PART 1: Compensatories.........................................................................................................................4

Compensatory Damages..................................................................................................................... 4

The Rightful Position Principle...................................................................................................4

Value as the Measure of the Rightful Position (Lesser of 2 rule).................................4

Reliance and Expectancy as Measure of the Rightful Position......................................5

Consequential Damages.................................................................................................................7

Limitations of Remedy and Liquidated Damages Clauses (over and under liquidated)............................................................................................................................................ 7

Litigating Damages for Personal Injury and Death............................................................9

Tort Reform.......................................................................................................................................10

Dignitary and Constitutional Harms......................................................................................10

PART 2: Injunctions.................................................................................................................................12

Irreparable Injury Rule.....................................................................................................................12

Ripeness/Propensity......................................................................................................................... 12

Preventative Injunctions (Wrongful Acts)...............................................................................13

Prophylactic Injunctions (Not Wrongful Acts).......................................................................14

Reparative Injunctions......................................................................................................................15

Winston/Bailey.................................................................................................................................... 15

Structural Injunctions....................................................................................................................... 16

School Desegregation Cases.......................................................................................................16

Institutional Reform......................................................................................................................18

Injunctions and the Rights of Third Parties.............................................................................18

PART 3: Choosing Remedies............................................................................................................... 20

Damages or Injunctions....................................................................................................................20

Irreplaceability................................................................................................................................ 20

Damages or Specific Performance...............................................................................................21

Burdens on Defendant or the Court............................................................................................21

Other Reasons to choose Damages over Injunctions..........................................................22

Ebay Test for PERMANENT INJUNCTION............................................................................23

Preliminary or Permanent Relief.................................................................................................24

Substantive Law of Prelim Inj...................................................................................................24

Procedural law of Prelim Inj/ TRO.........................................................................................24

Prospective or Retrospective Relief............................................................................................26

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Sovereign Immunity...........................................................................................................................26

Suits against officers in their Official Capacities...............................................................26

Suits against officers in their Personal Capacities- Qualified Immunity................27

Declaratory Relief.................................................................................................................................... 27

Declaratory Judgments.....................................................................................................................27

Reformation........................................................................................................................................... 28

Other Forms........................................................................................................................................... 29

Part 4: Restitution.................................................................................................................................... 31

Defenses..............................................................................................................................................32

Dobbs Problems- Rescission and Restitution....................................................................33

Disgorgement of Profits from Opportunistic Breach of K.................................................33

Rescission when rescission is no longer possible.................................................................34

Part 5: Punitives........................................................................................................................................36

Common Law and Statute................................................................................................................36

The Constitutional Limits (THE BMW GUIDEPOSTS).........................................................36

BMW GUIDEPOSTS........................................................................................................................ 38

Punitive Damages in K and other Punitive Remedies.........................................................38

Part 6: Ancillary Remedies...................................................................................................................40

The Three Kinds of Contempt........................................................................................................40

Collateral Bar Rule- Not in CAL.....................................................................................................40

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1. Basic Remediesa. Compensatory Damages

i. Designed to make P as well off as he would have been if they had not been wronged (usually $- Damages)

b. Restitutioni. Stop unjust enrichment by D- Dives D of ill gotten gains

c. Rescissioni. Undo the contract- put parties back where they were before the K was

formed, provided this is still possible to do. Generally done in situations involving fraud, mutual mistake, and illegality

d. Reformationi. “Keep” the K, used by the court to make the contract conform to the

intention of the parties when the contract was formed. Used when mistake or fraud is present

e. Specific Performancei. Equitable remedy in K, designed to compel D to do what he promised he

would with the P. Discretionary application- primarily in land Kf. Injunction

i. Equitable remedy in K or Tort which orders the D to do (Mandatory) or not to do (prohibitory or preventive) a certain thing. Discretionary application- applied carefully by cts

2. Ancillary Remediesa. Three Kinds of Contempt

i. Civil Coercive Contemptii. Criminal Contempt

iii. Civil Compensatory Contempt (not available in CAL)b. Collateral Bar rule (No available in CAL)

Goodman Breakdown1. Compensatories2. Preventative

a. Stop harm before it happensi. Ct orders- D must/must not do

ii. Coercive- ct orderiii. Declaratory- parties asking for judgment

3. Restitutionary(Facilitating above are:)4. Punitive Remedies

a. Coerce behaviorb. Only available in compensation situations

5. Ancillary Remedies a. How to collect/arg/get remedies

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PART 1: Compensatories

Compensatory Damages

The Rightful Position Principle1. Put P in the most rightful position available to make up for the

wrong/negative they suffered2. Hatahley

a. R: you cannot speculate harm, must do factual inquiries into what $ damages ware worth

b. Navajo had been using lands that US owns without permit. US took N animals and killed them. How do we put N in their rightful position

c. Lct eyeballed- assigned $ number to animals, $ for pain and suffering, $ for loss of use of herds

d. OVERRULED: Problem: you need to actually figure out indiv values- using forensic accountant

e. WHY individualize (POLICY): prevent over/under compf. Easier to limit prejudiceg. Remedies are meant to be individualistich. Limits missing potential areas of damages

Value as the Measure of the Rightful Position (Lesser of 2 rule)1. Different sets of facts warrant dif value assessments2. In re Sept 11

a. Lesser of 2 Rulei. Look for the least expensive way to put P in rightful position

3. Lesser of (2) Rulea. Lesser of

i. The dimunition of props MV, orii. Replacement cost, or Cost of Repair, or

iii. Other (consider all the possible valuations and which would be the cheapest)

b. Hypo application of lesser of 2i. Crash Car:

1. 5000 to repair2. 1800 value of car before crash3. 50 salvage value4. 1750 dimunition in value5. If totaled: no salvage value, 1800 = diminution in value)

ii. Rightful Position doesn’t care about unique experience if you can get something similar on the open market that is the MV and if that is cheaper than cost to repair you will not get repair you get MV

4. Lost Use

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a. If something is damaged you are entitle dot lost useb. If something is destroyed you cannot get lost used because you will be

satisfied by getting replacement cost5. Prejudgment Interest

a. You can get this while waiting for judgment (time between harm occurring and getting monetary judgment. Set at SS rate)

6. Consumer Itemsa. When consumer items are lost we could apply lesser of two rule but

minority of cts (INCL CAL) say that where there is a consumer item w/ a readily available MV you get cost of replacement minus depreiciation

i. Subtract the “use” you got form the ogii. Used to combat the lemon effect

1. Used items on market are depressed in value because of the lemon effect- value of good is below what it should be because buyers are fearful og getting defective one (some will be good, some will be defective- 1/10 defective lowers price on all) Cost of replacement would give too low a valuation

7. Trinity Church (Fact specific- finding “other” valuations)a. When cost of repair or cost of replacement are not calculableb. Church very unique, used old stonework. Was damaged but not so

much that it needed to be taken downi. P comes up with 3rd way to get $. Gets reduction in the

estimated life of the church1. Certain percentage of the useful life of the church has

been reduced, experts determine percentage and give that money

2. Idea: one day they will have to repair the church and this money can be used then

c. SN: you do not have to use the money to put yourself in the rightful position- once you get it, you can do what you want with it.

Reliance and Expectancy as Measure of the Rightful Position1. Expectancy- the benefit you thought you would get2. Reliance- everything that is not expectancy

a. Usually: money spent in belief deal would happen3. Neri v Retail Marine Corp

a. K for boat, B pays deposit. B rescinds but boat is already on its way. S refuses to refund deposit.

b. B sues for deposit. S sues for breach of Kc. Holding: both owed damages

i. B gets Deposit backii. S gets

1. Reliance Damages- stuck with boat, had to store it, wash it etc

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2. Expectancy Damages- benefit of bargain. What S would have gotten if K had gone through

a. Seller had unlimited supply and demand so he could have sold more; if not lost volume seller than he could not have gotten this.

b. In classic sense, expectancy is the marginal profit you would have made from that specific buyer (selling the boat to him for more than MV)

3. R-> Expectancy = K price- MV4. Lost Volume Seller

a. Person who sells similar items (sells many boats of same types, used cars lot, antique store)

i. Even if the items aren’t identical, if you are in the business of selling items you are a LVS (as opposed to someone who is selling THEIR car)

ii. When you make business off of sales we don’t want to penalize you for not making the sale

5. Chatlos Systems (expectancy) IMPORTANT CASEa. X buys a computer

i. K sale price- $46,020ii. MV- $207,000 (buyer told X comp was worth this much)

iii. Cts est value of compt - $6000b. Expectancy = benefit of bargain

i. They thought they were getting 207 computer so exp = $171,000 (warranted value – K price)

c. Ct says they also get the amount they over paid ( $40,00) ($6000 value from K price)

i. So if they keep the computer they get = $40,020 ( K price minus value ( 46,020-6000)

ii. If they return the computer they get $46020 (K price)d. Policy:

i. Company would be unjustly enriched if they kept the moneyii. Stop people making unwarranted promises

iii. Put P in rightful position as if promises had been realitye. SN: if they brought evidence of lost profits/clients etc from breach

they could also get RELIANCE damages6. Smith v Bolles (tort)

a. Expectancy in tort: all you getb. Fraudulent misrep of land deal

i. Used to require deliberate misrepii. No cts have mostly erased the difference between tort and K.

You can still get bene of bargain7. Texaco in v Penzoil

a. Plead in tort: get fraud misrep and punitive damages (only available in tort except, employment and insurance)

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b. Penz was going to purchase oil for Getty for discount. Penz can get more use value out of oil than usual person because they are a particular type of buyer which resulted in a better bargain. Texaco causes K to be breached

c. Ct uses how much pens would have benefitted , not how much average person would have

i. Got 10.53 bil and 3 bil in punitives and 7.53 bil in compesatory damages

Consequential Damages1. Consequential Damages = damages proximately caused by the breach2. A type of reliance

a. Reasonable and foreseeable- must let other person know what would happen if you breached a k)

3. Buck v Morrowa. P is dispossessed of land he uses for grazing.b. H entitled to consequential damages

i. It was written in the lease but even if it wasn’t P would get consequentials because they are just a type of RELIANCE damages

4. Meinrath v Singera. R: where the alleged breach of K consists only of a failure to pay

money, remedy is limited to principal owed plus damagesb. P claims they are entitled to bonus consequetials because they would

have invested the money and made money off the investmentsi. Ct rejects claims for consequential damages. Too tenious to

give profits off investment you would have made off the moneyc. Policy: you can’t know how investments would have worked out

Limitations of Remedy and Liquidated Damages Clauses (over and under liquidated)1. Self-imposed limits (voluntary)

a. Company sets limits because it is marketly accepted, buyer agrees for the convenience of using company or because it lowers price of product because company has less risk to spread to buyer

2. Kearney v Master Engravinga. K to purchase tool. K states

i. S is not liable for consequentialsii. B is limited to repair or replacement (S can allow return or

refund at their discretion)b. S warrants item for 12 montsh or 4000 hours. c. Machine malfunctions frequentlyd. Ct says: limitations of remedy fails its essential purpose as a remedy

because it leave the Buyer with no remedy if therei is a breachi. You cannot waive all remedies- wrong doing must be able to be

taken into accountii. Can limit consequentials but the second part of K is no good

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3. Limitationsa. You cannot waiver your right to have some remedy- cannot waive all

possible remedies (Kearney)i. There must be an available remedy

ii. If you are goint to strike remedies you remove just he particular remedy or waiver and leave others- limitations have to leave some form of recourse but you can still get rid of most as long as one remains

4. Liquidated damagesa. Parties bargain for specific $ amounts in advance

i. Liquidate the concepts (consequentials, reliance, expectancy) to money only and that mount is all that is available- Create Predictability

b. Ct allows parties to set figures w/ some limitsi. NO PENALTIES

1. Parties can’t agree to punitive measures for breach/ punishments

2. It is a penalty if the liquidated damages amount is not reasonable

a. This creates issue/paradox because “reasonable” before is an estimate but after there is an exact amount of damage that may look unreasonable post anti

b. If you knew the reasonable amount, you wouldn’t need liq damages clause

c. To get around, just sue stating they are a penaltyd. Over liquidated- penalty (not allowed)e. Under liquidated- amount is far below what they would hae gotten

sans clause (permitted w/in limits)i. Not allowed when it is so low it is essentially like having no

remedy at all (case by case factual inquiry)5. Northern Ill v Energy Coop (underliquidated)

a. NI promise to buy 56 mil barrels of naptha from ECI over ten years. Stopped buying when it became cheaper to buy natural gas. ECI sought damages based on difference between K price and Market price plus consequentials

b. TCT denied NI motion for sum judge on liquidated damages clause and struck liq damages defense. TCT said the clause gave non-breaching party CHOICE of recovering either ACTUAL or liquidated damages. NI Appealed

c. REVERSEDi. A liquidated damages clause is the agreement of the parties as

to the amount of damages which must be paid in the event of default. The non-defaulting party does not have to take that amount but that does not create the right to seek a greater measure

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ii. Liq dam clause provides agreed upon measure of damagesd. Controversial Case

i. Reasoning is suspect- the language of the K didn’t specify exclusivity but ct says that a statute requiring explicit limitations applies only to remedies not to damages

1. Nonsensical because liq damages is a limitation on remedies

ii. Say ALL liquidated damages are exclusive1. Open controversy as to whether K must be explicit as to

under liq damages being the only remedy- UNDECIDED in CAL

2. Likely a k would have to be explicit or you could choose a different remedy

e. Rule is PROBABLY that liq damages clause are exclusive remedies but likely need explicit language so arg both sides when you see an under liquidated damages clause

i. Proper arg: liq damages clause wasn’t exclusive remedy- that K allowed for other rems or it is so low it = Fails Essential purpose (A ct does not allow for there to be no remedy, if you have allusory remedy it fails its essential purpose) = no remedy

1. REMEMBER- OVER LIQUIDATED = PENALTY = NEVER OK

Litigating Damages for Personal Injury and Death1. When it comes to value for personal inj and death, there is no one who can

testify as to what the amount is- jurors are as much experts as anyone else (no expert person life value-er exists)

2. Truly do not make anyone wholea. Value can’t be measure in $ in a meaningful way but we try

3. Debus v Grand union Storesa. Petfood falls on D, she has 20% permanent disability. How do you

value the loss? b. Per Diem

i. Giving people a per day amount for the damage1. Means a smaller number

a. Attorney at trial would say something like “What would you say: $9 to suffer loss of hand?”

i. Makes jury believe they have come up with the number themselves

c. C-arg- by suggesting per diem you are vouching for iti. Encourages an inexact method of measurement

d. CC-arg- not suggesting metho assumes jury will come up w/ right waye. CAL allows per diem approach

i. But still can’t be prejudicial (can’t seem like you are being an authority)

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4. Discounting for present valuea. A dollar today is worth more than a dollar promised in a year

i. You can make the dollar productive and get a rate of return that you can’t get from a promised dollar

ii. So if you get a lump sum now, it can be smaller that if the amount is paid over a number of years

Tort Reform1. Fixed limits on recovery for pain and suffering are a centerpiece of the

national movement for ss limits on tort liability2. Arbino v Johnson and Johnson

a. A sued JJ alleging she suffered blood clots caused by Birth Control. I: Whether the limit on “noneconomic” damages in Ohio Rev Code violates the Ohio Constitution

b. Several ways a ct may apply the law to change a jury award of damages without running afoul of the Const.

i. Decreasing jury award as a matter of law cannot violate a right when it has been held numerous times that the ct can increase a jury award

ii. Interpret Const to prohibit statues that effectively prevent individuals from pursing relief for their injuries

1. Available remedies are meaningfuliii. Statute is not Arb/Capr- bene of limits could be obtained

without limiting the recovery of individuals whose pain and suffering is traumatic etc by setting limits for those not as severely injured and predetermined numbers

iv. Facially neutralc. Tort Reforms OK- upheld limits on punitive damages on similar

reasoning3. Problem of outlier verdicts is real but no as unpredictable as outliers might

suggesta. Insurance Commissioners created nine level scale for grading severity

of injuries 4. Difficult to value a life- Creation of the value of statistical life

Dignitary and Constitutional Harms1. Levka v City of Chicago

a. Invasive strip search- woman claims emotional distressb. Jury award $$- ct review jury awardc. TEST: was award so monstrously excessive as to shock the conscious

of the court?d. H: overturned awr- new trial or $25,000 (half prior award)

i. USES : Comparative Review- evaluates verdict by comparing it to other verdicts in similar cases

2. Perverse incentive (if you isolate perverse incentive it actually elongates recover time)

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a. Eggshell plaintive- on the hook for all damages even if affect was unique to that P and same harm would not have occurred on average person

i. Perverse incentive that you get more if you are harmed more1. Stronger emotional person gets less than weaker

3. Carey v Piphusa. Constitutional Harmb. Principal sees P holding what looks like a joint. Does not investigate,

suspends studenti. A person has a right to not be denied education- process

requirementc. Injunctive relief: P gets to go back to school after 8 days. P also sought

damages- declaratory judgment, removal of suspension from records, money

d. TCT: you can get everything but moneye. Ct App you can also get moneyf. SCT: TCT was right, everything but money

i. P not entitled to damages- compensatories1. P pled that denial of the hearing was a harm and he

should get $3000 for it. He didn’t get hearing = const harm- right to procedural due process

ii. In principal he is entitled to comp damages for denial of hearing but P did not show ACTUAL damage

g. RULE: you must show evidence of how you were harmed in order to get compensatory damages even if your Const right was ACTUALLY violated

i. You must have showing of harm4. What is actual harm

a. Not getting his day in cti. What damage arose? Can’t take out of the abstract

1. No monetary value attached to this harm.5. Just because there is a const violation doesn’t mean you get money

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PART 2: Injunctions1. You are always entitled to COMPENSATORIES after injury. If you want to

privilege of Inj you musta. Satisfy IIR- p must show there would be irrep injury if action was

allowed to continue/beginb. Ripeness Propensity- show that D has propensity to commit actc. Go to ct and show that you satisfy elements req to get an injunction

Irreparable Injury Rulea. Cts will not grant equitable remedy (inj) if a legal remedy (damages)

would be adequatei. Legal remedy must be as complete, practical and efficient as the

equitable remedyii. Real estate/ Real property is unique in a way that acts as an

excuse for specific performance1. But to qualify as unique, the real property cannot be

economically interchangeable (VAN WAGNER)iii. Scarcity and/or uniqueness are excuses for specific performance

(CAMPBELL SOUP)iv. If burden to D of suffering inj is more than bene of inj to P you

won’t get inj ( WHITLOCK)1. But if D knew about the burden they were assuming

because P gave notice, P can get inj (D brought hardship on themselves)

v. If the burden on the Ct to enforce the inj is too great you will not get inj EVEN IF the legal remedy is inadequate (CO-OP INSUR. V ARGYLL)

vi. We will not issue money judgments if the P would be unable to collect those damages and instead will issue inj (if D could not pay damages) (Ct must consider whether damages will be paid)

Ripeness/Propensity a. Threat of injury must be ripe in order to get injunction

i. Ct will hold off issuing inj until issue is ripeii. D must have propensity to engage in the harm (likely to commit

the wrong)iii. Ct Inquiry: Is there a real danger that the bad acts are going to

occur1. Suff eve to show that purported harm will occur

imminently2. If you don’t have the fact to show imminent harm you can

show SUBSTANTIAL FACTS that the harm will occur eventually (higher barrier)

3. The closer you get to the harm the less evidence you need

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Preventative Injunctions (Wrongful Acts)a. APPLY IIR- show that money damages aren’t sufficientb. APPLY RIPENESS/PROPENSITY- imminent and likelyc. Damage has no occurred yet by P senses it is coming so P goes to ct to get

inj against D to prevent harm - Keeps P in rightful position- Presume you will commit wrongful act so we are ordering you not to

d. Almurbati v Bushi. Enemy comabtants held at Gitmo, move to transfer people out-

sending them home or to third coutnries to be detained. Bahraini nationals seeking 30 days notice of any transfer out of Gitmo- want Prelim Injunction- ct order that gov must provide 30 days notice

1. Ev P provided: NY times article of intent to move detains to torture countries

2. Ev D (gov) provided: affidavit saying they won’t do itii. Ct Denies Inj.

1. Is IIR satisfied? a. Yes, facts ass alleged satisfy- stop people being

tortured2. Is Threat/Danger ripe?

a. No; ev shows that policy is not to send people to countries that torture. P fails to show threat because their ev is not suff.- News is a conspiracy not satisfactory ev.

iii. Policy: We don’t need ct to tell people not to break the law- here the gov said they wouldn’t do it, do not want to issue inj and add to punishment suffered by person who breaks the law. Inj heightens penalty for breaking the law

1. Would lead to inj for everything- there are already penalties for breaking the law

e. Marshall v Goodyeari. D sued for violating age discrim employ act

1. Remedy- lost wages (compensatories)2. DCT also issued injunction nationwide against further age

discrim firings/dischargesii. REVERSED:

1. IRR- Satisfied2. Ripeness/Propensity NOT SATISFIED

a. Inj too broad- Manager could do it again, so inj again him would be ok but nationwide ban is too broad- you would need evidence that it was a companywide problem. Haven’t shown PROPENSITY

f. US v. W.T. Grant Co (Mootness as C-ARG)

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i. D attempting to render case moot by stopping behavior and promising not to do it again. In response to complaint, D disentangled self from anti-trust situation

1. P claims D has propensity to commit, D claims Mootnessa. For mootness D must show they will not revert back

to past behaviorg. MOOTNES FACTORS (defense against Propensity)- No reasonable

expectation that wrong will be repeatedi. Bonefideness of expressed intent to comply w/law

ii. Affectiveness of discontinued use in removal of harmiii. Character of past violation- level of culpabilityiv. (Example of failed mootness defense: P wants inj against policy

for spying on them and discovered policy was spying on them during the trial. Ct granted inj. Showed propensity by spying on people during work up to case about them spying on people so their promise to not spy was no good)

Prophylactic Injunctions (Not Wrongful Acts)a. Preventing lawful acts that may have wrongful consequencesb. Nicholson

i. Ps own prop. D wanted to open halfway house in neighborhood. P sues to get inj to prevent halfway house from opening

1. P alleges crimes will increase and property values will decline

2. Tct issues injii. REVERSED

1. Not enough evidence of propensity- no evidence that there will be a nuisance

2. No IIR- speculative, intangible fear of harm is insufficient3. A mere fear is not ev4. Conduct is entirely legal and no NUISANCE has been est.

Must show that this company IS doing a bad job and creating nuisance (post est of halfway houses)

c. Pepsico v Redmondi. Inj to stop exemployee sharing trade secrets- Redmond know

pricing and roll out of productii. H: inj granted- R has to hold off working for competitor, cannot

disclose trade secrets1. Key: R could not do his job at competitor without using

knowledge for exemployer. Impossible for him to “forget” what he knows.

2. Harm hasn’t risen but is bound tod. Wilson Casket

i. Owner of company touches/kisses/rapes employees

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ii. Issue inj before he commits these acts on different/future party- enjoined from doing these acts/ from being alone with female employees

1. Propensity est through prior acts

Reparative Injunctionsa. Stop ongoing harmb. RULE AGAINST DOUBLE RECOVERY

i. You cannot get money damages for a harm and an injunction to repair that same harm

1. You CANNOT get inj + compenstatories or compensatories + interim compensatories

2. You CAN get inj + interim compensatoriesii. Forster v Boss

1. D sells prop w/ fraud rep that you can obtain permit for boat dock issued by Union Electric and that D would remove a swim dock. P buys but D did not remove swim dock and you can’t get a permit

2. First H:a. Jury awards

i. $ compensatories for permit (K diminution of value of house w/out permit

ii. $ in punitives for D committing fraudiii. $ in compensatories for failure to remove

dock (cost to remove dock)b. Judge Awards

iv. Orders inj to have dock removed and for union electic to transfer permit to new owner

c. JA+ JA = double recovery- violated rule against double recover

3. ON REMAND- R: No Double recovery- you don’t get money to demolish the dock and an injunction to have D demolish the dock- Choose Money Damages or Injunctive Relief, not both.

iii. Interim Compensatory Damages-1. Providing money for the harm that occurred while waiting

for trial2. For damage suffered during ct case- (having to store boat

because no dock, not being able to use dock)3. Awarded up until the point that injunction takes over- time

between start of harm and inj

Winston/Baileya. Apply when there is a federalism issue- no separation of powers issue

then don’t mention itb. Both claim to put P in rightful position, no more.

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c. Winston- Rightful Position Approachi. Today’s norm- more conservative- incremental- tailor to “exact

rightful positiond. Bailey- Equitable discretion Approach

i. Goes farther than Winston- sort of prophylactic: legal behavior likely to lead to wrongful result- puts P in rightful position at a time farther down the road

ii. Roving commission to do goode. Winston

i. 3m makes dictation machine. 2 employees leave and create own machine like 2Ms to sell to gov

ii. TCt says1. No damages2. D enjoined from disclosing and using Ps info for 2 years

from date of injunctioniii. P appeal- want longer/permanent (forever) inj.

1. Permanent inj does noe last forever, just means final judgment (as opposing to prelim inj which you get while awaiting trial)

iv. D wants damages no injv. Ct says- INJ = correct, 2yrs = correct

1. 2 years – time it would take competitor to create similar machine via reverse engineering w/out insider info

2. Put D in same position as other competitors- not punitive3. If D was never allowed to engage in the market it would be

a punishment for an unperformed harm. f. Bailey

i. Mutual fund owners invest $ w/ capital from holders of $$ in debentures. Owners were not as investest ad debenture holders- uneven distribution- allowed wrong incentive. Congress passes investment company act of 1940 that forbid this type of arrangement

ii. Tct- Mutual fund is put into receivership- trust become solvent again because of good investment

iii. Dct- while law allows it I won’tiv. Appeal Ct- t did not abuse discretion by going further than the

law1. Insolvency – likely and ct was remedying that2. Gave more than P needed to be in rightful position

Structural Injunctions- a. Not a 4th kind of inj. One of the three but applied to institutions- when

you are trying to make institutional change

School Desegregation Casesi. When repairing a large harm requires a lot of tinkering- applications of

Winston and Bailey- what does the rightful position require for this case

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ii. Swan v Charlotte- Bailey1. Segregation in violation of const (de jure segregation)2. Setting up neutral attendance zone based on geography would only

solve superficial level- there would still be de facto segregation through white flight- would not put P in rightful position

3. Ct sets up wedge shaped attendance zones which make it harder to move to different zones- appealed

4. SCT says- Not a problem- affirmeda. Regular zones would fail of essential purpose so we have to

go beyond incremental inj- go with Bailey and go furtheriii. Milliken I-moving toward Winston

1. Intentional pattern of segregation- predominantly black school districts w/intentional segregation

2. Ct app- remedy: desegregated the entire area- ordered that suburban school districts be combined with city districts and students mixed

3. SCT Reveresed- not narrowly tailored enough- forcing people to be involved in remedy to problem they were not a part of

a. Commitment to Winston- can’t involve people who don’t need remedy and weren’t a part of the harm

iv. Milliken II- 1. Reversed and sent back to DCT

a. Remedy: if we can’t physically desegregate by bringing outside in then we will have to provide an educational component- result of seg = allow resources to be allotted by race

b. Remedy to that problem = order resources funneled to the affected schools to ensure better edu of those students (affirmed)

v. Missouri v Jenkins- aggressively Winston1. Segregated school district- appeal from 1977 case2. Dct order very expensive changes to advance education in formerly

seg schools. Expand education opportunities, tutoring, magnet schools, money- cost per pupil higher than any other Missouri school district

3. Ct REVERSES: Applies STRICT WINSTON problem w/tcts measure for rightful positition0 over remedying. Goes beyond rightful position when it starts attracting students from outside district

4. Limits Milliken II- limits on spendingvi. Thomas’ Concurrence to Missouri- The Modern View of the Ct- WINSTON

(majority rule of sct)1. Federalism- sep of powers

a. Jusdges trying to play role of school board goes beyond the judicial power- They cannot decide how to fund school and what should be taught

b. Remedy should be fashioned by relevant institutions

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c. Tradition must only be based on constitutiond. Find liability- order cts to stop harm and sue again if they fail

to complyv. SN: Problem with contempt in the institutional

setting- institution can’t really be held in contempt- lack of incentive

Institutional Reformi. Hutto v Finney

1. Inj against solitary confinement longer than 30 days- D not interested in complying w/ orders

ii. Lewis v Casey1. Inadequate legal assistance in prison- violated right of access2. Inj: all prisons must comply w/ detail of inj3. REVERSE/REMANDED

a. Overly wide inj- have not shown propensity/scope- one or a few prisons violation does not show country wide problem

b. Ev only of 2 instances, not institutional wide denial of rightsiii. VMI

1. P appealing injunction in their favor saying it isn’t actually putting them in their rightful position

2. Ct agreed that they haven’t achieved rightful position

Injunctions and the Rights of Third Parties1. There is always a possibility of a 3rd party impact so look for it2. Test

i. Orders directed at bad D affecting 3rd partiesa. 3rd parties can be affected substantially but not to the

point of being RESTRUCTED by order to D who violated the law

ii. Orders directed at 3rd party1. Innocent 3rd parties can be subjected to minor and

ancillary orders2. Gov cannot directly order students to go to different

schools but can order District to desegregate and the District can tell students to go to different schools.

3. 3rd parties can sue actual party for damages from the orders

3. Hills v Gautreauxa. Racial segregation in public housing operated by CHA, Public

housing was built only in AA neighborhoods- ct ordered consideration of metropolitan plan

b. Judicial order directing relief beyond the boundary lines of Chicago where CHA and HUD (Ds) have authority to operate outside the city limits (unlike Milliken school districts which operated in their district only)

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c. Does this order against HUD affecting its conduct beyond Chicago’s boundaries impermissibly interfere with local gov, suburban housing authorities that have not been implicated in HUD unconstitutional conduct?

i. Not impermissible (affirmed)- would have same effect on suburban govs as a discretionary decision by HUD

4. Gen Building v Penna. Order to innocent 3rd parties can be minor and ancillary order

only- often record keeping etcb. Party no subject to the law may not be assessed a proportionate

share of the costs of implementing a decree to assure nondiscriminatory practices on the part of another party which was property enjoined. They CAN be require to aid the court by charting the changes resulting from inj.

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PART 3: Choosing Remedies1. Cts will not grant an equitable remedy if a legal remedy would be adequate

a. Reason for the rule: historical accidentb. Hard to know when it applies, cts just do what they think is bestc. Cts say they are applying it but they are just doing lip service- “The

legal remedy is inadequate…”d. For legal remedy to be adequate it must be fully as complete. Practical,

and efficient as the equitable remedyCommon Law Cts Cts of Chancery

History Used the Writ System Equitable ReliefRemedy Compesnation,

damages, replevin, detinue, trover

Injunctions, constructive trusts

Damages or InjunctionsIIR

1. Courts will not grant an equitable remedy if a legal remedy would be adequate

2. Legal remedy must be as complete, practical and efficient as the equitable remedy

3. Real estate/ real property is unqie in a way that acts as an excuse for specific performance

4. Scarcity and or uniqueness are excuses for specific performance (Campbell)a. Just because it is unique is not enough to bring on specific

performance- distinction between i. unique and economically interchangeable-( not enough to

satisfy IIR) and (WAGNERii. unique, physically different but not economically

interchangeable- must be MORE than unique (CAMPBELL)5. If burden to d of suffering inj is more than bene of inj to P you won’t get inj

a. But if D knew about the burden they were assuming because of notice by P then P can get inj (D brought it on themselves)

*Apply IIR, find wrinkle in test, explain that IIR doesn’t determine outcome, Judges do what they think is best, explain what is driving CT

Judges will find way to issue inj even when it would seem ev dictates against it, Result oriented0 hide behind IIR but usually determine case for some other reason

Irreplaceability1. Brook v. James A Callimore

a. C sues B because C lent B money w/Kthat says that if B fails to repay, C can take item of B’s personal property, B doesn’t pay.

b. B-arg: I will give C cash equivalent instead of PP (pay damages)

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c. There is a CL remedy- REPLEVINi. C-ARG, I am not asking for spec performance- asking for legal

remedy of replevind. H: C gets replevin gets item. P decided which legal CL remedy it

wanted2. Continental Airlines

a. Discount coupons- travel agency buying coupons in violation of rule that coupons were nontransferable. Tell comp to stop.

b. Remedy asked for: inj to stop transfer of couponsc. CARG- you can calculate financial loss from coupons transferd. Get INJ- result oriented- even forensic accountant have limits. It is too

difficult to calculate the loss/damages thaat coupon transfers cause. IIR Satisfied.

Damages or Specific Performance1. Campbell Soup

a. K between C and Farmers to deliver carrots. Carrots become scarce so the Market Price rises about K price. Farmers breach. C can’t get carrots anywhere else. C seeks Inj- Specific performance. Ask F to hand over carrots

b. TCT- no, get damages and buy carrots on marketc. APP CT- Tct wrong- IIR has been satisfied. If you gave C money to buy

carrots somewhere else they would not actually be able to get them (only F has carrots). Though you could calculate loss, it is easier to order that they get the scarce commodity.

2. Van Wagnera. P has lease for billboard. D bought building and watned to dear down

billboard. P wanted specific performance to maintain their lease on basis that billboard was unique

b. Ct: you pay rent which defines value- advertising potential is monetized and that ban be calculated so you can get that money and rent billboard elsewhere

i. When you have real estate/ real property it is unique, you scan still get damages IF it is economically interchangeable

ii. Avoids Disproportionate harm to D, wouldn’t be able to do anything with building while P had lease.

3. Efficient Breacha. Very rare- opportunities for EB are rare

i. Academic concept that doesn’t reflect reality- in cases where there is opp for EB, there is also likely one of those things that would make ct decide that an inj is approp, destroying EB

Burdens on Defendant or the Court1. Whitlock v Hilander Foods

a. D wants to expand Grocery store. Retaining wall moved up against Ps land. P notices foundation footins that extend itn otheir prop. D says

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he is just replacing what was there. P asks for rend for the encroachment. Negotiate while construction continues. P kicks D off land. P seeks inj to remove encroachment

b. TCT: focus on whether harm to P was intentional- Find D didn’t’ intend to encroach so no inj. Also P waited too long (latches)- can’t get equitable relief when you haven’t been equitable yourself

c. Reversed on appeald. CT Don’t know whose fault it is.

i. P put D on notices of encroachment, D went forward anywayii. Assuming no Latches

1. BALANCING TEST: whether hardship to D weighed again bene to P

a. If bene of inj to P is less than hardship to D it is not fair and P won’t get inj

iii. Comes down to who knew what and acted badly1. If D was on notice and encroached – inj2. If P lay in wait- no inj

2. COOP v Argylla. D owns safeway store, wants to close location in Ps shopping center.

Has 35 year lease. Closes anyway. P seeks inj to keep D in store because there is a bene to having D stores in shopting center that is hard to quantify

b. CT: can’t get inj- no specific performancei. Ct would have to supervise to ensure that D was actually

staying openii. Ct would have to figure out way to make D comply

iii. Huge Burden on D to continue having losing business iv. D pays lease plus damages

3. Structural v. Private Injunctions for Specific performancea. Ct will take on burden for structural inj to remain open (see structural

section)i. Assume these burdens because of economic incentives in inj

against prisons/schools/med reformii. Move now to stop cts even taking these roles- claim that const

limits judiciaries ability to assume these rolesb. Ct will not take on burden for Private inj remain open

i. Too burdensome- outweighs any bene to P

Other Reasons to choose Damages over Injunctions1. Current state of affairs it that cts will choose remedy that will provide best

outcome despite requirements of IIRa. Will just say damages/legal remedy is inadequate if they want to

provide equitable remedyb. Will cite IIR whenever they deny inj by saying legal remedy is

satisfactory

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2. In Cal we will not go through process of giving legal remedy if the result of that would be no remedy because D couldn’t’ pay- does not put P in rightful position

a. R: cts can consider the ability of a D to pay damages when considering whether to issue inj)

b. (opposite of Willing v Mazzocone- minority rule case)i. W sues P attorney because she says he kept some of her

money. W stand outside ct with sign disparaging P. Law firm wants inj to stop Ps behavior. Tct give inj. Appeals modify order to enjoin particular statements. Cts gave in partly because W did not have money to pay legal damages

ii. Appealed- thrown out- no injunction, only legal damages. 1. Whether a legal remedy is adequate must be

determined on the merits, not on whether D could pay the damages.

a. Effect: if you can’t pay you can’t have free speech- a person who has money could just pay the fine and continue the action. Poor person can’t pay so can’t afford to get fine

Ebay Test for PERMANENT INJUNCTION1. EBAY v MercECHANGE

a. Created bad test but you must still satisfy itb. 4 Part test for PERMANENT INJUNCTION- burden on P

i. Must show that you have suffered “irreparable” injury1. Problem; past tense language “suffered” when inj are

supposed to stop a harm that hasn’t happened yetii. Remedies at law are inadequate to compensate for injury

1. Problem; basically repeats req 1iii. Considering balance of hardship between p and D a remedy in

equity is warranted1. Problem: puts burden on P to prove a negative- P must

show no burden on Div. Public interest no disserved by permanent injunction

1. Problem: this was never a requirement for permanent inj before- it is the 4th element in a prelim injunction test

c. So pay lip service to the law- say the rule but then grant or don’t grant based on IIR

i. Limit it to the facts- say ebay test only applies in cases identical to ebay

1. Cts constructively ignore bayd. Mention EBay Test- Apply IIR

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Preliminary or Permanent Relief

Substantive Law of Prelim Inj1. Permanent v Preliminary v TRO

a. Permanent= final judgmentb. Preliminary = issued while awaiting trial- up until verdict

i. If you lose then you lose your inj bond- money paid to get the prelim inj

ii. Sufficiently important that they are appelable- either the issuance or denial of a prelim inj is appealable because of the fear of Irreparable injury.

c. TRO – temporary restraining order- expire after 14 daysi. Not appealable- shortcut to quick hearing- must be heard in 14

days- can be ex parte. 2. Prelim

a. Apply Winters Testi. To get Prelim inj. P must est

1. Likely to succeed on the merits ( On test say: They will succeed on merits, don’t discuss merits)

2. Likely to suffer irrepreable harm in absence of prelim relief (Ripeness and Propensity- when will harm occur)

3. Balance of equities tips in Ps favor (damage to D by PI if erroneously granted v If PI Denied and P deserved it)

4. An injunction is in the public interest (does it serve public policy)

Procedural law of Prelim Inj/ TRO1. Carroll v Pres and Commissioner of Princess Anne

a. White Supremacist group holds rally near cthouse in Princess Anne. Targets blacks and Jews. At end of rally, speaker says- tomorrow night lets raise hell for white race. Local gov official apply for TRO to stop rally group from meeting for 10 days

b. Ct issues TRO. Rally cancelled. After 10 days, TRO extended for 10 months

i. NOT OK, cannot extend TRO past period (then 10 days, now 14)

c. Appealed: Sct thrown out TROi. Procedural Problem

1. No notice given to opposing partya. Not always a problem- sometimes if D is there

they will cause irreparable injury to occur sooner (domestic violence) sometimes you can’t find D

i. Suspends due process right w/showing of necessity just for the time it takes to get P to safety

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b. They did not show excuses for no noticei. Could have served D, easy to find, no good

excuse or IRc. w/o both sides there is no advocacy for D

2. Sampson v Murraya. P worked for gov. Fired. Suspicion she was fired for reasons

pertaining to previous job. Should have had more procedure/process. Applies for TRO. Granted. Extended repeatedly

b. I: how long can you extend the injunctionsi. Employer submitted affidavits but ct wanted person to show

up. Employer refused. Ct extend injunction and keeps extending

c. P loses on the merits- d. Characterized as prlim inj rather than TRO because it kept being

extended and was eventually made unlimitedi. Though they called it TRO it was procedurally treated as

Prelim Inj. which is appelableii. Ct hears the case, decides

1. No IR- temporary loss of income, no harm to reputation2. H: Tcts cannot create unrepealable prelim injunction by

re-extending TROS.3. Convert TRO into Prelim Inj, making it appealable and

allowing ct to reviewe. DISSENT: Actual Practice

i. Problem w/ cts approach: w/TRO finding of facts and conclusions of law have not been filed- no valid prelim inj was ever issued- no well settled args of facts/law. There was no opportunity for P to lay out her facts/args so they could not actually decide on the facts

ii. Gov could have asked for a motion to dissolve TRO and if that was denied

iii. Gov could have asked for a prelim inj. Or gov could have asked for a hearing on the prelim inj- demand a hearing

1. They would get a hearing and either rwin or los and appeal. Even if ct refused to grant hearing- that would be appealable

3. Original Jurisdiction in App Cta. Idea that you can file complaint in app ct

i. They will take the case when there is no other ct that can hear the case

1. If you want to bring a case against a lct and get a writ of mandate ordering official body to do something

ii. Go to APP ct and have them order LCT to issue prelim inj hearing. (suing lower ct to get order that that the ct has to issue tro or prelim inj because right to appeal is inadequate)

4. Granny Goose v Brotherhood of Teamsters (alt)

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a. If you have indefinitie TRO and notice has been given (no listed eexpiration) the the order expires at the end of the SS maximum (then 10 days, no 14). D not bound after 14 days and so can’t be held in contempt of rviolating it after 14 days

b. Only when tro is indefinite- lists no end datei. If they give actual date or extend over SS period- apply

Sampson Requist or Marshall. (treat as Prelim inj because it functioned as on (Requist)- Ask for your hearing on the Prelim inj (Marshall) and then sue in App Ct if lct denies)

Prospective or Retrospective Relief

Sovereign Immunity1. Sometimes it matters who your D is- when you sue states/gov entities, your

remedies are limited

Suits against officers in their Official Capacities1. P seeking to control future conduct2. Chisholm(1793)

a. People suing state for money damages- A state was liable to suit by a citizen of another state or a foreign country

3. 11th Amenda. Response to Chisholm, no suit in law or equity, commenced or

prosecuted against one of the United States by Citizens of another State, or by Citizens of any foreign state

4. Hans (1890)(no longer quite so robust)a. Expands concept; States can’t be sued by their own citizens

5. Young (1908)a. Limits sovereign immunityb. You can’t seek money damages but you can get EQUITABLE RELIEF

wheni. You are citizens of that state and

ii. You don’t really sue the state- you sue the attorney general or warden or some other person in THEIR OFFICIAL CAPACITY

c. Legal fiction that you are suing a person in their official capacity because if you win then the person is deemed to not have been acting in accordance w/ the state and you get injunction

6. Edelman (1974)a. Can sue state but Only entitled to injunctive relief, never $ damagesb. F: Ill had AABD program, agrees to run program how fed gov suggest

to get fed funding. Fed gov requires that process and check to applicant must occur in 45 days. Ill took 4 months to process and pay and included no backpay. Director of ILL dep of pub health named as D

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c. TCT enjoins official from doing this and awards backpay- seems like legal remedy but TCT and CT App call it “equitable restitution” as an attempt at a work around

d. SCT says: paying money = compensatory damages which are not permitted under sovereign immunity. All we can do is equitable prospective relief, no retrospective relief

7. EXCEPTION: States can waive sovereign immunity (marshall dissent says immunity was waived in Edelman when they accepted funds)

a. BUT: states must explicitly waive SI- it cannot be impliedb. Now Fed SS contain language that by accepting the funds tates

expressly waive their SIc. W/out SS language there is no express waiver unless state waives SI

by itself (which it will sometimes do)

Suits against officers in their Personal Capacities- Qualified Immunity1. Work around for Sovereign Immunity2. Recovering damages for past misconduct3. Sue the individual in gov who harmed you- you can get $ damages

a. But individuals can utilize Qualified Immunity- Immune from suit personally

4. QI- standard RULE: Gov official performing discretionary function generally are shielded from liability for civil damages in so far as their conduct does not violate clearly established Statutory or Const rights of which a reasonable person should have known

5. Harlow v Fitzgeralda. F testified about tech problems on AirForce Dept. He is fired as

“reduction in force.” Memo came out that suggested they fire him in this way to get rid of him. F sues variety of people in official and personal capacity

b. D moves for sum judge then args that they are immune from money damages because they were acting in official capacity

c. How the Rule Test works in practicei. Two major problems

1. Most causes of action req. est. of Ds motives- won’t know if law applies until we know Ds intent

2. Defining reasonable person is hardii. Result: not much immunity protection

1. Creates incentive problem in public gov sectors2. Doesn’t encourage innovation

Declaratory Relief

Declaratory Judgments1. No contempt power2. Merely a judgment- not a finding

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3. P asks for declaration of his rights under a particular law or ordinance.4. Procedurally easier to get than an injunctions

a. Need not show IIR5. Reduce uncertainty; used eliminate frivolous threats of litigation, can serve

to vindicate certain const rights6. RIPENESS

a. Adversity of parties interestsb. Conclusiveness of the judgmentc. Utility of the judgment

7. Nashville RR v Wallacea. Appellant wanted judicial declaration that a state excise tax levied on

the storage of gas was invalid as applied to them under the Commerce Clause and 14th A.

i. (wanted declaratory judgment that tax is unconstitutional)b. Lct held for the appellees and it was affirmed by SCT of the statec. SCT said: lct/sct correct (upheld for appellees)- failure to give judicial

declaration was correcti. State upheld tax on the merits. Appellants sought to have

taxing act be declared unconstitutional. 8. Federal Declaratory Judgment Act

a. Requires an actual controversy b. Loosely follows SS1 and 8 of UDJA

i. Confers jurisdiction on cts to declare rights whether or not further relief is or could be claimed

ii. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect and such declaration shall have the force and effect of a final judgment or decree

iii. May refuse to render declaratory judgment where if rendered it would not terminate the uncertainty or controversy giving rise to the proceeding

iv. May be reviewed as are other ordersv. Further relief based on declaratory judgment or decree may be

granted whenever necessary or proper

Reformation1. K formation validity- equitable remedy- no jury2. Reformation (v. Rescission)

a. When parties actually have agreement- “Meeting of the minds” between two parties who agree on general terms. Think they have a K

b. Problem: written piece of paper (K doc) doesn’t property reflect eh agreement

i. Ct will reform the K to satisfy the actual agreement1. As soon as they have a meeting of the minds there is a K

whether or not its written (unless SS of Frauds applies)

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2. Written piece of paper can be reviewed by ct and reformed to reflect agreement

3. Recissiona. Rescinds the K/ withdraws K

i. Reverses transactions- everyone takes what they put in and leaves

ii. Invalid/void K- no meeting of the minds4. Ex:

a. Sale of prop= both sides understand what is being sold. Deed described land wrong. Sale occurs

i. Reformation; ct reforms deed to described deal properlyb. Sale of prop deed is accurate, neither side visits land and have

incorrect description of land. No meeting of the minds because they had the wrong thing in mind

i. Rescission: K is void1. If there is a mistake there is not meeting of the minds

and Rescission applies5. Handv Dayton-Hudson

a. P working for company that let hi go and offered him money to renounce any claims he had against them, asserted they already owed him the money anwya. P took k home and made identical K w/out the liability waiver. Signs it, turns it in and then sues company, alleging age discrim.

i. D asks for reformation- put waiver language back inb. Dct- sum judge for D- reform K (put waiver language back in)c. App- affirmed

i. Controversial- there wasn’t really a meeting of the minds. P did not agree to the og K.

ii. Reformation generally requires mutual mistake but in FRAUD cases, cts will use reformation to punish those with unclean hands

iii. P-Arg: I didn’t agree, sue me for fraud but no reformation. Ct rejects this arg-

1. Goal was to make D think he agreed to OG k and committed fraud. P wanted D to think there was a meeting of the minds and so they are allowed to think that there was one.

2. Ct basically trying to punish P for committing fraud. Force P to live with the fraud

d. Rescission would not work because you can’t re employ P- e. By reforming K, fraud claim by D is moot because it gets rid of the

fraud. But D could seek consequentials because of the fraud if there were damages caused in the interim

Other Forms1. Nominal Damages

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a. Kind of declaratory reliefi. Declares liability on part of D (creates hook for punitives)

symbolic $1ii. Allows case to go forward

2. Quo Warrantoa. Writ; predate equityb. Determine the right to hold a public officer or corp franchisec. Relic of write systemd. Used to raise grounds that renders incumbent ineligible for his office

3. Coram Nobisa. after res judicata has been applie, is the ability of the ct to modify the

final ordersb. Still applicable in CALc. Used conservativelyd. Typically used for ministerial changes (to change spelling ect)

i. Amend spelling, names, clerical errorse. Rarely used to correct anything significantf. Abolish in Fed Ct

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Part 4: Restitution1. Restitution- giving P what belonged to him. Putting D in rightful position

(dives him of any unjust enrichment he received)a. Divest yourself of the property: undo the transfer. Don’t care so much

about culpabilityb. Remedy for Unjust Enrichment

i. Remedy in law or equityii. Remedy in tort or k

2. Four types of cases for Restitutiona. No other cause of action but unjust enrichment

i. D gets money from ATM on accidentb. Ds gains exceed Ps loses

i. D steals money, uses it in Vegas and wins big- in Restitution, P gets all that money (any money you can trace to UE, p can get if D is wrong doer)

c. P wants to reverse the transaction and get back what they lost (actual property)

d. If D s judgment proof, P is just asking for what is there (getting back what belong to P- cut in line in front of creditors) reclaiming what is yours

3. Blue Cross v Sauera. Insurance Co sent money to wrong person. D receives checks an

deposits check. P sues seeking restitution. D wants jury trial. Tct says no. P asks for constructive trust- restitutionary remedy under equity

i. Const Trust: someone is holding your proper such that title has transferred to them but it is not theirs

b. D argues that it is not a constructive trust case- no object; P is just asking for money judgment not “this” money, just the right monetary amount. On appeal- reverse order for new trial with jury because of a directed verdict

c. If you are not “innocent” D then P is entitled to any interest/gains you make on that money- if you are impeding an innocent party getting their money, that reflects negatively on you.

4. Culpability of Pa. When P screws up

i. If its money- p ca make any mistake and ask for money back unless they were perpetrating a fraud.

b. Somerville v Jacobsi. P owns 3 lots, built warehouse on wrong lot (On D’s property).

P sues D. P wants the money for the FMV of the addition of the warehouse to the property

ii. CT: if D keeps warehouse they will be unjustly enriched so they can either:

1. Pay for the value of warehouse or

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2. Sell p land for value before construction of warehouseiii. Why?

1. P lacks culpability (innocent)2. P relied on surveryor who said they owned the lot on

which they build warehouse3. Ct wants to avoid waste- permit a transaction to stand

or you are wasting money building it and wasting money knocking it down- societal desire to not be wasteful

c. State v ANW Seed Corpi. State seize farm machinery belong to D. P sells prop. D appeals

and wins. Prop already gone. D wants FMV (Property was sold for less than FMV)

ii. Ct says: D only entitled to proceeds of the sale: Unjust enrichment- only get back the enrichment of the other party

2. Ds level of culpabilitya. D lies in wait; knows warehouse is being built and does nothing to

stop it- D is required to tell P to stop. If they don’t P is still entitled to restitution but they get to choose the measure and if they choose to force D to buy warehouse, they can force D to pay the higher measure of value

b. Cts often favor the D if everyone is evil- once you establish that P is an officious intermeddler, the ct looks no further and doesn’t matter if D was lying in wait, D gets to keep warehouse

3. Mitigating Harshnessa. If you can do something simple, such as move the warehouse, the ct

can say do that (add that into determination and assessing of costs, choose the cheapest)

b. Look at ps conducti. If p knowingly performed service in absence of K

1. Officious intermeddlera. D will not be forced to reimburse, D keeps

warehouseii. Allow D to elect method of payment- allow them to buy

warehouse or sell landiii. If D elects to purchase warehouse we allow them the cheapest

way of measuring value of warehouse (lesser of 2)1. Pay for increase in property value by having warehouse2. Pay cost of having warehouse built

c. When you are improving land you think is yours, the D can force a sale and make it yours

i. Forces dale is an option when P thinks they are improving their own land.

Defenses1. Change of Position

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a. If D was unjustly enriched by arg “Change of Position” they can keep whatever money they already spent

i. Reqs:1. No notice that D has been unjust enriched. D did not

now the money wasn’t’ there.a. Notice req only knowledge of facts sufficient to

make it reasonable to conduct a further inquiry that would reveal the truth

2. Must be actual change of position. Unusual expenditure upon receipt of the money. Expenditure that would not normally be made

a. (benes people who don’t need the money over people who use it pay for necessities)

Dobbs Problems- Rescission and Restitution

Disgorgement of Profits from Opportunistic Breach of K1. Snepp v Us

a. Constructive trust- breach of trusti. D signed agree w/ CIA under employ no tot release CIA info

w/out approval. D publishes book without approval. Didn’t actually divulge anything confidential.

ii. CIA SUE- 1. want declaration D breached K2. inj requiring D to submit future info for review3. order imposing constructive trust for gov benefit of all

profits that SNEPP might earn from publishing the book in violation of fidduty

iii. LCT- const trust- if D fails to comply, D must disgorge profits1. How: ct says- looks like trust agreement so treat it as

one. D had a dty to employer and breach that duty which is like a const trust

a. Fiduciary duty- gains from breach are traceable2. SCT agrees

a. Need to deter similar breaches of security even if there wasn’t’ actual security breach here

iv. Dissent: just a breach of K- how is that a breach of duty- no fiduciary duty. Breach of K doesn’t equal Breach of Duty

b. May v Muroffi. B buys land from S, prior to completion of sale, S sells fill to X

for $240,000. B sues for the moneyii. TCT says: no- you cant get 240000, should only get decrease in

value of land (122,000)iii. APPct: reverse- lesser of 2 not applicable here. S breach was

intentional- make quick buck. B should get profit. S should not be able to breach to make this profit. (moral traditional rule)

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iv. ASSUMPSIT- legal remedy; dealing with money- it is over payment of money in a different form- taking dirt –dirt becomes money- money should belong to land buyer.

c. Modern Rule: when people breach K intentionally it is possible that there will be disgorgement of profits

i. Forcing you to look at reason behind breachii. R3rd rule: If a deliberate breach of K results in profit to the

defaulting promisor and the available damage remedy afford inadequate protection to the promisee’s contractual entitlement, the promisee has a claim to restitution of the profit realized by the promisor as a result of the breach ( opportunistic breach)

Rescission when rescission is no longer possible1. Rescission- everyone takes their marbles home

a. Mobil oil v Usi. M enters into K w/US to maybe be able to drill for oil. NC has

ability to make K useless. Fed gov repudiated K. Passed statute that made K void. NC was vetoing K anyway (no damage- Mobile Oil wouldn’t get anything anyways)

ii. M wants rescission and restitutions (to get $ back)1. The repudiation by Fed gov gave Mobile opportunity to

get out of a bad K and get restitution2. Rescission is an option

iii. M wins, gets money back K is undone (even though it was a losing K, because P elects remedy)

2. Rescission when its not possiblea. Boomer v Muir

i. Parties can’t take marbles and go homeii. 95% of dam built- losing K. Boomer (dam builder) abandons

the work. Muir failed to deliver material. iii. Ct finds K was breached because of Ms failure to deliver

material.1. D has 95% complete dam. D repudiated. P elects to get

restitution0 not really rescission because P doesn’t get dam (can’t take it back)

iv. Valuation problem: This is really QUANTUM MERUIT (service)1. What is MV of service or How much was prop improved

by service OPTIONS:a. Traditional Rule- gets what he spent/ MV of

service (limited to MV even if he spent more than MV)

b. Restatement- caps at K price even if MV value or amount spend is higher

c. Alt- get 95% of K price ( amount of job completed)

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d. Get increase in property value2. If the service decreased prop value then you get nothing

because no benefit has been conferred/ no UE

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Part 5: Punitives1. Punitive Damages overview- Retribution and deterring harmful conduct

a. Rule Basedi. Basic Rules- applied only to compensatories (cannot ask for

them in a claim for restitution)ii. Can ask for nominal damages in order to be eligible for

punitivesb. Exxon v Baker (setting up outer limits to punitives)

i. Fed Maritime Law- so Fed ct sees case. Rule of very little impact- Punitives in this type of case = double the compensatory damages (limited to cases that involve maritime law)

ii. Exxon super tanker ran aground and caused massive oil spill because captain was drunk. Consolidated case by fishermen/locals

iii. Lct gave 500mill in compensatories and 5 Bill punitivesiv. Appct to assess if 5 bill punitives were unreasonable excessive

1. H: 1:1 ratio instated- if 500 mill compensatories then 500 mill is limit for punitives

2. Does not find problem with punitives as a concept just with the amount assigned

Common Law and Statute1. CA Common Law (Ford v Grimshaw)

a. Test- weighed against eachother: jury instruction- so we don’t really know how they come up with the number

i. Degree of “reprehensibility” of conduct (how bad was the conduct)

ii. Wealth of defendant ( amount must actually punish D)iii. Amount of compensiblesiv. Deterrence (large enough to stop behavior)

b. Common Law limited by Constitution

The Constitutional Limits (THE BMW GUIDEPOSTS)1. Theoretically, the Constitution set limits on punitives2. Browning (1989)

a. Eight Amendment- prohibition of excessive fines could mean a limit on punitives

b. Majority rejected- “fine” has part meaning- reject const limit3. Pacific Mutual (1991)

a. Large punitive upheld- SCT review CL factors/criteria for punitivesb. D claimed factors violated DUE PROCESS c. Ct Rejects arg; does not violate due process, factors const

4. TXO (1993)

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a. TXO manufacture evidence and file deal based on that- Fined $10mill punitives and $15000 compensatories

5. Honda (1994)a. Majority revers state ct punitive award

i. Oregon constitution denied judicial review of jury punitive awards

ii. SCT Invalidate Oregon’s const provision (Or const inconsistent with US const)

6. BMW (1996) THE RULEa. Maj invalidate “excessive” punitive damagesb. BMW repaints cars with damaged finish. Alabama has statute require

disclosure if more than 3% of car has been rpaired. BMW did not disclose

c. Jury awards punitives: Actual damaged @ $4000, punitives @ $4mili. 1000 BMW had been repainted but only one was at issue in

this caseii. Alabama sct reduces to 2mil because some cars were sold

outside Alabama where statute would not applyiii. USsct: There are outer limits to what is considered permissible

under const.7. State Farm

a. C is bad driver, state farm insures him. C has accident kills 1, injures 1. Prior to trial P offers 50,000 as settlement. SF refuses settlement, advises C to go to trial. C follows advice to a point then gets own laywer. Joins w/ P, settle their separate settlement then sue State farm.

b. In discovery, SF has national policy to obstruct and dney claims and cover it up.

c. Jury awards 2.6 mil in compensatories for emotional distress to C and $145 mil in punitives

d. TCt reduces, App ct puts back to Jury Awarde. USSCT review punitive award- reduces.

i. Runs afoul of BMW1. Reprehensibility- can’t consider people out of state,

only punish for one act in question (not overall bad acts)

2. Ration- 1:145 is very high should be a 1:1 ratio3. Fines – illustrate where a punitive should be4. Doesn’t really consider wealth of D anymore

8. Philip Morrisa. Decedent died of lung cancer. Estate sues PM in Or for fraud. Ps

attorney asks jury to consider ALL smokers in OR who have been deceived

b. Jury awards- $21000 economic damages, $800000 non economic damages (pain and suffering). Tort Reform statue limit reduces to

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$500,000 (only applies to damages, not punitives). $79.5 mil in punitives

c. SCT reversesi. You can consider other people for determining

reprehensibility but you can’t punish them for the harm they did other people.

ii. Remanded to apply reprehensibility standard- same award entered on remand w/new basis.

BMW GUIDEPOSTS1. Factors

a. Degree of reprehensibilityi. More reprehensible = higher limit

ii. Don’t consider how reprehensible the conduct of the D is toward people outside the state (really only look at Ds conduct toward P)

b. Ratio between punitives and compensatory- harm occurred to P and harm likely to occur in future

i. Ratio between punitives and the harm likely to occur and harm that did occur from Ds conduct

ii. Compensatory and otherc. Civil or criminal penalties

i. If there are civil or criminal penalties, punitives are REDUCED and if $ fine in civil/crim is low, punitives should be LOW

ii. Small fine = small punitiveiii. Large fine = arg both ways

1. Large fine = large punitive because clearly we see the act as band a person should be punished just as small fine = small punitives; the value of the act has been determined

2. Large fine= small punitives because the large fine is punishment enough, should not double up punishment

2. Read as limits to state factors. By finding due process right to not have excessive punitive we have changed standard of review. (fundamental rights have been violated)

d. De novo- no deference to lower ct- start over Any time appeal involves whether lct followed the law it results in denovo (basically relook at everything) reviewed fresh by higher ct.

Punitive Damages in K and other Punitive Remedies1. Punitives in tort- Yes2. Punitives in K- usually not

a. Allowed when there is an independent reason for allowing it3. Formosa

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a. Breach of K where D is liable for punitives. F sent bid to P. P relied on bid packet and it took 8 months to complete project. Evidenc that F intentionally enticed contractors to submit low bids using fraud.

b. K made under Fraud. P relied on bad numbers and ended up in losing K

c. Jury:i. Fraud cause of action: 1.5 mil compensatories, 10 mil in

punitivesii. Breach of K: 1.267 mil compensatories, 0 punitives (no

culpability considered)d. On remittiter

i. Fraud: 700kcomp, 10m punitiveii. K: 467K comp

iii. P elected to waive the K claim (unusual, usually you pick before award is decided)- can only measure harm once

iv. Appealed- F says: those are economic loses under K claim.1. Ct says: Fraud is Fraud- not forced to be K case just

because K was involved

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Part 6: Ancillary Remedies

The Three Kinds of Contempt1. Civil Coercive Contempt

a. Initiated by the partiesi. Coercion, getting someone to comply w/inj they have already

shown they won’t obey1. Jail/Fine

ii. If the coercion stops working it become Criminal Contemptiii. If the jail term is too lengthy it becomes Criminal Contempt

2. Criminal Contempta. Intiated by the ctb. Fines go to the ctc. Is a true charge- you have oporutnity to respond and say why you

should not be held in contempti. “I am charging you, this is a sentence, do you have a

response?”ii. No need for a trial when it is in the judges presence/ on the

recordiii. It is appealable0 if it is a gross misuse or arbi/capr

3. Civil Compensatory Contempt- Not in CALa. If there is damage to P because of injunction you just sue

Collateral Bar Rule- Not in CAL1. Protective of crim contempt2. When you are appealing a crim contempt order/sentence you are not

permitted as affirm defense to raise the issue of the correctness of the order you violated- you can’t argue that the order is wrong, only that procedure or findings of fact were faulty

3. CAL objects to collateral bar rulea. We don’t want to stop people being able to defend themselvesb. You can argue that the order is bad and that is why you violated it

(ct order could not be obeyed if you wanted to properly serve your client)- you are at risk though because if you violate the order and it is ruled to be good then you are in violation of that order.

4. Walker illustration of Collateral Bar Rulea. White supremacists stop people protesting Jim Crowe laws, boycott

of businesses. MLK lead boycotts, mass demonstrations near Easter- people weren’t interested.

b. Leader of town raises bond on injunction to $2000- went to ct exparte to get inj on demonstration

c. King couldn’t get permit for demonstration, Got served notice of inj, Held protest anyway

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d. King arrested for violating inj and for violating law req permits for demonstration

i. Args that could be made to overcome coll bar rule (to say it doesn’t apply)

1. Arg: that there was insuff time to get relief- review wasn’t possible- can’t get reviewed so you disobeyed it.

2. Arg: that the ct did not have jurisdiction to issue the inj

a. If you are wrong then contempt is appropb. If you show to another ct that the ct did not

have jurisdiction the n the inj they issued never really happened so you didn’t violate it

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