Remedies Outline
I.
II.
Introduction to Remedies
a. Categories of Remedies
i. Substitutionary v. specific
ii. Coercive v. noncoercive
iii. Provisional v. final
b. Substitutionary / specific remedies
i. Substitutionary remedies offer damages as a substitute for some injury
ii. Specific remedies give the plaintiff what he wants
1. Specific performance (the bargained-for item)
2. Replevin
c. Coercive / noncoercive remedies
i. Coercive remedies act in personam
1. They are backed by the contempt power
ii. Noncoercive remedies do not act on the person
1. Damages judgments have to be enforced by attaching property belonging to
the defendant
d. Provisional / final remedies
i. A provisional remedy occurs before the conclusion of the case
1. TRO
2. Preliminary injunction
ii. Final remedies occur at the end of the case
1. Damages
2. Permanent injunctions
Equitable Remedies, Generally
a. History of equitable remedies
i. At common law, English courts were divided into courts of law and courts of equity.
1. Law courts only recognized certain “writs,” or forms of pleading.
a. Advocates would attempt to shoehorn their claims into those writs,
but sometimes this was not possible to do
b. The king’s subjects were sometimes dissatisfied with the law courts
i. They would petition the king for special relief
ii. The king delegated powers to his chancellor
2. Over time, courts of equity developed into a separate system
a. They had their own law
i. Mortgages / trusts were inventions of equity
b. They developed different remedies
3. Law courts resented the power of the equity courts
a. By invoking equity, the king aggrandized his own power
i. This caused a corresponding decrease in the power of the
nobles / law courts
b. To avoid overly intruding on law courts, courts of equity developed
rules
i. This was the origin of the irreparable injury requirement
ii. In the United States, the courts of law and equity merged by the 1800s/1900s.
1. But significant differences still remain between law and equity:
a. Jury trial right
2. Equitable remedies are only available when legal remedies are not!
iii. Equitable Maxims
1. These “Yoda-like proverbs” were used at common law
a. But sometimes they lie in opposite directions
2. Common maxims:
a. “He who comes into equity must come with clean hands.”
b. “Equity does not suffer a wrong to go without a remedy.”
c. “Equity abhors a forfeiture.”
d. “Equity aids the vigilant, not those who slumber on their rights.”
e. “Equity regards substance rather than form.”
b. Irreparable Injury
i. In order to obtain an equitable remedy, there must be no adequate remedy at law.
1. There is no adequate remedy at law for:
a. Loss of something unique
b. Injury to constitutional rights
c. Damages difficult/impossible to quantify
ii. Campbell v. Seaman: Brickyard emitted fumes, damaging neighbor’s plants/trees.
1. Court enjoined continued operation of the brickyard. There was an
irreparable injury because one could not put a price on beautiful trees!
iii. Fortner v. Wilson: Plaintiff sought specific performance for a reneged sale of a brandnew Chevy. Such vehicles were not available on the open market.
1. Court refused specific performance because it wasn’t impossible to obtain
another similar vehicle. Therefore, there was no irreparable injury.
iv. Merrill Lynch v. Callahan: Merrill sued two former analysts after they left and started
poaching clients.
1. Court denied injunction because (1) Merrill acted too slow; and (2) damages
were adequate. Rejected argument that damage could not be quantified.
c. Equitable relief is discretionary!
i. Even when there is an irreparable injury, a court can refuse to permit it
1. Van Wagner v. S&M Enterprises: Advertising company sued after its lessor
breached a lease for advertising space on an exterior wall.
a. Court rejected argument that property was unique, and therefore
specific performance was the remedy. Equity is discretionary.
ii. Courts will often consider the public interest in deciding whether to grant equitable
relief
1. Georg v. Animal Defense League: Neighbors sued to enjoin construction of an
animal shelter, arguing that barking dogs would be a nuisance.
a. Court denied injunction, because it was in public interest to have
humane animal shelters.
iii. Courts hesitate to enter into long-term supervisory arrangements
1. Grossman v. Wegman’s: Commercial landlord sued failing supermarket after
it breached a 15-year lease.
a. Court refused specific performance, finding equitable relief
inappropriate because the court would have to supervise 15 years.
d. Equitable Defenses
i. If established, an equitable defense is a complete bar to equitable relief
1. Depending on the defense, and on the jurisdiction, it might not be a bar to
damages.
2. To defend against damages, a defendant could argue:
a. Illegality
b. In pari delicto (π doing same bad conduct as Δ)
ii. Four equitable defenses:
1. Unclean hands
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iii.
iv.
v.
vi.
2. Unconscionability
3. Laches
4. Estoppel
Unclean hands
1. A plaintiff cannot obtain an equitable remedy if they engaged in bad conduct
a. But the bad conduct has to be related in some way to the underlying
lawsuit (Seagirt)
2. Salomon Smith Barney v. Vockel: Investment firm sued a former analyst after
he left their company and started poaching clients.
a. Court denied relief, because Salomon Smith had him do the same
exact thing when he joined their company!
3. Sheridan v. Sheridan: Divorcing couple sought equitable distribution of illgotten gains. The husband had been skimming oil from his trucking job.
a. Court refused equitable distribution, because that would be dividing
pilfered goods among criminals. Called the police.
4. Seagirt v. Chazanof: Man who fraudulently conveyed real property to
relatives, and then back, sought a replacement deed after he lost the deed.
a. Court permitted relief. Even though the original conveyance was
fraudulent, the suit at issue was not related to that conduct.
5. American University v. Wood: Chiropractic correspondence school sued a
former professor who started his own school.
a. Court applied unclean hands, because both schools utilized the same
type of misleading advertising.
Unconscionability
1. Equity will not enforce an unconscionable arrangement.
2. Campbell Soup v. Wentz: Soup company sued a farmer for breaching an
exclusivity clause on carrots.
a. Court refused to award specific performance because contract was
incredibly one-sided.
Laches
1. The plaintiff is barred from recovery when:
a. π unreasonably delays;
b. Delay causes Δ prejudice
2. Laches is a more flexible concept than statutes of limitation in the law
a. It’s not a bright-line rule like a statute of limitations
b. Courts do usually consult the analogous statute of limitations
i. Presumption that laches is met if outside the SOL
3. Some courts think that there is a sliding scale between delay / prejudice
a. If slight prejudice to Δ, a long delay might be excused
b. This is a minority approach – most courts view these independently
4. City of Eustis v. Firster: Landowner who purchased his lot sight unseen sued
the City ten years after the city had built new boathouses on adjoining water.
a. Court applied laches. The City and third parties had vested interests in
the boathouses.
5. Nahn v. Soffer: Plaintiff exercised an option contract to purchase an empty
lot, but delayed in doing something necessary to complete the sale.
a. Court applied laches, because the land had increased in value during
the plaintiff’s unreasonable delay.
Estoppel
1. Applies in both law and equity
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2. Four requirements:
a. Party to be estopped knows something / should know something;
b. Estopping party acts in reasonable reliance;
c. Estopping party is ignorant;
d. Estopping party relies to its detriment
3. Feinberg v. Pfeiffer Co.: A pharmaceutical company stopped paying out a
pension that it had voted Feinberg after 37 years of service.
a. Court applied promissory estoppel. The woman had retired in reliance
on having a lifetime pension.
4. United States v. Georgia-Pacific: The government sued a lumber company.
The company had been unaware that its predecessor in interest had deeded
the land to the government.
a. Court estopped the government.
vii. Defenses, like equitable remedies, are discretionary in nature
1. Courts will sometimes refuse to apply the defenses for reasons like public
policy
2. In Seagirt, the court refused to apply unclean hands (in part) because of the
public policy interests in having an accurate title recording system
viii. Courts are reluctant to apply equitable defenses against the government
1. If the government were barred from enjoining an injustice, the injustice
could persist interminably
2. Some courts do say that equitable defenses can apply when the government
acts in a proprietary manner (United States v. Georgia-Pacific)
e. Civil Jury Trial Rights
i. The jury trial right does not apply to claims rooted in equity.
1. Makes it more important to understand which claims / remedies are
equitable in nature.
2. Substantive equitable doctrines:
a. Trusts
b. Mortgages
c. Fiduciary duties
d. Divorce
3. Equitable remedies:
a. Accounting
b. Constructive trusts
4. Equitable procedures:
a. Derivative suits
b. Class actions
c. Interpleader suits
ii. The Seventh Amendment is not incorporated to the states
1. Nearly all states have some state constitutional right to a civil jury trial
2. Either the plaintiff or defendant must demand a jury
a. The amount in controversy must be $ 20 or higher
3. What happens if a state case – with no jury trial – is removed?
a. The federal jury trial would attach, assuming it meets federal
requirements
b. Supersedes Erie doctrine
iii. In federal courts, the Seventh Amendment only “preserves” the right to a jury trial
that existed at common law (as of 1791).
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1. Forces federal courts to consider whether a claim would have been heard by
a jury in 1791.
2. What happens when a case has both legal and equitable claims?
a. Some states utilize the “cleanup doctrine.”
i. If the primary issue is equitable, and there are ancillary legal
issues, the judge can “clean up” the legal questions.
b. The Supreme Court rejected the cleanup doctrine in Dairy Queen
i. In federal courts, legal issues are first tried to a jury
1. The judge is bound by their factfinding
ii. Then the judge can hear the equitable claims
iv. Synthesized Supreme Court decisions:
1. The substance of the relief sought, not the form, is what matters (Dairy
Queen)
2. The action at issue doesn’t have to exist at common law
a. It just has to be analogous (Feltner)
3. The issues in the lawsuit, not the vehicle for the lawsuit, is what matters
(Ross)
v. Dairy Queen v. Wood: Lower court denied Dairy Queen a jury trial in a trademark
claim which sought an accounting.
1. Court: Because what Dairy Queen basically wanted was money (via an
accounting), it was more akin to a legal claim. Should have been a jury.
vi. Feltner v. Columbia Pictures Television: A TV station wanted a jury trial on statutory
damages after it was found liable for copyright violation. Lower court refused.
1. Justice Thomas: the right only has to be analogous to a common law action.
Copyright claims were tried for damages to juries at the Founding.
vii. Ross v. Bernhard: Plaintiffs brought a derivative suit against Lehman Brothers for
breaches of fiduciary duty. The lower courts refused jury trial.
1. Court: although derivative suits are a creature of equity, the corporation’s
claims were basically claims for damages.
f. Contempt
i. Because equity acts in personam, equitable remedies are backed by the contempt
power.
1. This power can be “liable to abuse,” as the Supreme Court notes.
ii. Categories of contempt:
1. Civil / criminal
2. Direct v. indirect
3. Compensatory v. non-compensatory
4. Disobeying court order vs. misconduct before tribunal
iii. Civil v. criminal contempt
1. Civil and criminal contempt can be distinguished in three ways:
a. Purpose
b. Beneficiary
c. Procedures
2. Purposes
a. Civil contempt is intended to coerce someone into complying with a
court order
b. Criminal contempt is intended to punish someone for disobeying
3. Beneficiary
a. Civil contempt benefits the complaining party, e.g. via compensatory
fines.
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iv.
v.
vi.
vii.
b. Criminal contempt benefits the tribunal
4. Procedures
a. Criminal contempt triggers procedural protections
i. Jury right (Bloom v. Illinois)
ii. Proof beyond a reasonable doubt
iii. Notice
iv. Statutory maximums (in states)
v. Constitutional protections (Fifth / Sixth Amendment)
b. There still may be some procedural protections in civil contempt
i. Indirect contempt, e.g. requires notice / hearing.
ii. Standards of proof differ
1. Preponderance
2. Clear and convincing evidence
5. A court’s subjective intent does not matter
a. What matters is the objective nature of the punishment
i. Contempt can be so punitive that it becomes criminal in nature
b. United Mine Workers v. Bagwell: Virginia courts levied “civil” contempt
fines of $64 million for violating injunctions on striking activities.
i. Supreme Court said that the huge fine was punitive, not
coercive.
6. Civil contempt is contingent on the target being able to change his behavior
a. They only have the “keys to the jail” if they can actually comply
b. Anyanwu v. Anyanwu: Nigerian husband who kept his children in
Nigeria, away from a New Jersey court, was confined for four years
i. Appellate Division said that prolonged intransigence did not
mean that the contempt remedy had lost coercive effect
Direct v. indirect contempt
1. Direct contempt is contempt that occurs in the judge’s presence
a. Can be punished immediately, without notice/hearing
b. A subset of this is “summary contempt.”
2. Indirect contempt is everything else
a. Triggers procedural protections:
i. Notice
ii. Hearing before a different judge
Compensatory v. non-compensatory
1. Some types of contempt involves compensatory fines
a. These go to the injured party
b. Have to be proved, similar to damages (Time-Share Systems v.
Schmidt)
2. Oftentimes, compensatory fines will include things like attorneys’ fees.
Conduct
1. Basically two categories of conduct that result in contempt:
a. Disobeying a court order
b. Misconduct / disturbance before tribunal
2. Illinois v. Allen: Criminal defendant removed from courtroom after repeated
outbursts.
a. Court ruled this did not violate Confrontation Clause. Also could have
bound / gagged, or held him in contempt.
Prospective fines
1. Prospective fines are a controversial area of the law
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a. This is when fines are levied per violation, per day, e.g.
2. In Bagwell, the Supreme Court said that such fines were not coercive in
nature
a. Although the targets had advance notice that violation would result in
contempt, and the fines were “purgeable by compliance,” that didn’t
make them coercive.
i. The criminal laws are exactly the same! Scalia concurrence –
injunctions resembling criminal law.
3. Some courts continue to permit such fines
a. Vermont Women’s Health v. Operation Rescue: Abortion protesters
given daily prospective fines for violating injunction.
i. Vermont Supreme Court upheld the fines, because the fines
were “purgeable by compliance.”
b. How can that square with Bagwell?
i. In Bagwell, the long span and complexity of the injunction may
have been another factor.
ii. Eggert argues that the court simply disfavored the abortion
protesters
4. Some legal scholars argue that prospective fines could be okay for mandatory
injunctions, but not prohibitory ones.
a. In other words, you can only be fined if you refuse to do something
you are told to do.
viii. Jury trial right
1. The jury trial right attaches to some criminal contempt proceedings
a. In Bloom v. Illinois, the Supreme Court rejected the argument that the
charge was a purely discretionary exercise of judicial power.
2. It applies if the sentence actually imposed is six months or more.
a. A sentence of less than six months, or a fine of < $500 is presumed to
be petty.
3. Consecutive contempt sentences in a single proceeding which add up to more
than six months DOES trigger the jury trial right (Codispoti)
ix. Collateral bar rule
1. A contemnor cannot challenge the validity of the underlying court order
during the contempt proceeding
a. A court order can only be challenged via direct appeal:
i. Motion for reconsideration
ii. Interlocutory appeal
b. This rule only applies to criminal contempt proceedings
2. Three exceptions to the collateral bar rule (Walker):
a. Transparent invalidity
i. Order on its face is obviously invalid (In re Providence Journal)
b. Total lack of jurisdiction
i. Issuing court obviously lacks PJ/SMJ
ii. If there’s a legitimate question, the trial court’s order must be
obeyed as long as there a colorable basis to believe it has
jurisdiction (United States v. United Mine Workers)
c. No practical basis for relief
i. Parties attempt to directly appeal, but are met with “delay and
frustration.” (Walker)
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III.
3. Walker v. City of Birmingham: Civil rights leaders challenged validity of TRO
which enjoined their march during the contempt hearing.
a. Supreme Court outlined the rule that you can generally only challenge
validity of order on direct appeal.
4. In re Providence Journal Co.: Newspaper challenged validity of a preliminary
injunction barring publication of FOIA materials during contempt hearing.
a. Court refused to apply collateral bar rule, because the order was
transparently invalid. Prior restraint on press NEVER upheld.
5. United States v. United Mine Workers: Miners disobeyed an injunction to
prevent a strike, arguing in contempt proceeding that the court lacked
jurisdiction under a federal statute.
a. Court applied collateral bar rule because there was a colorable basis
to believe the District Court had jurisdiction.
x. Summary contempt
1. Occurs before the court
a. “Before the court” can be interpreted somewhat loosely
i. For example, if someone throws a punch while being escorted
out of courtroom, but the judge doesn’t see it
b. In re Yengo: Lawyer held in contempt after he went to Bermuda
during a criminal trial.
i. Technically not “before the court,” but he was when he
reappeared with an inadequate explanation.
2. Can be punished immediately
a. But imprisonment would have to be less than six months, or it
wouldn’t be summary contempt
i. The jury trial right would attach
Declaratory Judgments
a. Declaratory judgments are a creature of statute
i. Both states and federal government have passed statutes to permit declaratory
judgments by courts
ii. The federal statute is the Federal Declaratory Judgment Act (FDJA)
b. Declaratory judgments serve several purposes:
i. Can ascertain whether something is legal or not before suing
ii. Can be advantageous for parties anticipating being sued
1. They can file suit in their preferred forum first
c. Does not violate Article III’s “case and controversy” requirement
i. FDJA explicitly requires an “actual controversy” for there to be jurisdiction
ii. Aetna v. Haworth: Lower courts said FDJA violated “cases and controversy”
requirement, picking up on dictum in Muskrat.
1. Court upheld FDJA. There was an actual controversy because legal rights /
positions of parties had crystallized, unlike in an advisory opinion.
d. To obtain declaratory judgments, the legal controversy must be somewhat concrete
i. Cannot be a purely hypothetical question
ii. But it doesn’t have to be as concrete as it was in Haworth
1. Very common in the patent context – companies will seek declaratory
judgment that their product doesn’t violate an aggressive company’s patent.
e. Declaratory judgment is discretionary!
i. National Wildlife Federation v. United States: Environmental group sued President
for declaratory judgment that he had violated a statute on budget issues.
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IV.
1. Court refused to intervene, because no one in Congress had complained, and
there was a low risk of recurrence.
Injunctions
a. TROs / Preliminary Injunctions (Rule 65)
i. Both TROs and preliminary injunctions are temporary forms of relief
1. They are intended to “freeze” the status quo.
a. In a TRO, the status quo is frozen until a hearing on a preliminary
injunction
b. In a preliminary injunction, the status quo is frozen until the trial /
issuance of a permanent injunction
2. They exist because cases can take a long time to resolve
a. Parties may be harmed during the pendency of a lawsuit
ii. Temporary restraining orders (TRO)
1. Usually last 14 days or less
2. Can be issued ex parte
a. But there has to be some sort of good reason
3. Are not immediately appealable
a. A party could seek a writ of mandamus (Vuitton)
iii. Preliminary injunctions
1. Last as long as the court wants
2. Cannot be issued ex parte
3. Immediately appealable
iv. Mandatory v. prohibitory injunctions
1. Mandatory injunctions tell someone to do something
a. Prohibitory injunctions tell someone not to do something
2. At the temporary injunction stage, courts are more likely to issue prohibitory
injunctions
a. This is because they are trying to preserve status quo
b. But some exceptions, e.g. if a party disobeys a court order by building
a wall, they may be ordered to knock it down
3. In rare cases, courts have issued mandatory injunctions to pay money
a. Looks a lot like damages
b. But in one case, a company was found liable for making carcinogenic
products
i. They were ordered to pay for medical testing needed while the
damages phase was still pending
v. Obtaining a TRO / preliminary injunction:
1. Exact formulation can differ by court
2. Five requirements we studied:
a. Irreparable harm / no adequate remedy at law;
b. Moving party will suffer irreparable injury
c. Moving party has a likelihood of success on the merits
d. Balance of equities
e. Public interest
3. Some courts permit a “sliding scale approach”
a. Judge Posner and others argue that a strong showing of irreparably
injury could compensate for a weak showing in likelihood of success
b. This approach was impliedly rejected by the Supreme Court in Winter
i. A “possibility” of success on the merits is not enough
ii. There needs to be some threshold showing on each prong
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c. Nevertheless, courts still seem to be applying the sliding scale
i. National Urban League v. Ross: Judge Ko granted a TRO based
on “serious questions going to the merits” in a Census
challenge.
ii. Seventh Circuit’s standard: “Better than negligible.”
4. Hughes v. Cristofane: Owners of a topless restaurant sought a TRO enjoining
enforcement of an ordinance against topless dancing.
a. Court granted TRO, because business showed possible ruin / First
Amendment issues.
5. Winter v. National Resources Defense Council: Environmentalists sued the
Navy, challenging their use of sonar equipment during training exercises.
a. Court: the standard for irreparable harm is “likely,” not “possibility.”
Balance of equities (whale watchers v. Navy) clearly against issuance.
6. Clinton v. Nagy: Girl brought an Equal Protection claim after she was not
permitted to participate in club football.
a. Court entered TRO. All five elements met.
7. Washington Capitols v. Barry: Star basketball player tried to sign with
another team after his old team was bought out by the Capitols.
a. Court enjoined him from playing with anyone else. Irreparable injury
because a star basketball player was irreplaceable.
vi. Bond requirement
1. Parties seeking a TRO / preliminary injunction must put up a security bond
to pay for damages if the injunction turns out to be unjustified.
a. Rule 65(c).
b. Despite the language of the rule, requirement is discretionary
i. Courts sometimes waive the requirement when the plaintiff is
indigent or the issue involves constitutional rights
ii. They often use discretion in setting low bonds
2. The enjoined party can recover damages from the bond
a. But only if they win on the merits of the claim
b. And they must prove their damages
3. We didn’t discuss in class, but courts are divided on whether damages can
exceed the bond.
a. Majority view is that they cannot (Coyne-Delany)
b. Minority view is that they can (Smith v. Coronado Foothills)
i. Especially when bond was set in an ex parte TRO hearing
4. Parties still have to prove their damages
vii. Hearing / notice requirements
1. Rule 65 requires notice and hearings to issue a TRO or preliminary
injunction
2. TROs can be issued ex parte in some limited situations
a. But ex parte relief is the exception, not the rule
i. Supreme Court in Granny Goose Foods said that “our entire
jurisprudence runs counter” to ex parte orders
b. Three requirements:
i. Specific facts clearly show
ii. Immediate / irreparable harm would result
iii. Attorney certification of steps taken
c. A classic case is if notice will result in destruction or concealment of
evidence (In re Vuitton)
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i. Generalized assertions about what could happen are not
enough (Mansukhani)
ii. Specific facts have to be shown
1. Affidavits
2. Verified complaints, etc.
iii. The risk also has to be immediate
1. Courts are sometimes more flexible on this in the case
of domestic abuse (Marquette v. Marquette)
d. In re Vuitton: Vuitton sought an ex parte TRO because counterfeiters
were known to transfer inventory upon discovery.
i. Second Circuit issued a writ of mandamus
viii. Parties bound by injunctions
1. A person is bound if:
a. Actual notice
b. Belong to one of three categories:
i. Parties
ii. Officers, agents, servants, employees, and attorneys
iii. Other persons in active concert / participation
2. Actual notice
a. Actual notice is a more relaxed requirement than notice of a hearing
i. No need to actually serve someone with injunction for them to
be bound
b. Cape May v. Johnson: Court enjoined a city council from passing an
ordinance. A telegram about the injunction reached them.
i. Court upheld the contempt finding, because the telegram was
sufficient notice.
c. Vermont Women’s Health: Anti-abortion protesters refused to take
copies of injunctions and drowned out the police reading it.
i. Court: willful blindness amounts to actual notice
d. Midland Steel v. United Automobile Workers: Copies of injunctions
were served on union leaders and posted conspicuously.
i. Court: that is sufficient notice.
3. A mere common purpose is not enough for “active concert.”
a. Planned Parenthood v. Garibaldi: Planned Parenthood argued that an
injunction against an anti-abortion group also applied to others.
i. Court: no, an injunction does not bind the world at large. The
mere fact of being anti-abortion was not enough.
b. SUNY v. Denton: SUNY tried to use an injunction against student
protesters against faculty members who sat-in at president’s office.
i. Court: they’re not bound by injunction. No showing that they
were agents / acted in collusion.
4. Courts are confused about whether successors of parties are bound by
injunctions
a. Rule 65 doesn’t say anything on successor liability
i. Courts are divided about whether Rule 65 imports concepts of
privity from the common law
b. At least as far as labor injunctions are concerned, there may be
successor liability in limited situations
i. Golden State v. NLRB: NLRB brought enforcement action
against a bona fide purchaser to pay back pay.
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1. Supreme Court upheld, because they were sufficiently
in privity to be bound by the NLRB order.
b. Permanent Injunctions
i. Four requirements (eBay):
1. Irreparable injury
2. Inadequate remedy at law
3. Balance of hardships
4. Public interest
ii. Courts retain discretion in deciding whether to issue injunctions
1. Unless Congress has expressly deprived courts of equitable jurisdiction
a. It has to do this in pretty clear terms (Romero-Barcelo)
2. eBay v. MercExchange: Federal Circuit applied a rule that permanent
injunctions are the default remedy for patent infringement suits
a. Court rejected any “default rule,” and outlined a four-part test for
permanent injunctions. Injunctions are discretionary!
3. Weinberger v. Romero-Barcelo: Lawsuit against the Navy for violating an
environmental statute in a bombing range
a. Court: the mere fact that there is a statute does not mean that
Congress deprived courts of equitable discretion.
iii. Courts may consider economic factors in assessing public interest
1. Walgreen Co. v. Sara Creek: Pharmacy sued a commercial landlord after it
breached a lease provision about not renting to competitors.
a. Posner explained that injunctions can be efficient because it
encourages the parties to settle (with a market price). But they can be
inefficient because negotiations break down / “bilateral monopoly.”
c. Framing the injunction
i. Rule 65(d)(1) says that an injunction must include:
1. Reasons why it issued
2. Specific terms
3. Reasonable detail about conduct to be restrained / required
ii. Injunctive relief is supposed to be directed at the parties, not third parties
1. Court can only enjoin wrongdoers (General Building Contractors Ass’n)
2. In practice, litigants often use injunctions to advance social change
a. “Public impact litigation” seeks plaintiffs to achieve policy victories.
b. Is this “regulation by litigation”?
iii. A remedy can extend beyond the geographic bounds of the wrong (Hills)
1. But the remedy is supposed to be tailored to the violation (Missouri v. Jenkins
/ other school desegregation cases).
2. Hills v. Gatreaux: Court permitted a metropolitan area remedy for a housing
discrimination case, even though the wrong happened in Chicago.
iv. Murray v. Lawson: Anti-abortion protesters were enjoined from protesting in the
“immediate vicinity” of a doctor’s house.
1. Court: this was not specific enough.
v. Reno Air Racing v. McCord: TRO referred to an attachment to enjoin a T-shirt from
vendor from violating an air show’s trademark.
1. Court: although the use of an attachment does not violate Rule 65, it is
“disfavored.” And the attachment was too vague: it only showed one image /
didn’t describe the trademark.
2. Eggert adds that some courts do categorically say that outside references
violate Rule 65.
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vi. Peggy Lawton Kitchens v. Hogan: Company tried to enjoin another company from
making cookies “substantially derived” from their cookies.
1. Court: the injunction didn’t say not to do that – even if it did, that would be
too vague to pass muster.
d. Substantive limitations on injunctions
i. Courts will hesitate to grant injunctions in some areas
1. Family / domestic affairs
2. First Amendment restraints
3. Criminal activity
4. Extraterritorial decrees
ii. First Amendment restraints
1. When a court restricts First Amendment speech via injunction, a court will
apply what is basically intermediate scrutiny (Madsen)
a. Does the challenged provision:
i. Burden no more speech than necessary
ii. To serve a significant government interest?
2. Prior restraints on press publications are extremely disfavored (In re
Providence Journal)
a. The only possible exception is national security
i. Progressive magazine article on how to build a nuclear bomb
ii. Troop movements (New York Times concurrences)
b. New York Times v. United States: United States sought an injunction
against publication of the Pentagon Papers by WaPo / NYT.
i. 6-3 court refused, but for scattered reasons. “First Amendment
absolutists,” vs. more balanced considerations.
iii. Criminal conduct
1. One maxim says that “equity does not enjoin a crime.”
a. Rationales:
i. Crimes can be prosecuted
ii. Seems pointless
2. There are exceptions:
a. Public nuisance (e.g. enjoining operation of a brothel)
b. Unauthorized practice of law / medicine
iv. Extraterritorial decrees
1. As a general matter, a court in one jurisdiction cannot affect property in
another.
2. But see:
a. Muhammad Ali sued Playgirl – court permitted injunction in England
because English law would also prohibit appropriation of likeness.
v. Kilgrow v. Kilgrow: A married couple in a dispute about religious education of their
children wanted an injunction to enforce a prenup.
1. Alabama Supreme Court refused an injunction. Equity should not insert itself
into domestic affairs involving intact marriages.
vi. Madsen v. Women’s Health Center: Florida court issued a very detailed injunction
against abortion clinic protesters.
1. Court applied intermediate scrutiny, upholding buffer zone / noise
restrictions, but striking down bans on approaching people / using images.
e. Experimental and conditional injunctions
i. Courts can sometimes craft more creative relief
1. Examples:
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a. Ordering construction of a wall
b. Prohibiting certain practices / activities during designated times
c. Delaying effect of injunction
d. Ordering enjoining party to indemnify costs (Spur)
ii. Boomer v. Atlantic Cement: Landowners wanted a permanent injunction against a
nuisance created by the neighboring cement plant. Plant cost $45K / employed 300.
1. Court entered a conditional permanent injunction, permitting continued
operation if the company paid permanent damages.
iii. Spur Industries v. Del E. Webb Development Corp.: A residential developer who
purchased rural land for development sued a cattle feed lot.
1. Court permitted permanent injunction, but because the developer “came to
the nuisance,” conditioned this on indemnifying the loss.
f. Injunctions against foreign litigation
i. Three types of injunctions against foreign litigation:
1. State courts enjoining other state courts
2. State courts enjoining federal courts
3. Federal courts enjoining state courts
ii. State v. state
1. A state court can enjoin litigation in another state
a. They do this by ordering the litigants to desist
b. But generally, they hesitate to do this (James)
2. Sometimes both cases can proceed
a. Then there is a “race to judgment.”
b. The first case to reach final judgment becomes preclusive, per Full
Faith & Credit Clause.
3. James v. Grand Trunk Western Ry. Co.: Surviving spouse brought a wrongful
death claim in IL, not MI. MI courts enjoined her.
a. Illinois Supreme Court counter-enjoined because it would not permit
its jurisdiction to be ousted.
iii. State v. federal
1. State courts cannot enjoin federal litigation.
2. Donovan v. Dallas: Litigants trying to stop construction at Love Field filed suit
in federal court after they lost in state court. The state court enjoined.
a. Court: state courts cannot prevent federal litigants from proceeding.
iv. Federal v. state
1. In certain situations, federal courts can enjoin state litigants
a. But federal courts should only intervene in certain state cases in
extreme situations (Younger):
i. State criminal proceedings
b. There would have to be “great and immediate injury” above/beyond
criminal prosecution (Younger)
2. Three situations, under 28 U.S.C. § 2283:
a. Congress expressly authorized injunction
b. Injunction is necessary in aid of federal jurisdiction
c. Injunction is necessary to protect/effectuate federal judgment
3. “Expressly authorized” is fairly broadly interpreted (Mitchum)
a. Need not invoke the statute
b. Need not explicitly grant injunction power
c. Only has to create some federal right / remedy that would be
frustrated in the absence of injunction power
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4. Mitchum v. Foster: Florida authorities brought a nuisance suit against an
adult bookstore owner. He sued them under § 1983, and sought to enjoin.
a. Court: 42 U.S.C. § 1983 does “expressly authorize” injunctions because
it creates a remedy that would be frustrated in absence of power.
5. Michigan v. Younger: Marxist sought to enjoin his state criminal prosecution
for handing out anti-capitalist literature.
a. Court refused to enjoin because of federalism/comity. Federal courts
should only enjoin if great/immediate injury beyond prosecution.
g. Structural injunctions
i. Courts sometimes craft injunctions that place them in managerial roles over
government / other organizations.
1. Most commonly happens in civil rights cases
2. Common examples:
a. Schools (Jenkins)
b. Prisons (Hutto v. Finley)
c. NYPD stop-and-frisk (Floyd v. City of New York)
3. Can also apply to private organizations
a. Teamsters overseen after they were taken over by Mafia.
b. Busting up AT&T (consent decree) overseen by judge
ii. Courts generally disfavor structural injunctions
1. Especially true of conservative judges
a. Two Rehnquist opinions in Rizzo and Jenkins.
2. Structural injunctions go beyond the judicial function
a. Federalism / separation of powers concerns
b. In Jenkins, a court ordered the state to pay out $1 billion for a single
school district!
3. The remedy is not usually a tight fit for the violation
a. In Rizzo, police ordered to “fix” all sorts of things that were perfectly
legal
4. Problems of long-term supervision
iii. Missouri v. Jenkins: District Court found an intradistrict segregation violation
because of “white flight.” $1 billion to make the Cadillac of schools.
1. Court: the remedy far exceeded the scope of the violations. Effectively an
interdistrict remedy, interference with state/local government.
iv. Rizzo v. Goode: Class actions by Philly PD for mistreating minorities. Found no policy
encouraging mistreatment, but entered orders to reduce incidence.
1. Court: District Court wrongly interjected itself into a dispute between
citizens/elected officials. No showing of a § 1983 claim – remedy exceeded.
h. Appealing injunctions
i. Three general categories of appeals:
1. Preliminary injunctions
2. Temporary restraining orders
3. Stays pending appeal
ii. Appealing preliminary injunctions
1. 28 U.S.C. § 1292 permits immediate appeal of a preliminary injunction.
iii. Appealing temporary restraining orders
1. TROs are not generally appealable
2. But if they extend past the permissible time frame, they become de facto
preliminary injunctions
a. Fourteen days is the permissible time frame
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V.
b. But an additional 14 days can be obtained for “good cause shown.”
3. There’s also a writ of mandamus (Vuitton)
a. This would be fairly extreme
iv. Stays pending appeal
1. To obtain or appeal a stay pending appeal, a party must:
a. Appeal to the District Court (Fed. R. App. P. 8)
b. Appeal to Court of Appeals
2. At the Court of Appeals, the motion is heard by a “motions panel.”
a. Four requirements to obtain relief from grant/denial of stay:
i. Likelihood of success on merits;
ii. Irreparable injury;
iii. Balance of equities;
iv. Public interest
b. Some cases suggest that there is a sliding scale on these requirements
i. In Holiday Tours, the parties only had to show “serious
questions” on likelihood of success because of the strength of
the other three prongs.
ii. But that case predated Winter – query as to whether this is no
longer good law.
c. These factors are assessed based on the relief sought
i. So, the irreparable injury that would result if the stay were
granted/denied.
3. Washington Metropolitan Area Transit Comm’n v. Holiday Tours: Area transit
authority permanently enjoined a tour bus company from operating.
a. Court denied a motion to vacate a stay pending appeal because of
especially strong showing on three prongs.
i. Modifying an injunction
i. Courts can modify or dissolve orders when, under Fed. R. Civ. P. 60:
1. The judgment is satisfied
2. Enforcement would no longer be equitable
a. Significant change in facts / law (Rufo)
ii. There is no need to show that the order would cause “grievous wrong.”
1. That came from Swift & Co., but was disavowed in Board of Ed. v. Dowell.
iii. A “significant change” cannot be something that the court actually considered
1. But it doesn’t have to be wholly unforeseen
2. For example, someone could modify a child support order after a parent
loses income.
Restitution
a. Restitution is about unjust enrichment.
i. Instead of recovering the harm done to π (damages), restitution seeks to reclaim the
benefits accrued to Δ.
ii. Five classic scenarios:
1. Δ obtains property / π owns it
2. Δ obtains property / title due to misconduct
3. Δ breaches contract (atypical)
4. Δ obtains benefit by mistake
5. Δ obtains benefit by misconduct
iii. Unjust enrichment can be either a substantive claim or a remedy.
1. Three elements of an unjust enrichment claim:
a. Benefit to Δ
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b. Retention would be unjust enrichment
c. Equity / good conscience demands that benefit goes to π
iv. Gifts / volunteers
1. The line between a gift and unjust enrichment can be pretty thin
a. On the one hand, an “officious intermeddler” can’t claim unjust
enrichment because they conferred an unwanted benefit
b. On the other hand, when someone does your duty or takes care of
your property, they may sometimes be entitled to restitution
i. For example, I pay to clothe/shelter your children
2. Restatement 3d of Restitution & Unjust Enrichment
a. §§ 21, 22 are about when taking care of someone else’s
property/duties will give rise to claim for unjust enrichment
v. Quasi-contracts vs. implied contracts
1. An implied contract is essentially treated as a contract
a. It can be enforced via contract law
2. Quasi-contracts are not contracts
a. But they can provide the basis for an unjust enrichment claim
b. Pyeatte v. Pyeatte: Married couple had an agreement that they would
put each other through school. Husband got his JD and bailed.
i. Court awarded restitution. Careful to say that it was an
extraordinary remedy.
b. Types of restitution
i. Can be legal or equitable
ii. Legal forms of restitution
1. Replevin (personal property)
2. Ejectment (real property)
iii. Equitable forms of restitution
1. Constructive trust
2. Equitable lien
3. Disgorgement
4. Accounting
5. Subrogation
iv. Constructive trusts
1. A constructive trust is a legal fiction
a. It bestows equitable title in property on π
b. This bestows superior rights over other creditors
2. Frambach v. Dunihue: Guy moved in with his neighbors. He made home
improvements for 19 years until he was kicked out.
a. Court denied him a constructive trust, but remanded to consider if an
equitable lien would be appropriate based on contributions.
3. Sieger v. Sieger: An illiterate man’s wife put the house in her name.
a. Court granted the husband a constructive trust.
v. Equitable liens
1. An equitable lien is also a legal fiction
a. It behaves like a real lien, but is not one
2. Acts like a security interest
a. Have superior rights over unsecured creditors
3. Iacomini v. Liberty Mutual: A garage was repairing a car, not realizing that it
was stolen. Mechanic tried to bill the insurance company when it reclaimed.
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a. Court remanded to consider whether an equitable lien would be
appropriate, given the mechanic’s work on the car.
4. Rolfe v. Varley: Investor helped pay mortgages for existing properties, but
there was no formal agreement in place.
a. Court: as a general rule, when someone pays debts on a property at
the behest of the owner, the payor is entitled to equitable lien.
vi. Disgorgement
1. Strips a wrongdoer of ill-gotten gains
a. Only applies to wrongful conduct
b. Restatement 3d of Restitution & Unjust Enrichment, § 51
2. Frequently used by the government
a. SEC, e.g. → keeps proceeds, or distributes to injured parties
3. Related concept is “profit from opportunistic breach.”
a. Restatement § 39 says that a party who obtains profit by
opportunistic breach can have that profit taken away.
b. This has been roundly criticized
i. Scalia in Kansas v. Nebraska accused the Restatement authors
of creating, not describing law.
ii. Flatly contradicts the idea of efficient breach
vii. Accounting
1. Calculates the just allocation of ownership interests
viii. Subrogation
1. A party with a contractual relationship can “stand in the shoes” of someone
else to enforce their legal rights
2. Classic example is insurance
a. Insurance pays out on a claim for a car accident
b. Then they sue the tortfeasor to collect, based on injuries to the
insured party
ix. Beacon Homes v. Holt: Builder built a house on a woman’s land at her mother’s
behest, thinking that it belonged to her. The daughter started renting out the house.
1. Court reversed dismissal, because it would be inequitable to permit the
daughter to keep the house, which she had received via reasonable mistake.
c. Defenses to Unjust Enrichment
i. Three primary defenses:
1. Unclean hands
2. Bona fide purchaser
3. Changed circumstances / positions
ii. Unclean hands
1. The plaintiff’s bad conduct can bar a claim of unjust enrichment
2. Abbe v. Marr: People bet on a race. They had been defrauded into thinking
that the race was rigged in their favor. The whole race was fictional.
a. Court denied relief based on unclean hands.
iii. Bona fide purchaser
1. When someone is enriched by mistake, or by no fault of their own, courts
may bar recovery.
2. St. Mary’s v. United Farm Bureau: An insurance company paid hospital bills
for a woman. As it turned out, the woman was no longer insured.
a. Court refused to make the hospital return the money. They were owed
money, and had no idea that the woman wasn’t really insured.
iv. Changed circumstances
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1. When someone changes their position based on a benefit that they received,
forcing them to give the money up could be inequitable.
a. But Third Restatement says they must be innocent to invoke this.
2. Applies in three general scenarios (Dobbs):
a. Δ received a benefit, but passed it on to someone else;
b. Δ consumed the benefit in ways he would not have otherwise
i. Especially true for consumption – investment / asset
purchases might not qualify
c. Benefit was lost, damaged, or destroyed
d. Measuring restitution
i. Many different methods to calculate restitution:
1. Marginal increase in asset value
2. Market value
3. Use value (rental value / actual gains)
4. Gains from sale
5. Collateral / secondary profits
ii. Sometimes these can be combined
1. For example, if you accidentally took my property, rented and then sold it, I
might demand the (1) rental profits and (2) the gains from the sale.
iii. Specific restitution
1. Restitution can be made by giving back what was taken
a. In practice, this is rarely used
iv. Proceeds v. consequential gains
1. Proceeds are the “principal” of the thing taken.
a. If you take 10 steers, the proceeds are (1) the steers; or (2) the
proceeds from their sale.
2. Consequential gains are downstream profits from the proceeds
a. If you use money from the steers to purchase stocks, your dividends
are consequential gains
3. In unjust enrichment claims / remedies, what is owed depends on the
culpability of the defendant.
a. Conscious wrongdoers are liable, generally, for both proceeds and
consequential gains.
b. Innocent beneficiaries are only liable for proceeds.
v. Tracing
1. Constructive trusts and equitable liens extend past the property originally
identified
a. Unjust enrichment claims can be collected downstream.
2. Bona fide purchasers may cut off tracing rights (Mattson v. Commercial Credit
Business Loans).
vi. Commingling
1. What happens when rightfully-owned property is commingled with
wrongfully-owned property?
2. Lowest intermediate balance rule
a. A constructive trust cannot exceed the lowest amount of the balance
reached.
b. Example:
i. I have a constructive trust for 100K. But Δ spends 50k.
ii. 50k of my money. Δ makes another 50k rightfully.
1. Can I recover the full 100k that I am owed?
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VI.
2. No, just the 50k, because that was the lowest balance in
my constructive trust.
3. Courts will presume that a defendant spent his own money first
4. Courts will also apportion gains pro rata
a. More likely do this if there was wrongful conduct by Δ
Damages
a. Overview
i. Purpose
1. To “make the plaintiff whole.”
2. Put the plaintiff in the rightful position he would have been in, but for Δ’s
conduct
3. McKesson v. Nashville Banner Publishing Co.: Lower court said a woman who
took documents could not recover because she would have been fired.
a. Court: wrongful conduct not known at the time by the employer.
Could receive back pay only until discovery of misconduct.
ii. Four general types of damages:
1. Compensatory
2. Punitive
3. Nominal
4. Statutory
b. Compensatory damages
i. Compensate the defendant for some expense / injury incurred
ii. Tort / contract damages
1. Very different types of damages
a. Tort damages:
i. Special damages
ii. General damages
b. Contract damages:
i. Direct damages (expectation)
ii. Consequential damages
iii. Incidental damages
2. Tort damages
a. Special damages
i. Out of pocket losses caused by the tortfeasor
ii. Examples:
1. Medical expenses
2. Lost wages
b. General damages
i. Less-certain damages flowing from the tort:
ii. Examples:
1. Pain and suffering
2. Loss of enjoyment
3. Future lost income
c. Punitive damages
i. Punishes the defendant for his wrongful conduct / deters future wrongdoing
1. Some states do not permit punitive damages
2. The recovery sometimes goes to the state
ii. Heightened standards
1. Scienter
a. Exact standard differs by state
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b. Examples:
i. Malice
ii. Willful / wanton
iii. Reckless indifference
iv. Gross negligence
2. Evidentiary standards
a. Differs by state
b. Clear / convincing evidence
iii. Generally only available in certain types of cases
1. Usually not available in contract cases (Griff was a counterexample)
iv. Requires an “anchor” award of damages
1. Nominal damages usually okay
2. Compensatory damages
v. Due Process limits on punitive damages
1. Excessive Fines Clause of Eighth Amendment does not apply.
2. But the Supreme Court says Fourteenth Amendment limits punitive
damages:
a. Three-part test (BMW v. Gore):
i. Reprehensibility of Δ conduct;
ii. Disparity between actual / potential harm and award;
iii. Available civil penalties
b. State Farm v. Campbell: Jury awarded punitive damages 145 times
larger than compensatory damage award.
i. Court said few awards would be larger than a single-digit ratio,
and even lower in some cases (e.g. high compensatories).
c. Phillip Morris USA v. Williams: At trial, π exhorted jury to think about
other possible plaintiffs hurt by smoking.
i. Court said that punitive damages awards could not punish for
injuries to nonparties.
3. Courts may be ignoring the Gore test, or manipulating it
a. Mathias v. Accor Economy Lodging: Bedbugs in a Motel 6.
i. Judge Posner upheld an award 37 times larger than the
compensatories. Skirting State Farm.
vi. Exxon Shipping Co. v. Baker: Drunken ship captain drove the Exxon Valdez aground
and spilled millions of gallons of crude oil.
1. Supreme Court in admiralty decided on a 1:1 ratio, at least where there was
no malice and civil penalties were high.
d. Nominal damages
i. A small damage award
ii. Sometimes purely symbolic in nature
1. Can also serve as an anchor for other damages, i.e. punitives.
e. Statutory damages
i. Set by statute, either because:
1. Damages are hard to calculate
2. Legislature wants to disincentivize certain conduct
ii. Examples:
1. Treble damages (RICO / Sherman Act / Lanham Act on trademarks)
2. Double damages (willful violations under FLSA)
3. Consumer protection laws / Copyright Act / Lanham Act
f. Measuring damages
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i. Breach of warranties
1. General rule is that damages are the difference between the value of the
property as warranted and the value of the property actually received.
2. Some exceptions:
a. Dealers Hobby v. Marie Ann Linn Realty: π had a 15-year lease on a
warehouse. In the 14th year, the roof leaked. Place was out of code.
i. Court refused to apply the general rule because π hadn’t
suffered any harm. Would not restore the party to rightful
position.
ii. Constitutional rights
1. A plaintiff cannot recover solely for violated constitutional rights
a. Except perhaps nominal damages
b. Must show actual damages!
2. Memphis Community School District v. Stachura: Jury told that it should assess
value of First Amendment rights in claim by fired sex ed teacher.
a. Justice Powell: can’t just subjectively weigh the worth of First
Amendment.
iii. Fraud
1. In a fraud case, damages should place the defrauded party in the position he
would have occupied, had Δ’s representations been true.
iv. Temporary v. permanent damages
1. Permanent damages are paid when something cannot be fixed
a. If the cost of repair > value of property, damage is permanent
b. The remedy is the diminution in value
2. Temporary damages are paid when something can be fixed
a. The remedy is the repair cost
3. Hybrid damages exist in situations when temporary / permanent damages
are insufficient
a. When repair will not restore the former value of the property, plaintiff
can recover diminution in value AND repair costs.
i. For example, in environmental torts, the wrongdoer is
sometimes required to fix damaged property even if the cost to
do so far exceeds the value of the land.
1. But the value of the land afterwards would be less
b. Terra Products v. Kraft: A company purchased an adjoining industrial
site that had previously been used to make batteries. It was
contaminated. Kraft paid for remediation, but Terra decided to sell.
i. Court would not permit hybrid damages. Not enough evidence
about what the land was worth.
v. Loss of use
1. As a general rule, damages for loss of use are capped at the value of the lost
asset.
a. The logic is that the plaintiff could just repair / replace goods.
b. Fukida v. Hon/Hawaii Service & Repair: Man took his car to a shop.
They kept it for more than two years, demanding payment.
i. Court permitted loss of use damages that exceeded the value of
the lost asset. Rationale of repair / replace did not hold up.
vi. Valuing assets
1. Three different methods of valuing property (O’Brien Bros):
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a. Capitalization of earning capacity (expected income over useful
economic life)
b. Market value
i. When is the relevant market price assessed? (Semenza)
c. Replacement cost, less depreciation
i. Whose replacement cost? Retail or wholesale?
1. Would depend on what π has access to
2. The lowest metric is the appropriate measure of damages
a. In theory, they should all be in the same neighborhood
3. O’Brien Bros v. Helen B. Moran: Navy tugboat accidentally sank a barge.
Admiralty court awarded way more than a brand-new barge was worth.
a. Second Circuit remanded. Plaintiff did not meet burden of showing
what property was worth.
4. Semenza v. Bowman: Sprayers used a pesticide which destroyed farmers’
barley. Trial court calculated market price at time of sale, not harvest.
a. Court agreed it was okay to use sale price, because farmers regularly
stored their harvest until prices rose.
vii. Interest
1. A subcategory of consequential damages
a. It compensates π for the lost time-value of money
2. Rates are set by statute
a. Sometimes the rates differ because prejudgment / post-judgment
rates were set in different statutes, at different times
i. Different rules on compounding sometimes
b. Interest rates are often significantly higher than inflation
3. Two types:
a. Pre-judgment
b. Post-judgment
4. Pre-judgment interest is less commonly awarded
a. At common law, could not be obtained unless the damages were for a
“sum certain.”
i. Excludes subjective measures like pain / suffering, loss of
enjoyment, etc.
5. Post-judgment interest is nearly always awarded
a. A few exceptions:
i. Payouts for future conditions
ii. Punitive damages
b. Incentivizes Δ to pay quickly
g. Limits on market measures
i. In general, monetary values are placed on various types of harms.
1. Market measures are sometimes inadequate
2. Examples:
a. Emotional distress
b. Destroyed photos / heirlooms
c. Pets
ii. Emotional distress
1. Only compensable in tort
2. But the recovery usually cannot be “standalone.”
a. There must be a “parasitic harm,” such as physical manifestations of
harm or physical impact.
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b. A few exceptions:
i. IIED, for example
ii. But some states still require parasitic harm, e.g. Virginia case
requiring physical manifestations beyond sleep difficulty.
iii. Destroyed photos
1. Three general approaches (Landers)
a. Pure market value (traditional)
b. Restatement (value of property to owner)
i. Includes original cost, plus replacement costs, less depreciation
ii. Does not include “mawkish” attachments
iii. Restatement 2d of Torts, § 911
c. Value to owner, including emotional attachments
2. Landers v. Anchorage: Man sued after police disposed of his personal photos
and videos. Jury awarded $25, and he had to pay attorney’s fees.
a. Court described three approaches, and adopted the Restatement view.
iv. Pets
1. As a general rule, π can only recover fair market value
a. In Texas case, animal rights amici argued against compensating for
sentimental value
i. Concerned about rising vet costs
h. Wrongful death cases
i. At common law, an action died with the plaintiff (or defendant).
1. But statutes permit recoveries, either by or against the estate.
ii. Several types of actions:
1. Wrongful death
a. Brought by π’s estate
2. Survival actions
a. Brought by children / spouse for lost economic benefits
3. Loss of consortium
a. Brought by π’s spouse for damaged relationship
b. Expanded to children / parents in certain cases
iii. Survival actions and loss of consortium are derivative claims
1. Any defenses that could be asserted against π’s estate could also be asserted
against the survivor.
i. Other damages principles
i. Collateral source rule
1. A defendant cannot reduce damages by deducting payments made by third
parties
a. For example, Δ cannot argue that he only has to compensate π for outof-pocket medical expenses because the insurer paid most of it
2. Has been revised by statute or rejected in many jurisdictions
ii. Benefits rule
1. Any damages have to be offset by benefits received by the plaintiff
a. Those benefits have to be the same type at issue in the case
2. Troppi v. Scarf: Trial court said that benefits of children categorically
outweigh the harm of an unwanted child, so no recovery.
a. Court: no, it’s a case-by-case inquiry. Later abandoned the wrongful
birth tort in Kuripati.
iii. Avoidable consequences doctrine
1. A plaintiff cannot recover for losses that should have been avoided
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iv.
v.
vi.
vii.
a. But if Δ had the same opportunity to mitigate, and didn’t, then it can’t
invoke the doctrine
2. Special areas in mitigation:
a. Substitute employment
i. Jurisdictions differ on whether π has to take any job to mitigate
lost wages, or whether they must only take a comparable job
b. Lost volume sellers
i. Mitigation doesn’t fully resolve the problem, because of
opportunity cost of lost sale
c. Non-compliant patients
i. Can a patient recover for medical expenses if they declined
treatment / failed to follow instructions?
3. Luten Bridge: County breached a contract for a bridge, and the contractor
kept building it.
Certainty
1. Both the existence and the amount of damages have to be proved by π with
reasonable certainty.
a. Existence is much more important – some leeway if this is shown
2. Exception:
a. When Δ’s actions made the exact amount difficult to establish, Δ bears
the burden of showing the amount of damages
3. Schoenfeld v. Hilliard: Part owner in TV venture sued after network failed.
Sought lost profits / lost assets.
a. Court said lost profits could not be proved with reasonable certainty.
Rosy / speculative projections. But could recover for lost assets.
Causation
1. Δ’s conduct must be the factual / proximate cause of the plaintiff’s harm
2. Two approaches:
a. Foreseeability (majority)
i. Were the damages foreseeable by the parties at the time of the
making of the contract?
ii. Hadley v. Baxendale
b. Implicit agreement test
i. What did the parties implicitly agree the damages would be?
ii. Offered by Oliver Wendell Holmes
iii. Explicitly rejected by the Restatement
Public policy
1. Damages cannot contravene public policy
2. Troppi v. Scarf: Family sued a pharmacist who negligently prescribed a
sedative instead of a contraceptive. Wrongful birth.
a. Court rejected lower court finding that wrongful birth damages were
against public policy. Public policy for encouraging contraception!
3. Taylor v. Kuripati: Same court decided to abandon the wrongful birth tort
a. Such a claim should come from the legislature, not courts.
Private ordering
1. Parties can contractually limit their remedies
a. Exclusive remedies (repair / replace)
b. Consequential damages
2. These are generally permitted
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VII.
a. Under UCC, not permitted if they cause remedy to fail of essential
purpose
b. Cannot be unconscionable
j. Liquidated Damages
i. Liquidated damages are set damages to be paid in the amount of breach
1. Must be reasonable in light of:
a. Actual / anticipated harm
b. Difficulties of proof
c. Inconvenience of obtaining adequate remedy
2. Cannot be penalty clause!
3. Red Sage v. Despa: Lessee had exclusivity clause to be the only food vendor in
the building. Lessor breached, and Red Sage invoked clause for ½ rent.
a. Court upheld liquidated damages clause. Damages would be hard to
calculate, and at time of execution the clause was reasonable.
ii. NDAs
1. Are NDAs a type of liquidated damages?
a. Plaintiffs can lose their settlements if they breach nondisclosure
agreements
2. Even if these are valid liquidated damages clause, are they:
a. Unconscionable
b. Violative of public policy?
3. Some states now say that NDAs forbidding mention of sexual assault /
harassment violate public policy
k. Tax Treatment of Damages
i. Some damages are non-taxable:
1. Personal injuries:
a. Lost wages
b. Medical expenses
ii. Other damages are taxable:
1. Emotional distress
2. Lost profits
3. Lost wages (not personal injury-related)
4. Punitive damages
iii. Juries are generally not informed about tax consequences
1. One exception in FELA (railroad cases) [Norfolk & Southern]
Attorneys’ Fees
a. As a general rule, the American Rule means that parties bear their own costs.
i. Host of exceptions:
1. Statutory fee shifting
2. Contractual fee shifting
3. Family law (divorce)
4. Litigation misconduct
ii. Statutory fee shifting
1. 200+ federal statutes permit fee shifting
2. Either the prevailing party or prevailing plaintiff
a. A party prevails when a court order changes the legal relationship of
the parties (Buckhannon)
b. Two methods for assessing fee reasonableness:
i. Lodestar method (rate * hours) – typical in fee shifting cases
ii. Percentage of recovery (attorney’s share of total) – typical in common funds
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