• Classical economic model: P should receive full value for his injuries, so that D will internalize the costs and have
the optimal incentive to avoid injuring others (pp. 13)
• One theory of valuing pain and suffering (cf. corrective justice) (pp. 13)
• Multipliers in punitive damages: making a given D pay more because of underdetection of torts; because Ds might
not be fully internalizing cost of harms in every case
• *Problematic: standards for awarding punitive damages are vague – presents the problem of giving proper notice to
putative D; may lead to overdeterrence, not knowing standard may lead D to be overly cautious (inefficient) (pp. 22)
• Injunctions versus damages  Property versus liability rules: which do we favor for specific rights? Depends on
the transaction costs involved (pp. 29)
- Property rules: if TCs are low, want to force people into voluntary market transactions – everything would be
protected and costs would be more accurate when they are a result of bargaining (as opposed to jury-determined
- Injunctions: where TCs are high (ex. many parties involved, bilateral monopoly); if parties can’t come together
and bargain after the fact. Injunctions are very strong protection – “final word”
• Undue hardship/balancing the equities in the context of specific relief: embodiment of economic approach to
the law – if a wrong is too expensive to correct, then D can pay damages instead (except where D’s conduct is too
culpable) (pp. 32).
• Efficient breach: if you can breach K, pay damages, and still come out ahead, then society as a whole comes out
ahead, but if you breach just for the sake of getting to choose something else without society getting a greater benefit,
then it’s just opportunistic breach. *Argument for enforcing expectancy damages  you can break K and make
enough to compensate the expectancy loss of the other party in the K and benefit as well (would make sure party
wouldn’t breach unless profit was high enough)
• Fluid class recovery (Eisen): is Eisen a license to steal, as long as D does so in small amounts? Laycock says it’s
just not a problem to begin with, because it’s a waste of resources to spend $10 on a $3.90 claim. But, even from a
purely economic perspective, the balance of cost-benefit must also consider the additional violations that would result
from a policy of not pursuing small violations. Moreover, justice may have an intrinsic value.
- J. Friendly’s response to the Eisen problem: don’t care about Eisen’s $70, but we do care about not creating a
license to steal; therefore, solution is an injunction against further violations, w/fees for P’s attorney, and if
necessarily, civil fines collected by government to recover profits from previous wrongdoing
• Corrective justice?
- One theory of valuing pain and suffering: P should receive full value for his injuries, so that he is placed as nearly
as may be, in the position he would have occupied if he had never been injured  looking at fairness to P (pp. 13)
- *Problematic: ex. P&S – damages may well undercompensate seriously injured individuals/death – most people
would not voluntarily exchange comfort/lives for any sum of money
• Stated goal of compensatory damages: U.S. v. Hatahley  individualized consideration of how P was affected, and
how to restore. Need for precision, to avoid giving a windfall to some Ps while stopping short of compensating others
(pp. 2)
- Value as a measure of rightful position: U.S. v. 50 Acres of Land: damages should be FMV of property
provided it is reasonably ascertained, not the cost of buying a better replacement. Trinity Church v. John
Hancock: church entitled to compensated for reasonable costs of restoring church to condition it was in prior to
the excavation (pp. 3)
- *Problematic: precise calculation of compensatory damages, limitations of “just compensation” jurisprudence
(used value versus full value of replacement goods).
- *Problematic: is there a robust market in what we are trying to value? Ex. a piece of land, versus pain/suffering
- *Problematic: values may be relative
Consequential damages: attempting to fully compensate P? For losses immediately arising out of the wrong, plus
those which flow proximately and naturally from it (*problematic: is the distinction tenable – Laycock, Williston) (pp.
Pain and suffering damages (cf. insurance theory of P&S damages, pp. 11)
Wrongful death
Reliance damages  ability to cover costs party expended thinking that the transaction would go through (pp. 4)
Expectancy damages (in contract and tort - *problematic: is the distinction tenable?) (pp. 4-5)
Reparative injunctions
Rescission: conceives of rightful position differently – rather than speculating about what might have been, simply
undo the transaction and restore everyone to their original positions (pp. 18)
Attorney’s fees: tension between P’s rightful position and incentive-based motivations
- City of Riverside v. Rivera: main debate is demonstrated in Brennan v. Rehnquist/Burger; Brennan stresses the
3rd-party social benefit of the “private attorney general” and cites legislative intent behind §1988 as trying to
provide an incentive for these types of actions, whereas dissent is concerned with Ps/Ps’ counsel running up the
hours pp. 47-48)
P is entitled to be made whole, but D is entitled to make P whole in the least expensive way.
• From P’s perspective
- State Farm: plaintiffs do not have “entitlement” to punitive damages
◦ Applied in In re Simon II: Rule 23(b)(1)(B) class is okay under “limited punishment” theory because it’s not
about making P whole if we are talking about punitive damages – it is focused on D’s conduct, deterrence
and entitlement to society  no “late-comer” problem because adjudication of one individual’s case doesn’t
impair the “rights” of others
- Carey v. Piphus  Nominal damages: importance to organized society that procedural DP be observed,
therefore denial should be actionable for nominal damages w/o proof of actual injury
- Damage caps: 7th Amendment, access to courts issues (pp. 11-12)
◦ Etheridge: cap applied after jury returns its verdict is not violation of 7 th Am because section does not apply
until after jury has completed its assigned function in the process. Jury has fact-finding function, judge
applies the law (remedy is a matter of law)
◦ Smith: cap is arbitrary, denies constitutional right of access to the courts, and right to jury trial
- Punitive vs. compensatory damages  Cooper Industries: when PDs are ruled as being unconstitutionally
excessive, fed courts are reviewing jury awards as de novo (remittitur w/o option of a new trial) – idea that PDs
might be different from CDs because they involve moral considerations, such that there is no concern that court is
getting in the way of jury fact-finding (pp. 25)
- Class actions
◦ 7th Amendment  Ortiz: constitutional concern of forcing individuals to be part of a class, precluding their
opt-out rights, thus violating the right to a jury trial?
◦ “Day in court” ideal  Ortiz: majority perspective: don’t want your rights adjudicated unless you are fairly
represented, and a non-opt-out class precludes this possibility, Martin v. Wilkes: protection of rights of
individuals who aren’t in the class (pp. 59-60).
Reasonable attempt at notifying parties? Securities case where P could not afford to properly notify
class members
- Damage scheduling: fixed matrices of value based on degree of harm (ex. workers’ comp) – law/fact debate –
violation of reexamination clause?
- Split-recovery schemes – 7th Amendment issue
• From D’s perspective: protecting DP rights of Ds in terms of what they are entitled to, what limits are on the courts
in terms of what they can take from Ds (from the wrongdoer’s perspective)
- Excessiveness review for compensatory damages (is this a DP right?): “shock the conscience”/ “monstrously
excessive” SOR for compensatory damages. Levka: uses comparative verdict review
- Limits on punitive damages  BMW v. Gore, State Farm
Limited punishment theory through the federal excessiveness review of punitive damages, there is some DP
limit on the amount that Ds can be punished (In re Simon II)
Multiple punishments problem: Ds has possibility of huge awards given to each P who comes forward
◦ State Farm jurisprudence: only applies to punitive damages. Other devices in legislatures/courts for
dealing with this problem? State statutes (ex. CA statute, GA “first comer statute”), argument in favor of
certifying class (problematic in individual causation problems) (pp. 21)
◦ Class actions  In re Simon II: by having a single non-opt-out class, court wants to prevent the multiple
punishments problem (State Farm can be read broadly to preclude multiple punitive damages) (pp. 66)
Class actions versus individual actions, “bankrupting” Ds
◦ Parker v. Time Warner: P sought to certify class of potentially 12 million members, had potential of
bankrupting D, not what statute intended (pp. 61)
◦ In re Simon II: not allowing the class to go forward and allowing individual cases to proceed might lead to
exhaustion of tobacco company’s resources, and leave many people who are part of this presently certified
class w/o any ability to recover damages (pp. 66)  limited punishment theory
Dignitary and constitutional harms  Levka v. City of Chicago + Carey v. Piphus: P must show actual,
compensatory harm (*problematic: victim who is “strong” and is able to continue on with life isn’t going to get a
high valuation of measures – does this shift “duty to take care” from D to P?) (p. 14)
Statutory fine jurisprudence:
◦ Parker v. Time Warner  P wants to certify a class, which could potentially reach up to 12M subscribers,
and statutory fine was for $1,000 per violation (doesn’t address cap in class action context)  basically this
class would bankrupt the company, and it couldn’t have been what the statute intended. Majority hints that
BMW v. Gore could be imported into the statutory fine context (*problematic: how would you apply the
guideposts?) (pp. 62).
◦ Amar/Reis: are large civil fines for minor violations unconstitutional? Are they punitive or remedial?
Application of 8th Am Excessive Fines clause (pp. 63)
• Compensatory damages: focus more on Ps actual loss – the idea is to fully compensate P, place back in rightful
position had injury not occurred
• Punitive damages: punishment, deterrence (insufficiency of compensatory damages to deter wrongful conduct),
social wrong, incentive for lawyers to take cases, civil alternative to overloaded criminal justice system (pp. 21)
- Multipliers: about deterrence role of punitive damages (1/probability of detection), relating to enforcement error
– even if there is no need to punish/exact retribution, still need to compensate for the fact that not all torts are
detected and Ds might not be paying for harms in every case
- Punitive damages in contract law  Formosa Plastics v. Presidio: there must be an independent tort, and there
must be tort damages, but damages need not be independent from damages caused by the breach (contracts case
gets pushed into tort territory – based on Formosa’s intent at the time representations were made, deciding not to
perform before even making the contract) (pp. 27)
- State Farm: Ps do not have a “right” to punitive damages – idea is deterrence/entitlement to society
◦ Class action context  In re Simon II: if this is the case, then there is no “late comer” problem and thus
adjudication of one individual’s case is not going to impair the rights of another, unlike argument behind
Ortiz) (pp. 66)
• Disgorgement/restitution: honing in on D’s conscious wrongdoing, as opposed to looking at P’s harm suffered.
Measures (quasi-contract, accounting for profits, constructive trust) are trying to measure gains to D – w/ each, could
try to find stopping point at only the ill-gotten gain (disgorgement short of being punitive), or disgorgement of all
profits derived, looking to D’s culpability (pp. 16)
- Rather than punitive damages, which are too speculative – might be too high/low; either under- or overdeterrence of the disputed activity (pp. 17)
• Consequential damages: Texaco v. Pennzoil: uncertainty in calculating damages is tolerated when difficulty is
attributable to D’s misconduct (pp. 7)
Specific relief: undue hardship/balancing the equities defense is unavailable if D’s conduct is too culpable  Ariola
v. Nigro: looking into the character/content of D’s action, either at level of intent, or presence of misconduct in some
respect – here, D intentionally encroached on P’s property (pp. 31)
Modifying consent decrees  Rufo v. Inmates of Suffolk County Jail: D can consent to provisions that go beyond P’s
rightful position, and cannot relitigate the minimum constitutional remedy on a subsequent motion to modify. There
is a strong contractual aspect to consent decrees – parties are trying to work out what is best for both sides; argument
that Court should give weight to parties’ decisions, letting them determine their own relief (and trade-offs, which court
might not know about) (pp. 45)
• Punitive damages
• Disgorgement (pp. 16)
• Liquidated damages clause (pp. 8)
• Limitation of remedy clauses (pp. 7)
• Cooper Industries moral considerations vs. fact-finding distinction – changes the balance between juries and
judges (reexamination clause issue – Ginsburg points out in dissent – upset that PD award is less of a fact than P&S,
and the idea that appellate courts can now step in and instead of granting option of a new trial, can just remit awards)
(pp. 25)
• Split-recovery schemes  Dardinger v. Blue Cross: is this stretching the court’s remedial authority – argument that
there is no right for the court to decide on funding a research foundation with damages award; makes judge quasi-head
of foundation, no institutional checks on judge’s power to allocate the money (should it be sent to jury, require
briefing by parties?); Ps are blindsided by allocation – no notice that scheme will be put into place, no chance to brief
the issue (pp. 25)
• Structural injunctions (pp. 40)
- Winston (rightful position)
◦ Milliken I: scope of remedy is determined by the nature/extent of constitutional violation – if segregation
occurred in Detroit school system only, remedy must be limited to that; reversed DC order to have
surrounding suburban school districts made parties. Not willing to expand remedial powers, on the theory
that rightful position should be thought of in terms of Detroit SD itself
◦ Dayton Bd. Of Education v. Brinkman: incremental segregated effect – what would things look like absent de
jure segregation? Court does not want to reach beyond effects that are directly related to instance of
◦ Missouri v. Jenkins: interdistrict goal is beyond the scope of the intradistrict violation – proper response by
DC is to eliminate to the extent practicable the vestiges of prior de jure segregation within the school district
◦ Lewis v. Casey: not the role of courts to shape institutions of government – remedy must be limited by the
wrong (in this case, two instances of injury to Ps are patently inadequate basis for conclusion of systemwide
violation/imposition of systemwide relief) (pp. 43)
- Bailey (equitable discretion, flexible/free-wheeling notion of doing complete equity)
◦ Swann v. Charlotte-Mecklenburg: DC has broad power to fashion a remedy that will assure a unitary school
system – must achieve greatest possible degree of actual desegregation
◦ Hutto v. Finney (arguably gives court more discretion): “interdependence of the conditions producing the
overall violation”; court has the authority to address each element contributing to the violation (pp. 43)
- Judge/jury problem: more controversy in this context (injunctions, not damages), especially because decisions
are being made by judges, not juries – judge has to articulate reasons and standards, whereas juries don’t have to
(keeps further scrutiny out of the decisions) (pp. 43)
• Modifying injunctions
- Courts can enforce injunctions that go beyond the constitutional minimum  Rufo v. Inmates of Suffolk
County Jail: scope of judicial power is such that a court can enforce this kind of injunction – extending judicial
power in this way is dependent on the idea of agreement of the parties (pp. 44) (**but, see effect of the PLRA, pp.
Class actions – broad disagreement in terms of judiciary’s role in procedural innovations: can courts be the
party “effectuating global peace”? (pp. 61)
- Ortiz: Brennan’s dissent: judges have to work “aggressively within the existing framework” – need to think
about how the courts can actually use Rule 23 in “adventurous” ways. Court need to, or else parties won’t have
their day in court.
- Ortiz majority: Rule 23 text and history has to be narrowly construed – taking this analytical framework, you are
not encouraging procedural innovation (pp. 61). Cautions courts not to certify a limited fund class action if the
limited fund is itself a creation of the certification – reading 23(b)(1)(B) properly (narrowly): it requires the
existence of a pre-existing limited fund. Limited fund must not give D a better deal than individual litigation
would have produced – court feels that the particular situation in this case led to insider Ds and Ps’ counsel
working out a deal that might have given the class less than it should have received
◦ 7th Am concern: certification of a mandatory class followed by settlement of its action for money damages
obviously implicates 7th Am jury trial rights of absent class members
◦ Due process concern: principle of not binding parties to in personam litigation to which they are not made a
party (because everyone should have their day in court)
- In re Simon II: “limited punishment theory” for basis of Rule 23(b)(1)(B) action, allowing a “global peace”
- Eisen: disapproval of fluid class recovery
Litigating PI and death – issues of perspective: legislators have some view of the big picture, but don’t see
individual cases and can’t legislate for them. Jurors see individual cases and have no view of the big
picture/comparable cases. *Only actors who have a holistic perspective are judges – should this allow more judicial
direction of PI/death litigation?
Severing trials (In re Simon II) – pp. 48 of Simon opinion