Remedies – Katy Koon – Hoffhiemer – Fall 2012
Book – Rendleman and Roberts, Remedies Cases and Materials, Eighth Edition
Note – outline made by following the reading assignments and putting them in order.
Note – outlines that follow this book but are not for Hoff’s Remedies class (case briefs, etc.):
1. http://www.scribd.com/doc/35075019/Remedies-Outline-Spring-2010Roman-FIU
2. https://docs.google.com/viewer?a=v&q=cache:pkvBPiUOTxQJ:www.hlsafiucol.c
om/uploads/5/3/8/4/5384280/remedies_brief_outline_2010.docx+&hl=en&gl=
us&pid=bl&srcid=ADGEEShW3rpbgnB-waST6J6K_KwADmAImg6RYm3BCBUF7kEza9hN6sHqwiopVyPjx0mX0wYfi0F39zQTefvMEAwQ0qlvsUA0JJWr9T4G7LI
y3wXOaV9S0iqEDqwjwq9urv9BnXLW4F&sig=AHIEtbTx62FoleYDj2nl5zktmkQ_JpTbpw
CHAPTER 1 – REMEDIAL GOALS
A. INTRODUCTION
1. What the Court May do for P
a. Grant specific relief (specific performance, injunction).
b. Award substitutionary relief (money damages).
i. Goal is to put P in her rightful position.
ii. Value – must determine this to compensate
1. Fair Market Value – the value a willing buyer would pay.
c. Award restitution (based on D’s gain or unjust enrichment).
d. Punitive damages (to punish)
e. Preventative damages (prevent a wrong before it happens; order someone to not
do something that is a legal wrong; sometimes all it takes is declaring the rights
of the parties – declaration of rights).
f. Miscellaneous Damages (atty fees)
2. What the Court May do to D
a. Require transfer of title or possession of property.
b. Order D to do something.
c. Prohibit D from doing something.
d. Direct D be confined to coerce him to obey any of the above except pay P money.
e. Enter money judgment to compensate, prevent unjust enrichment, or to punish.
3. “Specific” and “in personam” remedies operate against D’s person (equitable remedies)
4. “Substitutional” and “in rem” remedies operate against D’s property (legal remedies)
5. Substitutionary vs. Specific Remedies
a. Substitutionary – P received harm and received a sum of money.
b. Specific – seeks to prevent harm or undo it rather than let it transpire
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6. Equitable Remedies vs. Legal Remedies
a. Party lacks a right to a jury trial for equitable remedies, but have right to jury
trial for money damages.
b. Judges will enforce an in personam equitable order by holding D in contempt,
but will issue a writ of execution, garnishment, or judgment lien if needed to
enforce a judgment for money damages.
7. Persuasion Required for Injunction
a. Legal remedy (damages) is inadequate, OR
b. Without an injunction, will suffer irreparable injury.
E. HISTORICAL BACKGROUND OF MODERN REMEDIES
1. (a) Introduction
a. Court system developed in England.
i. Developed into a two-part format where you have courts of law and
courts of equity.
ii. You had to file a writ, which is how you started a lawsuit.
2. A Summary of CL Remedial Actions
a. Property
i. Writs of Ejectment
1. Developed to recover possession of a leasehold estate, but
extended its power to adverse claimants to title to land.
2. Today it’s used to recover possession to land.
ii. Personal Property
1. Replevin – today used to retrieve P’s property from D.
iii. Trespass
1. Provided basis for damages for D’s intentional injuries against P’s
property or person (taking P’s chattels and invasion of P’s realty,
which is trespass to land today)
iv. Trover
1. Compensation for the conversion of chattels.
3. History and Development of the Chancery Court
a. Court of Chancery vs. CL Courts
i. When CL fell short, Chancery would render complete justice.
ii. CL solutions often fell short b/c of the rigidity of the forms of action and
b/c of evidence rules that prevented the CL court from weighing merits.
iii. Chancellor used theories – more flexible, less rigid.
iv. Chancery developed requirement that to render equitable remedies, P’s
remedy at law must be inadequate or cause irreparable injury.
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4. Extraordinary Writs (still in use today)
a. Mandamus – orders someone w/in the court’s supervisory authority to do
something (mandate), which they have a ministerial duty to do (legal duty).
i. Ex – ordering clerk to accept papers.
ii. Can be used creatively.
b. Prohibition – an order prohibiting someone w/in the court’s supervisory
authority to NOT do something that’s w/in their ministerial duty to NOT do.
c. Habeas Corpus – order directed at someone in custody of someone else’s body
to come to court and explain the legality of the custody (child custody, police
custody).
d. These are exceptions to the rule that in CL claimant has a right to jury trial.
5. Equity Jurisdiction in MS
a. MS has divided jurisdiction b/t Chancery and Circuit Courts.
b. Circuit court has general jurisdiction over everything, but the MS Constitution
takes away full jurisdiction in equity and gives it to Chancery (and others, like
youth court, estates, etc.).
6. Problems if Something is Classified as CL or Equity
a. What if a case should be transferred from Chancery to Circuit or vice versa?
b. If the only issue is an error of jx b/t equity and law on appeal, it’s nonreversible.
i. MSSC is given authority in the same section to send it back to the right
court.
c. Constitutional right to trial by jury – so if it’s Chancery when it should be in
Circuit, is it a violation?
i. Deal with it, but if you realize during trial, interlocutory appeal,
mandamus, or writ of prohibition, but must be before judgment.
7. What About Cases that are Both Equity and Law?
a. Ex – asking for an injunction and money damages.
b. Overtime, courts looked at statutes and precedent – now circuit courts allowed
to provide for some equitable relief and chancery allowed to provide for some
legal relief. Kind of “concurrent.”
c. Can seek a judgment involving law and equity in either Chancery or Circuit.
CHAPTER 2 – MODERN DAMAGES
A. THE MEANING AND NATURE OF DAMAGES
1. Purpose of Compensatory Damages
a. Damages are compensation in money for loss or detriment caused by the
wrongful act of another.
b. Basic Rule of Damages – place P in the position she would’ve been but for the
wrong.
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2. Expectancy Interest
a. Refers to the fulfillment of an aggrieved party’s expectancy of gain if the bargain
to which he was a party had been carried out and performed (context – disputed
bargains).
3. Reliance Interest
a. Unlike expectancy damages, which derive from D’s failure to perform, reliance
damages flow from P’s entry into the bargain itself. Where expectancy damages
seek to put P in the position before the promised performance was rendered.
Reliance damages seek to place P in the position but for the K itself.
4. Restitutionary Interest
a. Refers to the restoration, return, or transfer of benefits received by D due to or
arising from P’s performance/efforts; seeks recovery of a benefit unjustly held.
5. Economic vs. Noneconomic Damages
a. Economic damages generally are objectively verifiable monetary loss, such as
medical expenses, lost earnings/profits, cost of repair, diminution in value, etc.
b. Noneconomic damages are subjective and non-verifiable losses, such as pain and
suffering, emotional distress, etc.
6. Cooper (emotional distress and humiliation are “actual damages” as provided in the
privacy act).
a. Facts – Cooper has HIV so he wouldn’t get his license to be a pilot, so he doesn’t
disclose his HIV to the FAA, but he discloses it to Social Security. Cooper asserts
Privacy Act, which prohibits interagency exchange of records, when the SS
exchanged his records with the FAA. Cooper asserts emotional distress and
humiliation. Privacy Act provides a c/o/a for “actual damages,” but does not
define the term.
b. Rule – emotional distress and humiliation fall w/in the term “actual damages.”
7. Time of Trial Rule – damages before trial are past damages; damages after trial are
future damages.
(A)(1) PROOF OF THE EXISTENCE OF DAMAGES
1. Damages – element of the claim, so no claim w/o damages.
2. Medical Monitoring – 50% chance of getting cancer in the future
a. No present injury
b. Prospect of future damages NOT recoverable (majority)
3. General Fear of Damages – exposure to chemical leads you to general fear
a. You’ll live with fear whether or not you get cancer.
b. Can’t recover for nonpecuniary things like pain and suffering in the absence of
personal injury.
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4. Occasionally rules of damages put us in a better position.
a. Burial/funeral expenses – recoverable in wrongful death action, which puts
injured person in better position b/c would’ve had to pay those eventually b/c
everyone dies.
5. Youst (the probable expectancy of winning a sporting contest, but for D’s interference
cannot be the basis for tort damages).
a. Facts – Youst (P), owner of a racehorse, sued D, driver of a different horse, for
intentional interference with prospective economic advantage for causing P’s
horse to break stride during the race. P’s horse finished 6th, and D’s horse was
disqualified. P sought damages of the purse amount for either first, second, or
third place and punitive damages.
b. Rule – the probable expectancy of winning a sporting contest, but for D’s
interference, cannot be the basis for tort damages.
i. Proof that it’s reasonably probable that the lost economic advantage
would have been obtained but for D’s interference is necessary.
ii. Sports generally involve the application of various unique or
unpredictable skills and techniques, together w/ instances of luck or
chance. P fails to adequately allege facts showing that his horse would’ve
won the race, or at least won a larger prize.
6. Du Pont (minority decision ruling a claim for medical monitoring is valid even when
there’s no cognizable injury).
a. Facts – Du Pont (D) admits to discharging chemicals in WV, and P sues for some
traditional torts, but the medical monitoring claim is the only one that survives.
Ps are worried they’ll get cancer later. Traditional tort claims dismissed b/c
there is no cognizable injury right now.
b. Rule – a claim for medical monitoring is valid when there’s no cognizable injury.
c. Split of Authority
i. The Buckley decision (SCOTUS) says no, but WV law says medical
monitoring is a claim.
ii. Majority of states (including MS) have relied on Buckley to reject claims
for medical monitoring.
d. Reasoning and Problems
i. Even though Ps don’t have an injury now, there is an increased risk they
will later. They want the payments to have tests for cancer.
ii. Problem – Ds required to pay for the frequent tests even though Ps may
never get cancer.
iii. Problem – gave them lump sum damages for all the future tests and P
could choose not to have them, but you can set up a court monitored
system to pay them or give D the bills to pay as they come in.
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B. PROVING THE AMOUNT OF DAMAGES
1. Uncertainty as a problem in the calculation of P’s damages (a list)
a. Lost Business Profits
b. Future Pecuniary Damages (impaired earning capacity, future medical expenses,
or future loss of business profits)
c. Nonpecuniary (pain and suffering, mental anguish, etc.)
i. Jury must translate the evidence into pecuniary form under instructions
that are often uncertain themselves.
d. Must Prove Fact of Damages and Amount
i. Fact of Damages – reasonable probability P suffered damage.
ii. Amount of Damages – if uncertain, based on approximations, reasonable
assumptions, or projections.
2. General rule – if there’s uncertainty, then the burden is flipped to the tortfeasor;
tortfeasor bears the burden of uncertainty in the amount.
a. So amount is easier to prove than factual damages.
3. Certainty – 2 Distinct Inquiries
a. Causation – did misconduct result in or cause the damages?
i. Exceptions – when the c/o/a itself requires a showing of actual injury.
b. Calculation – what quantity and quality of evidence is sufficient to establish the
amount of damages?
(B)(1) PLAINTIFF’S LOST CAPACITY TO EARN
1. The viewpoint is the date of trial – losses incurred prior to trial are past losses; losses
that will occur after trial are future losses.
2. Discount Rate – must discount the amount of future damages to present value.
a. The interest rate that when applied will generate the future earnings calculated.
b. When we have the appropriate discount rate, and we know the amount of money
we need to generate in the time frame, we can calculate the principal sum that
when invested at the discount rate will generate the stream of earnings.
c. The principal sum is the award for judgment the D pays as “damages.”
3. Washington (loss of earning capacity is an element of general damages distinct from lost
wages, so no need to show actual loss).
a. Facts – Washington (P), a prime candidate for the US Olympic wrestling team,
was permanently injured in a car accident. He sued for loos of income, and based
on his age, life expectancy, and employment, he was awarded $76k. D appealed
the jury’s award, contending that loss of earning capacity is inappropriate
evidence for a jury since it calls for speculation. P’s evidence of future earning
capacity has been excluded from trial by D’s objection.
b. Rule – loss of earning capacity is an element of general damages distinct from
lost wages (hence, no need to show actual loss).
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c. Special damages (past damages that can be quantified) – need actual proof, no
speculation.
d. General damages – compensate claimant for nonmonetary harm suffered.
4. No Double Recovery
a. Purpose of compensatory damages is to make someone whole and nothing more,
so you can only recover once.
5. Childs (lost future income has four elements)
a. Facts – P and unborn child were killed in an accident caused by mailman acting
w/in the scope of employment, so sued US for wrongful death.
b. Battle of the Experts – D’s expert factored a personal tax offset and personal
expense/consumption effect into his analysis and utilized a shorter work life
expectancy for Debra. P claimed these offsets were illegal under Georgia law.
c. Rule – P’s future earnings should not be offset by factors for personal taxes and
personal expenses/consumption pursuant to GA law.
i. GA’s wrongful death statute provides for the recovery of the full value of
decedent’s life w/o deducting any necessary or personal expenses of the
decedent had she lived. Thus, it was improper for D’s expert to offset
their future lost earnings by factors for personal
taxes/expenses/consumption.
d. Lost Future Income has 4 Elements (add them together)
i. Base year/entry level income (projected before tax income)
ii. Income growth rate (inflation, progression, productivity gains)
iii. Worklife expectancy (how long someone would remain in workforce)
iv. Discount rate
1. Present value of decedent’s future income (PV)
2. Plus lost fringe benefits (includes health ins, pension benefits,
social security).
3. Plus household services.
e. Can’t consider gender and race in calculating or familial status (single mom)
f. Can’t consider consumption expenses
g. Can’t consider personal taxes
6. Sovereign Immunity – FTCA (Federal Torts Claim Act)
a. US cannot be sued except to the extent they allow themselves to be sued.
b. § 1346(b)(1) – for injury or loss of property, or personal injury or death caused
by negligent or wrongful acct or omission of any employee of gov’t while acting
w/in the scope of his/her office, under which the US, if a private person, would
be liable to the claimant in accordance w/ the law of the place where the act or
omission occurred.”
c. 2 Important Rules
i. No punitive damages against gov’t even if private person would be liable.
ii. No jury trial.
d. 11th Amendment – no money damages against the state or state officials in
official capacity – sovereign immunity.
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i. Prospective injunctions only – Ex Parte Young
ii. Waiver of Sovereign Immunity – there must be an express waiver of 11A
sovereign immunity.
1. Acceptance of federal funds is not a waiver unless Congress
includes an express waiver.
(B)(2) PAIN AND SUFFERING
1. Defined – premised on the idea a victim who’s been through a harrowing experience
lost more than her earnings and medical bills.
a. Item of damages that doesn’t come up in wrongful death, but if someone
survived, even for a brief period, they have a claim for pain and suffering.
2. Shortcomings
a. Money damages don’t make them whole.
b. No rational scale that justifies the award of any particular amount.
3. Justifications for Recovery of Pain and Sufferings
a. Compensation – can be accomplished only in a symbolic and arbitrary fashion.
i. Money awards don’t make on whole – don’t alleviate pain.
ii. Problem – no rational scale that justifies the award of any amount for a
particular amount of pain.
b. Substitutes – use pain and suffering money to buy a substitute or distraction.
c. Deterrence
d. Litigation Finance – p&s damages are camouflaged atty fees.
i. We follow the American Rule, but there’s a general courthouse culture
that a verdict for pain and suffering covers attorney fees.
4. Subjectivity – pain and suffering is subjective to that particular P.
a. Conversion to dollar amount is difficult and expensive.
b. Jury has to calculate pain and suffering when they do not experience P’s pain,
which lead to subjectivity, uncertainty, and a risk of awards too high. Ds began
arguing for more predictable and concrete ideals for pain and suffering.
5. Proving Pain and Suffering
a. P’s testimony is prominent, but risky b/c it’s interested and potentially
exaggerated.
b. A physician expert can assess the level of pain from P’s descriptions.
c. Friends/family can explain/corroborate.
6. Parts of Pain and Suffering
a. Victim’s anguish and terror felt in face of impending injury/death;
b. V’s tangible physiological pain at time of injury and through recovery;
c. V’s loss of enjoyment of life (hedonic damages)
d. V’s loss of consortium
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7. Fleeting Pain and Suffering
a. If someone survives for 5-6 minutes, how much can they recover?
i. Probably nothing b/c too fleeting to be given any value.
b. NY cases w/ people whose children drowned in 5-6 minutes. NY says how
painful drowning is and how long you know you’re going to die is something that
could be worth a lot.
8. Limiting Pain and Suffering
a. No market for it, so we’re afraid of awarding too much.
b. We limit by rules of evidence – the evidence of pain and suffering limited.
c. Limits on the golden-rule arguments – asking jury to place value by putting
themselves in victim’s shoes.
9. Available Wrongful Death Remedies in MS (on exam) (11-7-13)
a. Statute is very broad.
b. Beneficiaries can recover for wrongful death, including pain and suffering, lost
lifetime earnings, loss of society, companionship, consortium, etc.
c. Hedonic Damages – not allowed in death actions.
d. Deducting for Consumption/Taxes
i. CA court adopted a general approach of NOT deducting for
consumption or income tax (MS follows CA).
10. Loth (hedonic damages is apart of p&s and not separate).
a. Facts – personal injury suit resulting from an accident. She sued D for personal
injuries, property damage, and lost earnings. D conceded liability at trial, so only
issue for jury was damages. She asked for past and future medicals, property,
and pain and suffering (which included hedonic damages).
b. Rule – there should NOT be a separate amount of recovery for hedonic damages
b/c pain and suffering is associated w/ loss of enjoyment, consortium, loss of life,
etc. In CA, a pain and suffering award can include compensation for P’s loss of
enjoyment of life, but it’s not calculated as a separate award.
11. McDougald (awareness required for hedonic damages).
a. Facts – P underwent a caesarean section performed by D. During surgery, P
suffered oxygen deprivation, which resulted in severe brain damage and left her
in a permanent comatose condition. Trial court instructed that she being aware
was NOT required to recover general and hedonic damages.
b. Rule – cognitive awareness is a prerequisite to recovery of loss of enjoyment of
life. Damages for loss of enjoyment of life may not be awarded apart from p&s or
in the absence of finding some cognitive awareness of P.
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C. LIMITATIONS ON RECOVERY
(C)(1) AVOIDABLE CONSEQUENCES
1. Rule – the reasonable measures P is required to take to prevent damages from
increasing.
a. D is not liable for avoidable consequences of his/her wrongdoing.
b. Technically P doesn’t have to mitigate, but P can’t recover for those damages that
could have been avoided.
c. P must take reasonable steps to mitigate, but uncertainty goes against D.
d. Avoidable consequences is an affirmative defense w/ BOP on D.
2. “The Fragile P” – D takes P as he finds him, including any preexisting conditions,
vulnerability, or fragility the P presents (similar to eggshell rule).
a. Courts have provided some leeway so that P’s individual beliefs and risk
aversion may be considered by the trier of fact when determining if P acted
reasonably in responding to the fact of her loss or injury.
b. B/c P’s duties are stated as being reasonable, there can be no hard and fast rule.
Courts do permit the trier of fact to consider the “divergent personalities, beliefs,
and fears” in gauging the reasonableness of P’s refusal to mitigate damages.
3. Williams (religious beliefs are a factor that may be considered by the jury in
determining whether the refusal of treatment was reasonably prudent).
a. Facts – Robbins (P) was injured in a car wreck. Her injuries were treatable, but
she refused necessary blood transfusions on religious grounds. She was confined
to a wheelchair for the rest of her life.
i. On the issue of mitigation, the trial court instructed the jury that they
should consider whether P acted reasonably in light of her religious
beliefs in refusing treatment.
b. Rule – religious beliefs are a factor that may be considered by the jury in
determining whether the refusal of treatment was reasonably prudent.
i. The overriding test determining if a P acted reasonably in caring for her
injuries is if she acted as a RPP; her religious belief is only one factor for
the jury to consider, together w/ all other evidence.
(C)(2) COLLATERAL SOURCE RULE
4. Rule – P who has been compensated in whole or in part by a source independent of the
tortfeasor is nevertheless entitled to a full recovery against the tortfeasor to prevent the
tortfeasor from gaining a windfall.
a. The classic application permits P to recover losses the P has already received
payment for under an insurance policy.
b. CSR bars the admission of evidence of the existence of the collateral source or
the receipt of benefits (except for medical malpractice).
c. Traditional CL rule is that CSR doesn’t apply to contract actions.
d. Subrogation Clause or Statute
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i. Normally, an insurer, after paying the loss, is subrogated to the rights of
its insured and may seek reimbursement of its payments from the
tortfeasor.
5. Lagerstrom (evidence of collateral source is admissible, but if presented, P must be
allowed to show any potential obligations of subrogation or reimbursement)
a. Facts – P’s estate sues hospital and its insurers for wrongful death/medical
malpractice. Got judgment of $55,755, but D presents evidence that out of pocket
expenses were only $755. Collateral source evidence brought in by D, but P was
not allowed to rebut with evidence that may need to reimburse Medicare $89k.
i. Statute says if there is evidence of any compensation P received from
other sources other than D, it’s admissible in an action to recover
damages for medical malpractice.
b. Rule – evidence of collateral source is admissible, but if presented, P must be
allowed to show any potential obligations of subrogation or reimbursement.
6. “Benefits Rule” – if D’s tortious conduct confers a benefit, as well as a harm on P, jury
may weigh the value of the benefit against the claimed harm.
a. Ex – negligent digging discovers oil well.
D. ENHANCEMENT & ADJUSTMENT OF COMPENSATORY DAMAGES
1. Reduction to Present Value (PV)
a. Future economic damages must be reduced to PV (doesn’t apply to noneconomic
in most jurisdictions).
b. Necessary to put P in the position but for D’s wrong, and not to put them in a
better position by giving them the future value instead of the current value of
their judgment.
c. How to Reduce to PV (possibilities) – determining the discount rate
i. Battle of Experts
1. Ex – Expert for P will account for an increase in pay b/c of
inflation, but Expert for D will say the inflation % is too high.
2. These are economic guesses for the future, and jury must decide if
reasonably supported by evidence.
3. Courts show resistance to this b/c juries get confused and it
becomes a “sideshow” of experts
ii. Court Decides What’s Fair
1. Court comes up w/ a discount rate and informs the jury.
2. This is a “legal” discount rate.
d. Calculate it what it would be in the future, then reduce it to present value
to prevent P’s overcompensation by way of discount rate (battle or judge
decides).
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2. Tort Reform
a. Tort reform’s goal is to decrease the number of P’s damages judgments and to
reduce the amount of judgments that remain.
b. Certificate of Consultation (unless they provide normal form of discovery) –
shows they consulted w/ an expert before commencing lawsuit.
c. 11-1-59
i. Complaint should NOT specify damages for medical malpractice, except if
you’re filing in federal court and need to satisfy amount in controversy.
ii. Purpose isn’t to limit lawsuit, but to reduce embarrassment for medical
professionals b/t many cases turn out to not be meritorious.
d. Joint & Several Liability – individual Ds will pay only for their % fault.
e. Select Immunities – can’t sue employer in tort if there’s a remedy available
under worker’s compensation.
f. Caps in MS
i. No cap on economic damages.
ii. Cap for economic damages (1 mil or 500k in medmal)
iii. Cap on punitives
3. Joint and Several Liability (85-5-7)
a. Rule – apportioned based on their individual % fault (comparative negligence).
b. Krieser (fault apportioned even b/t nonparty tortfeasors)
i. Facts – physician settled out for about $650k, but Hospital didn’t settle.
Jury awarded $200k and apportioned liability equally b/t the tortfeasors,
so each is liable for only $100k.
ii. Rule – fault will be apportioned even b/t nonparty tortfeasors.
c. Tanner (cerebral palsy expert not specialized enough to testify)
i. Facts – baby born w/ cerebral palsy. Tanners (P) believe it was caused by
asphyxia after birth that the doctors AND hospital caused (joint
tortfeasors). There’s a battle of the experts. P’s says asphyxia can cause
CP, but D’s experts say it’s too rare. At trial, the judge allowed the
Tanners’ expert to testify, despite D’s objection that it wasn’t based on
enough scientific fact. Jury found doctor AND hospital liable and awarded
$3 mil to baby and $100k to each parent. Hospital is the only D who filed
for appeal.
ii. Holding – P’s expert didn’t have sufficient specialized knowledge to
assist jurors in deciding the particular issues in the case.
(D)(1) PREJUDGMENT INTEREST
1. Interest Rates
a. There’s a delay in the payment effect b/c they’ve been holding the money for a
couple years and it could’ve been invested and collected interest.
b. P should’ve had the money when the injury occurred, so essentially works as
an involuntary loan to D, so D should have to pay interest to P.
c. P’s request for prejudgment interest arises from the delay b/t injury and
payment.
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d. Goal is to place both P and D where they would’ve been financially if D had paid
P immediately.
e. To avoid duplication, a court should discount future damages to present value to
the date of trial and compute prejudgment interest at the D’s cost to borrow.
2. Prejudgment Interest
a. Liquidated – contractual obligation – can get prejudgment interest (CL).
b. Unliquidated – all general damages, but also in some jxs, special damages, like
medical expenses – can NOT get prejudgment interest (CL).
c. Simple Interest vs. Compound Interest
i. Compound Interest – what you basically get from the bank; it
accumulates and interest is applied to the latest amount w/ earlier
interest applied.
1. Compound should be used for prejudgment interest since D
doesn’t pay each installment of interest to P but keeps it until the
whole judgment is paid.
ii. Simple Interest – calculated on the original amount for each base period.
3. MS 75-17-7 (if there’s an interest rate specified in a K, interest is set by the K).
a. If not set by the K, then statute provides for a per annum rate to be set by the
judge that’s fair.
b. Under no circumstances can be awarded for damages prior to the
commencement of the action. It’s prejudgment, not precommencement.
(D)(2) PUNITIVE DAMAGES
1. 11-1-65 – MS Limiting Punitive Damages (on exam)
a. 3 Things Entitle P to Punitives (clear and convincing evidence required)
i. Actual Malice
ii. Gross negligence, evidencing a willful/wanton/reckless disregard
iii. Actual fraud
b. Jury must first determine P is entitled to compensatory.
c. Do NOT inform jury of caps (judge adjusts for them later).
2. Procedure – Bifurcated Trial
a. Must have verdict showing compensatory damages are awarded.
b. Punitive Damages Hearing
i. Decide if it can be considered by fact-finder (court determines).
ii. Jury Should Consider
1. Similar past conduct
2. Concealment
3. Awareness of Conduct
4. Final Condition and Net Worth of D
iii. At the end of the hearing, judge gives jury instructions.
1. Primary purpose of punitives is to punish/deter.
2. Purpose of compensatory is to make P whole.
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c. Trial judge reviews jury’s determinations.
i. Amount reasonable and rationally related to punishment/deterrence?
ii. Reasonable relationship b/t award and injuries?
iii. Determine if reasonable based on the jury factors above.
iv. Judge looks at financial condition and net worth of D.
v. Looks to see if any other criminal sanctions against D.
1. Duplicative debt?
2. This isn’t to increase, but to consider lowering for the purposes of
punishing.
vi. Punishing D will be different than punishing another.
vii. Caps (judge considered, but jury doesn’t).
1. Have nothing to do w/ reasonableness; they’re ratio calculations.
2. A 20 million absolute max no matter what.
3. Ranges are in the statutes.
4. Exception – if you’re a convicted felon, caps don’t apply.
3. Constitutional Limits on Punitives
a. B/t 1989 and 1994, SCOTUS issued 4 decisions addressing constitutional limits
on punitives.
i. Court held 8A’s “excessive fines” doesn’t apply to civil damages, but
punitives that are excessive in relation to actual damages may
offend due process.
b. 14A Due Process
i. Factors Affecting Excessiveness
1. Degree of reprehensibility
2. Harm Suffered vs. Award (ratio of harm suffered [actual damages]
and punitives).
3. Difference b/t award and what’s awarded in other similar cases.
4. Contract Breaches and Punitives – rarely available unless accompanied by a tort.
5. BMW v. Gore (excessive punitives violate 14A DP clause)
a. Facts – Dr. Gore purchased a “new” black BMW for $40k. She took it to be
detailed 9 months later. They detected evidence the car had been repainted.
Gore’s car was repainted at BMW’s vehicle preparation center in GA. She sued
for $500k in punitives and compensatory damages. P proved actual damages of
$4k. In support of punitives, P presented evidence D sold 983 refinished cars as
new. Jury awarded $4k in compensatory damages and $4 mil in punitive, but the
ALSC reduced the punitives to $2 mil
b. Rule – punitives must be reasonable in light of the reprehensibility of the
conduct and the amount of the compensatory damages awarded.
c. Punitive Damages Must Reflect
i. Reprehensibility of D’s Conduct – BMW’s conduct was not reprehensible,
as no one’s safety was endangered.
ii. Reasonable Relationship to the harm P suffered – punitives here were
500x the harm P suffered.
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iii. Presence or Absence of Sanctions – high penalty not justified; should give
deference to legislation concerning criminal sanctions for the conduct at
issue.
6. Phillip Morris (cigs harming others [non-parties] can’t be considered in calculating
punitives)
a. Facts – Williams’ wife (P) sued Phillip Morris (D cig company) for negligence
and deceit against her husband for wrongful death. D led P to believe the
cigarettes were safe. Jury warded compensatory damages of $821,000 and $79.5
mil in punitives, but trial judge reduced it to $32 mil in punitives.
b. Rule - due process does NOT permit a jury to base punitive damages award in
part upon its desire to punish D for harming persons who aren’t parties b/c it
7. Exxon (in the absence of a statute outlining what punitives will be, the court is allowed
to determine them)
a. Facts – alcoholic captain caused Exxon Valdez oil spill – jury awarded $287 mil
in compensatory damages and $5 billion in punitives, which was reduced to $2.5
billion by the court. Maritime Rule – ship owner need not pay for the reckless
actions of an employee.
b. Issues
i. Does maritime law permit judges to award punitives for employee
misdeeds? Maybe.
1. The court split 4-4 on this issue (one judge had stock in Exxon).
2. The court therefore left the maritime rule (from the 9th circuit)
alone, but noted their affirmation of it can’t be used as precedent
b/c it merely reflected an even split in the Court.
ii. Does maritime law allow judge-made remedies when Congress has not
authorized them? Yes.
1. Judges are free to create remedies in maritime cases where
Congress hasn’t legislated in the area.
2. However, this freedom can be lost if Congress passes legislation
restraining such judicial activism.
(D)(3) ATTORNEY FEES
1. American Rule (dominant rule) – each party in a civil action pays their own atty fees.
a. Effects
i. Prevailing party may fall short of full compensation.
ii. Contingency Fees – atty will get % of recovery; if no recovery for client,
no recovery for atty.
b. Loser-Pays Rule (not real)
i. Could deter frivolous litigation, give Ds a respite, and clear congested
court dockets.
ii. Will increase the judicial system’s costs (a likely winner will have less
incentive to settle).
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2. English Rule (competing rule) – permits limited shifting of atty fees incurred by the
prevailing party to the losing party.
3. Exceptions to the American Rule
a. Statutory Authorization – (federal or state) authorizes the award of atty fees to
the prevailing party.
i. § 1988 – prevailing party can recover for reasonable atty fees (requires
lodestar).
ii. FRCP 23(h) – fees will be paid out of a fund recovered in class actions.
iii. USC 28 § 1927 – recovery of atty fees ok unless you unreasonably
multiple the proceedings (bad faith – making the case more expensive).
b. Contractual Authorization – generally recognized that parties to a K may agree
to the recovery of atty fees incurred by the non-breaching party as an item of
compensatory damages.
c. Common Fund – based on the principle that when a party has employed counsel
and thereby created a fund, which will benefit 3rd parties, the 3rd parties should
be required to assume a fair share of the atty fees incurred in the fund’s creation.
d. Third Party Tort – when a person commits a wrongful act she can reasonably
foresee will require P to prosecute or defend a suit, the expenses incurred in
connection w/ the suit, including reasonable atty fees, are recoverable.
e. Bad Faith – largely limited to claims against insurance companies for the failure
to provide benefits promised by the insurance contract.
f. Inherent Power – courts have inherent power to create proper sanctions to
redress litigation misconduct.
g. Private Atty General – Ps commence in private capacity a suit to provide a
significant public benefit.
h. Family Law – women in particular historically don’t have access to family assets,
so courts adopted an idea that the prevailing party had right to atty fees.
i. Public Benefit – if the prevailing party gets a judgment for a public benefit, atty
fees may be awarded to encourage litigation for public benefit.
4. To recover, Fees must be reasonable.
a. Not reasonable if D has made a decent settlement offer (incentive for D).
b. P’s atty fees are less likely to be reasonable if his lawyer acted in bad faith.
c. Calculating Reasonable Fees
i. Lodestar Method – compensated for fees for an hourly rate (hourly rate x
hours spent = reasonable fee).
1. Preferred method, and sometimes required, like for § 1988.
ii. Percentage Method – companion to contingency fee arrangement (total
recovery x percentage = reasonable fee).
iii. Blended Method – take Lodestar method, then blend it [(rate x hours =
total) + (50% of the total) = reasonable fee].
1. Disfavored – multiplier inappropriate b/c how
extraordinary/difficult the case was is taken into consideration by
both the reasonable hourly rate and how long the atty worked.
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5. To recover, Fees must be for the prevailing claims.
a. Some claims will be dismissed/settled and only some claims will prevail (courts
will look at this). Courts are historically cheap and maintain you can only collect
fees spent for the prevailing claims.
6. Procedure
a. Claims for atty fees are ancillary procedurally – the case goes to judgment, and
then there’s a post-judgment litigation to determine entitlement to atty fees.
b. This litigation does NOT toll the time for appeal, so clock is ticking.
7. UFBDH (prevailing party for public benefit gets atty fees)
a. Facts – trial Court - private atty general case, but there’s not a statute to allow
fees. The state must decide if it will allow fees (but SC of Utah decided it wasn’t a
private atty general case, but a public benefit one). Whether something is on the
ballot is a significant public benefit. If it shouldn’t be on there, it’s a public
benefit to not have it there. Trial court denied atty fees, so went all the way to
Utah SC.
b. Rule – case has lack of substantial monetary benefit (just injunctive relief) and P
is a public organization w/ significant assets to litigate, so obviously you need
recovery here to encourage litigation like this.
8. Nilsen (common fund from class action – litigant gets atty fees)
a. Facts – individuals processed at York County Jail filed suit claiming the Jail
violated 4A by maintaining a policy of strip searching arrestees w/o
individualized suspicion.
b. Rule – common fund – judicially-created; SC has recognized that a litigant who
recovers a common fund for the benefit of persons other than himself or his
client is entitled to a reasonable atty fees from the fund as a whole.
i. The common fund doctrine rests on the perception that individuals who
profit from a suit w/o contributing to its costs are unjustly enriched at the
successful litigant’s expense.
CHAPTER 3 – EQUITABLE REMEDIES: THE INJUNCTION
1. Consent Injunction – agreement b/t parties that the judge enters as an injunction and
treats as an injunction w/ contractual features.
2. No right to trial by jury (in equity suits).
3. Substantive Fields Classified as “Equity” (b/c early Chancellors developed them)
a. Trusts, mortgages, and bankruptcy.
b. Contemporary “equitable” substantive fields
i. Quiet title, partition, lien/mortgages, trusts, fiduciaries, guardianships,
dissolution of marriages, and adoptions.
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4. “Concurrent” Jurisdiction in MS b/t Circuit and Chancery
a. There’s essentially concurrent jurisdiction b/t Chancery and Circuit over a
combined claim of law and equity (wants specific performance + damages).
b. This is a de facto result, but they don’t use the language “concurrent” yet in
MSSC. They talk about equity jurisdiction and ancillary jurisdiction – it’s only
when we piece together the cases when we realize it’s “concurrent.”
c. Avoid the language for now, but that seems to be the effect.
5. Conflicts b/t Law and Equity
a. If there’s a problem b/t law and equity before judgment, must seek an
interlocutory appeal b/c there’s a MS Const. provision that states you can’t
reverse based on a mistake of law and equity.
b. Jury Trial Errors – inevitable in a conflict of law and equity, but aren’t
reversible if this is the only error.
c. Other Mistakes – if the case was or wasn’t transferred by mistake or there was
another significant error, like jury instructions, that would make it reversible,
MS Const. authorizes MSSC to send it back to any court.
6. Equity Jurisdiction
a. Equity jurisdiction combined two issues:
i. Does P have a proper basis for coming into equity?
ii. Should the judge exercise equitable jx by granting P an equitable remedy?
b. The court’s “equity jx” is not jurisdictional.
i. The issues are addressed by the judge’s wisdom and fairness, not by
the judge’s basic power to decide.
c. Limiting “Equitable Jurisdiction”
i. Inadequate remedies at law requirement (or irreparable injury).
7. Contempt – used to enforce an injunction; goal is to secure P’s entitlement.
8. Big 3 Equitable Remedies
a. Injunction
b. Constructive Trust
c. Specific Performance
A. TRADITIONAL MAXIMS ASSIST & LIMIT INJUNCTIONS
(A)(1) PLAINTIFF’S INADEQUATE LEGAL REMEDY, IRREPARABLE INJURY
1. P must show legal remedies will be inadequate, that she will encounter
irreparable injury w/o an injunction.
2. Test (I think these are different tests, book doesn’t specify).
a. P exhausted remedies at law;
b. Refusal of a court of equity to interpose, would, from the insufficiency of the
legal relief, or the imperfection of the legal procedure, work an injustice;
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c. Legal remedy is not as practical and as efficient to the ends of justice and its
prompt administration, as the remedy in equity.
3. Chancery Courts have Traditionally Granted Injunctions Where
a. P’s rights and interests were “equitable.”
b. P lacked an adequate remedy at law.
4. Irreparable Harm – it has to be the type of harm that relief wouldn’t fully compensate,
cannot be compensated w/ legal damages, there is no adequate remedy at law. Legally
there is a claim, but there’s nothing the court can do to make P whole.
5. eBay v. Mercexchange, LLC (patent holder does not always have the right to an
injunction against an infringement, but an injunction can NOT be denied solely b/c the
patent owner doesn’t use the patented practice; instead court must weigh “4 traditional
factors.”)
a. Facts – MercExchange was holding a number of patents, including a business
method patent for an electronic market designed to facilitate the sale of goods
b/t private individuals by establishing a central authority to promote trust
among participants. MercExchange sought to license its patent to eBay, but the
parties failed to reach an agreement. MercExchange brought suit against eBay,
but the District Court denied MercExchange’s motion for permanent injunctive
relief, so MercExchange appealed.
b. 4 Factor Test for P seeking Permanent Injunctive Relief
i. P must show he’s suffered irreparable injury;
ii. P must show the remedies available at law are inadequate to
compensate for that injury;
iii. P must show a remedy is warranted considering the balance of
hardships b/t P and D; AND
iv. P must show the public interest would not be disserved.
c. eBay applies to preliminary injunctions and TROs too.
(A)(2) EQUITY ACTS IN PERSONAM
1. “In Personam” – a decree of personal command to D; its directions can only be carried
out by D’s personal act.
a. The big 3 remedies (injunction, constructive trust, and specific performance)
require personal response/conduct from D.
2. “In rem” v. “In Personam”
a. The law (in rem) regards the right of P, and gives judgment that she recover the
property or damages b/c they are hers.
b. Equity (in personam) decrees D do or refrain from doing something.
c. It is b/c of this emphasis upon D’s duty that equity is more ethical than law – the
idea that equity acted “in personam” (on the person) meant that equity enforced
its decrees on the person through contempt.
3. “In Personam” Personal Jx Limit – since it acts on the person, need personal jurisdiction.
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4. Tabor (only where it clearly appears the prosecution of an action in a foreign state will
result in fraud, gross wrong, oppression, or evasion of the laws of the forum state, shall
an equity court enjoin the party from proceeding).
a. Facts – Tabor (P) is a Nevada Corp, which contracted w/ D for the purchase and
delivery of grain. D performed partially, then defaulted. Tabor filed suit in IL, but
D soon after filed suit in WI conceding default and seeking to limit damages. D
contested IL’s personal jurisdiction. Tabor petitioned the IL court to enjoin D
from proceeding further w/ the suit in WI. The IL court issued a temporary
injunction restraining D from proceeding in WI, but D proceeded anyway, and
received a verdict. D argued the IL court’s justification was insufficient for
enjoining a foreign court proceeding.
b. Rule – only where it clearly appears the prosecution of an action in a foreign
state will result in fraud, gross wrong, oppression, or evasion of the laws of the
forum state, shall an equity court enjoin the party from proceeding.
5. Matarese (an equity court may order a person over whom it has personal jx to convey
and interest in real property situated outside the court’s jx.).
a. Facts – involves property in Italy P hired D to buy for him. D bought the land for
$3k, and told P it was for $22k after asking for the $3k as down payment. D put
his own name on the deed and P filed suit against D for fraud, etc. Trial court
held that D committed fraud, held property in constructive trust, and that it had
jx over D. D appeals, arguing the trial court doesn’t have jx since he’s no longer in
the state/country and neither is the property.
b. Rule – when the subject matter of a suit in a court of equity is w/in another
state/country, but the parties are w/in the jx of the court, the suit may be
maintained and remedies granted that may directly affect and operate upon the
person of D and NOT in the subject matter.
6. McNulty (where a party over whom a court has jx has assets outside the court’s jx, the
court can order him to bring them w/in the court’s reach).
a. Facts – D won $128k in the Irish Hospitals Sweepstakes and deposited his
winnings in a secret bank account on the island of Jersey to avoid paying income
taxes on it. The gov’t (P), after prevailing in an action for collection of taxes,
sought an order directing D to deposit the assets w/ the clerk of court b/c these
were the only funds from which the judgment could be satisfied.
b. Rule – by virtue of its jx over D, a court has the power to order him to repatriate
assets located in a foreign country.
(A)(3) EQUITY CAN’T PROTECT PERSONAL, POLITICAL, OR RELIGIOUS RIGHTS
1. Certain Things Equity Can’t Do
a. Cannot protect personal rights, political, or religious rights.
b. Certain domains outside the scope of court’s powers.
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2. Kenyon v. City of Chicopee – Jehovah’s witnesses sought to enjoin the authorities’
harassing criminal prosecutions, but court held it could not grant an injunction to
protect their personal rights to free speech and free exercise of religion.
3. Political Rights
a. Should be resolved by legislative or executive action.
b. Judicial interference is thought to infringe upon the separation of powers.
c. Bush v. Gore – court of equity will not supervise the acts and management of a
political party.
4. Religious Rights
a. May resolve disputes about property rights, but only on the basis of neutral
principles of law, developed for use in all property disputes.
b. Can grant an injunction in church-state relations.
c. A court is incapable of resolving an ecclesiastical question or determine “true
faith”
(A)(4) EQUITY LACKS JURISDICTION TO ENJOIN A CRIMINAL PROSECUTION
1. General Rule
a. Equity will not ordinarily enjoin criminal prosecution.
b. Exception – except when there are exceptional circumstances w/ a clear
showing an injunction is urgently necessary to protect rights of property (or
other identifiable personal rights).
i. The normal inconveniences (burdens to reputation, etc.) and an
unmeritorious criminal prosecution are not the types of exceptional
circumstances.
ii. Examples
1. Prosecuting authority knew the laws were unconstitutional;
2. There was a showing that there was an inadequate remedy at law;
3. They were harassed so long, their resources are dwindling – can’t
make bail anymore.
2. Younger v. Harris (not assigned)
a. It’s a federalism generated decision that says federal courts won’t interfere in
state criminal prosecutions absent bad faith (bad faith is an exception).
3. Norcisa (equity won’t enjoin criminal prosecution except in very limited circumstances)
a. Facts – prior to the present action, the board of selectmen (D) filed a criminal
complaint charging Norcisa (P) with violating the state’s Vendor Statute b/c she
did not have the required licensing. P instituted this action in equity to enjoin D
from enforcing the criminal statute, and to ask for declaratory relief, arguing she
wasn’t a transient vendor w/in the meaning of the statute. P’s relief was granted,
and D appeals.
b. Rule – equity will protect personal/property rights by injunction only if
i. A substantial right of P will be impaired to a material degree unless relief
is granted.
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ii. The remedy of law is inadequate; and
iii. Injunctive relief can be applied w/o imposing an impossible burden on
the court.
c. Reason – the court maintains P has adequate remedies at law through her
defenses to the criminal complaint (the statute’s unconstitutionality). Business
damage or loss is not grounds to warrant equitable relief.
(A)(5) EQUITY LACKS JURISDICTION TO ENJOIN A CRIME
1. General Rule – equity will not enjoin criminals from committing crime.
a. Exception – equity is active in enjoining nuisances that are also crimes.
i. Equity will enjoin nuisances to protect public and private property rights;
it’s a preferred way of stopping nuisances even though the nuisance
might also be criminal.
1. Public Nuisances Routinely Enjoined
2. To Be a Public Nuisance
a. Must interfere substantially w/ public rights by affecting
i. Health, safety, convenience, peace, or comfort.
2. Why Equity Doesn’t Enjoin Crime
a. Without criminal statutes, you can’t put them in prison.
b. Messing w/ Legislature – we’re amplifying things we normally leave to Congress;
interfering w/ our normal way of gov’t.
3. Why Want to Enjoin a Crime? (why are criminal laws inadequate?)
a. Situations where we have a problem getting a convictions.
i. Witnesses – may not want to testify (threat of violence, sympathetic to D).
ii. If the evidence is weak, lesser POE standard in equity and no jury.
4. Acuna (acts that qualify as public nuisance are enjoinable even if they can also be
prosecuted as a crime).
a. Facts – gang members were terrorizing a community even though none lived in
the community. Ps seek to enjoin their behavior as a public nuisance.
b. Rule - equitable relief is available to enjoin conduct that substantially and
unreasonably interferes w/ private property-based collective values.
i. The trial court has equitable jx to enjoin public nuisances not defined as
crimes. Whether given conduct constitutes a crime has no effect on the
Court’s equitable jx. The court may grant relief even if the conduct can be
prosecuted as a crime.
ii. The activity enjoined falls reasonably w/in the definition of a public
nuisance. Requirement satisfied that the conduct be injurious to health,
indecent or offensive to the senses, and an obstruction to the free use of
property.
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(A)(6) EQUITY WILL NOT ENJOIN A LIBEL
1. Traditional Rule – equity will not enjoin a libel/slander (except when it does).
a. Prior Restraint Rule - injunction is a prior restraint if it forbids D’s speech in
advance.
i. A court will indulge a heavy presumption against the constitutionality of a
prior restraint. Prior restraint threatens expression more than
subsequent punishment would.
2. Cochran (no decision is made, but equity traditionally won’t enjoin defamation.)
a. Facts – Cochran (P) brought a state law defamation actions against Tory and
others (Ds) that were defaming him publicly in an effort to extort money from
him. Superior Court issued an injunction prohibiting Ds from picketing,
displaying signs, or uttering statements about Cochran. Cochran dies and Ds
argue the case is thus moot.
b. Holding – Court Doesn’t Decide
i. SCOTUS says the purpose for the injunction has been removed, so the
question of its constitutionality no longer needs deciding, but rules other
parties are free to seek similar injunctions against Ds if need be
B. INJUNCTION PROCEDURE
(B)(1) INTERLOCUTORY RELIEF: TRO AND PRELIMINARY INJUNCTION
1. Meaning of Preliminary Injunction/TRO
a. P maintains unless the judge grants an injunction right now, D’s misconduct will,
or soon will, inflict irreparable harm.
b. The judge may grant Ps a temporary restraining order (TRO) or a preliminary
injunction to protect P’s entitlement and to preserve the controversy for a
meaningful decision after full trial.
2. Injunction vs. Preliminary Injunction vs. TRO
a. Judge may grant an injunction only after a full trial.
b. A preliminary injunction follows a hearing and adversary proceeding.
c. A judge may issue a TRO w/ no adversary hearing.
d. Preliminary injunction must be issued w/ notice; TRO can be granted w/o notice
if certain conditions exist.
e. Can appeal a preliminary injunction, but not a TRO.
3. Bond Requirements
a. FRCP 65 requires bonds – often these bonds will be waived or set at nominal
amounts (especially for indigent parties).
i. No order shall be issued w/o security (not only $, can be property).
b. Rule – the amount of the bond will be the limit of liability for damages caused by
improper granting of a preliminary injunction/TRO or if P loses on a permanent
injunction claim.
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c. 3 Exceptions
i. Statutorily
ii. Bond is waived: P is then liable for all actual damages, no limit.
iii. Liable of independent ground – abuse of process, bad faith.
d. Effects
i. Low amount on bond will limit recovery of D if it’s an erroneous order.
ii. If waive bond, P’s liability will only be capped by actual damages.
4. Problems w/ Granting Prelim Injunction/TRO
a. Trial court rushed to do immediate justice more likely to make a mistake.
b. If the court hears only one side, more likely to make a mistake.
c. Increasing the risk of error the more we shorten to process (the less witnesses
and less opportunities for discovery).
5. Category of Cases w/ an Urgent Need for Relief – domestic violence cases.
6. Temporary Restraining/Protective Orders
a. An exception to the rule that courts won’t enjoin a crime.
b. Special circumstances when there’s no adequate remedy at law b/c crime hasn’t
been committed yet.
7. Temporary Relief is Temporary
a. Not permanent b/c there’s only a need to stop the abuser now, but there’s risk of
error in the rush of justice.
b. Purpose of TR is to maintain the status quo b/t the parties pending a hearing on
a preliminary injunction.
c. Preliminary injunction remains in force pending trial; either made permanent or
dissolved at the conclusion of trial.
8. Prophylactic Remedy (preventative)
a. Preventive in the sense that one party shows they’re entitled to injunctive relief
if D acts in some way (which are disfavored, but you can bring yourself in the
category of entitled persons – prelims disfavored and TROs really disfavored).
b. Courts can provide a full measure of relief, which includes the power to coerce
behavior that might be unlawful to achieve the lawful goals of the injunction.
9. FRCP 65(d) – Content & Scope of Prelims and TROs
a. Every order granting injunction MUST
i. State reasons why it’s issued;
ii. State its terms specifically; and
iii. Describe in reasonable detail the acts restrained or required (not by
referring to the complaint).
b. Prelims require notice (but doesn’t tell us what kind or how much).
c. TROs don’t always require notice (but could have notice and must in some
circumstances).
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10. Enforcement
a. Make sure the behavior required or prohibited is clear in the prelim/TRO so law
enforcement can better enforce it.
i. Also make sure to give clear notice so they know to follow it.
b. To get relief by sanction for contempt, must prove there was a violation.
11. To get a Prelim/TRO
a. Allege specific facts in a sworn affidavit or verified complaint.
i. Specific facts need to show imminent and irreparable injury before
hearing.
b. Notification
i. Atty must certify what efforts were made to notify the party (doesn’t say
you need to notify, but if no effort, explain why).
ii. Atty must certify why the TRO should be issued w/o notifying.
c. Bond – no order shall be issued w/o security.
12. Salinger (traditional equity test from eBay applies to prelim/TROs to enjoin copyright
infringement).
a. Facts – Salinger sues Colting (D) for copyright infringement b/c D’s book
involved many things about Salinger’s book, Catcher in the Rye. District Court
determined D’s defense was likely to fail and P demonstrated a likelihood of
success for copyright infringement. District Court granted the prelim and applied
the pre-eBay rule that standard required a prelim if there is a finding of
1. Irreparable harm; and either
2. Likelihood of success on the merits OR sufficiently serious
questions going to the merits to make them fair ground for
litigation, with a balance tipping toward P.
ii. District Court also applied the presumption of irreparable harm if P
demonstrates a likelihood of success on the merits (opposite of eBay).
b. Rule – eBay apply to prelim/TROs to enjoin copyright infringement.
i. eBay – prohibition against presumptions of irreparable harm.
ii. eBay’s Traditional Equity Test – Court must Consider:
1. P must show he’s suffered irreparable injury;
2. P must show the remedies available at law are inadequate to
compensate for that injury;
3. P must show a remedy is warranted considering the balance of
hardships b/t P and D; and
4. P must show the public interest would not be disserved.
(B)(2) JURY TRIAL AFTER MERGER
1. Sources of the Right to Jury Trial
a. 7A – suits a CL; value exceeds $20; preserved (only certain types of claims in
federal court); jury’s facts shall not be reexamined (exceptions).
b. Federal right to Grand Jury for indictment of a felony.
c. State Constitution – MS Article 3, Section 31
i. Unlike the federal Const., the MS Const. is sort of all purpose.
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ii. For civil cases, the right shall “remain inviolate” (right not violated).
iii. 7A vs. MS Article 3, Sec. 31
1. No $20 requirement
2. No preservation requirement
2. Suits at CL – damages litigation before a jury
3. Equitable Litigation – tried by judge
4. Introductory Cases
a. Dairy Queen (1962) – P seeks equitable relief, but D demanded jury trial,
claiming there’s a legal remedy available.
i. Justice Black takes D’s side, which shifted the jury trial test from the
historical law-equity classification to a more practical and simpler
determination of whether P’s demand seeks money.
b. Wooddell (1991) – the second, or remedies, test is the most important and giving
greater weight to whether the remedy P seeks is legal or equitable.
5. Remedies Test - Common Law Effects
a. Money damages are at CL and subject to the jury right.
b. Replevin, ejectment, ownership of real property, and legal restitution are at CL.
c. But P’s request for money is not always at CL, which complicated the remedies
test – other forms of money recovery may be equitable (prejudgment interest
and atty fees).
6. Columbia Pictures (the right to jury trial includes the right to have a jury determine the
amount of statutory damages).
a. Facts – Columbia (P) licensed TV series to 3 stations that were later acquired by
Feltner’s (D) company. When the stations didn’t pay their royalty payments, P
sued D alleging copyright infringement arising from the stations’ unauthorized
broadcasting. P sought permanent injunction for all copies of the programs and
actual damages based on a statute.
b. Rule – the right to jury trial includes the right to have a jury determine the
amount of statutory damages.
(B)(3) EQUITABLE CLEANUP
1. Defined – once equity jx attaches, the court possesses the power to resolve the entire
controversy, including those legal claim triable to jury, even when the equitable claims
have been dismissed and only legal claims remain.
2. Ziebarth (a court can award damages in lieu of SP requested in an equity suit when SP is
impossible).
a. Facts – Ziebarth (P), a cattle buyer, sought specific performance for sale of cattle
from D. D moved for dismissal b/c the cattle were no longer available, making SP
impossible. D’s motion denied and District Court awarded P damages (a legal
remedy) in lieu of SP. D appeals, claiming he was denied a jury trial.
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b. Rule - existence of a remedy at law does NOT preclude equitable relief if the
equitable remedy is better adapted to render justice. A legal remedy should be
granted when equity fails, but D cannot be deprived his right to jury if D
requested a jury.
C. THE MODERN INJUNCTION: DISCRETION AND FLEXIBILITY
1. Freed from a prescribed set of legal rules, the court’s equitable remedies become
discretionary and therefore flexible.
(C)(1) THE CHANCELLOR’S DISCRETION
1. Navajo (court of equity has discretion to meet the problem presented and to fashion a
proper remedy to accomplish just a proper result).
a. Facts – P, originally located in AZ, operated a school for Navajo youth. D invited
P to move its campus to NM and commence operations there in 1978. After a
series of unwritten short term leases, D sought to evict P in 1987. P responded
by requesting a “constructive” lease, damages for improvements, declaratory
and injunctive relief on behalf of the students, and compensatory and punitives.
The court found in favor of P, but solely ordered P was permitted to remain on
the campus for 3 years. D appeals.
b. Rule – court of equity has power/discretion to meet the problem presented, and
to fashion a proper remedy to accomplish just and proper result. This remedy
didn’t exceed the bounds of reason.
i. It was NOT an abuse of discretion for the trial court to devise a remedy
that permits P to continue functioning as a school as it searches for a new
home.
2. Weinberger (a court can remedy violations of a federal act by ordering equitable relief
other than injunctive relief).
a. Facts – Navy used an island for training w/ weapons/bombs in violation of law
b/c they were doing it w/o a license/permit. D brought an action seeking to
enjoin the Navy (P) from operating, alleging a violation of the Federal Water
Pollution Control Act. District court found that, although the discharged had not
polluted the water, P violated the statute by not applying for a permit. It ordered
P to apply for a permit, but did NOT enjoin the operation pending the permit
application.
b. Rule – a court can remedy violations of a federal act by ordering equitable relief
other than injunctive relief.
1. The Act is silent as to if injunctive relief is required. The court
must weigh the competing interests involved. In this case, the trial
court found the debris didn’t affect the purity of the water, and the
burden on the Navy in curtailing training was great. Thus, on
balance, injunctive relief was not appropriate.
2. Equity should also consider public consequences of the injunction.
If a public interest will be adversely affected, a court may withhold
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equitable relief pending final determination of the rights of the
parties.
(C)(2) TWO MAXIMS OF EQUITY: CLEAN HANDS AND LACHES
1. Courts have traditionally referred to certain maxims as guides to the exercise of
equitable jurisdiction.
2. Clean Hands Doctrine
a. Generally stated by the courts that parties seeking equity must have “clean
hands.”
b. Unclean hands usually means a party has been guilty of unethical or immoral
conduct directly related to the subject of the litigation.
c. The “unclean” conduct must relate directly to the specific matter at issue.
i. It makes no difference that D can show in some other, unrelated matter P
was guilty of unethical conduct.
d. Unclean hands of P bars only relief in equity. When P brings an action at law, he
is entitled to recover despite his own inequitable conduct if it’s not illegal.
e. D may interpose unclean hands as a defense if P seeks an equitable remedy.
f. Principles of Confinement
i. P’s misconduct cited as unclean hands must be related to the dispute P
sues on or to the relief P seeks.
ii. Unclean hands is discretionary w/ the trial judge.
iii. Public policy may override the unclean hands defense.
3. Laches
a. Premised on the maxim that equity aids the vigilant and not those who sleep on
their rights.
b. The essence of laches is unreasonable delay by P causing material prejudice to D.
i. Laches vs. SOL – laches is premised on delay AND prejudice when SOL is
premised on only delay.
c. Laches cannot be used to force action on P when the obligation to act lies w/ D.
d. It is a case-by-case approach. Equity determined if the particular delay and its
consequences warrant denial of equitable relief in the interests of justice and
fairness.
i. More flexible (and discretionary) than SOL.
e. Courts should consider and weigh any justification offered by P for the delay.
4. Green (no party can get equitable relief w/ respect to a transaction if he has himself
been guilty of conduct that’s fraudulent, illegal, or unconscionable. The misconduct
must be directly related to the subject matter).
a. Facts – Green (P) sued Higgins (D) for SP for the sale of real estate, after both
parties willfully and fraudulently prevented third parties from exercising their
legal rights in and to the property.
b. Rule – the clean hands doctrine applies even where P’s misconduct has not
injured anyone, and even were D participated in misconduct too.
c. Holding
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i. The unclean hands doctrine, preventing equitable relief due to P’s
inequitable conduct, applies even if P’s misconduct has not injured
anyone, and even if D participated in misconduct too.
ii. The conduct must be willful and fraudulent, illegal, or unconscionable.
The conduct must also be directly related to the subject matter of the suit.
Where both parties have acted inequitable, the court will refuse to lend
its aid to either party. This is the court’s unwillingness to give relief to a
party who acted inequitably regarding the subject matter of the suit. Here
both parties acted willfully and fraudulently, and the lower court’s denial
of relief is therefore affirmed.
5. (Stone 1) (P’s suit will be bared by laches if P unreasonably delays in filing and the
delay prejudices D).
a. Facts – Stone (P) who was the natural, illegitimate daughter of Hank Williams,
Sr. waited many years after learning of the possibility of her lineage before filing
suit against Williams, Jr. (D) for copyright renewal rights.
b. Rule – P’s suit will be barred by laches if P unreasonably delays in filing and the
delay prejudices D.
c. Prejudice - Ds were prejudiced b/c P’s delay resulted in faded memories, stale
evidence, and dead witnesses. There was also a change in D’s position to permit
P’s claim to be enforced.
6. (Stone 2) (D can’t claim he’s prejudiced by P’s delay in asserting her rights when he was
aware of them all along).
a. Facts – Stone (P) filed a petition for rehearing after her claims of being Williams,
Sr.’s daughter had been willfully concealed from her by Williams, Jr. and her
request for her share of the estate’s copyright renewal rights had been dismissed
b/c of laches.
b. Rule – D can’t claim he’s prejudiced by P’s delay in asserting her rights when he
was aware of them all along.
D. CONTEMPT
1. P enforces an injunction against an obstreperous D w/ contempt. The essential feature
of the order is to command to do or not to do something.
2. Direct vs. Indirect
a. Direct –misconduct that occurs in the courtroom; person can be punished on the
spot.
i. Can be imposed w/ limited procedural safeguards, but courts have wide
authority to impose contempt.
b. Indirect – D’s disobedience of an injunction outside the courtroom; person is
entitled to at least notice and to be heard (hearing).
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3. Criminal vs. Civil
a. Effect Test – contempt is criminal if it’s primary effect is to punish; it’s civil if the
primary effect is remedial.
i. Determined by examining the substance of the proceeding and the
character of the relief to be provided.
ii. The “effect” test is distinguished from the “purpose” test, which was
rejected.
b. Criminal – applied to conduct directed against the dignity and authority of the
court; it is a crime and falls under many of the same rules of procedure and
protections applicable to criminal proceedings.
i. Purpose is to punish/deter, NOT coerce.
ii. Protections apply – right to jury, proof beyond a reasonable doubt, right
against self-incrimination, right to attorney, etc.
iii. Criminal contempt requires intent – “willful violation.”
c. Civil – can be used to compel obedience for the benefit of P or compensate for
injuries resulting from noncompliance w/ the order.
i. Purpose is to secure the benefits of the injunction.
ii. No right to jury or BRD b/c traditionally in courts of equity.
iii. Either a coercive or compensatory order may remedy civil contempt.
4. Purposes of Contempt (not exclusive)
a. Compensatory – compensate P for any loss caused by the violation.
b. Coercive – revocable, indeterminate threat to imprison/fine.
c. Punishment – direct contempt in the courtroom, for ex.
d. These are NOT exclusive – you could have a fine that’s compensatory (partly to
cover losses), to coerce, and to punish.
5. Retrospective vs. Prospective
a. Retrospective – confesses failure; D breached the injunction and judge no
longer can secure for P the conduct entitled to; judge must substitute
compensatory contempt, monetary compensation, or criminal contempt
(employment a backwards looking remedy).
b. Prospective – coercive contempt, devised by judge to compel D’s future conduct
(ex – threats of fine/imprisonment).
(D)(1) WHAT ORDERS SUPPORT CONTEMPT?
1. H.K. Porter (district court’s power can only be used if the court’s decree is set forth in
specific detail, if the acts sought to be enjoined are described in detail, and if the
command is in substance an injunction).
a. Facts – P sued D for infringing P’s trade secrets. They settled, which the trial
court adopted and made part of its judgment. In the agreement, D agreed not to
sell certain molding compounds to Frigidaire, but D did it anyway. P requested a
contempt judgment, but the trial court dismissed.
b. Rule - for a court to issue civil contempt, D must disobey “an operate command
capable of enforcement.” Here the trial court didn’t go beyond entering a
judgment and did not use language to turn the K into an “operative command.”
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The court did not clearly spell out an injunction as part of its judgment pursuant
to FRCP 65, so no contempt for violation is possible.
(D)(2) WHAT IS A VIOLATION?
1. Playboy (a contempt order is warranted only if the moving party proves by clear and
convincing evidence that the alleged contemnor violated the injunction/order).
a. Facts - when a foreign internet site posted PLAYMEN images whose distribution
had been previously enjoined the in US, P alleged D was in contempt of the
permanent injunction.
b. Rule - a court has the power to hold a party in civil contempt if there’s a clear
and unambiguous court order, clear and convincing proof of noncompliance, and
the party in violation has not attempted to comply reasonably in a diligent
manner. An order is clear when it is specific/definite enough to appraise those
w/in its scope of the conduct being proscribed.
(D)(3) THE PUZZLE OF CRIMINAL CONTEMPT – COERCIVE CONTEMPT
1. Mine Workers of America (criminal contempt requires right to jury/higher BOP; case
discusses differences b/t civil and criminal contempt).
a. Facts – injunction implemented to enjoin mine workers from engaging in illegal
strike-related activities. Unions told not to violate injunction and every violation
brings a penalty of $100k for violent and $20k for nonviolent. 7 separate
contempt hearings over 400 offenses rack up $64mil in fines for the Union. They
settle on $52mil in fines to be paid to the state and counties, but the Union
argues fines are for criminal contempt and not civil contempt and thus require a
jury and higher standard of proof.
b. Rule – The fines are found criminal b/c imposed retrospectively, the counties
withdrew, so not for their benefit (remedial) anymore, and the fines were meant
to punish and not meant to coerce/compensate.
(D)(4) CONFINEMENT, CONTEMPT, AND CASH MONEY: ABILITY TO COMPLY
1. Constitution – cannot confine/imprison a civil “debtor”
a. Interpreting “debt” in the Constitution – interpreted to mean contractual or
tort obligations only. An order requiring payment of family support is not “debt”
and therefore can be imprisoned.
2. Statutes Permitting Collection Proceedings – judgment creditor with a money judgment
can implement collection proceedings (discovery to find and reach assets).
3. Compensatory Contempt – money substitute when contemnor fails to comply with
nonmonetary injunction.
4. Defense of Inability to Comply – justification for coercive imprisonment for civil
contempt depends on contemnor’s ability to pay/comply.
5. Burden of Proving Inability
a. Civil Contempt – statute designating BOP on D constitutional.
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b. Criminal Contempt (for civil order) – statute designating BOP on D for inability
to pay child support unconstitutional.
6. Moss v. Superior Court, Orbitz, Real Party in Interest (CASC 1998) (parent who willfully
doesn’t obtain/seek employment can be held in contempt despite inability to pay child
support).
a. Facts – Moss didn’t pay his child support. He was unemployed at the issue of the
child support order and unemployed when the mother filed for contempt. Moss
conceded he was able to work. Trial court issued contempt, but appellate court
set aside for insufficient evidence of Moss’ ability to pay. Mother appeals to SC.
b. Rule – a parent whose inability to pay court-ordered child support b/c of willful
failure to seek/obtain employment can be adjudged in contempt?
(D)(5) THE COLLATERAL BAR
1. General Rule – criminal contemnors cannot challenge contempt orders based on the
original injunction being invalid (civil contemnors usually can).
a. Exceptions
i. If the disobeyed order was transparently invalid or only a frivolous
pretense to validity.
ii. If there’s not available protective procedure to get judicial review of the
order before it’s violated.
iii. Claims where compliance would cause irreparable injury.
2. Ex Parte Purvis (ALSC 1980) (can’t overturn contempt after violating the order unless it
falls w/in an exception above; order here was not transparently invalid).
a. Facts – Purvis (petitioner) was enjoined from picketing (violence) but continued
because he questioned the validity of the order. He was put in jail then filed writ
for habeas corpus alleging the TRO was transparently invalid/unconstitutional.
b. Rule – a judicial decree of questionable validity must be obeyed unless it’s very
obviously in excess of the court’s power; can’t try to overturn contempt after
violating an order unless it falls in w/ an exception above.
c. Rationale – 1A doesn’t apply if there’s a danger of violence.
(D)(6) WHO MUST OBEY?
1. General Rule – only those in privity w/ enjoined parties are bound by court decrees and
can be held in contempt.
2. People v. Conrad (see rule).
a. Facts – abortion clinic has injunction against one pro-life group, but another
group w/ knowledge of the injunction protests. D claims they are not acting on
concert with the party whom the injunction is against.
b. Rule – parties cannot nullify an injunction by carrying out prohibited acts with
or through nonparties; nonparties (with knowledge of the order) are subject to
contempt if they intentionally violate the order with or for those restrained.
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E. ENFORCING CONSTITUTIONAL & PUBLIC LAW THROUGH STRUCTURAL INJUNCTIONS
1. Structural Injunctions – when courts utilize injunctions to assume ongoing
administrative control of governmental operations; protecting constitutional rights by
“restructuring” gov’t bureaucracy (so structural injunction).
a. Ex – racially segregated schools; violations of prisoner’s rights
b. Criticism – violate federalism and separation of power
2. Modification – can be modified if the legal or factual circumstances have significantly
changed and if the proposed modification appropriately addresses the change.
F. INJUNCTION REFORM
1. Injunctions, especially structural, are argued to be unnecessarily intrusive.
2. The Strike Injunction
a. Norris-LaGuardia Act – no jurisdiction to issue any restraining order or
temporary or permanent injunction in any case involving or growing out of a
labor dispute (except for injunctions against violence) (many state legislatures
adopted similar acts).
3. Injunctions Involving Controversial Matters (school prayer, abortion, etc.)
a. 2 Types of Proposed Bills
i. (1) Eliminating Jx Over Controversial Subjects
ii. (2) Eliminate/Circumscribe Court’s Ability to Order Particular Types of
Injunctions
iii. Problem – congress can’t exercise power to limit court’s jx in a way that
destroys another const. right (P’s rights) or undermine the court’s
essential functions.
4. Unconstitutional Prison Conditions
a. Congress and the Courts struggled with the power of structural injunctions.
b. Prison Litigation Reform Act – makes it harder for prisoners to contest the
constitutionality of conditions and curtails relief federal judges can grant.
i. Judicial branch will pay for masters, not the Ds.
ii. Same problem above applies.
5. Frew (consent decree should be enforced according to its terms if the state has NOT
established reason to modify the decree).
a. Facts – parents filed a class action against state healthcare officials for
deficiencies in the state’s Medicaid program (which state is required to meet in
accordance w/ statute) on behalf of their children.
i. Case was settled by consent decree (like a K).
ii. Parents unsatisfied years later motioned to enforce the consent decree.
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iii. District Court enforced the decree.
iv. Reversed on appeal based on 11A sovereign immunity (state cannot be
sued unless it explicitly waives immunity)
b. Issue – judicial enforcement of the consent decree.
c. Rule – decree should be enforced according to its terms if the state has NOT
established reason to modify the decree (in which court would make necessary
changes).
d. Reformation – consent decree against a state is enforceable.
CHAPTER 4 – UNJUST ENRICHMENT: RESTITUTION
1. Unjust Enrichment – separate basis of liability independent of tort/K/property for
recovery of benefit realized by D (not compensation for harm or injury).
a. Breach of K, tort, property wrong may give rise to unjust enrichment claim.
2. Freestanding Unjust Enrichment – P can seek restitution for unjust enrichment alone;
breach of K, tort, or violation of P’s property rights is NOT a prerequisite.
a. (ex – mistaken transfer of money to D)
3. For contract, tort, or property, P can show D violated her rights and seek restitution as
an alternative to compensatory damages or injunction.
A. UNJUST? ENRICHMENT?
1. Kistler (D unjustly enriched when purchased land where tenant had planted crops but
had no renewed his lease).
a. Facts – P’s (tenant) lease was not renewed prior to harvesting the crops he
planted on the leased land. Landowner died and the estate was sold, including
land P planted on. New owner unjustly enriched. He sought restitution for the
cost of his efforts.
b. Rule – D unjustly enriched. Unjust enrichment is an equitable one, providing one
party should not be allowed to benefit at the expense of another b/c of an
innocent mistake or unintentional error.
i. D would reap benefit of P’s labor/expenses w/o unjust enrichment claim.
D required to reimburse P cost of planting wheat.
ii. P planted his crops in good faith w/o knowledge of sale of land.
iii. P relied on past practices of the parties.
2. Patureau (D unjustly enriched when evicted tenant whose manure supplier had manure
on the land).
i. Facts – manure salesman supplied D’s tenant. Tenant was evicted for
indebtedness, but the manure salesman sued for UE of Patureau-Miran
who acquired manure.
ii. Held – D was unjustly enriched.
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3. Kossian (an enforced quasi K implied in law will arise when one party receives a benefit
at the expense of another. Quasi K does not support intent, but imposes obligations if
one receives a benefit and does not pay restitution).
a. Facts – P contracted w/ owner of a burned building to clear the debris left by the
fire. When the owner declared bankruptcy and did not pay, P brought suit
against the mortgage holder who repossessed the hotel and collected insurance
proceeds.
b. Rule – an enforced quasi contract implied in law will arise when one party
receives a benefit at the expense of another.
i. Quasi K – does not support intent b/t parties, but imposes obligation if
one receives benefit and does not pay restitution.
4. Knaus (D must voluntarily accept a benefit which it would be inequitable for him to
retain w/o payment since law implies a promise to pay when services are rendered and
accepted).
a. Facts – P had house on a lake w/ a dam that had holes and sought a contractor to
fix the holes. P requested neighbors to partake in repairing the dam. The
neighbors did not agree to having it repaired. P had it repaired anyway, and
some of the neighbors refused to allow the contractors access to their property
to repair. D is one of the neighbors that refused to pay.
b. Rule – D must voluntarily accept a benefit which it would be inequitable for him
to retain without payment since law implies a promise to pay when services are
rendered and accepted.
c. Holding – B/c P instructed repairs be made notwithstanding D’s opposition and
lack of willingness to enter the agreement, D did NOT voluntarily accept a
benefit. When one party confers a benefit to another despite the latter’s
opposition, disinterest, or refusal, he may not obtain restitution based on a quasi
contract or quantum meruit.
B. LEGAL RESTITUTION: QUASI-CONTRACTS
1. Legal Restitution Branches
a. Money/value restitution
b. Specific restitution – ejectment or replevin
2. Quasi Contract (implied by law or implied in law)
a. Implied by Law – fictional K is presumed in order to use the K form to enforce
restitution based on unjust enrichment; based on duties imposed by law, not by
the parties.
b. Implied in Law – real Ks based on conduct of parties as manifesting bargaining
intent.
3. Quantum Meruit – for the reasonable value of services rendered on the theory that
reasonable value measured the benefit D received when P’s performance benefited D
but D didn’t pay (for quasi or real Ks).
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4. Not Equity in Chancery Sense – equity in “fairness” sense, so need a jury trial and P gets
a money judgment.
(B)(1) MEASURING D’S BENEFIT – SERVICES
1. Key Question – did recipient of services expect to pay? Although recipient did not
expect to pay, did he request the services? Was recipient aware services were
rendered?
2. Elements of Quasi-K
a. Benefit conferred to D by P with the expectation of payment.
b. Awareness, appreciation, or knowledge by D of the benefit.
c. Acceptance or retention of the benefit by D under such circumstances as to make
it inequitable for D to retain the benefit w/o payment to P.
3. General Approaches to Measuring the Benefit (Campbell)
a. Cost of producing
b. Market value of the thing produced (the measure is reasonable cost)
c. Value to D of the thing produced
4. Reasonable Value – amount it would’ve cost D to obtain the services of another. P gets
the average profit obtained by the market clearing price for the services (Maglica).
5. Campbell v. Tennessee Valley Authority (fair market value of what D received is
appropriate in quasi contract cases in quantum meruit theory of recovery).
a. Facts – Campbell entered into oral K to make microfilms journals for TVA, but no
K b/c entered into w/ employee with no authority to make the agreement.
i. Court found the gov’t obtained a benefit from Campbell, but also
recognized the amount of the benefit was difficult to quantify because it
was intangible.
b. Holding – P entered into quasi contract with D.
c. Rule – fair market value of what D received is the rule of thumb to assess the
value of damages in a quasi contract on quantum meruit theory of recovery.
i. Difficult to quantify b/c benefit was to library patrons.
d. Approaches of Measuring the Benefit
i. FMV
ii. How much the benefit is worth to recipients
iii. Cost of production
e. Sovereign Immunity Concerns – quasi contracts (unlike express Ks) are not
waived by the gov’t, but court allowed restitution b/c TVA is an autonomous
entity not covered by the sovereign immunity doctrine.
6. Maglica v. Maglica (quantum meruit allows recovery for the value of beneficial services,
NOT the value by which someone benefits from those services).
a. Facts – P sued b/c she helped her “husband” build his mega business even
though they weren’t technically not married. P was secretary of corporation and
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D is president. P sued for breach of K, breach of partnership agreement, fraud,
breach of fiduciary duty, and quantum meruit. She got $84 mil in trial court for
breach of fiduciary duty and quantum meruit, D appeals.
b. Rule – The legal test for recovery in quantum meruit is NOT the value of the
benefit, but the value of the services.
c. Holding – reversed and remanded for an erroneous jury instruction that their
relationship alone (husband/wife and P’s services to the company) does not
require a finding of implied contract.
C. EQUITABLE RESTITUTION
1. Forms of Equitable Restitution
a. Constructive Trust
b. Resulting Trust
c. Equitable Lien
d. Subrogation
e. Accounting
(C)(1) THE CONSTRUCTIVE TRUST
1. Constructive Trust – equitable remedy that provides for specific restitution.
a. D is said to hold the property involuntarily “as a trustee” for the benefit of the
person with a superior equitable claim.
b. The trust is conferred to the non-possessor rightful owner of property from the
wrongful possessor “trustee.”
c. Imposed by law to prevent the possessor’s unjust enrichment.
2. Common Examples (where constructive trust is most beneficial remedy)
a. D is bankrupt and P creditor can trace their property to an identifiable asset.
b. D purchased an identifiable asset w/ P’s property, and that asset has appreciated
in value.
c. D transferred P’s property to a 3rd person and P wants them to return the
property (replevin/specific restitution).
3. Tracing Requirement – P must be able to trace so chancellor can find the property.
4. Simonds v. Simonds (when the property is acquired under circumstances where the
holder of legal title may not in good conscience retain the benefit, equity converts him
into a trustee).
a. Facts – first wife, per a separation agreement with her ex-husband, was to be a
beneficiary to ex-husband (and now decedent’s) life insurance policy. Separation
agreement required decedent keep a life insurance policy of $7k payable to P.
i. P sued D (2nd wife) for $7k since decedent allowed his life insurance
policy to lapse and got a new one naming his new wife and daughter as
the only beneficiaries.
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b. Rule – P’s rights in the separation agreement provide a nexus between her
rights and the later acquired policy naming the new wife. $7k of the life
insurance proceeds are therefore held in constructive trust for P.
i. “When property is acquired under circumstances where the holder of
legal title may not in good conscience retain the beneficial interest, equity
converts him into a trustee.”
(C)(2) TRACING
1. Defined – P’s ability to follow specific property as it was bartered, sold, or exchanged
for new property. It permits the court to follow the property into its new forms and
attach an equitable interest in that new form.
a. As long as owner can identify their property, it can be traces through an
unlimited number of transactions.
b. Property can be followed even if co-mingled with property of others.
2. Theft of Owner’s Property and Bona Fide Purchaser’s Rights – initial owner has no right
to reclaim the property.
3. Appreciation in Value – if it increases in value, you’re allowed to recover the value
increase (ex – used your stolen money to buy a winning lottery ticket).
4. Priority over Others – tracing gives you priority of over persons (creditors, other
interest holders).
D. DEFENSES TO RESTITUTION
1. Usual defenses apply (issue and claim preclusion, unclean hands).
2. D Can Contest the Unjustness or Enrichment Elements of the Claim
a. Unjustness – P conferred this as a gift.
i. P’s volunteer or intermeddler status for her unsolicited benefits to D is
not unjust.
b. Enrichment – D contests the existence of a benefit.
c. Ex – P paid debt to D that was unenforceable based on SOL (this was not really a
benefit conferred to D and it was not unjust b/c P actually owed D.
3. Affirmative Defenses Unique to Restitution – new factual material D brings in, and NOT
based on the truth of P’s facts.
a. Time Bar – SOL applies in legal restitution; laches applies in equitable
restitution.
b. Change of Position-Estoppel – D’s position changes after receiving a benefit (D
spent the benefit) and making restitution would be “inequitable.”
i. Ex – mistaken transfer from bank (P) to D.
1. If D knows it was a mistake and spends it anyway, defense will not
hold up.
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2. If D thought it was deposited for another reason (like as a gift from
someone), then defense will hold up.
ii. Estoppel is asserted if P conferred a benefit to D and P represented it was
not a mistake and D proves he relied on the benefit.
1. If P asks the bank and D tells him it’s his money and D spends it,
defense will hold up b/c of the misrepresentation, but if D doesn’t
spend it, the defense will not hold up (no change in position).
c. Bone Fide Purchase – someone who purchased wrongfully or mistakenly
obtained property has an absolute defense against unjust enrichment claims by
the initial owner.
d. Bona Fide Creditor – if the recipient of the benefit (either wrongfully or
mistakenly) uses it to pay a creditor, the creditor has an absolute defense against
a claim by the initial owner.
CHAPTER 5 – RESTITUTION IN TRANSACTIONS
A. DISQUALIFYING PLAINTIFF FOR RESCISSION – RESTITUTION
(A)(1) ELECTION OF ANOTHER REMEDY
1. A party induced to enter a K by fraud, misrepresentation, etc. has alternative remedies.
She can either rescind the contract and seek restitution, affirm the contract and seek
damages, or plead in the alternative. This section involves choosing a remedy.
2. Affirmance of Contract – affirmance can be shown in many ways
a. Express Affirmance – injured party expressly affirms.
b. Accepting Benefits – continued acceptance of benefits after discovering the
fraud, mistake, or injury.
c. Delay in Disaffirming – affirmance by silence after learning of her injury.
d. Suing for Damages – commencing an action for damages is an affirmance.
3. Rescission of a Contract
a. Usually P can change its mind and file for damages after filing for rescission as
long as no prejudice is shown against D.
b. If P gives notice of rescission and the wrongdoer considers accepting the tender
of rescission, no shift to the damages remedy is allowed.
4. Suing in the Alternative
a. FRCP 8(e) allows pleading in the alternative, but P cannot get double
compensation for 2 remedies, so an election is required before it is heard by a
judge or jury.
5. Gannet (rescinding party cannot rely on time spent in negotiation to remedy the injury
for defense against failing to give reasonable notice of intent to rescind; negotiation is
only one circumstance in determining the reasonableness of delay – party also
exercising ownership over the subject matter manifests an intent to affirm the K).
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a. Facts – D entered into K with P to buy a newspaper. P discovered information
from D prior to execution of the K was false and misleading a few weeks later, so
D refused to pay P. P sued for breach, D counterclaimed for damages and
rescission 7 months after learning of his right to rescind b/c the parties were
negotiating a settlement to the matter.
b. Issue – is rescission available when the injured party unreasonably delayed
giving notice of intention to rescind and exercised acts of ownership over the
subject matter of the K? No.
c. Rule – rescission is available only where notice of intention to rescind is given
promptly and the rescinding party has exercised no acts of ownership nor
manifested an intention to affirm the K.
i. Passage of time alone doesn’t preclude rescission right, but combined
with the circumstances of manifesting intent to affirm the K by exercising
rights of ownership, rescission will not be permitted.
ii. D may recover damages for fraud.
(A)(2) LACK OF INJURY
1. Standard for Rescission – substantially different than what was expected.
2. Earl v. Saks & Co. (minority decision - while pecuniary loss must be shown to maintain a
tort action for fraud, this need not be shown for rescission. A wronged party can rescind
where he obtains something substantially different from what he was led to expect).
a. Facts – Barbee wanted to buy a mink coat for P. P haggled with the store (D)
until the price was reduced from $5k to $4k, but P secretly agreed with D to pay
the $1k. D discovered this, revoked the gift, and demanded the coat be given to
him for $4k. P sought to uphold both the gift and the original purchase as
binding, thereby entitling her to the coat.
b. Issue – may nonpecuniary damages for fraud entitle the defrauded party to
rescind? Yes.
c. Rule – while pecuniary loss must be shown to maintain a tort action for fraud,
this need not be shown for rescission. A wronged party can rescind where he
obtains something substantially different from what he was led to expect.
i. Majority – usually monetary loss is required to rescind.
d. Reasoning – Barbee didn’t obtain what was bargained for b/c the fraud
participated in by P and D deprived Barbee of the opportunity to make a
complete gift to P.
CHAPTER 6 – CONTORT AND REMEDIES
A. TORT AND CONTRACT DAMAGES
1. P can sometimes choose between contract or tort claims.
a. Ex – P buyer can sue D seller for...
i. Broken promise or warranty (contract); Misstatement of fact (tort); or
Mistake (rescission-restitution)
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b. P cannot get punitive or emotional damages in contract.
2. Byrom, Do Damages Depend on the Same Principles Throughout the Law of Tort and
Contract? (law journal)
a. Contract duties are imposed consensually; tortious duties are imposed by law.
b. Foreseeability Differences
i. Contract – injury must be either naturally flowing from the breach OR
w/in the reasonable contemplation of the parties as the probable result of
breach.
ii. Tort – injury must be reasonably foreseeable from a breach of duty.
c. Damages Differences
i. Contract – award depends on the foreseeable amount of damage (injury).
ii. Tort – the foreseeability of the amount of damage is irrelevant (ex –
eggshell rule).
3. Evra Corp. v. Swiss Bank Corp. (__)
a. Facts – P lost a valuable charter contract w/ Pandora b/c D failed to effect its
telex deposit sent from P’s bank to deposit in Pandora’s account. P sued D to
recover the expenses of an arbitration with Pandora and the profits it lost b/c of
the cancellation of the charter.
b. Difference b/t General and Special Damages IN CONTRACT
i. General Damages (direct damages) – are directly consequential – here it
would be Pandora’s loss of the funds.
ii. Special Damages (consequential damages) – harms that are particular to
a particular individual – here it is P’s loss of the charter and arbitration
expenses.
1. Requirements of Pleading Special Damages
a. Must plead special damages specifically.
b. Must prove special damages w/ reasonable certainty.
c. Special damages cannot be too remote (must have
proximate cause for tort or must b/c within contemplation
of parties for contract).
d. Special damages must not be waived in the bargaining
process.
c. Issue 1 – is P entitled to those special damages? No.
i. Rule 1 – consequential damages will not be awarded unless D was put on
notice of the special circumstances giving rise to them.
d. Issue 2 – does the fact that P and D were not contractually bound make a
difference? No.
i. Rule 2 – A party is not required in the absence of a contract to take
precautions against harm that he cannot measure but is known by the
other, who in the existence of common prudence, could’ve avoided it.
1. P was in better position to minimize its losses than was D, and
therefore shouldn’t be rewarded for its failure to take reasonable
precautions.
2. Only foreseeable damages are recoverable in contract actions.
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B. WHERE DO TORT DAMAGES END? THE ECONOMIC LOSS RULE
1. Economic Loss Rule – no extension of liability of negligence to the indirect economic
loss of a third party (must be foreseeable).
a. Cannot sue for pure economic loss (lost profits, diminution) if you have NOT also
suffered damage to your person or property.
b. Only applies to negligence (not intentional torts).
c. “No pain, no gain.”
d. Purpose – D should not bear unlimited liability for economic consequences of a
negligent act b/c risk would be so uncertain it would incalculable.
2. Stern (__).
a. Facts – a fire gutted a hotel, which caused the loss of various union jobs. The
Union (P) brought suit against various individuals involved in designing the
hotel, claiming lost wages for the members and lost dues.
b. Issue – are economic damages recoverable, absent privity of contract, injury to
person or property, or intentional interference? No.
c. Rule – absent privity of contract, injury to person or property, or intentional
interference, economic damages are not recoverable.
INTERPLEADER
1. Defined – compelling other parties to litigate a dispute when P holds disputed property
on behalf of another, but doesn’t know who it should be transferred to. Must join all
persons w/ claims to the property.
2. Statutory Requirement of Trust/Security – the property is put in a trust or a security
bond is provided pending a result.
3. Burden of Fees/Court Costs – on the person who brings the action (hiring lawyer, filing
fees, etc. Interpleader is to prevent multiple claims against you, so can save money.
4. Federal Interpleader
a. FRCP 22 – requires the claim be either based on diversity jx or based on federal
question jx (when a claim is based on federal law).
i. Service of process must be carried out w/in the state where the court sits
or according to the long-arm statute.
b. Statutory 1335 – requires only minimum diversity b/t 2 claimants and a
minimum amount in controversy of $500.
i. Can get service of process anywhere in the US.
5. State Interpleader
a. Jurisdiction – available if state has personal matter jx over the claimants.
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