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Fall 2013
A remedy is anything a court can do for a litigant who has been wronged or is about to be wronged
*be able to explain why the rule exist; dont blindly apply the rule if it doesnt make sense to




damages (economic,
noneconomic, etc.)



damages (expectancy
+ reliance)

specific performance

A. P holds title:
i. writ of replevin
(personal property)
ii. writ of ejectment
(real property)

A. D holds title:
i. constructive
trust (P regains
legal title)

Unjust Enrichment

B. Title is N/A:
i. assumpsit (cash)
ii. quantum meruit


*not responsible for

breach of fiduciary
duty, subrogation,
equitable liens

***reformation/rescission are preliminary observations (not remedies); they are declaratory in nature but
are not declaratory judgments. Reformation/rescission are prerequisites to determining if remedy is legal
or equitable (consequence of reformation is almost always restitutionary)


A. Generally the irreparable injury rule states that courts will not grant an equitable remedy if a
legal remedy would be adequate; a legal remedy is inadequate if the loss is unique
(hard to value) + scarce (not readily replaceable in the market) or the legal remedy is
not as complete, practical and efficient as equitable remedy
in practice, courts only pay lip service to this rule: today, courts are willing to give
the better of the two remedies (advocates argument = IIR + larger driving force)
however, per the undue burden defense, if the hardship to D OR Court is undue,
equitable relief will not be granted; a burden is undue if the burden is
disproportionate to any benefit that P will receive from injunction
however, the undue burden defense is NOT available to Ds who acted deliberately
to harm P; a D acts deliberately if they could have corrected a mistaken belief by
taking reasonable care
3rd parties: Equitable relief may be denied based on its effect on 3 rd parties. In
regards to orders to defendant that merely affect 3 rd parties, law seems to be that
innocent 3rd parties, can be affected substantially, but not to the point of being
restructured (that is, have the court take over and tell 3 rd party what to do). However,
in regards to orders directly to 3rd parties, these orders must only be minor and
ancillary. Minor orders are inexpensive and not terribly burdensome. Ancillary
orders are issues that are not core to the case.
B. Brief History
-use to be equity court and common law court (legal)
-common law court was older so traditional remedy was damages and writs (writs are
very specific, however, so courts didnt want to keep creating new ones equity
courts started using general injunctions)
-IIR rule created to respect ruling classes during 1616 (this is not important today)
C. Equity vs. Law
-equitable remedy: courts of equity do not give parties right to a jury (just King and
contempt power for violating order)
i. injunctions/orders
ii. specific performance: specialized form of injunction that orders D to perform
the contract; courts frequently grant specific performance of k if scarcity, time
constraints, or the sheer size of k make it very difficult to cover
-legal remedy: courts of law give parties right to a jury trial and does not contain contempt
power for violating judgment
i. damages
ii. writs (replevin, trespass, ejectment, eviction)
-replevin: has a narrower scope than injunctions; it is only used to recover
property, not to prevent a threatened destruction or dispossession
D. Pardee v. Camden Lumber 73 S.E. 82
-facts: P sued to enjoin D from cutting down timber on Ps land. P wants preliminary
form of relief b/c D is trying to cut down timber now
-issue: is an injunction proper over damages?
-holding: yes; the court reinstated the injunction, and remanded the action.
-old rule was that P must prove D was insolvent before awarding injunction court
refuses to adopt this rule b/c it allows D to commit such acts as long as D could afford to
-legal remedies were inadequate to re-convert logs and lumber into live, standing trees
-damages are adequate in instances in which property that is injured may
be substantially replaced w/money recovered as its value

-here, damages are inadequate b/c P cannot use the money to replace trees
-if personal property has a value peculiar to its owner, or price of
affection, equity will vindicate and uphold the right to possession
E. Brook v. James Cullimore & Co. 436 P.2d 32 *use writ to avoid IRR rule
-facts: D appealed TCs judgment that ordered D to deliver property to P; D argues that
property should be valued and money damages are proper remedy.
-issue: can D substitute injunction order for money damages?
-holding: No; P had right to elect either return of property or money damages
-successful litigant entitled to either the return of property or money damages
-if property cannot be returned, P can then choose money damages
-if return is possible, must be returned if those are Ps wishes
-here, P is asking for writ of replevin (this is a legal remedy not equitable remedy);
therefore, b/c replevin is a legal remedy; it is not subject to the IRR rule
F. Continental Airlines v. Intra Brokers 24 F.3d 1099
-facts: Continental published coupon books w/no-sale provision, but told Intra that it wouldnt
enforce it. Later changed position and told Intra, which refused to comply. No
evidence of harm/benefit as a result, also no evidence of expenses by Intra in reliance
on old policy; TC grants injunction against Intra not to sell coupons
-issue: Intra argued injunction was not proper b/c P had adequate legal remedy (losses
from passengers use of coupons)
-holding: damages are not an adequate remedy
-very hard to determine whether P was harmeddifficulty and expense of establishing
economic harm supports argument that damages would be inadequate remedy
-P is entitled to make business decisions (not D and not court) real loss was of
power over business
-note: decision holds on to some semblance of IRR by saying that its difficult to determine
the money amount; but if IRR was really determinative the court would go through the
pain of determining damages
G. Campbell Soup v. Wentz 172 F.2d 80 *specific performance
-facts: Campbell contracted w/ Wentz to buy carrots. Market price shot up Wentz breached.
Campbell sought injunction and specific performance of k.
-issue: is specific performance of k proper?
-holding: yes; unique + scarcity = equitable relief justified
-inadequacy is determined by an examination of the facts in each instance
-here, benefit of k to Campbell was reliability and consistency these particular
carrots were a unique and scarce product that they contracted for so they could
avoid scrambling to find them on the market
-it would be better for Campbell to get equitable remedy, but legal remedy is
adequate shows that even in the business world, where its money-driven, we
are still willing to offer equitable remedies
-notes: in the minority of states, you cannot consider Ds inability to pay when
choosing between equitable and legal relief; CA is in the majority (if D cant
pay it doesnt make sense to use legal remedies). However, we do care about
Ds ability to perform injunction b/c of the serious contempt consequences
H. Van Wagner Advertising v. S & M Enterprises 492 N.E.2d 756 *undue burden to D
-facts: P had lease for advertising space on building but building was leased it to another
company. D breached lease k. P argues specific performance is proper b/c billboard
location was unique
-issue: is specific performance of k proper?
-holding: no; damages are adequate + undue hardship to D
-uniqueness: there is a difference between physical difference and economic

interchangeability and the point at which breach is redressable by SP doesnt lie in

physical uniqueness, but in uncertainty of valuing it
-here, value of commercial billboard space is not speculative
-granting SP in this case would also harm D disproportionately compared to how
much it would benefit P
I. Whilock v. Hilgander Foods 720 N.E.2d 302 *deliberate exception to undue burden
-facts: P granted D permission to build wall on property line P noticed footings extended
to Ps property but after conversation w. D, believed in good faith that D would
reimburse P. Parties could not reach agreement. P sues for injunction. TC awards SJ to
D, finding that encroachment was unintentional and P unreasonably delayed filing suit
-issue: did D act deliberately when putting footing on Ps property?
-holding: remand; in general, TC must balance the hardship to the D against the benefit to the
P BUT if Ds bad act is deliberate, the court may issue the injunction regardless of
the hardship to D
-here, balance of hardship clearly favors D wall already built/very expensive
-regardless, mistaken belief by D would not save it from injunction if D could
have figured it out with reasonable care
-P alerted D and D continued even after D obtained knowledge
-D has laches defense if he can show that P unreasonably caused delay in suit
J. Co-Operative Insurance Society v. Argyll Stores *undue hardship to court
-facts: Safeway decided that number of stores were no longer profitable and decided to
close them. This was a breach of their lease, which contained an obligation to
keep the premises open for retail trade during usual hours of business.
-issue: should the store be ordered to continue operating at a loss?
-holding: no; damages are a better remedy than specific performance
-the issue of supervising specific performance here is an undue hardship on the
court b/c forcing a business to stay open when its executives think it is
unprofitable will discourage the executives from managing the store properly
-counters: other stores relied on Safeway to draw customers into the shopping
center; and injunction would have allowed parties to plan a transition
-courts are not suited to run businesses
A. Generally Compensatory damages are designed to make P as well off as if there had been no
wrong; the goal is to put P back in their rightful position (not made whole). Per
Hatahley, amount of damages must be proved with specificity.
property damages (lesser of two rule): Typically, a plaintiff whose property has
been damaged recovers the lesser of: (1) diminution of market value (2) cost of
replacement or (3) cost of repair and loss of use. [note: see exceptions]
contract damages: Plaintiffs who are injured from a contract breach, may recover
reliance and expectancy damages. Reliance damages are costs (1) proximately
caused by breach and incurred by non-breaching party because they relied on the
contract and (2) reasonably foreseeable to the defendant. Expectancy damages
captures the benefit of the bargain that would have occurred if contract was not
breached [see exception for lost volume sellers].
limits on damages: In general, there are several limitations on damages. In re
contractual limitations, the rule is that parties are allowed to contract limitations on
remedies but cannot bargain so much as to effectively eliminate any remedy for
breach. Here, courts will not honor freedom of contract and will substitute a remedy.
Check for:

1. Liquidated damages
2. General limitations (avoidable consequence, remoteness, uncertainty, etc.)
3. Personal Injury/Pain & Suffering/Wrongful Death
4. Constitutional Harms
5. Tort Reform (capped damages)
-U.S. v. Hatahley 257 F.2d 920 *amount of damages must be proved w. specificity
-facts: government agents came in against orders, took horses owned by P-Native
Americans and sold them to glue factory
-holding: 10th cir. ruled that P must prove exactly the amount of damages suffered, when
possiblew/o precision, awards might be a windfall to some Ps while it would
stop short of restoring others
B. Value as a measure of the Rightful Position (Lesser of Two Rule)
i. rule: P whose property has been injured recovers the lesser of two:
a. diminution of market value (market value immediately prior to injury value after)
b. cost of replacement (replacement value immediately prior to injury)
c. cost of repair + loss of use
-NOTE: we do not offer loss of use as a damage by itself b/c it is up to P to
mitigate its losses
***however all three options provide for prejudgment interest***
ii. exceptions
a. unique property exception
- when property is unique or designed to be used in a very specific way, and there
is no robust market value, then we take away diminution of market value
option and apply either the other two options or any reasonable valuation
-special purpose rule for items that have greater value to their specific owner
than to the general market not wildly adopted (ex. family portraits)
b. specialty/luxury cars
-cars unique b/c even when repaired perfectly, their value is never fully restored
-many courts understand this and allow P to recover repair costs + loss of use +
residual loss of value (some extra amount to make up for market) if this
-residual loss of value = value before accident value after repair
-practical effect is that residual loss of value takes repair cost option off
the table b/c it generally makes it more expensive than other two options
-insurance: however, if you collect from your own insurance, P generally gets
the lesser of repair cost or the market value of car
c. lemon effect
-lemon effect depresses the used-product market b/c buyers are weary of the
uncertainty of buying used duds (must be able to purchase new version of
-replacement value of new product x number of years for depreciation of
the defective product (determined by expert)
-not majority rule/not adopted in CA
-only adopted in states that have adopted the restatement
-does not apply to cars
d. fluctuating values (stocks, etc.) dont worry about this exception
iii. general notes
a. generally, cost of replacement > diminution of market value
b. cost or replacement < diminution in only 1 scenario special and unique items

c. cost of replacement = diminution when there is total destruction

iv. In re September 11th 590 F. Supp.2d 535
*Goodman doesnt think 9/11 case is a good application of the law but Fisher case is a
straightforward application of lesser of two rule
-facts: tenant sought damages (replacement cost + loss of use aka rental payments) after
terrorist attacks
-holding: P not entitled to lost rental payments
-unique property exception does not apply b/c there was recently an auction that
gaged market value
-court applied rule without regard to fact pattern, here P argued it should get loss
of use (rental pmts) b/c it would take an exceptionally long time to rebuild and
P was in the business of renting but court argues rental value is built into the
price P paid for and that P gets pre-judgment interest during litigation
-Fisher (straightforward application of rule)
-1.03 M replacement cost
-480 k diminution lesser of two
-diminution here was much lower b/c Victorian houses were not desired
in the neighborhood
-cost of repair (not mentioned in case) is the third and last way to value
v. Trinity Church v. John Hancock 502 n.e.2d 532
*Goodman thinks court messed up in 9/11 but got Trinity right; this is a good example of
one way to solve an issue when the rule doesnt make sense
-facts: John Hancock construction causes stone masonry cracks in Church cracks
cannot be repaired; must be replaced which is prohibitively expensive for D and a
windfall for P b/c cracks do not impair use of church (here, replacement cost =
repair cost). Also, church is a special landmark (no market value option)
-holding: court applies special property exception; use a rational and reasonable
alternative when current options dont make sense
-Ps strategy was to measure church in terms of lifespan of church (100%
takedown) and the % of takedown that occurred before and after Ds
excavation project began.
-100% takedown = cost of replacement
-D owes (difference in takedown %) x (value of 100% takedown)
-dissent: damages are appropriate only when there is loss; here, the building is just as
usable as it was before we know P isnt going to use damages to fix church
C. Reliance and Expectancy (Contract Breach)
i. rule: P who is injured from a contract breach, may recover reliance + expectancy damages
-per Goodman, we dont worry about duty to mitigate (buyer isnt obligated to substitute)
-reliance: cost caused by breach and incurred by non-breaching party b/c they relied on k
-reliance damage = proximately caused by breach + reasonably foreseeable
-always entitled to pre-judgment interest
-also known as incidental or consequential
-expectancy: benefit of the bargain (non-breaching party entitled to the benefit of the
bargain that would have occurred if k was not breached)
-in general, we look at fair market value
-in re lost volume sellers, we look at profit b/c they likely have inroads where
they have heaper costs than fair market rates
-in the business of selling x products triggers lost volume seller
-substitute goods must be substitutes (not upgrades)
-negative expectancy: occurs when suing over your own losing k; worth it b/c its

been breached and reliance damages > k losses

-ex. remedy = expectancy (negative) + reliance; [reliance value reduced
b/c of negative expectancy]
ii. Neri v. Retail Marine Corp. 285 N.E.2d 311 *dont forget parties entitled to restitution
*straight forward application of k damages
-facts: buyer pays deposit ($4250) for boat rescinds order D refuses to refund
b/c boat is already on the way. Buyer sues for deposit return; seller countersues for
breach of contract damages.
-holding: in breach of k, seller is entitled to both expectancy and reliance; buyer is
entitled to damages restitution
-deposit = $4250 buyer gets deposit back on restitution theory (value of
unearned benefit to D)
-deposit is a way of lessening transaction costs
-buyer gets deposit back b/c onus is on D to prove that the deposit was
earned (has to be very specific)
-foregone profit = $2579 expectancy for a lost volume seller only (this is
different for other users)
-buyer argues seller later on sold same boat and still made profit (buyer
loses this argument b/c theory is seller could have sold two boats instead
of one loss volume seller)
-lost volume sellers make money by selling as many units as possible
-storage fees caused by breach = $674 reliance
iii. Chatlos Systems v. National Cash Register 670 F.2d 1304
*important case; Goodman thinks case gets reasoning wrong (right damages though)
-facts: computer product was inferior to what was advertised
-$207,000 advertised value
-$46,000 k price (thus, 207k - 46k = benefit of the bargain = expectancy)
-$6,000 actual value of product (reliance = 46k 6k = 40k)
-holding: damage awarded = $201,000 entitled to benefit of the bargain [207k-46k]
+ reliance [46k 6k]
iv. Smith v. Bolles 132 U.S. 125
*do not citeno longer good law
-facts: P bought mining stock at $1.50 (represented worth = $10/share) but found out that
land was worthless
-old cases use to make a distinction between tort and contract; these days we just
use expectancy + reliance
-however, one remaining benefit of suing under tort is getting punitive damages
(not allowed in contract)
v. Buck v. Morrow 21 S.W. 398
-facts: M leased pasture to B for term of 5 years. After 2 years, the land was sold and B
was dispossessed. B alleged that he couldnt find another pasture, so he had to
graze on the commons for 5 months, and he had to hire an extra hand to look after
the cattle there and round them all up. Also said that he used reasonable diligence
in trying to keep cattle from straying off, but 15 were lost.
-holding: TC said measure of damages = difference between K price and rental value of
pasture for the unexpired term; court says P also entitled to consequential

damages (reliance) that are the natural and proximate result of k breach
-confining damages to difference in K price assumes that P can
immediately go into the market and obtain similar property
-if P can prove the damages were foreseeable, he should recover
vi. Meinrath v. Singer Co. 87 F.R.D. 422
-facts: P claims D failed to pay bonus in timely manner as agreed upon and that failure to
pay led to costs to his personal businesses. Essence of the claim is that at the time
D signed k, it had a special awareness of the companies financial plight and their
dire need for funds, which created an obligation to make timely bonus pmts
-holding: D is not liable for consequential damages for failure of Ps other business
ventures b/c those business ventures are unrelated to the K
-where breach of K consists only of failure to pay money, remedy is
limited to principal owed plus damages in the form of interest
-policy of having an easy and certain measure of damages (any
exceptions are where there was failure to provide a unique article); or
else every K dispute would become enormously complex, w/theories of
unrealized profits/opportunities
-K agreements contain no implicit/explicit moral undertakings
vii. Texaco c. Pennzoil Co. 729 S.W.2d 768
-facts: P and G made a deal involving purchase of Getty Oil stock providing for division
of GOs assets. Jury found that T tortuously interfered w/agreement, and P
suffered damages of $7.53 billion; 3 billion in punitives. T filed motion for
-holding: Tortious interference w/existing K: P is not limited to damages recoverable in
K action, but also entitled to damages allowed under tort (punitives). Here,
punitives were too high
-uncertainty in calculating damages is tolerated when difficulty is attributable to
Ds conduct
-here, reliance cost was minimal (cost for prepping paperwork, etc.)
-rather, they are after the benefit of the bargain (expectancy)
-K price = $3.40/barrel; Price P otherwise would have to pay = $10.87
-damages = 7.xx *1 billion barrels of oil = $7.x billion
-note: this case irks people b/c P lost the opportunity; they werent harmed otherwise
D. Limits on Damages (Liquidated Damages)
i. Generallymany rules limit damages to less than Ps rightful position
a. contractual limitations: deny consequential damages, include liquidated damages, etc.
b. general limitations: rules in re avoidable consequence, remoteness, and uncertainty
ii. rule: parties are allowed to contract limitations on remedies but there are limitations to
bargaining; if parties bargain so much that there is no remedy for breach, courts wont
honor freedom to contract when courts substitute their own remedy, they will do the least
amount to remedy injured party in light of bargained for k
iii. Kearny & Trecker v. Master Engraving 527 A.2d 429
-facts: P purchased machine from D. K excluded consequential damages, and limited
liability to repair/replacement value of the machine. Turned out that machine
malfunctioned all the time which led to lost profit.
-issue: does UCC permit contractual terms that denies consequential damages when the
contracted remedy fails to achieve its essential purpose?
-holding: in general, clauses that exclude consequential damages are okay; it is only when
circumstances of the transaction cause the consequential damage clause to be

inconsistent with the parties intent that it is appropriate to ignore the K

-U.C.C. mandates that at least minimum adequate remedies be available when a
limited remedy fails to achieve its purpose
iv. In re Trans World Airlines, Inc. 145 F.3d 124 *liquidated damage clause
-facts: TWA leased two planes with a liquidated damage clause; TWA expressly agreed
to clause; In NY, liquidated damage clauses are upheld unless they are
unconscionable or against public policy.
-issue: were the liquidated damage clauses appropriate?
-holding: No; liquidated damages must be reasonably related to the likely damage +
expressly agreed to be exclusive remedy
-NYs public policy is intended to avoid clauses that fix damages that are plainly
disproportionate to the real damage fixing damages essentially forces party
to adhere to K out of economic fear
-it doesnt matter if parties consent to terms; unconscionable contracts are never
-TWA still owed overhaul deposit b/c deposit was a reasonable estimate of the
actual cost and was conditioned on TWAs performance (which it never fulfilled)
-notes: liquidated damages purpose is to bring deals to fruition; it allows parties to
estimate what damages will be
-over-liquidated damages are considered penalties and are disallowed; one cant
over K the damages into excessive liquidated damages (they would become
punitive damages)
-under-liquidated damages are permitted; as long as some remedy exists in K, it
is acceptable (the lower limit is theoretically case-by-case if court determines it
has failed its essential purpose) BUT if it is so under-liquidated that there is no
remedy at all, then it is not honored
v. Northern Illinois Gas v. Energy Cooperative 461 N.E.2d 1049 *liquidated damages
-facts: NIG promised to buy naptha from ECI but it became cheaper to buy from drillers
and pipelines. NIG stopped buying and ECI sued based expectancy + reliance
even though there was a liquidated damages clause. TC said non-breaching party
was free to pursue either liquidated damages in k or actual damages.
-issue: if non-breaching party does not pursue their rightful liquidated damages, can they
pursue other forms of damages instead?
-holding: no, parties are only allowed to obtain the bargained-for liquidated damage
clause (dont have to pursue clause but cant ask for greater damages than
those bargained for)
- UCC 2-719: ECI says under this, liquidated damage clause does not provide
exclusive measure of damages unless it is expressly agreed to be exclusive
-Court: 2-719 governs limitations of remedies, but 2-718 governs LDCs
-An LDC is not a limitation on a remedy b/c it is a pre-determined
agreed upon price and therefore is not subject to 2-719
-note: Goodman thinks the court got 2-719 analysis wrong; under-liquidated damages
limits remedies while over-liquidated damages expands remedies
-some courts say 2-718 governs all LQD and its assumed to be exclusive; other
courts say you actually have to say in k that it is exclusive otherwise courts
will honor other remedies 2-719(b)
-strategy for party who is receiving under-liquidated damages: first, argue not
reasonably related; second, check to see if it says LQD are to be exclusive
remedy in K
-strategy for over-liquidated is only to argue it is a penalty

vi. Personal Injuries (Pain & Suffering) as a limit on remedies

-rule: damages where value cannot be measured in dollars is generally a limit to how
much damages a party can recover; however, one can utilize techniques such as
per diem calculations to obtain larger jury verdicts
-P&S = economic damages + noneconomic damages
-Debus v. Grand Union Stores 621 A.2d 1288 *per diem approach
-facts: P gets injured in store b/c store clerk accidentally knocked over pet food
20% permanent disability. TC allowed jury to think of a per diem approach
to valuing damages (the amount appropriate to satisfy P per day x the number
of days left in Ps life)
-issue: are per diem calculations unduly prejudicial?
-holding: no, they are permissible if they are made under the supervision of the TC
-opposing party can protect against crazy awards by refuting evidence
-courts also have mechanisms like remitter to deal with gross jury awards
-damages must be arrived at based on the evidence at the trial, not argument
-dissent: counsel should be able to propose per diem calculation but should not be
able to provide suggested figures; court should give cautionary instruction to
jury b/c suggested figures appear to be fact when they are not in evidence.
-notes: additional notes on Per Diem calculations
-not allowed to argue during opening statements; in closing statements you are
allowed and you should
-no one is allowed to testify during evidence phase about dollar figures in re pain
& suffering (even experts arent well-versed to talk about pain & suffering
essentially the same level of expertise as any jury member)
-roughly half the states allow the per diem (CA included)
-notes: discounting for present value
-a dollar today is worth more than a dollar tomorrow due to opportunity to reinvest, however, jury verdicts are not necessarily discounted to PV
-most jurisdictions (including CA) do not explicitly instruct juries to
discount for pv
-this tends to over-compensate Ps
-proponents for not discounting argue that juries are always undercompensating for personal injury/wrongful death and this undercompensation is way less than any gain from not discounting PV
-defense lawyers rarely make argument to juries to discount b/c:
1. they dont think jury will understand and that they need to
focus on more key evidence
2. has an effect of admitting defeat
-interest vs. inflation
-inflation depresses value of money over time; on average, interest beats
out inflation and its still wiser to accept a dollar now than a dollar later
-lawyers fees are not discounted
-notes: golden rule approach (how much would jury pay to avoid this particular injury?)
is not allowed b/c it is very prejudicial and D cant really make counter-argument
that ask jury how much they would pay to inflict the injury
vii. Wrongful Death as a limit on remedies
-rule: verdict tends to be smaller b/c victim is no longer in pain and suffering (p&s cut
off at point at death) most of the damages then are economic not non-economic


-the younger the victim the less clear what someone will do with their life this
depresses economic damages
-child labor laws took away value
-some torts available for survivors such as loss of consortium
-estate will sue; if they win, they will distribute the winnings (thus, do not double
count for estate and family)
-ex. 9/11 Victims
viii. Tort Reform as limit on remedies
-tort reform usually wins on constitutional grounds; best arguments against it are policy
-Arbino v. Johnson & Johnson 880 N.E.2d 420
-facts: P suffered serious injuries from JJs birth control patch. OH has limits on
damages unless the injuries are very bad (doesnt limit medmal)
-issue: are OHs statutory limits on damages unconstitutional?
-holding: no
-statutes did not offend Ps right to a jury trial b/c they only required courts to
apply statutory limits to facts found by a jury (limits dont alter facts)
-statutes did not violate the "open courts" and "right to a remedy" provisions of
Ohio Const. b/c:
1. although it limits some non-economic damages, they did not wholly
deny a remedy
2. P still free to pursue a claim
-statutes did not offend due process b/c they were rationally related to limiting
uncertain damage awards and were not arbitrary
1. General economic concerns
2. Non-economic damages are difficult to calculate and susceptible to
influence from irrelevant factors
3. Costs of inflated damages get passed on to general public
-statutes did not offend equal protection b/c, under a rational basis test, they were
rationally related to a legitimate state interest in making the state's civil justice
system fairer.
-it is a judicial function to decide facts in a case, but that function is not so
exclusive as to prohibit legislature from regulating the amount of damages in
certain circumstances
-concur: history suggests legislature has the power to revise common law as it deems
necessary to prevent judicial bias
-dissent (ODonnell): cap is fundamentally different than a remittitur
-remittitur: court is permitted to reduce a jury verdict if they believe it is
unsupported by evidence and it orders a new trial; P can take courts damage
amount or can go through a new trial
-difference: caps dont give option of new jury
-further, if we have remittiturs, we dont need caps in the first place
-additur: only remedy for an unreasonably low jury verdict new trial; simply
adding damages to verdict violates right to jury trial
-dissent (Pfeifer): ignoring factual findings is the equivalent of changing them
-CA Tort Reformlimit applies only to med-mal and caps damages to $250k
(economic + non-economic); more P-unfriendly than other


-tort reform statutes never question liability; they only target remedies maybe tort
reform should address liability to fix these issues (harder to make legislation re liability)
-if the problem is that we are finding D liable when its the Ps fault, we
should address liability
-here, we are allowing the liability and limiting all remedies (Goodman dislikes)
-proponents of caps argue that the average jury verdict has increased insurance
premiums keep increasing
-by law, insurance companies must keep cash on hand and have a fiduciary duty
to invest that cash on handdue to the market turndown, these insurance
companys made bad losses on investments
-studies show that premiums increased then b/c insurance companys need to
make money and make up for these lossestotally unrelated to jury verdicts/
loose liability rules
-there are no showings that the tort reform statutes that have been passed have
had a negative effect on insurance premiums; instead they are still going up
-who benefits? The insurance company benefits; not doctors or Ps
ix. Constitutional Harms as a limit on remedies
-In general, constitutional harms, without more, will only get you nominal damages ($1);
P still need to show actual injury was caused by constitutional violation to get further
-if youre not seeking damages (ex. an injunction) dont need $1
-other limits: capped damages, equalitative limitation (k specifies whats not allowed)
-Levka v. City of Chicago 748 F.2d 421 *non-economic damages
-facts: female P was subjected to a strip search P claims she was so emotionally
damaged that she could not go out alone at night and could no longer work as a
booking agent at night, resulting in lost earnings
-issue: was a jury verdict of 50k in damages excessive ($0 for economic loss; $50k for
-holding: yes; court adopted a remittitur of 25k
-to determine if the jury award is grossly disproportional, court looks to previous
casesonly 3 cases involving female strip searches exceeded 30k, and those
cases had more aggravating facts
-juries are not allowed to do what court did; that is, compare case to past cases
-to recover for emotional distress, P must show something more than
negligence: intentional tort, negligence + physical impact, objective
manifestation, severity, fear of disease, in contract (emotional distress is
generally not compensable in contract; but most courts treat bad-faith breach of
an insurance contract as a tort; this opens the door to emotional distress and
punitive damages)
-Carey v. Piphus 435 U.S. 247
-facts: HS student suspended on suspicion of possession of drugs w/o hearing/
investigation, P sued for violation of procedural due process; contends that
damages should be awarded for the deprivation of a constitutional right
whether or not any injury was caused by the deprivation.
-issue: Whether a P must prove actual injury by a deprivation of his constitutional
rights before he may recover substantial non-punitive damages
-holding: Yes; in absence of any proof of actual injury only nominal damages may be


-while P can recover for emotional distress, neither the likelihood of such injury
nor the difficulty of proving it is so great as to justify awarding compensatory
damages w/o proof that such injury actually occurred
-P must convince the trier of fact that he actually suffered distress because of the
denial of procedural due process itself.
-BUT denial of procedural due process should be actionable for nominal
damages w/o proof of actual injury since the right to due process is absolute
-harm suffered = deprived of constitutional rights
-Ps emotional distress claim is based on his deprivation of rights; therefore,
dollar figure should be the same whether or not student was actually culpable of
carrying marijuana
-why might this case be worth trying? All you need is a dollar in damage to open
the door for punitive damages (not likely in this case)
A. Generally injunctions are both preventive and coercive remedies; they are court orders,
enforceable by sanctions for contempt of court, directing D to do/refrain from an act.
Temporary injunctions are granted pre-trial in instances where there will be injury if
we wait until a verdict to issue injunction; permanent injunctions are awarded at the
close of trial and are not necessarily indefinite.
B. Permanent Injunctions
i. Substantive Law:
1. Ripeness
2. Irreparable Injury Rule
**eBay is technically the law, but courts pay lip service to it
ii. Procedural Law
1. Hearing (courts of equity have no right to jury)
C. Temporary Injunctions:
i. Substantive Law
1. Winter (frontend):
-factor 1: P is likely to succeed on the merits
-factor 2: P is likely to suffer irreparable harm in the absence of preliminary relief
-factor 3: balance of equities tips in Ps favor
-factor 4: injunction is in the public interest
***courts must balance the competing claims and must consider the effect on
each party of the granting or withholding of the injunction
2. Injunction Bonds (backend)
ii. Procedural Law
1. Notice to opposing party
2. Hearing
A. Generally The U.S. Supreme Court in eBay created a four element test for permanent
injunctions, requiring that the P show: (1) they have suffered irreparable injury; (2)
remedies at law would be inadequate; (3) a remedy in equity is warranted
considering a balance of hardships; and (4) that the public interest would not be
disserved by an issuance of a permanent injunction in this case. Because of the
difficulty in coherently applying this rule, courts continue to rely on the traditional
formulations of what is needed to obtain an injunction. To show a permanent


injunction is merited, Plaintiff must prove the ripeness of the case and satisfy the
irreparable injury rule
ripeness: To satisfy ripeness, a P must make a threshold showing that preventative
order is necessary (that the threat of injury is ripe). If the harm is imminent, P
needs sufficient evidence that the harm will occur; if the harm is down the road, P
needs substantially certain evidence. Past violations or actual threats will greatly
simplify Ps burden of proof. [Check to see if injunction sought is preventative,
reparative, or prophylactic]
irreparable injury rule: see Choosing Remedies section above.
rights of third parties: In regards to orders to D that affects 3rd parties, law seems
to be that innocent 3rd parties, regardless if its an institution or individual, can be
affected substantially, but not to the point of being restructured (that is, have the
court take over and tell it what to do). However, in regards to orders directly to 3rd
parties, innocent parties may only be subjected to minor and ancillary orders.
Minor describes how expensive, how burdensome, how onerous the order is.
Ancillary describes issues that are not core to the case.
B. Ebay v. Mercexchange 547 U.S. 388 *this case is impractical and we only pay lip service to it
-facts: M offered electronic marketplace patent to EBay but parties could not work out
deal; M sues EBay for patent infringement. TC awards M damages; AC granted
injunctive relief
-holding: remand; both courts did not apply 4 factor test properly
-a P seeking a permanent injunction had to satisfy a four-factor test:
1. Suffered irreparable injury
2. Remedies available at law were inadequate
-Goodman: #1 and #2 are the same thing
3. Passes the undue hardship test (this is broader than our undue burden
-Goodman: someone was looking at preliminary injunction law
not permanent injunctions
4. Is not contrary to public policy
-Goodman: this shifts the burden that should be on D to P
-notes: in patent cases, a distinction has emerged between suit by Ps who compete in the
market with D and those who do not; if they compete likely get injunction / if
they dont compete likely no injunction
C. Ripeness
-Almurbati v.Bush 366 F.Supp.2d 72
-facts: prisoners contended that, in order to prevent torture of the prisoners, prison
officials should provide advance notice of transfer; media reports indicated
that detainees were previously transferred to foreign countries where they
were subjected to inhumane interrogation techniques.
-issue: is P entitled to injunctive relief?
-holding: no; to obtain injunctive relief, P must show the threatened injury is not
merely remote and speculative but needs to satisfy propensity rule
-uncorroborated news reports were insufficient to establish a likelihood of
harm, especially in view of the officials' assurances that transfers to foreign
countries were only made to home countries or to third countries where
humane treatment was assured.
-notes: courts never accept argument that if youre not doing anything wrong
anyway, you dont have to worry about injunction b/c injunctions
increase the penalties and issuing too many loses its deterrent power
-Marshall v. Goodyear Tire 554 F.2d 730


-facts: TC found that company wrongfully discharged employee in 1 plant based on

age discrimination law awarded nationwide injunction against company
-issue: is it proper to issue a nationwide injunction?
-holding: no; nationwide or companywide injunctions are appropriate only
when the unlawful acts indicate a companywide policy or practice in
violation of the statute
-injunction is a severe penalty
-the evidence is confined to the single acts one manager
-being too broad fails propensity requirement b/c an order that is too wide is
not tailored to Ds likelihood of doing the bad act
D. Rights of 3rd Parties
-Strategically, courts strain to make the order directed at D
-*exam tip: figure out WHO is being ordered
-the mildest admittance of wrongdoing negates 3rd party status and turns party to D
-Hill v. Gautreaux 425 U.S. 284
-facts: Fed Dept. of Housing violated the constitution by funding a racially
discriminatory public housing program
-issue: does Miliken I bar a remedial plan that includes conduct beyond the
boundaries of Chicago (court ruled that b/c harm only occurred in Detroit, a
proper remedy cannot involve adjacent innocent neighborhoods)?
-holding: no; remedial plan in this case is okay (geographic boundaries are not
-Miliken 1 was determined on constitutional grounds (no constitutional
violation = court doesnt have remedial power)
-P Argument 1: remedial order affecting its conduct beyond Chicago would
constitute a relief that doesnt match the harm
-here, unlike Miliken, HUD actually violated the constitution so court
has broad power to remedy
-CHA and HUD have authority to operate outside of Chicago
-court can order HUD, but it cant order parties dealing with HUD
-P Argument 2: remedy has the effect of consolidating governmental units not
implicated in the violations
-b/c local housing authorities must apply to HUD, an order directly
solely at HUD would not force unwilling parties to apply for assistance
General Building Contractors Association v. Pennsylvania 458 U.S. 375
-facts: court found against unions and employers for discriminatory hiring
practices; Ps failed to prove that associations or contractors were aware of
discrimination, and failed to show intent to discriminate by employers as a
class. But, held that employers/TA violated statutes and could be ordered to
help provide a remedy
-issue: whether a party not subject to liability for violating the law may nonetheless
be assessed a proportionate share of the costs of implementing a decree to
assure nondiscriminatory practices on the part of another party which was
properly enjoined
-holding: no; burden to third party is more than minor or ancillary
-1981 could only be violated by purposeful discrimination.
-why are the employers considered the innocent 3rd party?


-court says that they had no way to know of the discriminatory nature of
the lists created by unions b/c they just followed the unions orders and
used the lists. When viewed as a class, employers werent aware of the
discrimination. But it would be difficult to prove that every single
employer knew of it
-employers might have violated Title VII but employees would have had
to exhaust administrative remedies
-concur: agrees with court that remedial plan may not require quarterly reports
from the employers detailing their compliance, but thinks other reports
may be appropriate; wants reports providing employment statistics that
show whether or not injunction is being properly implemented (this is
minor and ancillary)
-Modification of Injunctions
-permanent injunctions can be revisited and modified via new law suit
-court has a broad scope to modify
-Consequences of Failing to Adhere to Injunctions
-contempt is a criminal offense if done willfully
-coercive civil contempt: court imposes conditional penalties to coerce D into obedience
(D has to have ability to avoid them)
-obey the law injunctions are too broad and are invalidated (p. 265 note 2: P was seeking
preliminary injunctions not to destroy evidence (this is already a rule) court rejects P)
B. Preventive Injunctions D has propensity to engage in harmful conduct sometime in the future
-rule: normal propensity requirement
C. Reparative Injunctions Harm is happening right now
-rule: propensity is already satisfied b/c harm is ongoing
-P can claim interim compensatory damages from time of initial harm until court
decision (damage begins when the harm began)
-Forrester v. Boss 97 F.3d 1127 *double recovery
-facts: P = buyer; D = seller. TC awarded P both damages and injunctive relief. D
argues this is double recovery.
-Fraud claim: D represented to P that they could get boat docking permit when D
knew they could not b/c D had boat docking permit court awarded damages:
-$10,000 punitive damages
-$12,250 compensatory
-P gets permit
-breach of contract: D promised they would remove swim dock but didnt
-$2,500 compensatory
-injunction to remove dock
-issue: is this double recovery?
-holding: yes; P cannot receive double recovery
-on remand, P needs to choose between injunction and damages but should
retain punitive damages b/c Ds action was abusive (punitive damages are
designed to deter future activity not to restore P to rightful position; thus, it
was not a double recovery)
-note: compensatory just needs to be 1 dollar to anchor the punitive
-concur: worried that if P elects damages, D wont be able to get back the permit
that has already been taken
-note: P can collect interim compensatory damages (value lost during the litigation
period) this is not double recovery b/c it covers two different time


periods this is ONLY applicable if P chooses injunctions (compensatory

damages already include this via pre-judgment interest); in addition, courts
have found that $1 nominal damage is insufficient double recovery to bar
D. Prophylactic Injunctions D has propensity to engage in lawful behavior that will likely result
in unlawful results (here, we stop lawful behavior)
-rule: P has to do more than show that the harm is inevitable harm must be imminent
OR inevitable + facts must be sufficiently developed so we know what the
harm/remedy should be
-United States v. W.T. Grant Co. 345 U.S. 629
-facts: govt. brought actions against D alleging he was involved in 3 corporations
and that the competitive relationship the companies constituted interlocking
corporate directorates in violation of the Clayton Act (he has fiduciary duty
to 3 corps). After complaints filed, D resigned from some of the boards.
-issue: is the matter moot b/c D resigned; that is, is the injunction no longer needed?
-holding: while the matter is not moot, affirmed the TCs dismissals of govt.s SJ
-moot: there is no remedy that the court can provide
-Ds voluntary cessation is one common source of claims that the case is
moot, or that no injunction is needed
-to successfully moot, D has to change the facts so that its impossible
to repeat it in the future (heavy burden)
-court will consider 3 factors to determine mootness:
1. Bonafide of the express intent to comply (credibility)
2. Effectiveness of discontinuance
3. Past violations
-court says both D and P failed P has not shown propensity in the future; P can
come back later when they do
-Nicholson v. Connecticut Half-Way House 218 A.2d 383
-facts: D wanted to open half-way house for prison parolees in Ps neighborhood.
-issue: (1) Is Ps fear that Ds lawful conduct may turn into a wrongful act
(2) Is Ps argument that home value will depreciate reasonable?
-holding: no, no
-Ps fear of future wrongful conduct is too speculative
-need evidence of specific acts or patterns of behavior
-depreciation is not good enough reason to warrant injunction
-injunctions are severe penalties
-effect is speculative
- Pepsi Co. v. Redmon 54 F.3d 1262
-facts: D use to work for Pepsi and signed confidentiality agreement. D accepted
offer from rival Quaker. P wants to enjoin D from assuming his duties at
Quaker and to prevent him from disclosing trade secrets
-holding: injunction is proper; P can prove a claim of trade secret
misappropriation by demonstrating that Ds new job will inevitably
lead him to rely on the Ps trade secrets
-D cannot help but rely on trade secrets as he plots competitors new course,
and these secrets will enable competitor to achieve a substantial advantage
by knowing exactly how P will price, distribute and market its products


-TC found that Ds actions in regards to P showed he was untrustworthy

-Counter: D would argue actual misappropriation of trade secrets vs. threat
E. Structural Injunctions long series of preventative/reparative injunctions that applies to
institutions (not a separate category of injunctions)
-Winston Style conservative rule; injunctions should be narrowly tailored to return P to
rightful position
-Bailey Style gives courts equitable discretion to be more flexible
-*Winston/Bailey distinction is not restricted to just structural injunctions
-*we currently have 5-4 court that leans Winston-style
-*both styles of injunctions aim to put P in the rightful position
-Justice Thomas Approach in some circumstances, courts dont have the power under
constitution to issue any injunction
-injunction here is vague
-only applies to PUBLIC institutions
-not majority rule
-court cannot completely take over STATE-run institutions
-Winston Research v. Minnesota Mining (3m) 350 f.2d 134 *Winston Injunction
-facts: Mining allege that Winston developed a similar recorder with its former
employees and used confidential information sought injunction +
damages; TC awards permanent injunction for 2 years
-issue: is the length of injunction appropriate? should damages also be awarded?
-holding: appropriate; damages should not be awarded
-duration of the injunction was approved on appeal as based upon the
approximate time that it would require a legitimate competitor to develop a
successful machine after public disclosure of the secret information (w.
trade secrets it took 14 months, thus court reasons w/o trade secrets itll
probably take two years)
-further, 3m lost its engineers to Winston; product didnt reach
market as quickly as it could have
-infinite injunction would be unfair to Winston; need to let skilled workers
use their skills
-no injunction would be windfall to Winston; culpable individuals would
go unpunished
-damages not appropriate b/c Winston had no past profits (determination
would be too speculative)
-however, there is an interim compensatory argument: there is
lost value b/c 3m developed the product later than it should
-Bailey v. Proctor 160 F.2d 78 *Bailey Injunctions
-facts: Gross abuse of trust by the officers and trustees led the trust into
court receivership and eventual liquidation. The shareholders filed suit,
proffering reorganization plans and contesting the TC's liquidation order.
-holding: TC's action in ordering the trust into receivership was a permissible
exercise of its inherent equity jurisdiction
-TC's jurisdiction in receivership did not lapse by virtue of an improvement
in the trust's fortunes sufficient to make it solvent
-Neither did the TC abuse its discretion in finding that none of the
shareholders' proffered reorganization plans were "fair and feasible." The
court concluded that, there being no adequate reorganization plan, the trial
court properly ordered the liquidation and distribution of the trust assets.
-notes: during receivership, district court is essentially owner of company


-argument against courts decision is that the court is not remedying the
harm that brought this case (harm was fraud and self-dealing)
-Brief History
-de jure segregation: caused by authorities and is unconstitutional
-de facto segregation: caused by natural factors and is constitutional
-Swann: neutrally drawn attendance zones would not achieve truly
nondiscriminatory assignment of children to school. TC has broad
power to fashion a remedy that will assure a unitary school system. Led
to generation of busing to desegregate (Bailey style injunction)
-Milliken I: scope of the remedy is determined by the nature and extent of the
constitutional violation. If segregation occurred in Detroit school
system only, remedy must be limited to that; reversed order to have
surrounding suburban districts made parties (Winston style)
-Milliken II: court affirmed educational-quality remedies (ex. remedial training);
some argued that this exceeded the scope, but injunction had a
consequential damages feel to it
-Missouri v. Jenkins 515 U.S. 70 *Justice Thomas Approach
-facts: P-school board alleged D-state/surrounding school districts had caused/
perpetuated system of racial segregation of schools in Kansas City area.
TC found that state and KC SD were liableapproved magnet school plan
(extensive long-range capital improvements plan worth over $540M)
-issue: was remedial plan too extensive?
-holding: yes; inter-district goal is beyond the scope of the intra-district violation
identified by the TC
-here, there is no inter-district violationtherefore proper response
by the TC would therefore have been to eliminate to the extent
practicable the vestiges of prior de jure segregation w/in the SD
-TC created the magnet district in order to serve the inter-district
goal of attracting nonminority students from surrounding school
districts and redistributing them within the KC SD pursuing
desegregative attractiveness is beyond remedial authority
-racial imbalance, alone, is not unconstitutional
-consent (Thomas): here, we shouldnt put P back to rightful position b/c
constitution will not allow it use other branches to correct
this specific harm
-restraint on judicial power = federalism + separation of powers
-whenever possible, courts should issue unified remedies in single
degrees; judiciary shouldnt be injected into day-to-day management of
institutions and local policies
-Hutto v. Finney 437 U.S. 678 *Bailey arguments in re prisons
-facts: TC found prison conditions unconstitutional removed remedy after it
found substantial improvements; AC reversed TCs decision to withdraw
supervisory jurisdiction; court found violations had not been cured
entered order that placed limits on number of men in cell, required each to
have a bunk, discontinue poor diet, 30 days max isolation sentence.
-holding: remedial plan was proper
-TC had given repeated opportunities to remedy; based on the history of
the litigation, court was justified in entering a comprehensive order to


insure against the risk of inadequate compliance

-dissent: distinguishes between prisons and school systems (students can receive
special instruction in later grades)
-majority decision doesnt comply w/Milliken II
-majority doesnt justify that confinement described becomes
unconstitutional on the 31st day needs other justifications, otherwise
its just a prophylactic order
-not remedial doesnt restore victims
-need to let state and local authorities manage their own affairs
-Lewis v. Casey 518 U.S. 343*Winston arguments in re prisons
-facts: Class action by AZ prisoners complaining that inadequate law libraries
and legal assistance in state prisons interfered w/their right of access to
the court TC issued injunction regulating details of law libraries in
every prison in the system
-holding: injunction too expansive
-not the role of courts to shape institutions of government
-remedy must be limited by the wrong
-actual injury to only one P
-another P was unable to file a legal action
-2 instances are patently inadequate basis for conclusion of system wide
violation/imposition of system wide relief
-TC failed to give sufficient deference to legitimate penological interests
asserted by prison authorities
-failed to give authorities sufficient opportunity to propose their own
-too intrusive
-notes: it doesnt matter whether it is brought as a class action still looking for
specific instances of harm
-U.S. Virgina 518 U.S. 515
-facts: VMI case where TC remedy was to create a womens only counterpart to
a male-only school issue is sufficiency of the Womens Institute
-issue: does Womens Institute afford women who want male VMI training, the
same opportunity; that is, did the injunction do enough?
-holding: no; remedies that leave original injury untouched do not match the
constitutional violation
-violation here is the categorical exclusion of women from extraordinary
educational opportunity afforded men
-VA didnt eliminate policy left it untouched
-schools not comparable
-remedy doesnt offer any cure for opportunities/advantages
withheld from women who want a VMI education and can make
the grade
A. Generally To obtain a preliminary injunction/temporary restraining order, a P must satisfy
the Winter test by showing: (1) a likelihood of success on the merits, (2) a
likelihood of immediate and irreparable harm in the absence of an injunction, (3)
that the equities balance in Ps favor, and (4) that the public interest would not be
harmed if an injunction is issued before trial. AND P must put up bond money
(amount of money D is likely to suffer if preliminary injunction is improvidently


Procedurally, there must be notice to opposing party and a hearing.
Temporary Restraining Order (TRO): are designed to prevent irreparable harm
that will occur even before a preliminary hearing can be held. A TRO can be
obtained ex-parte in emergency situations. The TRO, if granted, will last for 1015 days, depending on the applicable procedural rules. A hearing on a motion for
preliminary injunction, with both parties, must then be held, whereupon the court
will determine whether to keep the injunctive relief in place. To obtain a TRO, a P
must satisfy the Winter test.
B. Winter v. Natural Resources Defense Council 129 S. Ct. 365 ***Substantive Standard
-facts: Navy uses active sonar which might harm marine mammals TC entered
preliminary injunction on Navys training exercises
-holding: a P seeking a preliminary injunction must establish that
(1) he is likely to succeed on the merits,
-likely refers to on the merits (case), NOT likely to get injunction aka
IRR (remedy)
-facts on exam will likely satisfy this b/c this is not a remedies question
(2) that he is likely to suffer irreparable harm in the absence of preliminary relief,
-likely (higher standard than permanent injunction) + Propensity + IRR
-this only applies to irreparable harm that occurs PRIOR to trial; dont
consider harm that would happen after trial
(3) that the balance of equities tips in his favor,
-the irreparable harm that the P will suffer if injunction were not
granted > the irreparable harm to D if injunction is granted
(4) and that an injunction is in the public interest
-in practice, factor 4 rarely comes up (on exam, do not manufacture
arguments that arent available); these arguments are reserved for parties
outside of the case
-lower courts held that when a P demonstrates a strong likelihood of prevailing on the
merits, a preliminary injunction may be entered solely on a possibility of irreparable
harm; this is incorrect P needs to demonstrate that irreparable injury is likely to occur
(this is proper b/c injunctions are a serious remedy)
-regardless, this case was decided on the public interests and the Navys interest in
effective training
-standard for preliminary injunctions vs. permanent injunctions is largely the same except
P must show a likelihood of success in re preliminary injunctions instead of actual
-note: all 4 factors need not be met; courts have treated this 4-part test as a balancing test
C. Note on Injunction Bond Payments
-P should seek preliminary injunctions with extreme caution; must be sure you will win
cause there can be devastating losses to P
-if D suffers MORE than P paid for injunction bond, D doesnt get extra money from P
D. Notes on Procedural Requirements/ Right to Appeal
-if P cannot find D after due diligence, notice can be considered given and preliminary
injunction can be issued in Ds absence (in practice, how often do you need an


preliminary injunction against a non-existent D?)

-p. 459 (b)(1) there are 2 situations where TRO can be issued w/o notice (dont even need
due diligence here) cant find person + dont have time to do due diligence OR no
notice b/c it will accelerate further harm/would endanger P
-right to appeal: there is a right to be heard in court but is limited; there is no right to
-permanent injunctions are appealable b/c they are final judgments
-preliminary injunctions are appealable and create an appealable moment
for everything that happened prior to be appealed
-TRO does NOT create appealable moments (can be appealed after a preliminary
injunction creates an appealable moment)
-another way to get around non-appealable issue seek the appellate courts original
jurisdiction (lets sue the trial court; this is not an appeal, this is a new case)
petition for writ of review/mandamus/prohibition
-parties can do this whenever
-real party in interest is the nominal party (the winner of the other case)
-these are also quicker than appeal
-why dont lawyers do this every time? courts do not have to take these cases
(asking for a remedy that isnt necessary if they can wait for appealable
moment) irreparable harm will not occur if we deny this petition
-Carroll v. President and Commissioners of Princess Anne 393 U.S. 175 ***notice
-facts: White supremacist group held racially charged rally. County obtained
preliminary TRO against next scheduled rally. TC awarded permanent
injunction for 10 months; AC reversed 10-month order on the grounds
that the period of time was unreasonable and that it was arbitrary to
assume that a clear and present danger of civil disturbance and riot would
persist for 10 months
-issue: whether and to what extent the authorities of local governments may
restrict petitioners in their rallies/public meetings
-holding: this case doesnt even get to issue, b/c injunction was granted on
procedural error
-10-day injunction was issued w/o notice to D and w/o any effort to
invite them to participate in the proceedings
-order must be tailored as precisely as possible to the exact needs of case
-dissent: no TRO could restrain free speech
-notes: capable of repetition yet evading review exception to moot
doctrine; courts can view these cases even if moot
-Sampson v. Murray 415 U.S. 61 ***right to appeal
-facts: Question as to whether P was entitled to more elaborate procedural
protections in re her discharge; TC granted TRO from firing P until
government produced testimony from the official that fired her.
-holding: court held that respondent's showing fell far short of the "irreparable
injury" required to justify issuance of a restraining order temporarily
enjoining respondent's termination
-court disagreed that either loss of earnings or damage to reputation
would afford a basis for a finding of irreparable injury and thus provide
a basis for temporary injunctive relief
-judge just calls TRO a preliminary injunction so it can hear appeal
-in practice, this does not happen courts dismiss whenever they can


-***dissent (this essentially became the rule): TROs are not appealable, except in
extraordinary circumstances where the denial actually decides the merits of the
case or is equivalent to a dismissal of the suit
-courts will not review errors made by TCs unless the error has been
brought to TCs attention/ TC needs to have chance to correct it
-denial of the opportunity to have a preliminary injunction is appealable
-note: lawyers should treat Marshalls dissent as a rule and advocate for that
A. Generally A declaratory judgment is a remedy used to determine the parties rights before
the harm occurs and is constitutional because it satisfies case in controversy
requirement and doesnt violate mootness because of federal statutes allowing
them. To obtain a declaratory judgment, a plaintiff will only have to
show ripeness (does not have to satisfy the irreparable injury rule). Further, in
practice courts are more lenient in regards to the ripeness requirement in re
declaratory judgments than in re injunctive orders.
ripeness: To satisfy ripeness, a P must make a threshold showing that
preventative order is necessary (that the threat of injury is ripe). If the harm is
imminent, P needs sufficient evidence that the harm will occur; if the harm is
down the road, P needs substantially certain evidence. Past violations or actual
threats will greatly simply Ps burden of proof.
Strategically, a plaintiff may seek a declaratory judgment because it is easier to
obtain than injunctive relief and, in practice, if defendant ignores the judgment,
many courts will view this as an affront to judicial authority. This in effect
creates a loophole for plaintiff to get an injunction that may not have been
available earlier from a pure issue of law. Courts will still engage in an undue
burden analysis.
counter: A potential counter for defendant is that not all pertinent parties are
present in the lawsuit. Generally, courts require that when declaratory relief is
sought all persons shall be made parties who have an interest which would be
affected by the declaration, and no declaration shall prejudice the rights of
persons not parties to the proceeding.
reformation/rescission: Reformation and rescission are not declaratory
judgments but they are remedies that are declaratory in nature. Courts may reform
a contract when the parties meeting of the minds is not reflected in the
agreement; generally, in reformation cases the parties had an actual agreement
and the writing does not reflect that agreement so courts reform the writing to
reflect such. In contrast, courts rescind the entire contract when there was no
meeting of the minds. If there is no mutual agreement because one side made a
mistake, this creates a void contract. However, if the mistake on one side was
caused by fraud or inequitable conduct by the other party, courts have been
willing to choose reformation as the proper remedy over rescission (Hand).
capable of repetition and yet evading review: allows courts to declare
judgment even if it is moot
B. Declaratory Judgments vs. Injunctions
i. What does the P have to prove?
-injunction: IRR + propensity
-declaratory judgment: propensity (no ripeness = no case or controversy)
ii. What does the relief consist of?


-injunctions: an order preventing/forcing activity

-DJ: judgment clarifying the parties rights
iii. What are the consequences if D ignores order/judgment?
-injunction: contempt, res judicata (final judgment)
-DJ: no contempt; res judicata, if D fails again then P can sue them for injunction
iv. Declaratory Judgment pros:
1. No IRR
v. Declaratory Judgment cons:
1. No contempt power
2. No preliminary relief
3. May not get a jury (court sees if its closer to law or equity: if law jury; if
equity no jury like all injunction cases)
4. Structural/supervisory aspect of equity is absent
C. Remedies That Are Declaratory In Nature:
i. Nominal damage (receiving $1 for harm is almost like declaring that P was right)
ii. Quo Warranto
iii. Writ of Corim Nobis allows court to go back and correct opinions that have errors
after they have become final
***per Goodman, these last two are in the book but he will not test on this***
iv. Reformation/Rescission (equitable remedy)
D. Declaratory Judgment Cases
-Nashville Railway v. Wallace 288 U.S. 249 ***constitutionality of DJ
-facts: railroad maintained storage facilities in Tennessee for gasoline that it
shipped to other states. The state levied taxes on the gasoline and the
railroad filed an action for a declaratory judgment, claiming that the tax
was unconstitutional b/c it imposed an impermissible burden upon
interstate commerce b/c the gasoline was only stored in Tennessee after
being shipped from other states and before being shipped to other states.
-issue: this is challenged on its constitutionality based on case or controversy
theory that judiciary is only allowed to rule on controversies w/o simply
just giving advisory opinions; must be an adversarial proceeding
-holding: declaratory judgments are constitutional
-this proceeding maintains the adversarial nature of a regular case; it just
differs as to remedies (remedies are not governed by the constitution)
-cant have a declaratory judgment that doesnt solve case or controversy
-note: in rem property proceedings (which really are not cases or controversies)
are constitutional too
-Cardinal Chemical Co. v. Morton International 508 U.S. 83
-facts: patentee sued the alleged infringer for patent infringement. The alleged
infringer filed a counterclaim for a declaratory judgment that the patents at
issue were invalid. TC entered judgment for the alleged infringer and
declared that the patents invalid. On appeal, the lower court affirmed the
finding of no infringement but vacated the judgment of invalidity.
Specifically, the lower court, convinced that the finding of noninfringement had entirely resolved the controversy between the litigants,
dismissed the declaratory judgment as moot. P is keen on getting
declaratory judgment that patent is valid to preserve its value in the
-issue: can a federal court use its finding that a patent has not been infringed as a


per se justification for upholding the validity of the disputed patents?

-holding: No
-two questions of law do not always necessarily cancel each other out
when only one is resolved (in matters of patent law, non-infringement
and invalidity are two separate questions) Therefore, the AC may find
that a patent has not been infringed but it may not rely on such a
determination as a per se basis for vacating a judgment holding the same
patent invalid.
-procedurally, counter claims have their own case or controversy (is
essentially a different case)not moot, there is relief that can be
granted a remedy can be provided, a case is not moot
E. Reformation vs. Rescission
-reformation: courts reform k when the parties meeting of the minds is not reflected in
the k; generally, in re reformation the parties had an actual agreement and the writing
does not reflect that agreement so we reform the writing to reflect the actual agreement.
-here, courts reform the k w/o real analysis of irreparable harm
-rescission: courts rescind the entire k when there was no meeting of the minds. If there
is no mutual agreement or one side made a mistake, this creates a void k
-Hand v. Dayton-Hudson 775 F.2d 757
-facts: upon firing appellant, appellee made an offer to pay him $ 38,000 if
appellant agreed to release appellee of any claims. TC found that P
fraudulently altered release that both parties signed reformed the release
to conform to its original meaning
-issue: can a court reform a k when there is not a mutual mistake (that is, P never
agreed to the terms)?
-holding: yes; reformation of k is allowable generally when there is a mutual
mistake of fact but where there is mistake on one side and fraud or
inequitable conduct on the other, reformation can be proper over
-note: even though there was no meeting of the minds, the courts still choose
reformation over rescission (probably b/c they disliked the lawyers character
feels equitable)
A. Generally Equitable Relief: The 11th Amendment precludes individuals from suing another
state under any circumstances. However, via Young, individuals are allowed to
sue their own state so long as (1) the lawsuit is directed at an official acting under
his official capacity and so long as (2) they are only seeking prospective equitable
relief. Retroactive remedies are not allowed. This essentially equates to no money
judgments against the state.
Monetary Relief (sovereign immunity waived): If plaintiff is simply seeking
equitable relief and is suing his own state, plaintiff need not worry about
sovereign immunity waiver. If plaintiff seeks monetary relief, the relevant issue
becomes whether sovereign immunity was waived. Generally, one is not allowed
to sue the federal government but Congress can waive sovereign immunity at the
federal level just by passing acts. At the state level, the state must waive its
sovereign immunity explicitly [simply accepting federal funds alone does not


constitute a waiver but if state (1) accepts federal money and (2) there is a
congressional statute that says acceptance results in an explicit waiver, then the
state is no longer immune. NOTE: the individual accepting funds is the one who
is liable and he, not the state, has to be the named defendant]
Monetary Relief (sovereign immunity NOT waived): If a plaintiff desires
monetary relief and sovereign immunity has been waived, then we do not need to
go into a qualified immunity analysis. If sovereign immunity has not been
however, a plaintiff can obtain monetary relief by suing an individual of the state
in their personal capacity (not their official capacity) so long as plaintiff (1)names
an official who in his personal capacity, (2) violates clearly established statutory
or constitutional rights of which (3) objectively a reasonable person would have
known. Sovereign immunity does not apply because and individual acting in his
personal capacity is not a sovereign. Some states will fund the personal expenses
of its liable officials.
Culpable Defendants: However, if the defendant knew about the rule and
knowingly violated it, they automatically waive immunity; that is, plaintiff does
not need to prove objectively that law is well established or that a reasonable
person should know. Often, this exception swallows the rule b/c in practice
plaintiff can just argue exception (creating a question of fact) to force a trial when
the policy behind the rule is to eliminate unnecessary trials.
Generally, injunctions are preferred against the government and damages are
considered more dangerous/intrusive [contrary to normal cases]
B. Suits Against Officers in Their Official Capacities
-Rule: there is no right of a citizen of any state, to sue even their own state for money
damages (it is okay to sue your own state, if you seek equitable prospective relief; note:
equitable relief is always prospective)
-History of Rule: win revolutionary warwhat form of government? states reluctant to
join union and give up rights Chisholm: 2 citizens of SC suing Georgia and won
(states very upset up this) 11th A. overturns Chisholm Hans goes further than 11th
A: not only do we limit citizens from suing another state, now states cant be sued by its
own citizens Young cuts down Hans: Edelman
-Edelman v. Jordan 415 U.S. 651
-facts: regulations required states to determine welfare applicants eligibility and
deliver first check within 45 days; Illinois routinely took up to 4 months
P sues director of program TC awards permanent injunction to comply
with regulations and to pay all benefits wrongfully withheld (retroactive)
-issue: D claims 11th A. barred the award of retroactive benefits from public fund
-holding: 11th A. bars the retroactive monetary payment from state treasury.
-while 11th A. does not bar a suit against a state by the state's citizens, the
court had consistently held that an un-consenting state was immune
from suits brought by the states' citizens
-states do no constructively consent (waive immunity) by participating in
federal programs/accept federal funds
-note: does not overrule Young b/c the relief sought in Young was prospective in
nature and did not amount to money damages against the State.


-dissent (Marshall): by participation in the programs, the States waive immunity

they might have otherwise had from federal court orders
requiring retroactive payment of welfare benefits
C. Suits Against Officers in Their Personal Capacities
-Rule: government officials performing discretionary functions generally are shielded
from liability for civil damages insofar as their conduct (1) does not violate clearly
established statutory or constitutional rights of which a (2) reasonable person
would have known
-Old Rule: problem was rule was not working in practice, too hard to show good
faithnever will get SJ long trials
1. Knew or reasonably should have known about the rule
2. Subjective good faith
-Harlow v. Fitzgerald 457 U.S. 800
-facts: Harlow and Butterfield acting as White House Aides to former President
Nixon are alleged to have conspired against Fitzgerald. D claims absolute
immunity based on public policy.
-issue: at issue was the scope of the immunity available to senior aides and
advisors of the President of the United States in a suit for damages based
on their official acts.
-holding: court held that petitioners were entitled to qualified immunity that
would be defeated if they knew or reasonably should have known that
the action violated respondent's constitutional rights or if the action
was taken with malicious intention to cause a deprivation of
respondent's constitutional rights
-2 types of immunity:
1. Absolute Immunity: judges, legislators, certain members of
executive branch (prosecutors, executive officers engaged in
adjudicated function, and President)
2. Qualified Immunity: is not available if 1. Official knew or
reasonably should have known that the action he took within
his sphere of official responsibility would violate the
constitutional rights of P or 2. Official took the action with the
malicious intention to cause a deprivation of constitutional
rights or other injury
-special f(x) of some officials might require absolute immunity, but those
who seek it must bear the burden of showing that public policy requires
an exception
-policy: insubstantial claims are a cost on society as a whole (expense of
litigation, diversion of official energy from pressing public issues,
deterrence of able citizens from acceptance of public office, influence
the public officials decision making)
-notes: new rule is better, but not perfect. Government employees still have to go
through deposition and litigation sometimes (court is overlooking the fact
that there is almost always a question of what actually happened + intent



Unjust Enrichment



A. P holds title:
i. writ of replevin (personal
ii. writ of ejectment (real

A. D holds title:
i. constructive trust (P
regains legal title)

B. Title is N/A:
i. assumpsit (cash)
ii. quantum meruit (service)

*not responsible for breach of

fiduciary duty, subrogation, or
equitable liens (operate like
constructive trusts)

***in re all types, P is entitled to cut in line of other creditors (including assumpsit)***
A. Generally Restitution is a return or restoration of what the defendant has gained unjustly in a
transaction; the fundamental substantive basis for restitution is that the defendant
has been unjustly enriched by receiving something, tangible or intangible, that
properly belongs to the plaintiff; restitution rectifies unjust enrichment by forcing
defendant to give back what he has gain unjustly to the plaintiff
The substantive issue is whether plaintiff has a right at all; that is, has defendant
been unjustly enriched?
The remedial issue are: (1) is restitution an appropriate remedy? (2) If so, how do
we measure restitution? (3) Is restitution the desired remedy?
P cannot seek punitives in conjunction with unjust enrichment (must seek
B. Why Would Plaintiff Seek Restitution?
1. It is Ps only remedy
2. Restitution can be greater remedy than compensatory damages
3. P just wants to reverse the transaction (equitable restitution)
-if D is insolvent, restitution might be better to get property back (b/c itll be
harder to get damages)
4. D might be insolvent (here if P sue for damages, P becomes a creditor just like
everyone else; under restitution, bankruptcy court will grant P priority over creditors)
-counter: P should not be able to get windfalls
5. Easier to prove
6. Suing under restitution increases the cost of litigation to D (more intrusive, more
intensive discovery trying to trace money, etc.) this likely increases the amount D is
willing to settle for
C. Is Restitution an Appropriate Remedy?
-rule: generally, if P proves that D has been unjustly enriched, courts will permit P to
choose between damages or restitution, but not both.
-exception: if statute of limitations has run on damages claim or statute of frauds bars
enforcement of a k, damages are then inappropriate remedy and P must choose
restitution claim


-statute of frauds states transactions involving land have to be in writing***

-note: traditionally, courts hardly apply irreparable injury rule in re restitution
D. Measuring Restitution
1. The increased assets in the hands of the D from the receipt of the property
2. The market value of services or intangibles provided to the D, w/o regard to whether
the Ds assets were actually increased; that is, the amount which it would cost to obtain
similar services, whether those services prove to be useful or not
3. The use value of any benefits received, as measured by (i) market indicators such as
rental value or interest or (ii) actual gains to the D from using the benefits, such as the
gains identified in item 5
4. The gains realized by the D upon sale or transfer of an asset received from the P
-counter: at least some of the profits were due to Ds efforts
5. Collateral or secondary profits earned by the D by use of an asset received from the P,
or, what is much the same thing, the savings effected by Ds use of Ps asset
E. Limits On Unjust Enrichment
-rule: courts refuse to permit recovery of restitution even when unjust enrichment is fully
established, if a restitutionary award would interfere with the ds own rights or
would be inequitable on the particular facts of the case:
-protecting Ds autonomy Ds autonomy interest must be fully respected; D must not
be made to pay restitution for something he did not take, did not want, and did not
bargain for (ex. house painter paints in Ds absence)
-protecting 3rd party innocent purchaser the innocent purchaser for value must be
protected where legal title has passed from P (ex. X fraudulently gets title to blackacre
from P and sells to innocent purchaser. P not entitled to recover blackacre from 3 rd party
but can get $ from D)
-protecting Ds who have changed position innocent Ds must be protected where they
have changed position after receiving the enrichment and where they would be placed
under significant hardship if restitution is required (extremely difficult to satisfy)
-Ds changed position defense (reliance), D needs:
1. Lack of actual or constructive notice
2. Actual change of position recognized under the law (unusual receipt of
money prompts unusual expenditure that normally would not have
been made)
-protecting public policy
F. Mistake Cases
-rule: benefits conferred by mistake often provide grounds for restitution
-Blue Cross Health Services v. Sauer 800 S.W.2d 72 *mistaken payment
-facts: P was an insurance provider. P had mistakenly mailed 66 checks to Ds.
Once P discovered its mistake, P demanded payment from Ds on
restitution theory.
-holding: P entitled to restitution; a person who pays money to another by
mistake is entitled to restitution from the beneficiary even if the
mistake was due solely to the payers lack of care; D can have
affirmative defense that their position has changed so that it would be
unjust to require restitution
-here, P asks for a constructive trust (equitable remedy) to avoid a jury
trial b/c insurance companies are disfavored by juries


-counter: to get this back on the legal side (jury trial), D would
argue IRR (legal remedy would be perfectly adequate b/c its just
about money)
-notes: if restitution remedy is simply cash, than Ps level of mistake does not
seem to matter b/c cash is so easily returned (assumpsit)
-Blue Cross: mistaken payment just money
-Somerville: mistaken improvement property gain
-simplest way to fix this is to force D to get back what they got:
buy improvement or sell their lot
-notes: money not returned to P if there was no mistake, or there was fraud, etc.
-Somerville v. Jacobs 170 S.E.2d 805 *mistaken improvement
-facts: P accidently constructed building on Ds property. D did not realize this
until after building was complete and claim property interest in building
-holding: P wins; equity will grant relief to one who, through a reasonable
mistake of fact and in good faith, places permanent improvements upon
land of another, with reason to believe that the land so improved is that
of the one who makes the improvements remedy: court said to the D
you lose, but b/c youre not responsible for this, you have the option of
two choices: (1) sell land to P at fair market value w/o value for
improvement (forced sale) OR (2) buy the improvement (when
buying the improvement, D has the chooses the lesser of two: cost of
building warehouse OR fair market value of the improvement)
-unlike mistaken overpayment cases, in mistaken performance cases Ps
culpability DOES matter
-Ps mistake must be reasonable (we dont care if P is an idiot,
we care if P willfully blind or recklessly makes mistake)
-actual notice to P bars unjust enrichment claim even if P did not
understand/comprehend noticecourts are unsure about
constructive notice)
-dissent: taking the property of someone violates a constitutional right
-here, remedy is designed to protect the P (party who made the mistake)
-notes: analogous problem 4-3 officious intermeddlers
-if painter makes mistake, homeowner is liable for lesser of 1. value of
of service or 2. value of improvement
-notes: lying and wait (culpable defendants)
-if D is culpable, D still has election but slightly different: D can sell the
lot OR D can pay for the greater of (1) either the cost of the service or
(2) the fair market value of the improvement
-courts are split on this
-notes: D doesnt have option to sell the land if P never thought the house was
theirs to own (ex. house painters paint other peoples houses not
expecting to keep them, so shouldnt be forced to buy them)
-notes: what happens when D choses to sell the lot but P is insolvent? (Goodman
doesnt know)
-State v. ANW Seed Corp 802 P.2d 1353 *court mistake
-facts: state won a default judgment and executed on the judgment during the
pendency of appeal. The judgment was reversed after the state sold


property at a deep discount. AC affirmed the determination that Seed Co.

was entitled to restitution at the fair market value of the property seized.
-issue: when a P executes on an unsuperseded judgment which is later reversed,
what is the measure of restitution: proceeds of the sale or fair market value
of the property sold?
-holding: proceeds from sale; majority view as reflected in Restatement and
policy reasons suggest value = proceeds of sale
-Restatement: a person who has conferred a benefit upon another in
compliance with a judgment, or whose property has been taken
thereunder, is entitled to restitution if the judgment is reversed or set
aside, UNLESS restitution would be inequitable or the parties contract
that payment is to be final under assumpsit, P is only entitled to get
the value that the enriched party (D) actually enjoyed (so if he didnt
enjoy and devalued unjust enrichment, opposing party limited to the
devaluation + interest)
-here, state sold property at a discount so P can only get back
what D was actually enriched by
-policy reasons: authority to act upon a valid judgment would be
essentially negated if the judgment creditor risked liability for the
uncertain and perhaps unascertainable market value of the property
-notes: this doesnt apply if its just money and D loses it; still liable for the
amount lost
-notes: bona fide purchasers, that is 3rd party individuals who purchased in good
faith, cannot be sued for unjust enrichment
G. Breach of Contract Cases
-general rule: upon Ds substantial breach or repudiation of an enforceable k, a P who
has partly performed is entitled to recover restitution of any benefit he has
conferred in performance of the k AS WELL AS any reliance damages b/c
reliance damages are generally seen as not violating double recovery (ex.
price paid + interest, market value of service, or specific restitution of
particular item conveyed; expectancy/compensatory damages violate
double recovery principle)
-unenforceable k: when k is unenforceable, restitution is usually Ps only option for the
benefits he conferred (ex. violate statute of frauds, one party is a minor, k has become
impracticable, etc.)
-specific restitution: restitution for breach of k usually results in money recovery
however P is entitled to specific restitution when:
1. P has transferred a specific thing that can be returned
2. When the specific good or property that P conferred is unique or has special
qualities (ex. Picasso painting); or
3. P has a security interest in the good transferred
-expectancy or k price as a limit on restitution
-rule: in general, to protect efficient breach theory, restitution is NOT measured
by the benefit D obtains collateral to his breach, but by the value of Ps
part performance; thus, restitution in excess of the Ps expectancy (k
price) is denied when (1) P seeks to recover the Ds collateral profits
resulting from Ds breach or (2) P has fully performed and Ds only
remaining obligation is to pay a sum of money (note: if only partial
performance, P can seek value of partial performance even if its greater
than k, but once he has fully performed he is capped at k price)


-restatement approach to partial performance: Ps restitutionary remedy is

capped at the k price (R.3d is not yet law but likely will be in the future)
-ex. Boomer hypo p. 692
-P builds dam and is 95% done when buyer breaches. This was
also a negative expectancy k.
-k = $333k
-95% completed costs: $571k
-holding: P is awarded the entirety of Ds gain ($571k) law
-R.3d remedy = ($333k)(95%) = 316.35k
-notes: The traditional rule is that if P is waiving her k claim, then we completely
ignore the k terms and P is entitled to restitution of her partial
performance, even if her performance exceeded the agreed upon k price.
However, under the restatement approach, both parties are on notice of
how much each wanted to spend; thus, we limit the restitution to amount
expected by k (CA does not follow restatement approach)
-exception to expectancy ceiling: disgorging Ds profits
1. if intentional tort exists, than D should disgorge profits from breach to P
-if waiving the tort claim in favor of restitution claim (and D
intentionally caused tort) P entitled to disgorge Ds profit
-if you are waiving the tort claim in favor of restitution claim (but D
didnt not intentionally cause the tort) P not entitled to Ds profits
-if D had notice of mistake and went through with it P entitled to
disgorge Ds profit b/c ignoring notice can become a tort
2. if k claim, then we dont care about culpability P not entitled to disgorge
Ds profits
-exception 1: k combined with tort or fiduciary breach P entitled to
disgorge Ds profits
-exception 2: P acquires a property right in the Ds promised
performance (equitable conversion) If D profits by
converting and using Ps goods, P is entitled to recover
restitution from the D measured by his profits
3. if there k facts, but waive k claim for restitution claim P entitled to
disgorge Ds profits if (1) D took away opportunity from P to make money and
(2) P cannot regain this opportunity
4. miscellaneous notes:
-if seeking constructive trust, disgorging profits is not an issue b/c we
-there is no disgorgement of profits with mistaken improvement b/c if it
was a tort (trespass) it wasnt an intentional trespass (mistake)
-May v. Muroff 483 So.2d 772
-facts: in the interim between entering into k and the final closing of deal,
D improperly sold $240,000 worth of fill from the land. TC ruled
that P was entitled to $122,067 (difference between the value of
the land before and after the injury)
-holding: no, P is entitled to $240,000 profit
-Ds breach was deliberate and he should not be able to profit b/c
here, the court believes the Ds culpability has gone too far (the


fill is so substantial to the purpose of land that the breach denies

P the opportunity to profitably perform that cannot simply be
replaced with damages)
-R.3d: if a deliberate breach of k results in profit and the available
damage remedy provides inadequate protection, P has a claim to Ds
i. profitable: breach has to be profitable (gains net of potential
liability in k damages, greater than breaching party could
have earned by performance)
ii. deliberate: D must have intentionally beached
iii. inadequate remedy: Goodman thinks remedy is inadequate
when D steals an opportunity
-losing contracts (negative expectancy) issues
-generally, suing for damages is a worse option than restitution in re losing ks;
here, better to do nothing than sue for damages under a losing k b/c expectancy
value is negative
-Mobil Oil Exploration v. US 530 U.S. 604
-facts: P sought restitution for money paid for lease ks giving them
rights to explore for and develop oil. The rights were not absolute,
but were conditioned on petitioners' obtaining further permissions.
P claimed that the US repudiated the ks when it denied them
the permission-seeking opportunities they were promised.
-holding: P entitled to restitution (rescission of k)
-here, if the US breached a contractual promise, then the US
must give the companies their money back even if it was a
losing k for P
-damages = negative expectancy; restitution = 156M
H. Tort Cases
-several torts, will entitle P to restitution:
-conversion (acts by 1 person inconsistent with the ownership rights of another)
-breach of fiduciary duty if it yields gains to the fiduciary
-copyright/trademark infringement
-tortious interference with k
-in breach of k cases, intentional torts will enable P to seek the profits resulting from Ds
breach (see Exception to Expectancy Ceiling: Disgorging Ds Profit above)
I. Notes on Constructive Trusts
-rule: P who proves his constructive trust claim by clear and convincing evidence wins
an order that requires the D to transfer legal title of specific property or intangibles
to the P. Court first declares D to be constructive trustee, then order D as trustee to
make a transfer of the property to the beneficiary of the constructive trust, the P.
B/c of CTs tracing feature, if property/fund increases than P is entitled to
increases; if it decreases, then P gets the decreased amount, not the original
-Constructive Trust Characteristics
1. No Jury: CT claims are traditionally viewed as equitable claims
-do not need to satisfy IRR


2. Tracing: P may obtain not merely what he lost, but gains received by the D
from the propertys increase in value/from its transfer/from its use in a
business + prejudgment interest
-to get this benefit, P must trace his money or property to some particular
funds or assets (difficult to achieve)
-ex. if D took $10k and comingled it in an account with $50k, for
a total of $60k; P needs to account for how entire $60k was spent
-note: CT is also available when D takes CASH from P (even
when P didnt have legal title) as long as P can trace which is
often impractical
-in terms of tracing, we are tracing the form of the property (not tracing
from person to person)
-we give P the most favorable presumptions
3. Property in specie: CT may allow recovery of the specific property taken from
P or any property substituted for it
4. Priority: CT gives P priority over other creditors to the extent that the P can
identify a property/substitute as that which in good faith belongs to him
-counter against CT: other creditors have interests too and it would be
unjust to give P windfall if other creditors are not serviced
-Reasons P Wants Constructive Trusts:
1. Transfer of title; or
2. Breach of fiduciary duty (accountants, lawyers, financial planners in some
cases, not doctors) trace, dont look at culpability
2.5 Duty of Trust in special relationships created by Snepp
-Constructive Trust vs. Assumpsit
-assumpsit doesnt trace the forms; its just a judgment that says D owes X
amount of money (up to D to figure out how to pay it)
-not wise to use assumpsit if the value grew (lose benefits of tracing gains); good
when the value decreased (tracing under CT will give P decreased value)
-if its hard to tell if there is growth/loss b/c of comingling of funds, courts try to
maximize the Ps gain (the P is entitled to the presumption of gain)
-courts will apportion fund
-Snepp v. United States 444 U.S. 507
-facts: As a condition of his employment with CIA, D agreed not to divulge
classified info and not to publish any info w/o prepublication clearance. D
breached duty and published book w/o clearance CIA wants CT over
book profits; TC D breach + awarded CT; AC agrees but invalidates
CT b/c thought that Ds fiduciary duty extended only to preserving
confidential material (limited damages to nominal damages + punitives)
-holding: reverse; AC denies P the most appropriate remedy for Ds breach of
trust and will leave P with no reliable deterrent to future breaches
-CT protects P from unwarranted risks CT remedy simply requires D
to disgorge the benefits of his faithlessness
-actual damages are unquantifiable
-nominal damages are hollow alterative that will deter no one
-punitives are speculative and unusual and bear no relation to
either Ps loss or Ds unjust gain (further, proof of tortious
conduct might require P to disclose confidential info)


-dissent: D did not breach his fiduciary duty to protect confidential info. Rather,
he breached his contractual duty to obtain pre-publication clearance. In
order to justify CT, majority attempts to equate contractual duty with
fiduciary duty here, D did not gain unjustly from his breach (even if
D submitted book for review, CIA would have to clear it b/c it
contained no confidential info) thus, CIA is unjustly enriched by CT
-notes: Snepp stretches the boundaries of CT (typically, we never disgorge profits
in re constructive trusts) b/c D is not a fiduciary (just an employee).
However, court was willing to hold this special relationship warranted
disgorging profits
-ex. D disposes of legal title hypo (if P fails to get CT, can sue as a regular creditor)
-if D obtains blackacre from P by fraud and subsequently gets rid of it to a 3rd
party, D no longer has legal title to blackacre and cannot be a constructive
trustee. D may still be liable for the fraud, but at this point, D is only a debtor
and P is only an unsecured creditor. Suing only as an unsecured creditor, P will
be unable to recover the specific property, unable to recover any gains that might
once have been associated with that property, and will be unable to get the
benefit of any automatic priority over other creditors
-what about tracing? If D no longer has title, we cant trace unjust gain? (tracing
stops here because it is not money and there was a bonafide purchaser)
A. Generally Punitive damages are not a remedy in and of themselves; they are justified in part
by deterrence, and in part by retribution and designed to encourage plaintiffs
societally to sue more often in certain areas. In order to qualify for punitive
damages, a plaintiff must be (1) seeking compensatory damages [or an
injunction and P can obtain at least $1 in nominal damages] (2) under a tort cause
of action.
k exception: Punitive damages are generally not appropriate under contract
causes of action. However, if there is a parallel tort [or other COA based on Ds
culpability] available for plaintiff to plead based on the same set of facts as the
contract claim, then punitive damages can be available.
Under the Ford Pinto case, CA has announced what factors the jury should
consider when assessing punitive damages: (1) degree of reprehensibility of
defendants conduct, (2) the wealth of defendant, (3) amount of the
compensatory damage award, and (4) the deterrence effect on defendant and
others similarly situated [not as important on exam b/c these are jury
However, defendant is permitted to ask for a reduction of jurys award if the
award violate the Due Process Clause. Courts will balance the BMW guideposts:
(1) degree of reprehensibility of defendants conduct, (2) ratio between
compensatory award and punitive award, and (3) comparison to similar civil or
criminal penalties
The degree of reprehensibility must be grounded in the defendants conduct in
the state in which suit is brought because his conduct may have been lawful in
other jurisdictions. A court may consider defendants out-of-state conduct, but
only to determine the reprehensibility of its in-state conduct. Likewise, courts can


consider facts regarding defendants conduct towards in-state nonparties to

determine reprehensibility but cannot use it to value a punitive damage award.
While the Supreme Court has declined to impose a bright-line ratio, they suggest
that the ratio between the compensatory award and the punitive award
should be a single-digit ratio. This in effect has become the de facto rule because
lower court judges are reluctant to disregard this and have their decisions
reversed on appeal.
The existence of statutory civil or criminal penalties tends to reduce punitive
award. Most torts do not have statutory penalties and therefore the existence of
penalties for this rare occurrence tends to show that the legislature already
considered the punitive award appropriate for the conduct. (counter: the rarity of
these statutes, shows just how serious defendants conduct was)
B. Constitutional Limits on Punitive Damages (Due Process Clause)
-Browning Ferris (1989): D argues unconstitutional award b/c violates 8th A. (cruel and
unusual) changes standard of review on appeal (de novo)
but majority rejected 8th A. argument (D loses)
-Pacific Mutual Life Insurance (1991): Ford Pinto factors are affirmed states replaced
shock the conscience test with Ford Pinto factors
-TXO (1993): this time D loses but its just a plurality upholding punitive damages
award signals tide is turning
-Honda Motors (1994): reserved punitive but on a procedural technicality not b/c award
was excessive (availability of AC to review)
-BMW (1996): first time SC reversed punitive damages based on being excessive
(DPC) created 3 guideposts (factors, balancing test):
1. degree of reprehensibility of Ds conduct
2. ratio between compensatory award and punitive award, and
3. comparison to similar civil or criminal penalties
-State Farm Mutual Insurance v. Campbell 538 U.S. 408 *solidifies BMW
-facts: State Farm set corporate financial goals that required capping the amount
it would pay on claims, w/o regard to the number of claims or their merit.
To meet these caps, SF often refused to pay claims on behalf of
unsophisticated insureds that were thought unlikely to complain
effectively. SF put false documents in claim files, removed documents
that suggested liability, and destroyed manuals that might reveal the
scheme. Jury awarded 2.6M compensatory/145M punitive; TC reduced to
1M/25M State SC reinstated the 145M punitive award.
-holding: here, punitives are okay but a more modest amount would suffice b/c
award was based on Ds national conduct (involving out of state nonparties)
-guidepost 1: degree of reprehensibility considerations:
i. harm caused was physical as opposed to economic
ii. tortious conduct evinced an indifference to or a reckless
disregard of the safety of others
iii. the target of the conduct had financial vulnerability
iv. conduct involved repeated actions or was an isolated incident
v. whether the harm was the result of intentional malice,
trickery, or deceit, or mere accident


vi. states cannot punish D for conduct that D may commit

outside of its state (out-of-state conduct may be probative
when it demonstrates the reprehensibility of the Ds action in
the state where it was tortious but D should be punished based
on harm committed to the particular P (NOTE: this doesnt
mention other in-state nonparties that BMW says to include)
-guidepost 2: ratio between compensatory and punitive award
-Goodman: you can have punitive damages alongside an
injunction if you obtain at least $1 in nominal damages. But
keep in mind in light of the BMW guideposts that nominal
damages may severely limit the amount of punitives
constitutionally allowed!
-few awards exceeding a single-digit ratio between punitive and
compensatory damages satisfy due process b/c the DPC
prohibits the imposition of grossly excessive or arbitrary
punishments b/c D needs to have fair notice of what his
punishment will be
-counter: greater ratio may be appropriate where the injury is
hard to detect or the monetary value of noneconomic harm
might have been difficult to determine
-guidepost 3: disparity between the punitive damage award and the
civil penalties authorized or imposed in comparable cases
-care must be taken to avoid the use of civil process to assess
criminal penalties that can be imposed only after the heightened
protections afforded to D in a criminal hearing
-dissent: DPC does not limit punitive damages
-Philip Morris USA v. Williams 549 U.S. 346
-facts: P die from smoking Ds cigarettes. Theory of the case was fraud:
D knew of the health risks posed by its product but advertised
that they were safe. P emphasized Ds affect on ALL smokers in
the state. Jury awards 21k in economic damages, 800k noneconomic damages (state capped at $500k), 79.5M in punitives
-holding: DPC forbids use of a punitive damage award to punish D for
injury it inflicts upon nonparties
-can use info about nonparties to determine reprehensibility but
cannot use it to value award (juries cannot consider harms
alleged to nonparties for purposes of punishing D, but they can
consider nonparties (in the state) to determine reprehensibility
toward this P
-notes: Goodman is very confused about how to apply this standard
C. Punitive Damages in Contract COAs
-Formosa Plastics Corp. v. Presidio Engineers and Contractors, Inc. 960 S.W.2d 41
-facts: D had an intentional scheme to defraud contractors by enticing them to
make low bids by making misrepresentations in the bid package and
withholding info. TC reduced award to 700k in actual damages, 10M in
punitive damages, prejudgment interests, and attorney fees.
-issue: D claims that fraud claim cannot be maintained b/c Ps losses were purely
economic losses related to the k


-holding: P has a viable tort claim against D and has sufficient evidence to meet
each of the fraud elements; thus, even though P is suing under k,
punitive damages are appropriate
-as a rule, a party is not bound by k procured by fraud; moreover, it is
well established that the legal duty not to fraudulently procure a k is
separate and independent from the duties established by the k itself
-tort damages are recoverable for a fraudulent inducement claim
irrespective of whether the fraudulent representations are later subsumed
in k or whether the P only suffers economic loss related to the subject
matter of the k
-if P presents legally sufficient evidence on each of the elements of a
fraudulent inducement claim, damages sound in tort
-Fraud: requires a material misrepresentation, which was false, and
which was either known to be false when made or was asserted w/o
knowledge of its truth, which was intended to be acted upon, which was
relied upon, and which caused injury; a promise of future performance
constitutes fraud if the promise was made with no intention of
performing at the time it was made
D. Other Punitive Remedies (not covered in class)
i. federal maritime common law
-Exxon Shipping Co. v. Baker 128 S. Ct. 2605
-facts: Exxon Valdez spilled millions of gallons of oil. Ships captain
was a relapsed alcoholic who had dropped out of treatment.
There is evidence that superiors knew this. There was also
evidence that captain had been drinking that eveningTC
awarded 4.5B in punitive damages to Exxon and $5k in punitive
damages to captain, on top of regular damages.
-holding: court believes verbal guidance for punitive damages will result
in unpredictable awards and there needs to be quantified
guidelines the most promising alternative is to leave the
effects of inflation to the jury by pegging punitive damages to
compensatory damages using a ratio or maximum multiple
court decides on a 1:1 Ratio TC determined compensatory
damages at 507.5M; thus, max punitive award would be
-prevailing rule limits punitive damages to cases where a Ds
conduct is outrageous owing to gross negligence, willful,
wanton, and reckless indifference for the rights of others
or behavior even more deplorable
-punitives are thought to be justified when wrongdoing is hard to
detect (increasing chances of getting away with it) or when the
value of the injury and the corresponding compensatory
award are small (providing low incentive to sue)
-procedure: amount is determined by jury and then reviewed by
TC and AC to ensure that it is reasonable (some states have
statutory caps on punitives)
-dissent: this 1:1 rule is too precise to be applied in the common law;


better to react to facts that came before us (precise rules is

better suited for congress)
ii. Statutory Recoveries by Private Parties
a. antitrust: P recovers 3x their compensatory damages
b. secured credit: if a secured party violates any of the rules governing
repossession and sale of consumer collateral, debtor may
recover actual damages or all the interest + 10% of the
principal sum of the transaction
c. truth in lending: act authorizes recovery of actual damages + 2x the finance
charge (2x finance charge between 100-1000)
d. privacy act: for certain intentional violations, US shall be liable for actual
damages but in no case will P receive less than $1000
iii. Civil Penalties Payable to the Government
A. Generally Ancillary remedies help enforce some other remedy. Contempt is an ancillary
remedy that is available at any time by any judge and is enforceable by fines or
imprisonment. Criminal contempt is punitive in nature; that is, it is a punishment
for a past willful violation of a court order and the punishment is not conditional
on future compliance. On the other hand, coercive civil contempt holds the
contemnor in contempt in order to coerce them to imply with an existing
injunction; thus, contemnor must have power to obey injunction and avoid
punishment. [Unlike criminal contempt, in coercive civil contempt a violation
does not need to be willful b/c even if violation occurred by accident, now
contemnor is on notice and has the power to avoid misconduct it in the future.]
Contemnors can contest the propriety of the injunction at any time, however the
collateral bar rule bars certain collateral attacks on the validity of the injunction
after the fact; that is, the offense is complete when D willfully violates the
injunction, even if the injunction is later held erroneous. Exceptions to this rule
occur when (1) court has no jurisdiction (2) appeal is met with delay or
frustration or (3) the injunction is clearly transparently invalid. The collateral
bar rule only applies to criminal contempt cases.
B. Vocabulary
-the contemnor: person who is held in contempt (P, D, or 3rd parties)
-contemnacious conduct: conduct that should be held in contempt
C. Collection of Debt (not covered)
D. Contempt (available at any time by any judge, but is equitable in nature):
i. Criminal Contempt: criminal contempt is punitive in nature; that is, it is a punishment
for a past willful violation; the punishment is not conditional on future compliance
-collateral bar rule: contemnors can contest the propriety of the injunction at
any time, however the collateral bar rule bars certain collateral attacks on the
validity of the injunction after the fact; that is, the offense is complete when D
willfully violates the injunction, even if the injunction is later held erroneous;
the violator should be appealing the injunction through another proceeding
(TRO, etc.) [not available in CA]
-exceptions: (1) court has no jurisdiction
(2) appeal is met with delay or frustration
(3) injunction is clearly frivolous pretense to validity or
is transparently invalid


-reason for rule: What about all the times the court gets it right? We
don't want people to feel free to violate valid
injunctions just b/c they think they're right.
-two basic methods: jail and fines
-fines are payable to the state
-3 protections for contemnor: proof beyond a reasonable doubt, separate council
(if contemnor is a 3rd party), right to a jury
-when does a criminal contempt contemnor get criminal protections?
-factor 1: violation occurred inside or outside the courtroom?
-if outside, contemnor given full criminal protection (even if
judge can see through the window)
-if inside, and contempt order requires jail time > 6 months, then
contemnor given full criminal protection
-if < 6 months, no protections
-if inside, this is summary criminal contempt (even in this
proceeding though, the contemnor gets minor procedural due
process opportunity to explain oneself to judge)
-factor 2: how high is the penalty
-if jail time > 6 months, contemnor gets criminal protection
-based on contemnors wealth, a minor fine might not afford
protection whereas major fine will afford protections
-Walker v. City of Birmingham 388 U.S. 307 *collateral bar rule
-facts: city officials brought suit against protestors to stop them from
engaging in an organized march w/o a permit, a violation of
1159. TC granted a temporary injunction to block the march.
When protestors proceeded with the march, the TC held
petitioner protestors in contempt.
-issue: the issue is whether protestors can be sentenced for contempt for
violating an injunction based upon an ordinance that may be
-holding: affirmed; once an injunction is issued, a party needs to
challenge the constitutionality of the law in court rather than
violate the injunction and be in contempt.
-court rejected protestors' argument that 1159 was
unconstitutional. The court applied the rule that a statute was
not unconstitutional until it was judicially deemed as such.
-b/c 1159 had not been declared unconstitutional, and
petitioner protestors failed to challenge the injunction, or the
underlying statute, they could not complain about the
subsequent contempt citation.
-Arguments that the Collateral Bar Rule does not apply here:
1. Goodman: court probably would have delayed appeal, which
would have given rise to collateral bar exception BUT D never
2. if injunction has a "frivolous pretense to validity" or is
"transparently invalid", collateral bar rule does not apply
3. if court had no jurisdiction to issue the injunction, then the
collateral bar rule may not apply
-What are we valuing in CA by eliminating the collateral bar rule?
-if you feel that the court is wrong, you can violate the order and take


your chances
-court has a certain level of insecurity in its authority
ii. Coercive Civil Contempt: holding contemnor in contempt b/c we want to coerce
them to comply with an existing injunction; contemnor must have power to obey
injunction/avoid punishment
-two basic methods: jail or money
-fines are payable to the state
-NOT compensatory to injured party
-used for contemnors who need to be encouraged to engage in behavior
they could not perform if in jail
-unlike criminal, violation does not need to be willful (even if violation
occurred by accident, now contemnor knows the rule and should not violate it in
the future)
-notes: collateral bar rule does not apply b/c the civil P is not entitled to benefit
from an erroneous injunction
-ex. General Civil Contempt. Miller published article that revealed CIA agent
identity. Miller refused to testify in court and reveal her sourceimprisoned for
85 days. This is coercive civil contempt b/c Miller had the option getting out of
jail at any time by testifying.
-ex. Ineffective Punishment. If injunction requires contemnor to be out in society,
imprisonment is not a coercive civil contempt b/c it prevents them from obeying
-ex. Punishment That Becomes Ineffective Will Be Thrown Out. X was involved
in organized crime and refused to testify imprisoned for 5 years. Finally, court
let him out b/c he realized this method for this particular contemnor was
ineffective (note: criminal contempt was still available)
-standard to look for: is the coercion working?
-no purpose in fining someone who cannot pay
-no purpose in jailing someone who will never yield to the order
-ex. Civil Contempt That Becomes Criminal in Nature. Criminal protections
generally are not available to contemnor in civil coercive contempt. At some
point, however, when the contempt punishment reaches a certain amount of time
in prison or certain amount of fines that start looking punitive instead of
coercive this becomes criminal in nature (new proceedingcontemnor
afforded heightened criminal contempt protections: proof beyond a reasonable
doubt, separate council [if they are 3rd parties], right to a jury)
-note: NOT retrospective; that is, paid fines cannot be returned, but any
future fines are subject to criminal protections
-International Union, United Mine Workers v. Bagwell 512 U.S. 821
-facts: Union members repeatedly violated TCs injunction and amassed
$12M fines payable to companies and $52M payable to the
state. Parties settled and moved to dismiss. TC dissolved the
injunction and vacated the 12M payable to the companies but
refused to vacate the 52M owed to the state on the grounds that
it was a coercive civil fine
-issue: were the fines civil and not dismissible or criminal in nature and
thus warranted contemnors heightened protections?


-holding: fines were criminal in nature and contemnors were not afforded
sufficient protections
-criminal contempt is a crime in the ordinary sense and criminal
penalties may not be imposed on someone who has not been
afforded the protections that the Constitution requires of such
criminal proceedings
-civil contempt sanctions are considered to be coercive and
avoidable through obedience, and thus may be imposed in
an ordinary civil proceeding upon notice and an opportunity to
be heard.
-a contempt sanction is considered civil if it is remedial, and for
the benefit of the complainant. But if it is for criminal contempt
the sentence is punitive to vindicate the authority of the court
-here, fines got so large that the punishment became
criminal in nature
iii. Compensatory Civil Contempt: fines payable to P for violating injunction (even for
actions that occurred in other jurisdictions that have violated a court order)
-CA doesnt have this
-note: disadvantage is that it gives contemnor a backdoor to damages if they
wanted them over injunction and failed to get them at trial. Before court issues
an injunction, the court decides that damages would be an inadequate remedy.
Now that the injunction is violated, it awards compensation after all