio Corp.000 during the five year time period. in short.p.m and has derived profits from the sale of the product. (1969) McKennan v.ding ding. . Would be likely to cause. RKO Radio Pictures (S. this Court has sustained recovery of the full amount of defendant’s profits where his own wrongful action has made it impossible for the plaintiff to show in what proportions he and the defendant have contributed to the profits.as if never unlawfully terminated . even though damages could not be measured with the exactness which would otherwise have been possible. . not affiliated with respondents. Petitions charged that. “the type of loss that the claimed violations . but later finds out that he could have fired them for a lawful reason. and in turn tried to hide behind this difficulty in its defense. “The msot elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of he uncertainty which his own wrong has created.” . v.
.Ct 1946) . P’s must prove antitrust injury. Inc. .124 Double features . prices and values as affected by the conspiracy. although their character is such as frequently to call for its application. In cases where a wrongdoer has incorporated the subject of a plaintiff’s patent or trademark in a single product to which the D has contributed other elements of value or utility.prove more than injury causally linked to an illegal presence in the market. but later finds evidence of wrongdoing by the employer sufficient to lawfully terminate him. It should be. Nashville Banner (1995) D fires someone for an unlawful reason. such as petitioners. with what they would have been in its absence under freely competitive conditions. they were subjected to loss of earnings in excess of $120. consequentially. by comparison of profits.because the tortuous acts themselves precluded ascerainment of the amount of damages more rescisely.theaters owned by some of the conspirators were enabled to secure and show feature pictures in advance of independent exhibitors. “jury could return a verdict for the plaintiffs. Age discrimination firing. .
although the result be only approximate.S. were otherwise. City of NY .Story Parchment. Difficulty of ascertainment is no longer confused with right of recovery” for a proven invasion of the plaintiff’s rights.Brinks contracts to collect parking .129-130 Brink’s v. specific deterrence General deterrence by example vs. deterring a specific party When are punitive damages acceptable? How about risk * outrage = acceptability (just a general idea Totolo made up.p. . The wrongdoer is not entitled to complain that they cannot be measured with the exactness and precision that would be possible if the case.enough proof .p.“The constant tendency of the courts is to find some way in which damages can be awarded where a wrong has been done. 282 U.Tort Reform Arbino v.Note 4 . And how much responsibility should a company be able to take for actions of their managers. Baker) . Johnson & Johnson Personal accountability Should a company be punished for the bad actions of managers. Criminal penalties General v.Brink’s employees steal from meters . at 565 Note 3 case .Evidence of damages .130 .Court cites Bigelow: “It will be enough if the evidence show the extent of the damages as a matter of just and reasonable inference.” Ex Post and Ante issues.not enough proof . Jan-31 .” .collection increases $1 million in first ten months after replacing Brinks. Drunken sailor who causes damage (Exxon Shipping v. which he alone is responsible for making.truly irreparable harm Billions of dollars Egregious (but not intentional) behavior
. No reason you cannot allow evidence found between the breach and the trial.
Court noted that the punitive damages award was not excessive when compared to various civil and criminal penalties they could have faced. fraud.000 for each act of fraud.S. Jury found Campbell 100% at fault and rendered verdicts totaling nearly $186k. denied Campbell’s appeal in original suits against slusher v. State Farm refused to pay the part of the judgment exceeding policy limits and refused to post a supersedeas bond to delay collection during appeal. Respectively.
Trial Court Jury awarded $2. 2) ratio between punitive award and thee harm likely to result from the defendant’s conduct. Supreme Court States have discretion. etc. 1) degree of reprehensibility of the defendant’s conduct. v. Punitive. Co.6 mil to Campbell in compensatory. Campbell agreed to sue State Farm using Slusher and Ospital’s lawyers. but there are procedural and substantive constitutional limitations on these awards. Court also relied on State Farm’s wealth and testimony indicating that “state farm’s actions will be punished t most in one out of every 50. Conclusion: “the ratio between punitive and compensatory was not unwarranted.
.000 cases as a matter of statistical probability. Supr. including $10. Caused an accident that killed one driver and disabled another Liability insurance only covered $25k per person. Two victimes decided not to collect from Campbell. Campbell hires own lawyer to negotiate. Ospital State Farm paid the judgment. Campbell Campbell tried to pass 6 vans on a wo-lane highway in Utah. $145 mil in punitive Trial court reduced this to $1 mil and $25 mil. U. Utah Supr Court applied the three guideposts in BMW v. 3) and the civil or criminal penalties that could be imposed for comparable misconduct Reinstated $145 mil. disgorgement of profits. and intentional infliction of emotional distress.State Farm Auto Ins. but State Farm refused offers to settle for policy limits. the suspension of its license. and pay 90% of any recovery to Slusher and Ospital Ut. Ct. as well as the harm that actually has occurred. Gore (1996). And Campbell decided to sue State farm for bad faith.
or mere accident State Farm’s handling of the claims against Campbells merits no praise. 5) And the harm was the result of intentional malice.Due Process prohibits grossl excessive or arbitrary punishments on a tortfeasor. TC found that State Farm employees altered records to make them appear less culpable. however.” Punitive awards serve the same purpose as criminal penalties. Reasonableness of punitive damages -. State Farm disregarded the near-cerain probability that a judgment ine xcess of policy limits would be awarded.that Phillip Morris knew for the entire 40 years that there was at least a substantial risk that smoking caused cancer. trickery.Degree of reprehensibility Determine reprehensibility by considering whether: 1) the harm caused was physical as opposed to economic. Theory of the case was fraud . This is because “elementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice” of the conduct that will subject him to punishment as well as the severity fo the penalty a State may impose. 3) The target of the conduct had financial vulnerability. and knew for most of that time that smoking in fact caused cancer. but a more modest punishment for this reprehensible conduct could have satisfied the State’s legitimate objectives.” . Williams P died of lung cancer. defendants subjective to punitive damages haven’t been accorded the same standard of a criminal proceeding. State cannot punish a defendant for conduct that may have been legal where it occurred. Cannot consider wealth if considering wealth trumps this 9-times-compensatory constitutional limits. Court says Blurred line b/w punitive and compensatory damages “The wealth of a defendant cannot justify an otherwise unconstitutional punitive damages award . . or deceit.
Phillip Morris Co. v. 2) the tortuous conduct evinced an indifference to or a reckless disregard of the health or safety of others. State Farm ampliied the harm by assuring the safety of their assets and telling them to put a forsale sign on their house post-verdict.9 times compensatory or less is constitutional. but that It falsely and systematically sought to reassure the public and
. No error awarding punitive damages. 4) The conduct involved repeated actions or was an isolated incident. .
” Constitutional Due Process forbids a State to use punitives for injuries upon nonparties to the case (other people who have received lung cancer or who are at risk for lung cancer). intentionally inflicting substantial risk o serious illness or death on thousans of Oregonians.although parties can come back seeking enforcement (eg. “grossly excessive. $79. BUT. Preventative wrongful acts (preventative injunctions) Themes 1) faith in money vs. Oregon court upheld punitives.
Feb-07 INJUNCTIONS Equitable vs. Williams repeated the assurances that smoking was safe.S. Jury: $21k in economic damages.5 mil.Damage judgments do not . in punitives. $800k in no economic. Williams died soon after.injunctions require courts to oversee/supervise compliance . but permitting punishment for conduct directed to others that was both in-state and similar. and this was such a case. lack thereof 2 Losses that are easily quantifiable vs. Supreme Court Constitution imposes certain limits . Family persuaded him to quit. Concluded D’s conduct was extremely reprehensible. Read State Farm as forbidding punishment for out-of-state conduct or for conduct dissimilar to the illegal conduct directed at P. not-so-much 3) judicial economy .minimize the risk.” The punitives far exceeded a single-digit ratio to compenatories.
. . either before or after the reduction to the statutory cap. a felony that the legislature treated very seriously.
U. . Concluded: “what Philip Morris had done was manslaughter. legal relief Injunctions are equitable. single-digit ratios can be exceeded when the conduct is unusually reprehensible.
Example: integration of universities in the 1960’s Preventative Injunctions Almurbati v.265. Glickman (1996). and the rightful position. or Yemen) Court: no evidence that they’ll be transferred to such a country. Respondents refute: the facts P’s allege. Distrust is based on nothing more than speculation. mistreatment. etc.And most notably. P’s rely on news reports and statements from two of the petitioners herein. ripeness. Injunctions. P’s filed for habeas relief to be released. . “it is the policy of the United States not to repatriate or transfer individuals to other countries where it believes it is more likely than not that they will be tortured. “This is not the stuff that should cause a court to disregard declarations of senior Executive Branch officials submitted to the Court ‘under the penalty of perjury.P’s are 6 Bahraini nationals classified as “enemy combatants” and held at Guantanamo. P’s allege that they will suffer “immeasurable and irreparable harm” (torture or death) by foreign gov’t to where they may be transferred (Pakinstan. . This Court cannot conclude that P’s would suffer irreparable harm if they are transferred from Guantanamo. Then they filed for a preliminary injunction forbidding the Gov’t to transfer any plaintiff out of Guantanamo w/out 30 days’ notice to the court and counsel (filed as part of their habeas case). . “petitions must show that the threatened injury is not merely ‘remote and speculative.Garnishment. innuendo. Saudi. Specifically. because R’s directly refute P’s allegations of their potential torture. Afghanistan. note 3??)
.enjoin lawful acts to prevent possible future wrongful acts that may cause harm 3) Reparative . .Humble Oil v. and second hand media reports. Court Finds: That the underlying basis for the claims is their basic distrust of the Executive Branch. Harang (1996) (p. Bush (p. and indefinite detention .263) . Note Case .to force public institutions to comply with a particular legal obligation.to repair harm 4) Structural .enjoin wrongful acts to prevent harm 2) Prophylactic . they do not allege any statements were made by anyone with authority to determine their destination upon release.’” Milk Industry Foundation v.’” Holding: Thus.” (More likely than not??) Rule: To obtain injunction relief.) 4 Types of Injunctions 1) Preventive .
. Court: 1) Finds that the evidence to the one incident is slight. the party that destroyed the evidence would be liable to the injured party for damages This is an example of a case where damages could be used to work like an injunctionMarshall v. . 2) The Lower Court made no findings with respect to it. 3) The Lower Court didn’t rely on it in determining the scope of the injunction. (and cites 2 cases on p. relying on the proof of a discriminatory job order placed by the Lakeland store. Hannah v. Appellant argues: regarding the scope of the injunction. . .Alleged violation of Age Discrimination in Employment Act of 1967 District Court Found: there was a violation in terminating William Reed. “but for the spoilation of evidence the injured party would have prevailed in the dispute à if presumption not overcome. and 4) The Court made no finding of discriminatory company policy or practice.Secretary of Labor sued Goodyear .This doesn’t warrant such a broad injunction The General Rule: From previous case history establishes that a nationwide injunction is appropriate only when the fact indicate a company policy or practice violates the statute. and granted the requested relief . courts still will not grant them unless there is good reason .Court found single violation .passes the tests.270) Secretary Argues: that in the instant case there is sufficient proof of multiple violations to warrant a nationwide injunction.Store Manager unlawfully fired Reed.a manager who thinks he can run the company best if he only has younger people working for him. and Reed’s discharge was isolated -. Heeter Unclear why it had been destroyed Heeter files counterclaim for spoilation of evidence Court: spoilation could be a stand alone . Goodyear (1977) (p.Issues w/ injunctions Even when cost of imposing injunction is zero/nothing/nada. and back-pay. . Holding: Relief should be limited to only the one store. District Judge expressed that Goodyear itself is committed to the principles of the statute.nationwide injunction against further violations. .269).
S. Jones . v.T. . Complaints alleged that the size and competitive relationship of each set of companies made it fall under §8 Accordingly.U. v.“something more than the mere possibility” vs. “the case may nevertheless be moot if D can demonstrate that ‘there is no reasonable expectation that the wrong will be repeated. Both sides agree that voluntarily relieving oneself of duties doesn’t make a case moot. -.’” U.This means the case is still open. “some cognizable danger” 2) key .S. What happens when courts decide merits and holds D’s acts to be illegal.distinction between “mootness” and “denial of injunction” Mootness . . SOMETHING MORE THAN THE MERE POSSIBILITY WHICH SERVERS TO KEEP THE CASE ALIVE. Soon after complaints filed. But.Court dismissed civil actions against Hancock and three pairs of corporations for which he served as director. W. Complaintants asked Court to order the interlocks terminated AND to enjoin future violations of §8 by the individual and corporate defendants. of America (19450.dismissal as a right .Voluntary cessation of wrongful conduct is very common Key Points Burden is on P to prove propensity D then has burden to show mootness Vol Cess is usually not sufficient to call a case moot
. -. “tHE NECESSARY DETERMINATION IS THAT THERE EXISTS SOME COGNIZABLE DANGER OF RECURRENT VIOLATION.S.note case (1998)) court reversed injunction to admit women “effective immediately” b/c Court was confident that the school would heed the directives of SC in a different decision.Clayton Act of 1914. § 8 prohibits interlocking corporate directorates. v. Grant Co.no case / case dismissed Denial no need for injunctive relief. Aluminum Co.” 1) The “Test” . Very high burden Not enough evidence on the other side. but also that no injunction is necessary? U. Hancock resigned from the boards of one of the Co’s.
Final Points and Takeaways 1) Distinction b/w “some cognizable danger” and “mere possibility” is useless 2) The result in cessation cases may come down to the District Court’s fact ruling. . Granting of injunction is denied
.Use of the property is lawful. and D appealed.Suit for injunction filed against them. one can be granted later if promise to cease is broken.Insufficient without evidence . Embalming/undertaking . under the present circumstances. “P didn’t allege or offer evidence to prove behavioral patters which would cause them harm to warrant the injunction. Rests completely on suspicion.enjoined because there was a measurable nuisance and evidence thereof.at this time. “present fear of what may happen in the future .patterns/statistics/etc. Can always seek damages. insufficient facts that D will make “unreasonable use” of the property.D’s purchase home to turn into halfway house for those released from prison. . 2) Depreciated property values . Issue: “Whether a proposed use constitutes a nuisance. .“clearly distinguishable on its facts from the present situation” Holding is limited . 4. . “Mere depreciation of land values . . Cannot sustain an injunction sought on the ground of nuisance. . but Restidents have complaints 1) Fear of criminal activity .” --Other Cases Town Dump . . Connecticut Half-Way House. Did DC believe that the D was going to really stop its activities? Substantial discretion for DC’s ruling. INC.Not a nuisance.Trial Court enjoined it as a nuisance. Feb-09 Nicholson v.” Court: .” Test à “reasonableness of the use of the property in the particular locality under the circumstances of the case. 3) If injunction is denied.
Injunction made P’s whole.250 compensatory. Forster v. Court Affirm in part. Fraud D’s do not contest fraud. and remand for further proceedings. Primary Issue .P’s buying property. . Jury awarded $12.Awarded P damages for fraud and breach of contract.Injunction that makes them whole plus damages to compensate them for the loss of the veryr ights that the injunction has guaranteed.
Pepsico. Union would grant permit to plaintiffs and revoke the permit already granted to Defendants. and $10k punitive. Boss (p.
. v. D’s selling property. -. and injunctive relief. . Defendants appeal . They represented that P’s could obtain permit for boat dock when they knew P’s wouldn’t be able to.Therefore.Possible Alternative Arguments for Plaintiffs Statistics . 295-310 (3 cases). District Court . D’s Argument .Sale of property on the Lake of the Ozarks in Missouri . reverse in part. Redmond (p. Feb-14 Assignment . property transferred is exactly as agreed -.’ .D’s Argue that P are receiving double recovery.expectation damages granted.D’s have lost theirs .295) .dock removed and they have their permit.half-way houses cause crime D having problem in the past Prior injunctions against D Prior Court orders D has ignored.P’s have their permit . Inc.This Happened .284).No future permit may be granted to D’s that would interfere with Plaintiffs’ rights.pp.Injunction Union Electric agreed that if the Cour says P’s are entitled to a permit under their contract w/ Defendants.
They have money and property and are in a better position than would have been had there been no fraud or breach of contract. Minnesota Mining & Manufacturing Co. and right to have D’s dock removed) Damages are designed to compensate the loss of these rights. Plaintiffs Under Missouri law. an injunction would be irrelevant to the recovery of damages. an injunciton guaranteeing P’s their boat-dock permit can change this. if this argument were accepted.P developed an improved precision tape recorder and reproducer.D (Winston) developed a similar machine. It’s possible P’s sustained damages b/c they had to wait for complete fulfillment of the terms of the sale..right not to be defrauded. and to keep compensatory and injunction would be a double recovery. Nothing that happened thereafter. P’s argue They sought redress for violation of trwo separate legal rights -. However. including Johnson and Tobias. for example. even though one or the other of these events occurred on the day immediately following the sale.
. damages ffor fraud in connection w/ sale is difference b/w value of land on the date of sale as represented. they will recover double. But that’s not the case here. The value at date of contract was $12. The lapse of time was greated than one day -.500 more than at tome of conveyance. by using confidential information acquired while working on Mincom machine. breach of K. P alleged D’s machine was developed by former employees of P. . AND specific performance. and the “littoral rights” appurtenant to the purchased property (right to a boat-dock permit.(Plaintiff) . This makes nos sense. and value of land on date of sale as actually conveyed. Winston Research Corp Defendant) v. P’s have received damages for fraud.about three years. P sued for damages and an injunction. Court Injunction made them whole.If P’s receive the difference between the value of the property as promised and the value of the property as transferred.
14 months later. . P’s argue they were entitled to a permanent injunciton under Shellmar rule. as a result of public announcement. District Court’s decision was premised upon a determination that Mincom’s trade secrets would shortly be disclosed. Court also required assignment of patent applications to Mincom. Tobias. Winston contracted w/ Gov’t to develop a precision tape reproducer. demonstration. No damages were awarded. P’s argues: Injunction should have been permanent .or at least for a longer period.Also found that the general approach was not a trade secret of Mincom’s. and 2) To protect Mincom from injury from the wrongful disclosure and use of trade secrets by former employees prior to public disclosure. Winston hired technicians who participated in Mincom’s development . P was entitled to protection of its gtrade secrets for as longa s they remained secret.That trade secret was improperly utilized in developing the Winston machine District Court enjoined Winston from disclosing or using the trade secrets for 2 years. D’s argue would bar any injunction at all once there was public disclosure. They formed Wisnton Research Corporation. and P’s argument would require an injunction in perpetuity w/out regard to public disclosure. . He joined Tobias.1962 . etc. .But the particular embodiment of the general concepts was Mincom’s trade secret. Johnson was in charge of Mincom’s program quit working for Mincom. who had also worked for Mincom as sales manager. Winston completed machine w/ same low time-displacement error as Mincom’s machine.Mincom had substantially completed research phase of program and began development of production prototype. D’s argue that under Conmar rule public disclosure would end the obligation. District Court: rejected both of these and granted injunction for a period it concluded would be sufficient both: 1) To deny Winston unjust enrichment. and neither employees nor their privies may be enjoined beyond the date of disclosure.
. -. District Court Found (and Winston concedes) Johnson. through no fault of Winston.Late 1962. . D’s argue: No injunctive relief was appropriate.Thus. and gang based Winston’s production upon same approach as they did at Mincom.
4 years were required to develop the machine. Court Appropriate injunctive period is that which competitors would require after public disclosure to develop a competitive machine.presumabley b/c their machine was builr in a way that requires some time for persons unfamiliar with it to determine the details of its construction. ..and they’d get a head start over legitimate competitors who didn’t have access to trade secrets until publicly disclosed. injunction should be at least 3 years from completion of appellate review. placed Mincom in position it would have but for the breach of confidence. Winston sold no machines and had no past profits to disgorge. Accordingly. 2-year injunction was insufficient to overcome the wrongful advantage obtained by D’s. District Court granted injunction for a longer period -. District Court denied EE’s any advantage from their faithlessness. And the District Court’s choice in implementing the injunctionm rather than monetary relief was not unreasonable. By enjoining use of trade secrets it would require a legitimate Mincom competitor to develop a successful machine after public disclosure of the secret information. and Winston developed it in 14 months. Proper fto make injunctive period run from date of judgment since public disclosure occurred at about that time. The time which Winston took with the aid of the very disclosure and use complained of would seem to be a fair measure of the proper period. To enjoin future sales AND make an award based on future profits would result in duplicating and inconsistent relief. and imposed the minimum restraint consistent with the realization of these objectives upon he utilization of EE’s skills. Mincome: District Court should have awarded monetary damages as well Court says no. Court felt it didn’t need to decide whether the injunction should be extended. Injunction requires a legitimate Mincom competitor to develop a successful machine after public disclosure. -. and to compensate for delay which Mincom encountered in final states of development b/c Winston hired away Mincom’s key personnel.Appellate Court District Court’s approach was sound.Permanent injunction would subvert public’s interest in allowing technical EE’s to make full use of knowledge and skill in research and development .On the other hand. denial of any injunction would leave them unpunished where no damages were awarded. Evidence of future profits was at best highly speculative. Winston showed evidence it would probably sell its machien and get profits after injunction
by that point. Example: 6% interest returned to investors. usually on a date far in the future. Stockholders receive $120k after only investing $150 = 80% return. Voting control of Trust was held by owners of $150k in stock. debenture holders get their interest.304) Aldred Investment Trust . typically interested in a safe. [[Debentures are bonds or promissory notes -. It’s obviously difficult to assign a dollar value ot this. Investors receive only 6%. Stockholders risk $150k.Mutual Fund before the Investment Company Act of 1940 Its structure was typical of the abuses that led to the Act. shortening development program. Winston hindered Mincom’s development program and increased cost. and investors can lose $6 mil. Investors risk $6 mil. Stockholders were caught in a fraud and self-dealing. Court: however. Obtaining financing for development program. in debentures/investors provided most of the capital. Profit goes to stockholders Profits can be enormous as a percentage of investment because $6 mil. but these sales and profits wouldn’t tainted by breach of confiedence. invested benefit’s the stockholders. Holders of $6 mil. Trust gains 8%.expired. but they were too remote and/or speculative. and to pay periodic interest until principal is paid. Proctor (p. Debenture holders are fixed-income investors. Receiver was appointed at the request of the SEC.promise to pay a fixed sum of money. since Winston could have developed its machine from publicly disclosed information. Bailey v. Two year injunction depri Winston of any benefit that may have been gained. If trust does well. as we have noted. stockholders can lose no more than $150k.
. Stockholders receive the extra 2%. and reducing development costs. the District Court expressly considered this delay and extended the period of the injunction for an equivalent period. securing Gov’t contract. The Trust became insolvent / went broke / bankrupt / ruined / inoperable. == Fraud. steady return]] Uneven and misleading distribution of risk and reward. Mincom sought damages on other bases. Mincom suggests that by hiring Mincom’s skill employees. If trust goes broke. and shielded Mincom from potential harm from Winston’s competition.
jurisdiction is dependent upon jurisdiction existing at the time the receivership was commenced. There are other grounds for appointment of a receiver.” Upheld Court’s decree appointing receivers -. Therefore. so the court’s jurisdiction is not destroyed by this solvency. Court holds that a Court of Equity has inherent power to appoint a receiver to liquidate a corporation or investment trust where fraud. or abuse of trust is present. Rule: liquidation will only be decreed in an extraordinary case. Appellants’ Argument #1 1) District Court lacked jurisdiction to liquidate the Trust Court . Issue to Address NOW: Whether we can say that the Court abused its discretion in failing to vest control in present common shareholders w/ terms of the Trust and capital structure unchanged. Bailey Appealed: 1) Both reasons for receivership had been fixed: a) The trust was no longer insolvent.within court’s general equity powers. 2)Whether or not District Court could do this. and increased investment made the Trust solvent again District Court: Ordered a receiver to liquidate the Trust. mismanagement.
. but to the manner in which the Court may exercise their jurisdiction. now that nobody guilty of Fraud or Abuse of Trust . and accordingly. Present solvency and removal of control of fraudulent officers do not pertain to jurisdiction. Court found that the plans for reorganization were not fair and reasonable.New Shareholders. Bailey bought Hanlon. or where special and peculiar circumstances exist. 2) And even if they hadn’t. However. emphasis was on power to appoint a receiver. Trust was insolvent and the officers-trustees were guilty of “gross abuse of trust. whether or not insolvency is likewise present. other than solvency. At that time. Jurisdiction at time of creating of the receivership is a continuing jurisdiction. rather than power to order liquidation as the end of receivership. the Court had no power to order liquidation. b) Those responsible for the fraud were no longer associate w/ the trust. at the time of appeal. liquidation was the only other alternative.Issue Came About The initial control group (stockholders) was led by Hanlon. Temporary insolvency does not affect the court’s power to supervise receivership.
when a court of equity exercised jurisdiction to appoint receivers. But. but rather indicated a court of equity doing equity. which led to the enactment of the Investment Company Act of 1940.. integrity.do not dissent to this liquidation. Court properly felt that the debenture holders were entitled now to the cash salvaged from what had appeared to be a doomed enterprise. We find it impossible to say that the order of liquidation was improper. Accordingly.who have the greatest equity and whose interest are being sought to be protected by the Court . The (potentially fraudulent) Trust is Lawful.pp. If appellants intend to invest. it’s argued that one of the motives for continuing the Turst was to preserve its security structure. SEC indicated that Aldred Trust embodied evils. these facts may well render it fair and equitable to require liquidation in the absence of an acceptable plan of reorganization. Insolvency was likely. lack of sufficient earnings to cover interest was possible. Court couldn’t feel assured that a recurrence of these events was impossible. Act doesn’t require liquidation or reorganization of existing investment companies which do not conform to new statutory standards.Appellate Court: District Court didn’t provide the grounds for exercise of discretion. Deventure holders . Remanded. inasmuch as similar trust couldn’t now be created under the Investment Company Act.to take account of the fact that capital structure is not in conformity with standards and safeguards which Congress has NOW written into law. Grandfathered-In. nothing would prevent controlling shareholders (appellants or successors) from embarking on new speculation to the detriment of the debenture holders/investors. Important Question: Not personal honesty. but the lack of balance and equality of control in the capital structure of the Trust. But it would be inequitable to allow them to do this “with burnt fingers” to remain investors in an enterprise of proven questionable value. Accordingly. But Court is able to garner facts which seem to support he manner in which such discretion was exercised. etc. 310-342
. District Court affirmed. they could form a new one. Finally. it is proper for the court to afford complete relief -. Feb 16 . and even solicit present debenture holders. pursuant to a complaint charging gross abuse of trust.
but structural injunctions are generally broad in application -. Casey (p. There are many would-be plaintiffs.theory doesn’t always match what happens in practice . and best way to put them in rightful position is to require a structural change of some sort . . and prison reform Example. due to inadequate access to legal
. Jenkins . Bradley .STRUCTURAL INJUNCTIONS So far we’ve talked about private law remedies Structural remedies are much broader They go beyond any one specific plaintiff’s rightful position.“white flight problem”
Assignment for Tuesday.330) Complaint Inadequacy of the law libraries and legal assistance in state prisons . Miss.330-342 (finishing previous assignment). OR 2) Had some other nonfrivolous complaint dismissed. not the ends.also. To use Bounds 1) must show inability to file some or other no frivolous complaint. District Court . Higher ed.Law libraries and legal assistance are the means. using Brown v. constitutional rights to the courts.rarely does Broad in their application .The “ends” or goal is a reasonably adequate opportunity to present claimed violations of fundamental.This interfered w/ their right of access to the courts. Smith.statutes can sometimes be narrowly tailored. System is still subject to a structural injunction order Milliken v.exception .desegregation.akin to class action law suits More efficient as a deterrent and as a means of achieving rightful position Missouri v. 375-392 330-342 and 375-392 Lewis v. private bill aimed at specific individuals Quintessential structural cases . busing. Feb-21 Pp. and Next Assignment.
as well as other suits. had once been unable to file a legal action. Therefore. and other findings. and hence. support an injunction. we can eliminate from the proper scope of this injunction. and 2) finding that Harris.cause for that injury was the inadequacy which the suit empowered the court to remedy -failure to provide the special services that bartholic would have needed. . and are therefore inadequate to justify system wide remedy. Court found atual injury for one plaintiff . Question Whether the two proven injuries. Further Reasons the Order Cannot Stand 1) 2)
.actual injury requirement doesn’t work here. to avoid dismissal of his case. . in light of his illiteracy. they have not been found to have harmed any plaintiff in this lawsuit.constitutional principle preventing courts from undertaking tasks of other political branches à separation of powers. If inadequacies of this character exist. provisions directed at special services or special facilities required by non-English-speakers. were not the proper object of remedy. y prisoners in lockdown. Standing Must show injury . while incarcerated at Perryville. Issue #2 Was the inadequacy that caused bartholic’s injury widespread enough to justify system wide relief? Only findings supporting this were: 1) finding w/ respect ot bartholic at the Florence facility. Court of Appeals went beyond their scope. courts are authorized to remedy all inadequacies in that administration Remedy must be limited to the inadequacy that produced the injury-in-fact that plaintiff has established. These were inadequate to conclude system wide violation. This is true for class actions.Bartholic.information. and by the inmate population at large. If a plaintiff demonstrated harm from one inadequacy in Gov’t.
.384) Question: Whether in a replevin action. may recover its value. against the will of the successful party. but this does not in either case restore the property to its former state. Injunctions Pardee v. and 3) avoid delivery of the property by tendering its value as set forth in the affidavit for replevin. Substitutionary or Specific Relief I. We can now get a preemptive injunction on damage to real property (logs).375) . The rule that would normally render the action for damages futile or unavailing does not command uniform approval by the public nor members of the legal profession.Maitland. owner may recover possession thereof by an action of detinue. Cullimore & Co (p. Brook v.378). Equity (p.W. F. Irreplaceable Losses a.Cullimore sued Brook claiming special interest in multiple items of personal property. 2) impose his election by requiring the trial court to render an alternative money judgment against him.Feb-21 CHAPTER 5 . James A. Basic takeaway We abandon the idea that monetary remedy is best. or. waiving that.P sued to enjoin D from cutting timber on P’s land Injunction awarded Order dissolving the injunction This is an appeal from that order Unless trespass constitutes irreparable injury. . nor replace it by the return of an equivalent Can’t replant trees. none is shown There is no allegation of insolvency of the trespaser nor of any other circumstance precluding recovery of such compensation in money as the law gives for the injury done and threatened by an action.CHOOSING REMEDIES A. “Our rule permit’s a mere trespasser to utterly destroy the forest of his neighbor. provided he is solvent and able to respond in damages to the extent of the value thereof. After timber has been cut. (p. Camden Lumber Co.It allows property to be wholly altered in nature and character.
. the defeated litigant in possession of property whose recovery is sought may: 1) elect to retain that property as his own. or converts it into a mere claim for damages.
who resold 58 tons .on the open market. Specific Performance of Contracts Campbell’s Soup Co. against whom judgment for possession was rendered. .Wentzes harvested about 100 tons of carrots.There was no monetary damages available at common law. there was no method by which prevailing party could recover a judgment for the value. . (p.Brook attempted to satisfy the judgment by depositing $2. and “if found to be available that judgment be rendered for Cullimore for immediate possession of said property.Jan. .He doesn’t need to avail himself of the new remedy unless he wants to. Winning litigant has the option . half elsewhere . .for delivery by Wentzes to Campbell of all the Chantenay red cored carrots to be grown on 15 acres of their farm. and if not. not money. Inc.Wentzes sold 62 tons of carrots to another farmer.Market price was $90/ton. .. Intra Brokers.Property was worth $2.PA farmers . and they carrots were virtually unobtainable. Inc. v. he is not barred from pursuing the other remedy. 1948.half to Campbell. Property was of substantial value. Cullimore was willing to accept it. and to enter a money judgment for its value Common Law . did not have the power to retain the property and pay its value as stated in the affidavit for replevin. . had a right to insist on it.Cullimore refused to accept this.If possession can’t be given. . it must be returned. v. prevailing party may then proceed to enforce his money judgment.500. Holding: Brook. b. .500.
.387).391) Campbell’s contracted w/ Wentz .. Continental Airlines. .Alternative remedy of a money judgment in replevin is extended solely for the benefit of the wronged party. Appeal Brook sought remand with directions to take evidence of the value of the property. .property or money .” Trial Court ordered Brook to deliver the property to Cullimore. they told Campbell representative that they wouldn’t deliver at the contract price. in 1947 season. Property was far from worthless or materially deteriorated.Primary object of statutory replevin is recovery of specific personal property.Defeated litigant is not granted an option to either relinquish possession or to pay the value of the property.If return of property sought by replevin is possible. and as the winning litigant. and moved for a hearing “to determine whether said property is available” for delivery. .If property couldn’t be returned. Wentz (p. .
Campbell filed suit against Wentz and Lojeski to enjoin further sale of contract carrots. Trial Court P failed to establish that the carrots were unique goods. p.P contracted for them . like a finding that Chantenay carrots are of uniform color.Campbell suspected they carrots were “contract carrots” and refused to purchase more.with option to renew for 4 more years. for advertising purposes -. for 3 years.
. Michaels sold the building to Defendant S & M. the wall on a Manhattan building. v. (note 2.P built up a reputation for its products as part of which reuptation uniform appearance was important. . for a total of 7 years. .Didn’t know that two months earlier.. . S&M’s actions constituted a breach Remedy Van Wagner wants specific performance. or of mixed fact and law.Objects were unavailable on the open market.Van Wagner erected a sign and leased it to Asch Advertising for 3-ear period . S&M assert that monetary damages are adequate. There is no reason the court should be reluctant to grant specific relief when it can be given without supervision of the Court or other time-consuming processes against one who has deliberately broken his agreement. 1982 .402 . S & M Enterprises (1986) “Specific performance of a contract to lease ‘unique’ billboard space is properly denied when damages are an adequate remedy to compensate the tenant and equitable relief would impose a disproportionate burden on the defaulting landlord.Whether they are unique goods is either a conclusion of law. Appellate Court (this opinion) This isn’t a pure factual conclusion. There is considerable authority showing liberality in the granting of an equitable remedy. Appellate Court can make its own judgment regarding this. but the amount awarded was improper.1981 Barbara Michaels to lease to P.Past and present trends regarding specific performance vs. monetary damages). . .Accordingly.Test for specific performance isn’t necessarily “objective” This case is a proper one for equitable relief.S & M sent Van Wagner a letter telling him to cancel the lease with Asch. and to compel specific performance of the contract. .” Contract . . Van Wagner Advertising Corp.
But in this state (NY). Rationale Nature of transaction Specific performance is generally used for sale of real property. Instead. rather than any inherent physical uniqueness of the property. Court: But “uniqueness does not automatically yield specific performance. Titolo’s main points on case Undue hardship on the company’s inability to follow through with it’s reconstruction project A complex contract . but so is every parcel of real property. But K here is for a lease of real property. Trial Court found That the leased property is physically unique. P Argues Specific performance must be granted in light of trial court’s finding that the demised space is unique as to location for the particular advertising purpose intended.Allegheny v.Court Specific Performance or Damages is in the sound discretion of the Trial Court. TC also correctly concluded: That specific performance should be denied on the ground that relief “would be inequitable in that its effect would be disproportionate in its harm to D and its assistance to P. uniqueness in the sense of physical difference does not itself dictate the propriety of equitable relief.where specific performance was allowed. uniqueness will be determined by the uncertainty of valuing it. Specific performance of merger agreement . Refusing specific performance was not abuse of discretion. Specific performance is available for leases in some instances.” Specific performance should not be an undue hardship. but specific performance is also burdensome to the parties.damages hard to measure. DQE . as are many consumer goods. specific performance for breach of a real property lease is not awarded as a matter of course. “Where specific performance has traditionally been the remedy for breach. TC correctly concluded: That value of unique qualities could be fixed with reasonable certainty without high risk of under compensating injured tenant.
you have to make sure both sides perform. Personal service contracts . “ready willing. in these cases.Irreparable injury rule remains relevant and it is technically good law.standard rule: no specific performance (liberty) .the buyer sometimes can get specific performance of a contract to sell personal property that would not otherwise be unique. regardless of the money. Takeaways 1) in a time of shortage -. Lawler 269 sw.but sometimes liquidated damages clauses and non-competes are enforced . suggests there is a lot of fairness in play here.g. e.then courts will permit specific performance. 2) This conclusion leads directly to the replace ability rule in Pardee -. Courts also consider fairness. the problem using specific performance.but only really works w/ union protection backing the employee.this implicit notion of rather uniqueness à that replacement isn’t impossible 4) other cases.old view was that supervision was too difficult -.sometimes emplmoyers are required to rehire employees! -.to get more of those carrots -. .DiGiuseppe v. and able to perform .Campbell Soup Co. Counterexample Unconscionability Difficult to invalidate a contract based on the unconscionability of the contract.not going to be able to get these exact trees.fairness and equitable discretion of the courts. 3) Other factors .3d. Court: “the mere fact that cotton prices soared after this alleged contract is not in itself adequate to show buyer is entitled to specific performance.Chapter 5-b -.but not that is a standard approach --.. in contracts.Feb-23 .when something is “rather unique” -. and Van Wagner Campbell’s Soup Uniqueness Is uniqueness being used a proxy for “hard or impossible to replace”? If it’s difficult enough to get that product -. 588
.” Sometimes. Titolo’s Notes .
. Under this theorem. ti would be vastly superior if we could get ex ante bargaining to determine what the parties themselves are willing to pay to pollute/avoid pollution This is preferable where there are low transaction costs Key: depends on assumption tha parties are in the best position to evaluate the harm and the cost to them individually -. We will be in the business of transaction costs . Because parties know what’s in their best interest. and that’s what sets the table for the debate.Posner rule Transaction cost analysis Where there are no/low transaction costs. ex post Ordering someone not to do something is cheaper and less wasteful than resolving afterward.Law and Economics Efficient breach Transaction costs Damages and equitable relief Economic analysis of the choice b/w damages vs. etc. Freedom/liberty/economic perspective . But they’re both ways of setting prices for harms. and they know whether it’s possible to come up with a price.injunctions are more inhibiting. .
.***** Clever Argument à Schwartz (note 2. . injunction Ex ante vs. bargaining will (by definition) lead to an efficient outcome. p.request for specific performance itself proves the inadequacy of damages*****
2) transaction costs . studies.costs of negotiating. know what harm they are at risk to endure. specific performance Law and econ . legal fees. Posner and Coase say we should issue an injunction.wasteful to litigate over damages that could have been prevented by an injunction. .very influential movement beginning in 1970’s Efficient Breach in the context of specific performance 1) damages v.better than outside parties would be. .401) . Should specific performance be available even when damages are available? Damages may be under compensatory b/c of the time/effort/cost of finding replacement transaction. In summary When transaction costs are low.coase theorem .
you can buy yourself out of a k if you make the other party whole. Efficient breach isn’t inherently bad.which is less than the $60 difference in price ($90 fmv . Efficient breach assumes that the price one is willing to pay is reflective of social worth Laycock . . 3) Welfare consequentialism . situation where we can make one person better off w/out making anyone else worse off = pareto improvement (pereto optimal). .Campbell si not made worse off (gets the benefit of the bargain). Pareto applied to Campbell’s case . .pareto efficiency Situation where no new allocation of goods can be made w/out making at least one person worse off Given an initial allocation of goods. .this goes to the heart of the concept of irreparability. and perhaps it outsmarted itself with these liquidated damages.When high . . that is still good.401) Macneil. .If breach. Pareto assumes it is.significant barriers . In this case.$30 max k price in liquidated damages clause).an empirical question and more data But we don’t really have enough data to speculate with any reasonable degree of accuracy to determine what is efficient (?? I think ??). Wentz is made better off. .“Individual willingness to pay is quite an imperfect proxy for societal value. efficient Breach of Contract Question of transaction costs .But is it always true or true by definition? . (check today’s ppt slide on TWEN).
3) efficiency analysis . monetarily .utilitarianism
. . Note 4 (p. if winner can compensate the loser. When one person is better off and another is made worse off.But it is what Campbell contracted for.Depends on one’s moral/normative perspective.Third party buyer is made better off.” It’s not a matter of whether it wills sometimes be true.Does it matter if this approach gets it wrong in some cases but averages out? . Campbell gets $50 per ton.
Benthamite utilitarianism suggests that we should choose the approach that provides for the greater overall good -.Free market capitalism.using small transactions to model complex macro systems Reasoning: models of discrete interactions fcan form larger policy choices. President and Commissioners of Princess Anne (p. . And 10 days later. If we can assign a dollar value. so to speak. issued ex parte. Supreme Court .”
.10-day restraining order. Micr vs. and to an extent Assuming we can assign a dollar value to it Why not let some people go homeless. macro economic perspective considerations . if on balance.”
March-08 (and stuff from March-06) Carroll v. but 10 month wasn’t U. In Summary Mainstream law and economics theory suggests an efficiency-based approach to specific performance vs. Damages .456) White supremacist group rallying Ex parte motion for TRO and Ex parte injunction request 10-day TRO granted.S.focuses on aggregate outcomes Ex: policy that leads to larger unemployment rate . law balances notions of “Efficiency” with notions of “Fairness.greater good for greatest number. a 10 month injunction granted Appellate Court reversed. some children not get social services. “An order issued in the area of First Amendment rights must be couched in the narrowest terms that will accomplish the pin-pointed objective permitted by constitutional mandate and the essential needs of the public order. without formal or informal notice to the petitioners or any effort to advise them of the proceeding. the value of other benefits (like economic growth) outweighs those things. Free trade .not as concerned w/ individual utility and outcomes . .law has rejected that approach. and Instead. cannot be sustained. saying 10-day was all right. Must give notice if the remedy is an injunction in relation to a first amendment right.
.(p.470) Sovereign immunity . Jordan . 10-day restraining order granted.Probationary EE of fed gov’t was fired. . Gteamsters (Sampson) note 2 Prospective or Retrospective relief . . and must conform to the standards applicable to preliminary injunctions.TRO’s aren’t appealable. Court wanted to hear testimony from the person who fired her. but temporary injunctions are. forbidding her discharge.“Judicial power shall not be construed to extend to any suit commenced or prosecuted against one of the United States “While the Amendment by its terms does not bar suits against a State by its own citizens this Court has consistently held that an unconsenting State is immune from suits brought in federal courts by her own citizens as well as by citizens of another State. . March-06 class). Gov’t refused to produce Sanders. Court extended 10-day restraining order until gov’t produced him .Supreme Court Agreed .Court of Appeals held that a temporary restraining order continued beyond the time permissible under Rule 65 must be treated as a preliminary injunction.But it now appears to read as: . .460) . .It is appealable because it’s really a temporary injunction.(p. not a TRO
TRO .FRCP 65 (PowerPoint on this.Congress has waived most of the federal gov’t’s sovereign immunity .Sampson v.”
Ex Parte Young (1908) 14th Amendment
.11th amendment “judicial power of the US shall not be construed to extend to any siut in law or equity commenced or prosecuted against one of the US by Citizens of another state or by subjects of any Foreign State” . Granny Goose v. Murray .government’s immunity from being sued in its own courts without its consent. (ppt March-8) Edelman v.Sought preliminary injunction to prevent her discharge pending an administrative appeal to the Civil Service Commission.
. no back payments to the 45-day mark) ..Prospective relief for unlawful actions via injunction is fine (ex parte young)
.e.So is it really an “individual” suit? (no)
Additionally. it must be an expressed waiver of sovereign immunity. it is transferred to the new official (who did nothing wrong!) . ex parte young created its sweeping fictional exception that makes the constitutional enforceable against states again Edelman then puts a limit on young to keep the exception from swallowing the general rule Finally. then the suit doesn’t go along with that old official. (ppt.Equitable relief for unlawful actions is fine.Suits are allowed against gov’t officials in their personal capacity. . Fitzpatrick and Seminole hold that congress can modify this Jud made scheme only when it is enforcing constitutional rights (not going to talk about this last issue that much). .Discussion of prospective and retrospective relief.No. but if the official leaves office (like the official in Edelman did!).Was only paid starting on the date of determination (I. for unlawful actions taken in the scope of their employment .Legal relief is not. .) In response to that concern about complete unaccountability..DC relied on the concept of “constructive consent” to conclude that Illinois had waived its sovereign immunity and consented to be sued Supreme Court .. In other words . the states largely assumed they were immune from suit under the new Constitution Chosholm outraged them so much . you have to desegregate the school district. Edelman v. Jordan (p. .Facts/Reasoning . we can say. not a constructive or implied consent.” Under constitution when originally ratified.Can’t sue for lawful actions. Instead.DC issues injunction compelling Edelman to comply with the time regulations and give the back pay .470) . “tomorrow.
.complying with equitable relief costs money . . as long as the conduct does not violate clearly established constitutional or statutory rights.protection fo state treasuries .damages to protect rights vs.abuse of power under color of law USC 1983 . . including the Constitution. But later. and therefore violates 11th amendment and sovereign immunity.Will not be liable for damages for previous non-compliance. . until somebody sues them.Once sued. do we gut sovereign immunity too much if we . Equitable Relief . In other other words: .Backward-looking (retrospective) legal relief is not covered under ex parte young. doing something legal. Thoughts about Edelman and sovereign immunity / remedies generally Legal vs. need to protect gov’t officials’ discretion working in their capacity What if an official is acting in his capacity.Edelman means that states are free to ignore federal law. . Qualified immunity = balancing of competing values .486) Harlow v. Fitzgerald Qualified immunity (1887) Immunity from civil liability for a public official who is performing a discretionary function.Blacks Law Dictionary But we can’t just let officials do whatever they want just because they’re working in their capacity. Suits against officers in their personal capacities (p.injunction
.What remedies are available? . .why is it okay to require a state to spend potentially millions of dollars (or billions!) complying with a structural injunction if it is immune from even a dollar in damages? Federalism Summary Trying to balance a) right to some remedy for wrongs b) sovereignm immunity You can’t have a remedy against the state without limiting sovereign immunity.. . that action becomes illegal. they may have to comply with law in the future. BUT.
Harlow Notes 6 and 7 ***** Take another look at these!!!! 1) what counts as clearly established law? SC cases / Appellate cases? 2) keeping abreast of legal developments .
Note 8 Continued. Officers entitled to rely on cases from other circuits.law was clearly settled that this search didn’t fit exceptions SC reversed. Creighton (note 8) FBI searched house w/out warrant Held: immunity denied b/c clearly establish that search requires warrant or . US v. Lanier D judge convicted under criminal statute making it a felony to deprive under color of law constitutional right Issue: was judge on notice that there was a constitutional right not to be harassed? Holding: YES .BUT. . . #3 When there’s a circuit split Officers sent information into resident who signaled he bought drugs 10th circuit .qualified immunity would be defeated if an official “knew or reasonably should have known that the action he took within his sphere of official responsibility would violate the constitutional right of the plaintiff. Harlow Bare allegations of malice should not suffice to subject gov’t officials either to the costs of trial or to the reach of the broad-interpretation . . the state can adopt a policy that it will pay the monetary damages owed by an official who is sued while acting in his capacity as a gov’t employee Subjective v. objective aspect of good faith .But does every rank-and-file employee know/understand?
Anderson v. . . officers should not be liable in damages for choosing the wrong side.Informational newsletters . and where courts are divided. or if he took the action with the malicious intention to cause a deprivation of constitutional right or injury. .
1) Private individuals may sue to enforce 601 for injunctive relief and damages 2) 601 prohibits only intentional discrimination 3) 602 regulations may validly proscribe activities that have a disparate impact on racial groups.Bivens Controversy (and circuit split) (Also check out the rest of the notes. P was Spanish speaker challenged rule under Title VI prohibits discrimination in federally funded program. specifically. even if such activities are permitted under 601.535) . Six Unknown Named Ageents (p. notes 3-6) Alexander v. School looking for Advil pill she was supposed to have Held: no constitutional basis for searching beyond clothing.530) Issue: Is there a private cause of action for violation of the fourth amendment Holding: Yes Berger Dissent: Violates separation of powers by creating judicial remedy Black Dissent: Debate is whether to create a Bivens cause of action” and grant remedies for violation of particular federal statutes.536) Falabam Dept of Public Safety enforced regulating requiring all driving license tests to be given in English.(p. Could Congress repeal the Bill of Rights by not allowing for remedies? Note 3 (p. Sandoval (P) .Safford v. Analysis
. Redding 13-year-old girl strip searched. Robbins Whether there is a damage remedy in any given case involves judgment about best way to impliment constitutional guarantee Not an automatic entitlement. Wilkie v. Can’t be the case that statutory authorization is required to vindicate constitutional right. March-13 Cause of Action Bivens v.
in other respects. .TN Declaratory Judgment Act confers jurisdiction on TN courts “to declare rights . as applied to appellant. .] Affirmed. “Neither as originally enacted nor as later amended does Title VI display an intent to create a freestanding private right of action to enforce regulations promulgated under 602. as in this case real. .(p.The Constitution doesn’t require that the case or controversy should be presented by traditional forms of procedure. the federal courts have no jurisdiction Facts Appellant brought Suit under Uniform Declaratory Judgments Act of TN. we must consider the Constitutional questions raised by the appeal.The states are left free to regulate their own judicial procedure.602 doesn’t have any right in it.602 regs exist for the sole purpose of effectuating the substantive rights in 601. . the Court upheld the tax.The judiciary clause of the Constitution defined and limited judicial power. It’s just the provision allowing the gov’t to regulate 601 Gov’t and respondents argue that regulations authorized under 601 bear rights-constraining language and so must be privately enforceable. and substantial. General point from Sondoval . may likewise be dispensed with if. Lower Court. whether
.As the prayer for relief by injunction is not a necessary prerequisite to the exercise of judicial power. invalid under the Commerce Clause and the Fourteenth Amendment of the Federal Constitution. . Chattanooga. Wallace . [On the merits. Louis Railway v.Judicial hostility to implied causes of action.Decree for appellees was affirmed by TN Supreme Court Issue: Whether this litigation presents a case w/in the appellate jurisdiction of this court. the controversy presented is. Accordingly. not the particular method by which that power might be invoked. allegations of threatened irreparable injury which are material only if an injunction is asked. invoking only traditional remedies. & St. Section 2 Without case or controversy. .” Dissent . Supreme Court’s Holding . Reasoning .573) Scope of Judicial Power: Article III. . CHAPTER 7 PREVENTING HARM WITHOUT COERCION: DECLARATORY REMEDIES A. . to secure judicial declaration that a state excise tax levied on the storage of gasoline is. Declaratory Judgments Nashville.
but that is only sufficient. which provides “no jdugment udner this chapter shall preclude any party .textbook case of unripe complaint where it’s not appropriate to get declaratory relief. ti doesn’t require that the case be any particular “traditional forms of procedure” and only “for traditional remedies.Requires Ripeness .Orders action or inaction Requires Irreparable Injury and Ripeness Declaratory Judgment .Doesn’t require Irreparable Injury . . and have the force and effect of a final judgment or decree.” Declaratory Relief isn’t per se impermissible for case or controversy purposes. but unfortunately. . This makes it important to know the dimensions of the claim that is foreclosed by bringing the first action. “ . Note 5 . issue preclusion Claim preclusions “foreclose litigation of matters that have never been litigated.However. Usually there is a judgment. Monsanto MPS argues that judgment in Mycogen II wasn’t barred by res judicata b/c the action in I was brough under decl judgment. Morton International.Must be “Necessary and Proper” Few points from notes Note 2 . if initial action sought more than just Declaratory Judgment. Request for further relief isn’t disallowed by claim preclusion. 2) While the Constitution requires a case or controversy. Inc. Court Disagrees [[See note 5 and PowerPoint from March-13]] Cardinal Chemical Co. Injunction . .Declares something unconstitutional . the precise definition is impossible.579)
.(p. . you don’t need to find irreparable injury . 1) Actual judgment isn’t necessary for jurisdiction.or not further relief is or could be claimed” . .(p. .578) Claim preclusion vs. v.“ and . v.It may be affirmative or negative in form and effect. not necessary. most courts hold that all related relief should have been brought at the same time Mycogen Corp.“provides that “no action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for.
Introducing Restitution . if the court found that the infringement claim was properly dismissed? .Unjust Enrichment
.Ex Parte Young .Benefit to Defendant as the Measure of Relief: Restitution A. . Note 3 .Argues that fed circuit’s decision means lower court’s decisions couldn’t even be appealed Supreme Court .If the Court now holds that the patent is valid. not their form 1) Highly similar to preventative injunctions. Cardinal files petition for cert. Restitution From Innocent Defendants -. and also vacates declaratory judgment. Sauer . and refuses to hear the latter.Choice b/w forfeiting asserted constitutional right and risking penalties . re validity of the patent. then others won’t be able to sue.Mistake Blue Cross Health Services. . addressing the issue now prevents multiple suits on the same matter.Why would you need to know about the declaratory judgment re the patent.and some who are treated as innocent I.Federal Circuit.As a policy matter. .
Points 1) Declaratory judgments are generally judged on their substance.Insurance company mistakenly sends a check to the wrong person. .Using patents to implicitly threaten lawsuits w/out actually doing so would be in the other party’s interest (and society’s too. Not coercive .Voluntary compliance or subsequent action B) Another way in which they differ is that “Irreparable Injury” requirement is probably stricter for injunctions than the “Necessary and Proper” requirement for declaratory reliefRemedies Class Notes 2 March-20 pp. .Disagreement here satisfies the “case or controversy” requirement . for that matter) to address the issue. v.Because the (possibility of) threat of “scarecrow patents” might be sufficient . but the are NOT identical A. on appeal.It just has to be enough of a threat that the Court can address it.effectiveness in changing party behavior depends either on .suit to enjoin enforcement of the law avoid the problem. affirms dismissal of infringement claim. 634-665 Chapter 8 . Inc.
. “unjustified enrichment is enrichment that lacks an adequate legal basis.But D couldn’t show any change in position Why are D’s liable? D’s had no cognizable role in causing the mistaken payments Did they do anything wrong at all? No From their perspective. As affirmative defense.. but for the wrong amount.000 for Mexican pesos worth only $500 Wachovia entitled to amount of overpayment. and it would be unjust to require restitution .cannot be unjustly enriched for a mistake. General right to recover for mistaken conferral of benefit Wachovia v.liability is not based on tort or contract.2D 554 (2000) Bank teller mistook old pesos for new pesos .. but based on unjust enrichment. That’s the General Rule . ” (PowerPoint March 20). For Example: But if the insurance co. If two parties settle dispute without perfect knowledge of the facts. Person making the mistake should be clueless re: the mistake If someone aware of a discrepancy pays $. Thomasko 529 S. back. it results from a transfer that that law . They Chose the wrong peso exchange rate -. restitution. Difficult case If the Sauers were on an extended vacation and the $ was direct deposited? Restitution (Black’s law dictionary) .Paid $21. this would not be
.Sauer must pay Insurance Co. Quantum meruit.Restitution Damages .MISTAKE -. Exception: The unjustly enriched person may not have to pay it back if he detrimentally relied on the money. this shouldn’t be their problem. asame thing. sent it to the right person. neither side can claim mistake when a new fact emerges. and later found out it could have saved 10% because of a different interpretation of the contract. compensation.restitution. Ds claim that they changed their position. . they are taking a risk.E.
P should have used more care to make sure wasn’t mistaken . in the alternative. improved Lower court requires Ds within 60 days to elect whether to 1) buy land + building for $19.No forced exchanges if it can be avoided .Improver knows he’s building on someone else’s land gets no remedy . Ps own lots of land 45 and 46 Bulding on 47 D claimed ownership on theory f annexation Ps sue for $20.600 as value of land. Dissent This is crazy! It’s improper private taking . You’re liable.624 note 10) Preference for voluntary contract . You refuse to pay. (p.(p.One side clearly in wrong . shouldn’t be forced to sell/purchase the building! Mistake-negligence .
Change of position/reliance is a possible basis for seeking restitution. Somerville v. to purchase the land so improved upon payment to the landowner the value less the improvements.Example: person mistakenly builds on another person’s land. Jacobs .innocent improver gets more generous remedy where landowner sees what’s happening and says nothing.632) Ex: You are unconscious.recoverable. Other grounds for restitution Emergencies (p.eminent domain . Can’t recover based on facts discovered later. or. Doctor saves your life.500 or 2) sell land for $2000 Court orders forced transaction. Confers Benefit.627) Ifentitled to recover the value of the improvements from the landowner. In re Cristan’s Estate Man saved from committing suicide Committed to hospital Forced to pay for this intervention Damages = market value of treatment (his committal / intervention)
.People have long-range plans for property.
the judgment debtors’ recourse is provided by Appellate Rule 12. Satisfied a trial court decision which is modified by the appellate court.N.631. Restoration of its value is the remedy. Court of Appeals vacated the default judgment. 1991) State action against Defendant ANW Seed Corp.50 Court of Appeals Affirmed State Supreme Court Reversed (opinion). or the value of the property. A. D’s moved for an order of restitution to restore the property sold at execution. D’s appeared. D’s did not post a supersedeas bond. Court Orders Later Reversed State v. . after execution thereon.and More Restitutionary Causes of Action a. Denial of D’s motion to vacate was followed b an apeal.W. Court set the value at $57.6 months later. . After a hearing. which provides. in the alternative. vehicles. .8. the trial court shall enter orders .” Because of the sales of property. State obtained writ of execution. .Sheriff seized and sold farm machinery. and other personal property of defendants. . . to restore the reasonable market value of the property and to reimburse defendants for lost income resulting from the seizure and sales. Debtor may delay collection until all appeals have been decided. alleging violation of the Consumer Protection Act. Seed Corp. . TC entered an order of restitution for the fair market value of the property. 629-6342. .And other notes pp. Authority was granted.50 Sales were conducted in accordance with the statute. it could not be restored.
. or. Sales proceeds were $16. Measuring Restitution from the Innocent . Appropriate to restore to the party any property taken from that party. These defendants did not supersede the judgment against them When the unsuppressed judgment is reversed. Involuntarily partially .588. TC judigment is presumed valid unless superseded. “If a party has . (Wash. but counsel withdrew and a default judgment against D was granted.
but the actual amount of enrichment which.P asks D to restore vehicle . magistrate did not err in valuing the benefit conferred as the reasonable value of the services provided.No meeting of minds on the meaning of the material term “restore” . . as between the two aprties it would be unjust for one party to retain.D leased building owned by P. Unenforceable Contracts and Quantum Meruit Anderson v.643) .only proceeds of the execution sale less the expenses of the sale. Issue 2 Measure of recovery under quasi-contract . Total benefit received by Anderson to be $9800. “Not the amount of the enrichment. the reasonable amount of all services received. no contract existed. .at least FMV of goods sold + unspecified consequential damages from not using property Restitution D’s gain .oral agreement .” Anderson also contends magistrate improperly allowed recovery of 20% mark-up he charged on some of ther sublet work. Sykes Datatronics.000. these findings must be sustained (because they’re findings of fact). but state received only a fraction Restitution received is based on benefit received State is innocent
b. which P thought he owed.” Anderson requested the services or assented to having them performed for his own benefit.
.638) . but rather.” instead of the $1.Magistrate held that Anderson was liable under quasi-contract. ANW seed lost its god and suffered damages.much smaller number . .Titolo’s Notes Restitution P’s damages .800.contract implied in law.27 for “reasonable value of services and materials retained by Anderson. Inc. Schwegel (p. In absence of clear error.(p. Farash v. Correct measure for unjust enrichment is not the loss suffered by one party. Magistrate found that amount billed represented reasonable value of the benefit received by Anderson.“Based on these facts.Accordingly. allowing D to recover $4. the benefit unjustly retained by the other party.
P may recover for efforts that were to his detriment and that thereby placed him in a worse position. . but that consumers might think that the beer and the scotch were produced by the same company. 299.Y.(p. Fleischmann Distilling Corp.not an actual contract. . that there was no competition b/w the two products. This isn’t attempt to enforce oral lease or an oral agreement to enter lease.658) P’s made and distributed Black and White scotch whisky (well-known trademark). Court Ds deliberately infringed the trademark. and recover .and both barred by statute of frauds. . D didn’t benefit from P’s efforts doesn’t require dismissal.seekes to recover for value of work performed by P in reliance on statements by and at the request of D. 2nd issue Not barred by statute of frauds. . including expenditures made in preparation for performance or in performance. Lorillard 19 N.” Erben v. 302 (1859). less any loss that the party in breach can prove with reasonable certainty the injured pary would have suffered had the contract been performed. . .parties contracted by exchanging promises that P would perform certain work in his building and D would enter into a lease for a term longer than one year. Maier Brewing Co..” Interpretation of Restatement §349 “Injured party has a right to damages based on his reliance interest.Statute of Frauds. deals solely with remedies available where a party has breached an existing contract. v. Rendering the services in pursuance thereof. . This shouldn’t operate to prevent recovery under quasi-contract theory . the party .that 2nd and 3rd are the same . by its very terms. may treat it as a nullity. but he or she may have an action for damages including one for recovery based on reliance.D never signed contract or occupied building -P 1) enforce oral lease for term linger than a year .Statute of Frauds 3) third . The value of the services.” Dissent: This passage.D Maier brewed and distributed cheap beer under Black and White label. Dissent’s argument .
.P attempts to take contract outside statute’s scope and make it enforceable. Restatement provides that “injured party who hadn’t’ conferred a benefit may not obtain restitution. .an obligation imposed by law to do justice -. . .P was going to make certain modifications and complete its renovation. “The contract being void and incapable of enforcement in a court of law.
upon finding that the appellants “knowingly. But this wasn’t the basis for accounting in this action.’ ” it granted the appellees an accounting of the appellants’ profits. and is overcompensation. It must be determined if the concept of unjust enrichment. in either of the above circumstances shall constitute compensation and not a penalty. upon the finding of an infringement and “subject to the principles of equity. utilized “subject to the principles of equity.” will properly serve to effectuate the policies of the Lanham Act. according to the circumstance of the case. Lanham Act. B. . but this is based on the assumption that the accounting of profits in this action was utilized as a method of compensation the appellees for diversion of sales. and 3) costs of action. 0 In assessing damages. 2) any damages sustained by P. . no diversion of sales. Amount has no relation to damages sustained by P. willfully and deliberately infringed the said trademark ‘Black & White. Court may enter judgment for any sum above amount found as actual damages. but let’s analyze.They argue. this must be so. “P shall be required to prove D’s sales only . . We conclude that the District Court reached the correct and proper conclusion when. since appellees have shown no injury to themselves. and no palming off or fraudulent conduct. Court may enter judgment for such sum at its discretion and as it deems just.C. If Court finds amount is inadequate or excessive.Such sum. Appellants also argue that award of profits was of both Maier and Ralph’s Grocery Store.S.§1117 provides that a trademark registrant shall be entitled. This language apparently confers a wide scope of discretion upon District Court judge. 15 U. not exceeding 3 times that amount. §1117 Appears to say that such a remedy shouldn’t be granted as a matter of right. Recovering more than Plaintiff Lost
.D must rove all elements of cost or deduction claimed.” to recover: 1) D’s profits. Appellants allege that District Court granted an accounting of profits as a matter of right upon the finding of an infringement and the granting of an injunction.Appellant’s argument Even if the District Court had jurisdiction to enter order for an accounting of profits. no direct competition from which injury may be inferable. makgin of an order wasn’t merited by the facts.
Disgorging the Profits of Conscious Wrongdoers Olwell v. GFI copied one of Hamil’s favbric patterns. Bolton . Metro-Goldwyn Pictures Corp . v.pro rate method . and public relations) are actually implicated by the production of the infringing product. Maier. .Estimate the importance of the misappropriated iput .675) According to Hamil. Question: how do we calculate the profit that D owes to P What can be subtracted as elements of cost that ought not to be included in calculation? . Inc. 1) determine what overhead expense categories (rent.Infringer has the burden of demonstrating a “sufficient nexus between each expense claimed and the sales of the unlawful goods..]] Sheldon v.(p.Conscious wrongdoer can deduct money spent in acquiring the property/carrying on the general business . and practical method of allocating the implicated overhead to the infringement.They sold to JC Penney and JC Penney sold the garments in the store. Nye & Nissen Co. GFI .Jury found Bolton copyright infringed with a song.1. etc. a court need not scrutinize for inclusion or exclusion particular items within the overhead category 2) Arrive at a fair.(p. .Sheldon apportioned profits to the inputs required to make movie . entertainment. business.Once a sufficient nexus is shown between a category of overhead and the production or sale of the infringing product.(p.Unclear why we needed “guesswork” (note 3) Question: what kind of evidence can we use? Three Boys Music Corp.665) . = Hamil sued SGS for using the fabric. . accurate.649)
Remedies Notes 3 Thursday. v. .conscious wrongdoer cannot deduct direct contributions/expenditures incurred directly in the commission of the wrong
Hamil America. personnel. Hamil applies the two-step process used in Sheldon. March 22 [[Don’t forget to go back and read the egg cleaner case.”
Published a book about certain CIA activities in South Vietnam. and all presumptions are drawn against the infringer. . “must demonstrate a direct a and valid nexus” between each claimed overhead expense category and the production of the pattern. District Court Found Snepp “willfully.678) Previously Found that profits attributable to Snepp’s breach are impressed with a constructive trust.(p. and propose a fair and acceptable formula for allocating a portion of overhead to the pattern’s production. as a willful infringer. On remand.Ct grants cert.” . And in this finding. deliberately. . Court determined as a matter of fact that publication of the book had “caused the United States irreparable harm and loss. District Court must determine that the particular allocation formula is optimal and sound. District Court must recalculate GFI’s profits.Published it without submitting to the Agency for prepublication review. .Affirmed finding that Snepp’s failure to submit his manuscript for prepublication review had
. Court of Appeals.Snepp worked as a CIA agent . Employment Contract Snepp pledged not to divulge classified information and not to publish any information without prepublication clearance. Accepted findings of District Court and agred Snepp breached a valid contract. Secrecy agreement” by publishing his book without submitting it for prepublication review. to correct the judgment . Government brought this suit to enforce this agreement. .S. District Court erred appling Shelding by using a blanket prohibition of all overhead deductions.Finally. .” District Court enjoined future breaches of Snepp’s agreement and imposed a constructive trust on Snepp’s profits. .Also Found that Snepp deliberately misled CIA officials into believing that he would submit the book for prepublication clearance.. GFI. United States . and surreptitiously breached his position of trust with the CIA and the .Infringer also bears the burden of proposing a fair and acceptable formula for allocating a portion of overhead expenses to the infringing items at issue.
S. but restitution is better sometimes.Nominal damages are a hollow alternative. Court limited recovery to nominal damages and to the possibility of punitive damages if Gov’t .Time between contract to sell and the final closing thereof. .(p.
May v.Rationale . Court upheld the injunction against future violations of Snepp’s prepublication obligation. Supreme Court Court of Appeals denies gov’t the most appropriate remedy for Snepp’s acknowledged wrong. Usually we measure contract damages by P’s loss. Gov’t couldn’t pursue the Court of Appeals’ remedy without losing benefit of bargain it seeks to enforce.This is a natural and customary remedy and consequence of breach of trust. .could be situation where there is not a substitution transaction available. . certain to deter no one. U.Proof of tortuous conduct necessary to sustain punitive damages might force gov’t to disclose some of the very confidences tha Snepp promised to protect. . .They bear no relation to Govt’s irreparable loss or Snepp’s unjust gain. . profitable breaches are rare.that Snepp’s book divulged no classified intelligence. .
. it as no remedy at all.Punitive damages recoverable after jury trial are speculative and unusual . Court thought that Snepp’s fiduciary obligation extended only to preserving the confidentiality of classified material.for the purposes of this litigation .First Amendment right to publicsh unclassified information and the Gov’t’s concession . and 3) inadequate protection of promise’s entitlement .683) . not D’s gain.inflicted “irreparable harm” on intelligence activities vital to our national security.tendency to assume that disgorgement is not available in K Disgorgement will be rare b/c in real world.buyer is buying a property right . Muroff .Purchaser claims that $240k 3 Part Test 1) Profitable 2) deliberate. Therefore. Sometimes courts will use disgorgement of profits as a measure of P’s damages where they are hard to prove. seller improperly sold fill from the land in question to a third party fo $240k. But also Concluded that the record didn’t support imposing a Trust.in jury trial . Constriuctive Trust protects both gov’t and former agent from unwarranted risks. When gov’t cannot secure its remedy without unacceptable risks.could prove tortuous conduct.
g.what happens when there’s a deposit and a losing profit from their point of view .Look for inadequate remedies. .This doesn’t make sense from a rightful position point of view Total breach on one side of the contract . when what non-breaching party bargained for doesn’t have an easily identifiable/measurable monetary value Ex.That’s okay . protection of government.Buyer wants $5k down payment back Seller argues buyer would have lost 3k if K was performed Held: Buyer was entitled to a refund. Bush v.688)
April-03 First Class After Break Constructive Trusts Wrongdoer/beneficiary is converted into a constructive trustee over P’s property Purpose of law of constructive trust is to distinguish owners from creditors.put everyone back to start. Canfield (Price change on flour ..D wants to know if they need to repay all of that.If K had gone through. Owners deprived of property by some means giving rise to a claim in restitution do not become ordinary creditors They Can still assert their claim to ownership for as long as their property or its proceeds
. e.Seller breaches ..686) .Where K would have been a losing contract . Mobil Oil Exploration v.
Rescission .Restores status quo as closely as possible . US .Appeals to elemental notions of justice . and the doctrinal explanation is that he could rescind the contract and recover restitution of his down payment (And rest of notes starting on p. money would have been lost (or smaller amount of money).clarifies why P’s might want rescission instead of damages .other side wants to cancel the contract altogether because he would have been worse off .(p.
You need to be able to connect the specific money owed directly to the winnings -. -. Husband won lottery. In re Erie Trust. the distinction would be lost and the remedy would lose most of its value. Usual application of this rule is to ordinary contract creditors.are all insolvency proceedings. Commissioner found no evidence of fraud or unjust enrichment warranting the imposition of a constructive trust on husband’s winnings. usually you’ll be able to press your position as victim of fraud -. No constructive trust. 707-708 is a clear example. its application in Ruffin to child support highlights the strength of the rule. Timing Fraud
.or whatever P is trying to get the constructive trust over. Paoloni v. Trustee.remains identifiable If the remedy were extended to ordinary creditors. In re Teltronics in note 4. Ruffin Husband owed wife spousal support and child support. Wetherill says Leitner’s fraud creative a constructive trust. In re Leitner. pp.P claims to the proceeds of the lottery ticket bought with ill-gotten $ In re Leitner Wetherill hired Leitner to perform legal and accounting services. Leitner embezzled a bunch of money from Wetherill and used it for a home. In re JD Services. In re involves cases highlighting insolvency proceedings.especially if the fraud is serious. If both creditor and victim of fraud. Everyone would have a claim to identifiable property. It helps if it’s a larger amount of money. In both Ruffin and Paoloni . either in bankruptsy courts or state court receivership. In re Mesa. Clark contested the existence of a constructive trust. Goldstein
Ruffin v. Distinction between deprived owners and ordinary creditors has fuzzy boundaries at the margins. and these are where constructive trusts matter most.
This State . A constructive trust is fundamentally at odds with the general goals of the Bankruptcy Code. which was not the case here.” Seciont 547 requires transfer by debtor before it can operate. at the time he filed bankruptcy.
Court filed an adjudication surcharging Erie Trust for $26. whether in their original or substituted form. equitable interest in the home.hadn’t addressed the issue.constructive trust arises at the time of the occurrence of the events giving rise to the duty to reconvey the property -.000 . Clark also argues that }547(b) operates to avoid constructive trust and attachment lien as preferential transfers. 2) Whether bankruptcy court should ever impose a constructive trust based on state law when the state court has not done so before a debtor has filed for bankruptcy. Majority state law . Accordingly.NOT at the date of final judgment declaring the trust.trustee is ordered to convey the bare legal title to Wetherill. Accordingly. Where improperly converted assets of a trust estate are traced into the fund for distribution. which he was obligated to convey to Wetherill.
In Re Erie Trust Co. 6th Circuit previously held that a constructive trust is an equitable remedy effective only from entry of a final judgment. But this is not universally accepted. Debtor didn’t own any transferable. Court Predicts that Kansas would follow the majority rule.Kansas . Holds that Wetherill woned the equitable interest in the residence on the date Leitner filed bankruptcy. Order .cash taken from estate by company as commissions to which it was not entitled. the equitable interest in the homew as owned by Wetherill. Court of common pleas denied right to a preference over general creditors.Files Bankruptcy Then suit 1) It has already been decided. Leitner held only legal title. it didn’t become property of the estate. This lacks merit because neither the trust nor attachment were a “transfer of an interest of the debtor in property. not Leitner. a prefernce has always been allowed on the theory that such assets never have become a part of those of the trustee but at all times have remained.
are also subject to the claim of appellants in this proceeding. together with cash items of $1900.
. from funds on deposit in other banks. the trustee’s general creditors are not entitled to any share in their distribution. In re JD Services One of JD’s subsidiaries deposited a check for $7250 into an account. Lowest amounts in other banks was $6300.000 from the account to a new one at First Security Bank. together with the cash on hand and the cash items. Bank coded the check as $725.800 into the Church of the Covenant bonds and the Leichner mortgage). The money was taken by Erie Trust from the estate and placed in the general cash funds of the company. it’s not sufficient for a trust beneficiary merely to show that the general assets have been increased by an unauthorized appropriation of trust property. but he must also identify the trust res by tracing it into some specific property. as constituting a single fund. or assets. In PA. funds. Therefore.This conclusion is based on the fact that banks and individuals alike generally regard cash on and and deposits in banks as a unit of cash resources distinct from assets consisting of securities and other forms of personal property.after the time of the conversation. Investments made by the trust company .the property of the trust beneficiary. Lower Court Order reversed. Appellants are entitled to their rights in the general cash funds as well as to pursue the balance of their claim of $25. The deposits of the trustee company in other banks are to be considered. . Parties agreed that the extra money was included in this transfer. Lowest amount of actual cash in those funds from the time when the money was taken from the estate until the receiver was appointed was $2800.000. Issue Have appellants been able to trace converted cash of the estate into the assets in the hands of the receiver for distribution? . This tracing step wasn’t explained. sufficiently differentiated from the company’s general assets to meet the requirements of the law in regard to the tracing of trust property. any securities into which such deposits were transmuted must be regarded as merely substituted forms of the trust property. Debtor wire transferred $800. If deposits are considered part of the fund into which the trust res has been traced. Other large transactions were made as well.Lower Court said no.
Lowest balance is no less than $394. Furthermore. Turst is created in property and exists only so long as there is an identified and ascertainable interest in the property to be the trust res.
. Of the two approaches . Some deposits bounced.750 . Debtor continued to use the accounts.To impose the same tracing requirements as are required under state law is reasonable and will cause no greater hardship on the bank than it woul experience outside a bankruptcy setting. If trustee deposits other funds. 2 Approaches 1) “Collected Balance” .. it is generally held that trustee isn’t replenishing trust funds.” .total funds available for withdrawal at any given time. which demands equality of distribution among cretors of equal rank. which means he has an unsecured claim for the remaining $323k. If funds held in constructive trust have been commingled. . Constructive trust must havef a trust res at all times.400. . If it traces the funds.the extra amount. The second bank agreed to put a hold on the account for the difference.“any funds removed from a commingled account are presumed to be the Debtor’s funds to the extent the funds exceed the beneficiary’s equitable interest. and the bank put length holds on deposits before making the funds available.5 million went through the account over a couple weeks. . . The bank must trace its funds held in constructive trust using the lowest intermediate balance rule. If bank can’t trace funds. 2) Analyze the amounts on deposit as the “Available Balance. New deposits aren’t subject ot he equitable claim. return of trust res ot Bank won’t violate bankruptcy policy because the Bank will eb receiving its own money and not property of the estate.Bank of America noticed the oerror and notified him.Lowest balance during the 2 weeks is no less than $717. and about $6.total funds on deposit. bank becomes creditor to the extent of its lost. a tracing requirement is reasonable when weighed against bankruptcy policy.available balance most accurately traces the actual funds. regardless of whether or not funds are available for withdrawal or use by the Debtor. beneficiary of trust must trace funds using the lowest intermediat ebalance rule.
but the problem is that there are other creditors .She could just sue.000 in account.000 .000 of Scum’s personal cash in his checking account (not part of the trust). and the balance is $5k Sells 100 shares of Exxon from mother’s account. JD Services illustrates thse kinds of issues. Deposits.His notes on JD This was a mistake Same rules for mistake and fraud. Ponzi Schemes . and courts don’t let victims of a common fraud invoke the tracing fictions against each other Cunningham v. She can only get a constructive trust on the reduced amount (and she lost $3000).simple tracing. receiving $5k in cash. But this is better than being kicked into the group with other creditors. Tracing Problems Scum manages a trust fund for againg mother 100 shares of Microsoft worth $30/share 100 shares of Exxon Mobile worth $50/share 100 shares of Walmart worth $60/share. said that vcictims could reclaim as much of their own property as they could actually identify without reliance on fictions. $10.Bernie Madoff These cases usuall involve commingling the funds of multiple victims. . In the unusual case where P could trace into an asset worth more than the amount that P lost.000 in scum’s personal checking account.Withdraws $12k from checking and loses it in Vegas .How do we trace it? . P could recover that extra value from a solvent conscious wrongdoer.now worth 3k Still $10. Scum sells 100 shares = $6000 Scumuses $6k to buy 300 shares of GE at 20/share GE stock drops to 10 .sell one stock and buy another . but not from an innocent recipient (to protect the recipient) or from an insolvent recipient of any kind (to protect the other creditors).History of the account.the original Ponzi scheme case.now $1. Receives $4k & deposits it. Brown . Problem 8-2 Sells 100 shares for $3k Deposits into checking à $13.For example. raising it to
. . Court applies exactly the same tracing rules it would have had D embezzled the money.easy . Problem 8-1 .
61) dwarfs the equity in the amount of the home. She can elect to trace all $6k of her money into the Casio stock. 726 .000 shares of Casino Co.losses go to scum.“Nevertheless.Debtor owned the home.000 shares are now worth $12k.
April-05 pp. winnings go to mom If Scum ahs no other creditors. at $8. there is no prejudice to the Debtor since the total amount paid to contractors and suppliers alone far exceeds the probable equity in the home. her recovery will probably be capped at her actual loss of $8k. . mom can get the windfall of ¾ of casino stock. and these fraudulent moneys were used to improve it. Then adds more Mom money à $5000 = $6. worth $9k.000 Casino Co. ¾ of casino stock is now worth 9k.“If.$10k.Debtor purchased home in Florida . Account à $2. . so that she gets ¾.
.Debtor then knowingly assisted in fraud in order to pay for improvements on home .” .000 in account.415.” Court Orders: 1) Travelers’ objection to homestead exemption is sustained 2) travelers is granted an equitable lien in $378k 3) Debtor’s homestead exemption shall not be a defense to any action by Travelers to enforce its equitable lien by foreclosure or otherwise.So Mom Account Money goes from $3k.Total of the amouts invested into home ($378.000.who owns the property? Constructive Trust . buying 1.000.757 Equitable Liens In re Mesa . the Court [imposed] an equitable lien for the full amount. so 1. a smaller amount was invested in the home improvements. but then deposits more of her money -.726) . If scum has other creditors. rises to $12. Writes $8. contrary to Debtor’s testimony. Writes an $8.000. His notes Another distinction .000 check on the checking account.(p. leaving 2k of Scum’s money to be lost in the poker game. which may be no more than $25. to $1k (and stays as lowest amount).Good Lawyering . leaving $2.000 check for sock. Lowest amount was $1.
the same lien he would have gotten if he had voluntarily loaned the money for the improvements. .Court grants Sacramento an equitable lien on theory of unjust enrichment b/c Jones would profit from the improvements. . Innocent Defendants Many D’s are innocent recipients Ps who work on the wrong property by mistake or pay more than their fair share on join property get lien Lien = Value of the benefit or the cost of producing it (whichever is LESS). Equitable Lien à subrogation (see ppt slide for today).Theoretically.Lender loans D money to buy lots in subdivision .Gives 50% of the value of the house at the time of trial secured by lien on house.Calls it an equitable lien.Jones gambled on the lien. relying on the subordination clause in the first mortgage . hoping that the clause wasn’t enforceable. Sacramento Savings & Loan Association .Divorced. .Makes a big difference whether we call her constructive trustee or lien holder . so Jones becomes the senior creditor. Some protection for innocent D Jones v. and parents still own land and house .High inflation .In constructive trust. but still gets interest owed. you get to choose higher or lower if there’s a bad actor . so they would be bumped down after him. you give whichever is less.Builder completed hosues and defaulted on both loans .Young couple builds house on parents’ land.This makes it so they don’t force the owner to sell the house.Lien holder à value of labor put into the house . expecting to eventually own land .Sacramento didn’t fulfill the terms of the subordination clause.House cost 27k to build à Time of trial it’s worth 57k .Here. it’s possible to give pro rata constructive trust in such cases. but looks more like a constructive trust .but here.Lender records first mortgage but the mortgage has clause providing that it would be subordinate to a constructive loan Sacramento loans $ for construction.the rule = he gets only equitable lien . In practice .basically.
. court gives hybrid remedy .Jones buys fitsrst mortgage for low price . .Constructive trustee à 50% share of house (which more than doubled in value) . .
But. not a constructive trust for fractional interest in the house.S. Morts learned of the IRS lien. and Belmonts gave Morts their interest in the promissory note and the deed of trust (with the title insurance policy). IRS seized the land. District Court seeking injunction and declaratory judgment that their trust deed was superior to federal tax lien.District Court Dismissed complaint without prejudice. which goes up in value Rotary club gets equitable lien instead of constructive trust Club cannot recover more than it lost from an innocent D Here: award equitable lien for the amount of the original payments. concluding that the Morts couldn’t bring their claim for equitable subrogation without first pursuing their legal remedies against the title
. restricted Sacramento’s right to enforce lien .culpability determines when constructive trust or equitable lienMort v.733) Myers writes promissory note to Kern . Procedural History . United States (p. refused to enforce Mexican judgment Daughter innocently used money from house to buy a second house Rotary club traced money to second house.avoid undue hardship on Jones .. Review 1) how you trace property 2) choices P has as to what assets to choose 3) one of two remedies .and no monetary judgment Wealthy Mexican citizen leaves Tuscon property to Rotary Club Sold the tuscon home Mexican court struck rotary club from list of legatees Court found no notice or service of process.no award of interest . . and 2 months later.not demand immediate sale .Morts filed complaint in U.$30k .secured by deed of trust on property Myers owned separately IRS puts lien on Myers for $33k for unpaid income tax Belmont loans Myers’ Trust $38k Myers paid off Kern loan and part of Tax Lien Morts paid Belmonts $38k.
Rule Doctrine of equitable subrogation allows a person who pays off an encumbrance to assume the same priority position as the holder of the previous encumbrance. is transferred after the IRS lien. Morts acquired their interest after IRS filed a atx lien on the property. . .S. the Kern’s interst. which were stolen.does IRS beat out this claim? Oct 1992. Person asserting subrogation has only the rights of the person to whom he is subrogated U.Dec.“E His Notes on Mort v. Belmont loaned to DeLee . 1992. it’s easy .Bonds were sold by the thief. IRS files tax lien on property for $33k (junior lien).S. through
.Senior Lien is padi before Junior Lien However.741) . and directed judgment against them for the value of the securities. 1869 .IRS seized the land.insurer.(p. Porter . 13m 1992. If you stop there. v. but argued that they were entitled to be equitably subrogated to the priority position of the lender whose loan was paid off by their assignor.P owned $13k gov’t bonds. Issue 1: Does the court have jurisdiction to grant equitable relief? . California US sues to recover sales ax paid to state by federal contractor US could be subrogated to contractor’s claim against state Here: that claim was barred by Statute of LimitationsNewton v.March. it appearing on the trial that they had collected or disposed of them and received the proceeds. 1990: Myers signs promissory note (to kerns) signed secured by Nevada property (Senior lien) Aug 24. 12. Now we need to figure out the priority -. Myers conveys title to property of the trust Nov.TIMELINE . which arose prior to the IRS lien. U.THIS IS How YOU DO IT ON THE EXAM IF LIEN PROBLEM -. . Belmonts conveyed interest to Morts for $38k payment 1993 . and proceeds were divided between them Judge found that D’s had notice at the time they received the securities that they were the avails and proceeds of the stolen bonds. The doctrine upon which this case proceeded: “The owner of negotiable securities stolen and afterwards sold by the thief may pursue the proceeds of the sale in the hands of the felonious taker or his assignee with notice. .
whatever changes the proceeds may have gone, so long as the proceeds or the substitute therefore can be distinguished and identified, and have the proceeds or the property in which they were invested subjected to a lien and trust in his favor, . . . . . . Is founded upon the plainest principles of justice and morality, and is consistent with the rule in analogous cases in courts of law and equity.” “The purchaser from a thief, however honest and bona fide [literally, good faith] the purchase may have been, cannot hold the stolen chattel against the true proprietor, but the latter may follow and reclaim it wherever or in whosoever hands it may be found. The right of pursuit and reclamation only ceases when its identity is lost and further pursuit is hopeless; but the law still protects the interest of the true owner by giving him an action for conversion of the chattel against any one who has interfered with his dominion over it, although such interference may have been innocent and under a claim of right, and in reliance upon the title of the felonious taker. Rule: “A thief cannot convey a good title to stolen property has an exception in case of money or negotiable securities transferable by delivery, which have been put into circulation and have come to the hands of bona fide holders. Lower Court found that D’s had notice of the larceny of the bonds, and the use made of the money arising from their sale, at the time they received the notes and mortgage. It was for the trial court to weigh the testimony, and the finding was warranted by the evidence. Judgment Affirmed. Banque Worms v. Bankamerican International - (p.748) - Security Pacific International Bank mistakenly wired $2 million to Banque Worms - a French Bank. - A few hours after the transfer, he directed Security Pacific to stop payment and make it instead to National Westminster - SP received the telexes, Spedley had a credit balance of only $84k Later, SP received additional funds to cover the transaction and then began to execute - In mistaken disregard of Spedley’s second telex canceling the transfer, SP transferred funds into Banque Worms’ account at BankAmerica - That aafternoon, SP executed Spedley’s second payment order and transferred $2 mil to Natwest, USA. His account was debited twice and was overdrafted SP attempted to get the funds from Spedley, but failed because by that time, he had entered into involuntary liquidation All banks sued each other. District Court applied the “discharge for value” rule, and granted judgment for Banque. SP appealed, arguing that NY didn’t recognize the discharge for value” rule in cases like this,
and the controlling rule is “mistake of fact”, which says: “in order to be entitled to retain the mistakenly transferred funds, Banque Worms needed to dfemonstrate detrimental reliance. Court “Discharge for value” rule should be applied. His notes on Banque Worms Does Banque Worms need to return the money? Held: “They don’t need to return the money - discharge for value rule applies.” Under ordinary restitution, there can’t be unjust enrichment. Courts discourage it. But with the bona fide purchaser rule, there is an exception. It’s a policy-driven rules. National uniformity in the treatment of electronic funds transfers is an important goal, as are speed, efficiency, certaintiy, (to enable participants in fund transfers to have better understanding of their rights and liabilities), and finality. Replevin, Ejectment, and the Like Replevin/ejectment - writs for the recovery of property - restitutionary remedies Often arises under repo of [something]9 Replevin P has choice b/w replaying and damages - can also sue to recover damages for loss during the period of deprivation of property - forcible detainer à due process requires some kind of hearing before seizure of property - be aware of these remedies, as they can come up in legal practices. April-10 Collection (Of Money) Overview of Collection Judgments - Judgments in themselves don’t obligate someone to pay. - Must file a writ of . . . . Writ of attachment, Writ of execution, Writ of garnishment Or . . . . . . . . . Writs of possession and fierfi facias on judgments for specific property “on a judgment for recovery of specific property, real or person, a writ of possession may issue for the specific property, . . . “The writ may be levied upon goods and chattels . . . . Judgment proof Whether a debtor is judgment proof often depends on the diligence of the plaintiff’s attorney,
and on whether the amount to be collected exceeds the cost of collecting it. - Judgments against deep pocket corporations and governments get paid by check - they may offer to pay 80% now or the whole thing after a barely colorable appeal, but sooner or later they pay They have lots of assets and no way to hide them - judgments against small businesses or especially individuals creates problems - just the beginning of a whole new game - Plaintiff now knows as the judgment-creditor, has to scrounge around to find assets - P or P’s attorney or sheriff has to search around P may have to deal with - whether sheriff did it right (Credit Bureau v. Moninger) - fight other creditors who are chasing assets - secured creditors and taxing authorities may claim priority over him. Bankruptcy Petition - Ther are personal injury defense lawyers who immediately file bankruptcy petition for every client found liable - Collection is easiest in states with fewer exemptions - But even wage garnishment doesn’t make collection easy - other creditors may get there first, or garnishment may cause the employee to lose his job, or file for bankruptcy, or quit his job and disappear. - Heart of the problem is that no everyone is capable of paying a judgment - But the collection process aggravates the extent to which that is true - Except for garnishment, the collect process ignores income and focuses on assets. The collection process leaves creditor chasing assets that often don’t exist and that were not the basis of his extending credit. (A few more points on ppt.) Credit Burea, Inc. v. Moninger - (p.829) - Judgment creditor files writ - Writ issues to sheriff - He “expressly asserts dominion over property” (varies across states) Ex.: Physically take possession, and Inform parties that he’s executing the writ - Sheriff sells asset at auction - Proceeds go to 1) Sheriff for costs of repo 2) Senior lien(may or may not be judgment creditor 3) Junior lien, etc. Governed by UCC and bankruptcy priority rules outside scope of this class.
other times bank accounts . the judgment debtor may also owe money to the bank. . family.If the Bank had accurately reported the balance in the account.Sheriff named Lysinger tried to levy on 500 acres of growing cotton Sheriff apparently thought he should drive around the coton Pratt wasn’t at home. Dixie national Bank v.Garnishee . automobiles) .One issue with banks à set off claims . . .“Came to hand this 6th day of July .Household goods.State Exemptions Also: states exempt certain classes of property from judgment Policy . .Garnishee can argue that it doesn’t owe judgment debtor. although defenses as such are rare for banks and employers.(p.The Bank could assert against the garnishor any defenses good against its depositor.(not in book) .The officer in making a levy on such property must do something that constitutes trespass.Ex. One car à 5k . etc.what if it’s really big? . . . and the loan agreement may authorize the bank to set off the debtor’s deposits against the loan in the
. assert dominion over it. the garnishment action would have been straightforward. the most common garnishees. appliances. etc. Beaurline v. and forbid its removal by the person against whom the writ has been issued. but no challenge the underlying judgment . toys.then you have to go onto property. books. or household use of such individual à 8k. Rule 1) if you’re making a levy.Chase can recover what the Bank owes to Gore. furniture. . Chase . He didn’t advertise. .That’s not a levy. but no more than that. . animals.837) . Sinclair Refining Co. clothing.sometimes wages that are garnished. . “ .third party who owes money to judgment debtor (usually bank or employer) .don’t’ leave debtors without the means of subsistence (household furniture. but his wife was there Lysinger told her he was levying on his cotton and for her not to do anything with it. .Court . The fact that the sheriff’s dept made no effort to get the cotton picked and thereby reduce it to actual possession emphasizes the fact that there was no levy accomplished.aside from having the account. you have t o take possession of it . and wearing apparel that are held primarily for the personal.
All answers were “no. the bank wins . Post-judgment Discovery . . Face-off b/w bank and creditor .P’s lawyer worked through every point on an elaborate checklist. and the other from the bank so it can satisfy the loan. In re Marriage of Logston .They settle . .Illustrates use of the contempt power to collect alimony and child support.Coercive Judgment . so they regularly claim that they exercised the right just in the nick of time. Contempt Order -.banks exercise right to set off by an entry in their own books. ABA Journal 1984 .may have two claims . D withdrew all assets and had $10k in his pockets about which they never asked in the Depo.In this case. P’s lawyer asked D’s lawyer if deposition answers had been truthful.Consumer Credit Protection Act protects judgment debtors by capping garnishment at 25% disposable earnings or 30x federal minimum wage/week State law may be more restrictive than this federal cap. asking 10 different ways .
.Judgment creditor can investigate debtor’s assets Third parties The process can be done electronically now à very creditor friendly.even to f default Garnishment may act as “default” under the loan terms.And there are exemptions . They had been .848) .Years later. it has to hand over its own $ .D appears for deposition w/out lawyer .Garnishee can be exposed to risk if not handled properly .” . the Court issues a contempt order against debtor .Until execution process begins. no interest in particular property arises for a judgment creditor . alimony debtor raises exemption statute as defense.Non-compliance with order is evidence of contempt. Takeaways .(p.In Dixie.one against the garnishment creditor.On the morning of Deposition.Instead.to illustrate technicalities .In most states. instead of the bank handing over debtor’s $ to satisfy judgment.
Notes 3 & 5: Limiting Expenses . they generally have to collect out of assets . . Partial fees are sometimes awarded.Poorer Plaintiffs won’t be able to file suit.There won’t be any civil rights cases.attorneys padding fees How much is awarded .Creditors lend on income. and become a lawyer and make money to pay for the judgment against him.(p. (He had already failed the Bar Exam four times). they get attorney fees from D’s If P’s lose..More Ancillary Remedies: Attorneys’ Fees and the Costs of Litigation A. but if the debtor doesn’t’ pay voluntarily.Full compensation at reasonable market rates
..Court ordered him not to become a priest. they don’t pay D’s attorney fees Rationale . This is the main debate in American Economy. .Can be kept in jail on the contempt citation. . . Fee Shifting Statutes City of Riverside v.Court can order you not to get married .we don’t want to deter poor P’s from suing Some controversy .This case sets up the basic policy question of whether losing litigants should eb liable for the other side’s attorneys’ fees Rationale for awarding fees 1) rightful position 2) manipulate incentives to litigate Second rationale has dominated the American debate. especially to prevailing defendants. Most common in child support cases. .Fees are treated as a collateral or ancillary matter and not as part of basic compensation.Note case . Rivera . If P’s win. but to go back.877) .Collection in many cases is difficult and may be impossible .Debtor cannot defend on the grounds that he didn’t have enough $ for “bare living expenses” . pass the bar.
April-10 Continued Chapter 10 .
Lodestar Method .Prevailing firm turns in billing sheets . you have both .000 attorney fees Conservatives à It’s sufficient if some lawyer somewhere will take these cases. so that statutory cases will be equally attractive to lawyers with a choice.: $10.Some public interest lawyers have said that this makes it harder to get attorneys to take these cases because D’s can give up early and avoid a judgment.many of the recent Unconsciounability cases have been about class action waivers in arbitration clauses (usually in consumer contracts -.Only provable work is recoverable as fee award . Liberals à want the market rate for paying clients with equally complex cases..A clause waiving Jury trial generally isn’t considered unconscionable . . .The underlying dispute is a disagreement about how much incentive to bring these claims is appropriate.Ex.buying something online from Apple . Reasonable hours . and $100.But how exactly do we measure this? .Emerging rule . à The skill requisite to perform the legal service properly. If some of these cases are uneconomic and don’t get brought.75% of consumer law contracts contain arbitration clauses
. Buckhannon Rule .usually if you have one or the other.000 judgment.But waiving class action suits or arbitration generally is unconscionable Eisenberg & Miller. that is the way it should be.How to Calculate Damages . Arbitration’s Summer Soldiers: An Empirical study of arbitration Clauses .Lodestar = reasonable hours X reasonable hourly rate PLUS appropriate adjustment for type of case / issues in case à The novelty and difficulty of the questions. à The amount involved and the results obtained.substantive and procedural Unconsciounability .Court needs to retain some jurisdiction to enforce a settlement agreement (whether or not formally entered as a consent decree).D’s are now looking more closely at these bills KEEP DETAILED RECORDS OR YOU WILL NOT GET PAID April-12 Unconsciounability & Arbitration .
in a very real sense.Davis v. Obstead v. .Requires you to agree or else you can’t get hired Substantive Unconsciounability . but if a party challenges the enforceability of the graeement as a whole. Inc.Class action waiver is unconscionable in this case because it’s unconscionable under
.Only 6% of companies contract with other companies contain arbitration clauses One-sided arbitration clauses . and that makes it procedurally unconscionable.But there are no factors of adhesion such as surprise or concealment.Where an agreement to arbitrate includes an agreement that the arbitrator will determine the enforceability of the agreement. the district court considers the challenge. the DRP was “take it or leave it.Employment K with dispute resolution clause .Dell can’t just come from Texas into California and contract around Dell. and some states don’t . . .Every consumer law contract contains provisions prohibiting class arbitrations . (they almost always do) If a party challenges specifically the enforceability of that particular agreement. Court finds it’s substantively unconscionable Rent-A-Center. . just whether the arbitration clause was enforceable Choice of Law .Class action waiver is unconscionable under California law . V.The employment k was written by a sophisticated employer . .The DRP was not hidden . the challenge is for the arbitrator . no less . O’Melveny & Myers . . . ignoring California Law and applying Texas Law .Here.a national and international law firm.. Dell. 3) Waived some other right . .Nevertheless. Jackson . the Court finds several terms substantively unconscionable where the K: 1) Shortened the time in which an employee could bring a claim 2) imposed an overbroad confidentiality clause forbade employers from .It didn’t really resolve the underlying question.Challenges to parts of the contract other than arbitration clause are handled by the arbitrator.Often these bind the less powerful party but not the powerful party . West.Whether it’s procedurally unconscionable .Some states allow class actions.whether the substance is unconscionable . And California has a materially greater interest than Texas in applying its own Law. . . Iinc.
or has wrongfully removed a child from the person with custody . it’s not enforceable.If the K violates Antitrust law.Two-prong test 1) P bears at least substantially equal responsibility for the underlying illegality 2) P’s recovery is barred only if preclusion of the suit does not offend the underlying statutory policies ..” . .
Unclean Hands and In Pari Delecto Unclean Hands .Unclean hands doctrine evolved from the discretionary nature of equitable relief in English courts of equity. .P was involved with the fraud. Dahl . v. In Pari Delecto and Unclean Hands are basically the same thing .P (guy who developed the wrench) sued à was barred by unclean hands . V.In other words.Note Case .G. such as Chancery.Black’s Law Dictionary Example . improperly retained custody of a child after visitation.P didn’t disclose that the other guy lied. so he says we’re not going to let you enforce it.both available in equity and damages claim Pinter v. Such a party is described as having “unclean hands.California law.The principle that a party cannot seek equitable relief or asseert an equitable defense if that party has violated an equitable principle. P could be barred from seeking damages -. so he’s screwed . Automotive .Section 8 of the uniform child custody jurisdiction act says there’s no relief where. Kaiser Steel Colp.P and D settled the case and D assigns the (fraudulently filed) patent. Mullins . E. such as good faith.D begins manufacturing the wrench . one party has wrongfully removed a child from another state.P invesnts wrench and D files false patent claiming to have invented the wrench .same as under the general contract rule/policy of illegality
.Used to be called the clean-hands doctrine . The doctrine seems to let D get away with bad conduct Precision Instrument Manufacturing Co.even if where P could otherwise win on the merits.
Georgia-Pacific .S. .This doctrine is founded on principles of fraud.Apparently they didn’t know golf balls fly through the air .941) House near golf course .In this case.Evidence not confined to words of agreement à not rooted in K formalities . asks for it back. brother-in-law says no.Example: Gamblers cannot sue to recover their illegal losses. . v.Land K with U. through false language or conduct.illegal gambling or cheating at gambling? .000 acres 1958 . D can’t bring it up .CA: gov’t stopped from asserting ownership because it led private owners to believe it had abandoned contract à leads to reliance on that apparent representation
.Beelman v.They get stopped from filing suit -.relates to reliance -. you can’t take advantage of that and tell them to undo everything they’ve done U.(p.Co.Held .Note Case .It comes down to which is worse . the person to be stopped has induced another person to act in a certain way.1934 . .(Skipping over some Estoppel and Waiver Stuff) Estoppel and Contract . Beelman .If the fraud isn’t aimed at the Defendant. but some states recognize an exception where D cheated .Fraudulent transfers . with the result that the other person has been injured in some way.you know the other side invested a bunch of money.P not barred by unclean hands because fraud wasn’t aimed at brother-in-law Cases usually use a comparative fault approach.Black’s Law Dictionary Getty .S.Linked to fraud à all fraud gives rise to estoppel Equitable estoppel 1) A Defensive doctrine preventing one party from tking unfair advantage of another when. .Adds the whole course of dealing as a contract term . apparently cheating at gambling is worse Estoppel and Waiver -. had cut and conveyed 6.gov’t tries to sue to get the land back .Gov’t now obligated to provide protection 1941 . Gov’t .P transfers $ to brother-in-law to escape IRS collection.stopped from forcing the other side to give you a remedy.gov’t retracted the boundaries of forest and fire protection (Decades after the original K) . where the other side invested so much money (golf course) .
Trying to kill her husband was not an “unequivocal attempt to relinquish” Procedural Waivers .Center later decides to enforce the contract .g.Company puts another type there . etc. and Continuing Violations (p. .Wrap-up and summary of course . April-17 Estoppel.Shopping center agrees . v. Statutes of Limitations.contract to sell blue widgets.on the 10th time (or at least eventually). of Limitations.They waived that right Another Example .Also termed sleeping on rights 1) what is unreasonable delay? 2) what is prejudice?
. in administrative law.Thursday . you waive the right to bring it up later
.unreasonableness + Prejudice . civ pro.Come up with questions and issues you want clarified for the last couple classes (whenever we start review -.Ex wife didn’t waive her right to spousal support by hiring a hit man to kill her ex-husband .Voluntary relinquishment or abandonment . Wasilla .Waiver . Laches. slackness . Statutes.941-973) Laches . make red widgets. Waiver. Richardson v.Tuesday .could have just as easily been an estoppel case .Remissness. you can no longer bring up the issue and sue for the blue widgets because you waived that. Richardson .This comes up e.. and Continuing violations .in a ways that prejudices the party against whom relief is sought.almost always an equitable one .of a known right Carr-Gottstein Foods Co.laches.Unreasonable delay in pursuing a right or claim . .expressed or implied . sell many times -.“you can only put one type of store there .f you didn’t raise a claim or procedural right at a certain time.either Tuesday or Thursday)
.P seeks . It’s the harsher rule . .O. Klehr v. and they unduly delayed their complaint.usually where would the plaintiff be?
.Senator McCarthy (Communist) wants to be on the ballot for (president?) Applicants tried and failed to qualify for a position on the ballot in a previous election. Smith Corp. . . but only as to harms within the SOL period No Bootstrapping Where does this happen? Example continuing violation in employment law -. A. Harjo . The delay meant that the legislature could not consider alternative filing requirements. no . no Right with both legal and equitable remedies: .complaint about their name .(pp. v. They were familiar with the statute and could have brought suit earlier. last day of class before exam review)
SUMMARY Basic remedies question: where would the parties be but for the violation .separate accrual à one act within the SOL starts the clock running.yes. (Check PowerPoint for April-17.P seeks legal remedy . 957 and 958) Redskins Football . new violation occurs with each paycheck .
Preventative Injunction McCarthy .(p.966) How to deal with measuring gSOL when there are continuing harms . . . then it’s not defensable.early on in employment? If the rule says “this happened outside the SOL. . .Laches applies because they created the name decades before (1960’s?).yes.With respect to paycheck discrimination cases. Inc.antitrust à each overt act that is part of the violation and that injures P starts .Lilly Ledbetter Fair Pay Act of 2009 Right with legal remedy only .3) When does laches apply? Pro Football. P can recover for harms that occurred earlier than the SOL but were part of the same act.continuing violations across time .last predicate act à one predicate act within the SOL period.where do you recognize the harm -.
for pain and suffering and such That is hard to measure.you want to keep P in that position to start with Reparative injunction . even if that leaves P under compensated .when part of the transaction is irreversible. . you want to give him enough money tobuy his way back to that position . money restitution from D is generally measured so as not to make D worse off.In damages. -Supreme Court doesn’t like broad discretion in the Chancellor (equity) courts -Specific performance S. Three categories under Restitution 1) D harms P w/out any equivalent benefit to himself .Restitution is measured much more aggressively Something in bold here on the ppt.and Innocent Defendant . desegregation cases (which one should be held responsible for desegregating) Equity . decree is just a specialized form of injunction at this level of analysis .Where that is impossible. .Declaratory judgments .But that tradition doesn’t make much sense unless it can identify a principled stopping point. (see ppt. 2) Conscious wrongdoers . and restitution is irrelevant
. . .P seeks damages. Preventative Injunction .) Restitution .
Irreversible Transactions .prison cases.sometimes P can demand that D be resored to his original position Restoration 1) innocent recipients of undeserved benefits 2) see pp.you want to restore him to that position in kind .There is a competing tradition that the chancellor has broad discretion to do good. reasonable compensation .P.Each side must account for interest or the rental value of property during course of possession. without regard to the position anyone would have occupied but for the wrong.
Ancillary remedies ..) (see ppt.None of these remedies are worth having without ancillary remedies for enforcement.irreparable injury .between efficiency and Fairness as the measure of law.e. Punitive damages are the great exception to the rightful position principle . . there’s no point in having them. so remedies law is a testing ground for the two approaches. Remedies is all about limits Some of those limits are closely linked to the basic rules (of rightful position? . .P loss is equal to D’s gain. (see ppt.Then P plainly prefers restitution. too expensive to compensate P The Economist concentrates on getting just the right amount of every kind of behavior. 3) D makes profits greater than the harm inflicted on P . equitable lien.. Olwell. . and damages are equal to restitution . . Maier.g. etc. etc. and a miscellany of others to collect most money remedies.But P may prefer restitution if D is broke and if P can still trace the very thing he lost.The goal of corrective justice is to stamp out wrongdoing and to fully compensate every wrong. . including harmful behavior. .etc.) Substantive policy concerns such as free speech and free labor (problem is not that we avoid inadequate remedies but that we fear remedies that will be TOO effective) Policy and Economics Conflict between the economists and the corrective justice theorists .
Despite radically different starting assumptions.We force equitable remedies.Without the ability to enforce remedies.relative cost of alternative remedies . They are designed to punish and deter. execution. not to repair.) With so many remedies. Constructive trust. garnishment. there must be rules or procedures . Remedies are the key to getting just the right amount of deterrence. most cases can be decided the same
.There is no sense in which they restore anyone to his rightful position.2) direct transfer from P to D and no change in value . .
EXAM . work through your options. D can be on the hook for more damages.(and more on ppt. Every problem from 3 perspectives 1) P’s perspective .Could it be drafted and enforced? .how many ways oculd I measure them? .way under either theory. We’ll give a more generous reward when there’s wrongdoing -.Argue both sides on exam Is there other harm still about to happen. 2) D’s perspective . P’s damages? -.Most remedies leave discretion to trier of fact .but sometimes it can be D’s argument) .WAY TO ANALYZE .or least lucrative .Don’t’ forget to discuss collecting judgment .look to maximize remedy .What exactly do I want D to do? Is it workable? .(avoid economic waste) 3) Court’s perspective . not always -.(fairness if often a P’s argument (sometimes. Are there measurable damages? . .especially fraud.Which is most lucrative .whatever you think that means. If so.and still within the bounds of fair argument? . and are there any advantages to going after that profit instead of.Injunction?
.look for ways to minimize . or things that D could fix directly? How? .Did D profit from the violation. lien.look for the best remedy -.You can only get paid if you can find a way to get paid.whether in litigation or the exam. etc. Most justices and judges consider both corrective justice and (compensation?) Work comfortably w/ the full range of remedies .This is where the room is for persuasive argument .constructive trust. or in addition to. Must actually be able to get and collect the money.