Docstoc

REMEDIES

Document Sample
REMEDIES Powered By Docstoc
					                                       REMEDIES

                                         Spring 2005

                                          Prof. Lind

I.    OVERVIEW

     A.   Introduction

          -    The study of judicial civil remedies is about what lawyers and courts can actually do
              to help someone who has been, or is about to be, wronged.

     B.   Classifications of Remedies

                                             1.    Substitutionary versus Specific Remedies

                  -     Substitutionary remedies occur when P receives money as a substitute for
                       the right which was violated.

                  -    Specific remedies operate to restore to P the exact item or state of being of
                       which she was wrongfully deprived.

                  -     Specific and substitutionary relief are not necessarily alternatives; it is
                       often necessary to award both specific and substitutionary relief in order to
                       make P completely whole.

                                       2. The Four Major Remedial Categories: Damages
                  Remedies, Coercive Remedies, Declaratory Remedies, and Restitutionary
                  Remedies

                       a.       Damages Remedies

                            -      Damages are substitutionary remedies. The primary forms are
                                  compensatory damages and punitive damages. Other forms include
                                  nominal, statutory and liquidated damages. See page 3 for
                                  descriptions of each form.

                       b.       Coercive Remedies

                            -      Coercive remedies are specific remedies and are capable of being
                                  enforced through the court’s contempt power. Coercive remedies
                                  are the most effective and powerful remedies wielded by the courts
                                  today.

                            -      The primary forms of coercive remedies are injunction and
                                  specific performance. When the court orders to do something it is a
                                  mandatory injunction. When it orders someone to refrain it is a
                                  prohibitory injunction.

                            -      The goal or purpose of coercive remedies is to prevent irreparable
                                  harm before it occurs.

                       c.   Declaratory Remedies

                            -      Declaratory relief is neither substitutionary nor specific, in that no
                                  court order or directive results from the action.



                                               1
                             -       The goal or purpose of declaratory relief is simply to provide an
                                    authorative pronouncement regarding the rights, obligations or
                                    legal relationship of the parties.

                        d.       Restitutionary Remedies

                             -       The primary specific forms are constructive trust, equitable
                                    subrogation, rescission and reformation, accounting for profits,
                                    ejectment and replevin. The primary substitutionary forms are
                                    equitable lien and quasi contract.

                             -       The goal and purpose of restitutionary remedies is to prevent
                                    defendant’s unjust enrichment, by making defendant give back that
                                    which defendant wrongfully or unjustly gained at plaintiff’s
                                    expense.

                                               3.   Legal versus Equitable Remedies

                   -     The distinction between the two still makes a difference in five contexts.
                        See page 7.

                                               4.   Provisional versus Final Remedies

                   -     Provisional injunctive relief, in the form of a preliminary injunction or
                        temporary restraining order, can provide critical protection pending trial on
                        the merits to a plaintiff who makes a very strong showing of the need for
                        such extraordinary relief.

                   -     Obviously, they can only be justified in exigent circumstances to prevent
                        irreparable harm from occurring before the merits of who’s right and who’s
                        wrong can be adjudicated.

      C.   Enforcement of Remedies

           -    All a money judgment really gives a victor is an adjudication of liability entered into
               the official record. Nothing happens, unless P takes further action.

           -    Coercive remedies are “in personam” commands which, if not obeyed, can subject
               D to contempt penalties such as stiff fines or jail, until she obeys the court’s
               commands.

           -    Courts also use the contempt power against lawyers, litigants and witnesses to
               protect dignity and order in the courtroom.

      D.   Choice of Remedies

           -    One reason why good lawyers always think, early on, about rights and remedies is
               that in the vast majority of cases there are alternative claims, legal theories and
               remedies available – some of which are inconsistent with each other or could become
               unavailable if the putative P is not carefully advised.

II.    EQUITY AND EQUITABLE REMEDIES

      A.   A Historical Perspective

                                             1. The merger of law courts and equity courts did not
                   eliminate the use of equitable remedies or the limitations and conditions
                   applicable top those remedies.



                                                2
                                    2. Over time, as equity courts heard more petitions,
            they began to develop “rules” or “maxims” governing equitable relief.

                a.   He who comes into equity must come with clean hands;

                b.   He who seeks equity must do equity;

                c.    Equity is a court of conscience;

                d.   Equity does not suffer a wrong to go without a remedy;

                e.    Equity abhors a forfeiture;

                f.    Equity regards as done that which ought to be done;

                g.   Equity delights to do justice and not by halves;

                h.    Equitable relief is not available to one who has an adequate remedy at
                     law;

                i.    Equitable relief is discretionary;

                j.    Equity aids the vigilant, not those who slumber on their rights;

                k.   Equity regards substance rather than form;

                l.    Equity acts in personam;

                m.   Equity is equality;

                n.   Equity follows the law;

                o.   Equity will not aid a volunteer;

                p.   Where the equities are equal, the law will prevail;

                q.   Equity imputes an intent to fulfill an obligation;

                r.   Where the equities are equal, the first in time will prevail.

B.   The Development of Equity in the United States

                                      1. With merger, most jurisdictions have abolished
            distinctions between legal and equitable actions. Rule 2 of the Federal Rules of
            Civil Procedure is illustrative providing that “there shall be one cause of action
            known as the ‘civil action.’”

C.   Equitable Remedies Today

                                     1.    Standards for the Availability of Equitable
            Relief

                a.    Conscience and Equity


                                       3
        a.    Equitable remedies are only available when “equity” and
             “conscience” demand them. Court’s use the maxims as well as
             their own sense of morality.

b.   Equitable Remedies Are Granted In Personam

        a.    When a court renders an “in personam” judgment, it orders
             the defendant to do, or refrain from doing, some act. A
             defendant who refuses to comply can be held in contempt and
             subjected to prison or fine.

c.   Inadequacy of Legal Remedy/Irreparable Harm

        a.    Equitable relief is not available except when plaintiff’s legal
             remedy is inadequate. This principle is also known as the
             “irreparable harm” requirement.

        b.    CASE: Fortner v. Wilson, (1950). Fortner’s rule was codified
             in Uniform Commercial Code, § 2-716: “specific performance
             may be decreed where the goods are unique or in other proper
             circumstances.”

        c.    CASE: Schiller v. Miller, (1993). Injunctions may not be
             granted for the retention of personal property unless it is found
             to be unique or otherwise peculiar, and unless the plaintiff
             demonstrates that there is no adequate remedy at law.

        d.    There is no general rule for determining when harm is or is
             not irreparable, in some circumstances equitable relief is so
             routinely granted that categories of inadequacy have emerged.
             The basic categories are:


                         i. Inability to restore or buy a substitute with
                      money. This category is comprised primarily of
                      property which is unique or unduly difficult to
                      replace with an equivalent or important personal
                      interest or civil rights.


                          ii.   Absence of other remedy.


                         iii.   Damages are too difficult to estimate.


                         iv.    Problems with collecting a money judgment.


                        v. Multiple judicial proceedings will be
                      necessary.


                        vi. Other procedural or practical difficulties with
                      legal remedies (e.g., pre-trial delay, jurisdictional
                      problems, immunity rules, etc.).




                     4
                d.    Equitable Relief is Discretionary

                          a.    A court may deny equitable relief even though plaintiff’s
                               legal remedy is inadequate.

                          b.    CASE: Georg v. Animal Defense League, (1950). Even
                               though the presence of the proposed animal shelter may result
                               in some annoyance to appellants, their remedy is not by way
                               of injunction but they are relegated to an action for damages.

                          c.    CASE: Grossman v. Wegman’s Food Markets, Inc., (1973).
                               Contracts which require the performance of varied and
                               continuous acts will not, as a general rule, be enforced by
                               courts of equity, because the execution of the decree would
                               require such constant superintendence as to make judicial
                               control a matter of extreme difficulty.

D.   Equitable Defenses

                                     1.    Unclean Hands Doctrine

                a.    The “unclean hands” doctrine states that “he who comes to equity
                     must come with clean hands.” Equity will deny relief to a plaintiff who
                     comes with “unclean hands.”

                b.   CASE: Sheridan v. Sheridan, (1990). No one shall be allowed to
                     benefit by his own wrongdoing, nor enrich himself as a result of his
                     own criminal acts.

                c.    CASE: Seagirt Realty Corp. v. Chazanof, (1963). Exception to unclean
                     hands. The clean hands doctrine only applies when the plaintiff has
                     acted unjustly in the very transaction of which he complains.

                d.   CASE: American University v. Wood, (1920). A court of equity is a
                     court of conscience, and will exercise its extraordinary powers only to
                     enforce the requirements of conscience. It is no part of its function to
                     aid a litigant in the promotion of a fraud upon the public.

                e.    “Unclean hands,” includes all misconduct and wrongdoing that is
                     sufficiently related to the plaintiff’s claim. Almost any conduct
                     considered to be unfair, unethical or improper – including, of course,
                     the illegal – can be raised as a bar against equitable relief.

                                     2.    Unconscionability

                a.    Since equity developed as a “court of conscience,” courts feel free to
                     deny equitable relief on the grounds of conscience.

                b.    CASE: Campbell Soup Co. v. Wentz, (1948). The contract involved is
                     too hard a bargain and too one-sided an agreement to entitle the
                     plaintiff to relief in a court of conscience.

                                     3.    Laches

                a.    Laches is any unreasonable delay by the plaintiff in instituting or
                     prosecuting an action under circumstances where the delay causes
                     prejudice to the defendant.




                                       5
                       b.    CASE: Stone v. Williams, (1989). Plaintiff in asserting her rights was
                            guilty of unreasonable delay that prejudiced the defendant because
                            there was no excuse for the delay in filing suit and evidence was lost.

                       c.    CASE: City of Eustis v. Firster, (1959). The test of laches is whether
                            there has been a delay which has resulted in the injury, embarrassment,
                            or disadvantage of any person, but particularly the persons against
                            whom relief is sought.

                       d.    CASE: Nahn v. Soffer, (1991). In determining whether the doctrine of
                            laches applies in a particular case, an examination is made of the
                            “length of delay, the reasons therefor, how the delay affected the other
                            party, and the overall fairness in permitting the assertion of the claim.”

                                            4.    Estoppel

                       a.    Estoppel is a doctrine that can be used both offensively and
                            defensively.

                       b.   CASE: Feinberg v. Pfeiffer Company, (1959). A promise which the
                            promisor should reasonably expect to induce action or forbearance of a
                            definite and substantial character on the part of the promise and which
                            does induce such action or forbearance is binding if injustice can be
                            avoided only by enforcement of the promise.

                       c.    CASE: O’Sullivan v. Bergenty, (1990). Any claim of estoppel is
                            predicated on proof of two essential elements: the party against whom
                            estoppel is claimed must do or say something calculated or intended to
                            induce another party to believe that certain facts exist and to act on that
                            belief; and the other party must change its position in reliance on those
                            facts, thereby incurring some injury.

       E.   The Right to Trial by Jury

                                               1. CASE: Dairy Queen, Inc. v. Wood, (1962). Where
                   both legal and equitable issues are presented in a single case, only under the
                   most imperative circumstances, circumstances which in view of the flexible
                   procedures of the Federal Rules we cannot now anticipate, can the right to a jury
                   trial of legal issues be lost through prior determination of equitable claims.

                                              2. CASE: Ross v. Bernhard, (1970). The right to jury
                   trial attaches to those issues in derivative actions as to which the corporation, if
                   it had been suing in its own right, would have been entitled to a jury.

                                             3. CASE: C & K Engineering Contractors v. Amber
                   Steel Company, Inc., (1978). Because plaintiff’s suit for damages for breach of
                   contract was based entirely upon the equitable doctrine of promissory estoppel,
                   the gist of the action must be deemed equitable in nature and, under well
                   established principles, neither party was entitled to a jury trial as a matter of
                   right.

III.    ENFORCEMENT OF EQUITABLE DECREES

       A.   Contempt Defined

                                             1. “Contempt” is broadly defined as an offense
                   against the dignity of a court.



                                              6
                                       2. CASE: In re Little, (1972). The vehemence of the
             language used in court is not alone the measure of the power to punish for
             contempt. The fires which it kindles must constitute an imminent, not merely a
             likely, threat to the administration of justice. The danger must not be remote or
             even probable; it must immediately imperil.

B.   Civil v. Criminal

                                      1.    Civil and Criminal Contempt Distinguished

                 a.    CASE: United States v. Professional Air Traffic Controllers
                      Organization, (1982). The purpose of a criminal contempt proceeding
                      is the vindication of the court’s authority by punishment through the
                      fine or imprisonment of the contemnor for his past conduct. Civil
                      contempt proceedings are for the purpose of coercing compliance with
                      the orders of the court and/or to compensate complainant for losses
                      sustained by defendant’s noncompliance. A definite fine which is
                      neither compensatory, nor conditioned on future violations of the court
                      order is punitive and can be imposed only in criminal contempt
                      proceedings.

                 b.    CASE: Yates v. United States, (1957). When a witness is jailed for
                      civil contempt, it is inappropriate to hold the witness in jail after the
                      grand jury’s term ends. Since the witness can no longer purge the
                      contempt, no coercive reason remains for keeping the witness in jail.
                      However, the judge may hold the witness in criminal contempt, and
                      impose a punishment for a continued refusal to testify.

                 c.    CASE: Bagwell v. International Union, (1992). The punishment,
                      whether fine or imprisonment, is deemed to be criminal if it is
                      determinate and unconditional, and such penalties “may not be imposed
                      on someone who has not been afforded the protections that the
                      Constitution requires of such criminal proceedings.” The punishment is
                      deemed to be civil if it is conditional, and a defendant can avoid such a
                      penalty by compliance with a court’s order. Civil contempt sanctions
                      are either compensatory or coercive. Compensatory, civil contempt
                      sanctions compensate a plaintiff for losses sustained because a
                      defendant disobeyed a court’s order. Coercive, civil contempt sanctions
                      are imposed to compel a recalcitrant defendant to comply with a court’s
                      order.

                                      2.    Civil Contempt Damages

                 a.    CASE: Time-Share Systems, Inc. v. Schmidt, (1986). If any actual loss
                      or injury to a party in an action or special proceeding, prejudicial to his
                      right therein, in caused by such contempt, the court or officer, in
                      addition to the fine or imprisonment imposed therefore, may order the
                      person guilty of the contempt to pay the party aggrieved a sum of
                      money sufficient to indemnify him and satisfy his costs and expenses,
                      including a reasonable attorney’s fee incurred in the prosecution of
                      such contempt. Indemnity must be based on proof of damages actually
                      suffered or it cannot be sustained.

                 b.    CASE: Vermont Women’s Health Center v. Operation Rescue, (1992).
                      When imposed as a coercive sanction, the fine must be purgeable – that
                      is, capable of being avoided by defendants through adherence to the
                      court’s order. Further, the situation must be such that it is easy to gauge



                                        7
                            the compliance or noncompliance with an order. The fine will be due
                            only upon a further violation of the injunction by one of the class of
                            persons to which it is directed, with service or actual notice of its
                            provisions.

      C.   Procedural Requirements

                                             1. CASE: In re Yengo, (1980). When the contempt is
                   in the presence of the court, the judge may act summarily without notice or
                   order to show good cause. On other occasions, the proceedings shall be on
                   notice and on an order for arrest or an order to show cause. Supreme Court’s
                   dual test for summary contempt powers: (1) the act or omission must occur in
                   the presence of the court so that no further evidence need be adduced for the
                   judge to certify to the observation of the contumacious behavior and (2) the act
                   must impact adversely on the authority of the court.

                                           2. CASE: Bloom v. Illinois, (1968). Criminal
                   contempt is a crime to which the jury trial provisions of the Constitution apply.

                                            3. CASE: Illinois v. Allen, (1970). There are three
                   constitutionally valid ways to handle an unruly defendant: (1) bind and gag him,
                   thereby keeping him present; (2) cite him for contempt; (3) take him out of the
                   courtroom until he promises to conduct himself properly.

      D.   The Duty to Obey: Collateral Challenges

                                            1. CASE: United States v. United Mine Workers of
                   America, (1947). An order issued by a court with jurisdiction over the subject
                   matter and person must be obeyed by the parties until it is reversed by orderly
                   and proper proceedings. (Collateral Bar Rule) Violations of an order are
                   punishable as criminal contempt even though the order is set aside on appeal, or
                   though the basic action has become moot.

                                          2. CASE: Walker v. City of Birmingham, (1967).
                   Order cannot be disobeyed even if Constitutionally invalid. (Collateral Bar
                   Rule)

                                             3. CASE: In re Providence Journal Company,
                   (1986). There is an exception to the Collateral Bar Rule for court orders that are
                   transparently invalid. Still, as a general rule, if the court reviewing the order
                   finds the order to have any pretense to validity at the time it was issued, the
                   reviewing court should enforce the collateral bar rule.

IV.    INJUNCTIONS

      A.   Nature and Purpose of Injunctive Relief

                                            1. Courts use injunctions to order litigants to engage
                   in, or refrain from engaging in, an act. Sometimes injunctions are classified as
                   being either mandatory or prohibitory: an injunction which compels an act is
                   referred to as mandatory, while one which forbids an act is a prohibitory
                   injunction.

                                             2. Any in personam order which is enforceable by
                   contempt is in fact an injunction.

      B.   Standards for Issuance of Injunctive Relief



                                             8
- Some injunctions are permanent in nature: they are issued after a determination
   of the merits of a lawsuit and are designed to apply prospectively and
   permanently unless modified or dissolved.

- Other injunctions are temporary in nature including the temporary restraining
   order (TRO) and the preliminary injunction (a.k.a. temporary injunction).

           o A preliminary injunction is issued at the beginning of litigation and is
               designed to prevent irreparable harm from occurring during the
               pendency of a suit (i.e., before the merits can be decided).

           o A TRO can be issued ex parte and is designed to maintain the status
               quo until a hearing can be held on whether to grant a preliminary
               injunction.

                             1.    Requirements for Provisional Relief

      a.      In order to obtain either a TRO or a preliminary injunction, a plaintiff
             must show that immediate and irreparable injury will result absent the
             injunction.

                 a.    When a preliminary injunction is sought, plaintiff must show
                      that this injury will occur during the pendency of the lawsuit.

                 b.   When a TRO is sought, plaintiff must show that it will occur
                      before a hearing can be heard on whether to grant a
                      preliminary injunction.

      b.      CASE: Hughes v. Cristofane, (1980). In order to obtain relief by a
             temporary restraining order under Rule 65 of the Federal Rules, the
             plaintiffs must show:

                                     i. That unless the restraining order issues, they
                                  will suffer irreparable harm;

                                     ii. That the hardship they will suffer absent the
                                  order outweighs any hardship the defendants would
                                  suffer if the order were to issue;

                                    iii. That they are likely to succeed on the merits
                                  of their claims;

                                    iv. That the issuance of the order will cause no
                                  substantial harm to the public; and

                                    v.   That they have no adequate remedy at law.

      c.      CASE: Washington Capitols Basketball Club, Inc. v. Barry, (1969).
             The purpose of the preliminary injunction is to maintain the status quo
             between the litigants pending final determination of the case. In order
             for plaintiff to succeed in its motion for a preliminary injunction, it is
             fundamental that it show at least first, a reasonable probability of
             success in the main action and second, that irreparable damage would
             result from a denial of the motion.



                               9
d.   CASE: American Hospital Supply Corporation v. Hospital Products,
     LTD., (1986). A district judge asked to decide whether to grant or deny
     a preliminary injunction must choose the course of action that will
     minimize the costs of being mistaken.

                     2.    Hearing Requirement

a.    In general, judicial orders should only be issued after a contested
     hearing. The TRO is unique because it can be granted ex parte.

b.    CASE: In re Vuitton et Fils S.A., (1979). A temporary restraining order
     may be granted without written or oral notice to the adverse party or his
     attorney only if (1) it clearly appears from specific facts shown by
     affidavit or by the verified complaint that immediate and irreparable
     injury, loss, or damage will result to the applicant before the adverse
     party or his attorney can be heard in opposition, and (2) the applicant’s
     attorney certifies to the court in writing the efforts, if any, which have
     been made to give the notice and the reasons supporting his claim that
     notice should not be required.

c.    CASE: American Can Company v. Mansukhani, (1984). Ex parte
     temporary restraining orders should be restricted to serving their
     underlying purpose of preserving the status quo and preventing
     irreparable harm just so long as is necessary to hold a hearing, and no
     longer.

                     3.    Persons Bound

a.    A TRO or preliminary injunction is binding only upon the parties to
     the action, their officers, agents, servants, employees, and attorneys,
     and upon those persons in active concert or participation with them
     who receive actual notice of the order by personal service or otherwise.

b.   CASE: Alemite MFG. Corp. v. Staff, (1930). The only occasion when a
     person not a party may be punished is when they either abet the
     defendant, or are legally identified with him.

c.    CASE: State University of New York v. Denton, (1970). Persons who
     are not connected in any way with the parties to the action, are not
     restrained by the order of the court.

d.   CASE: United States v. Hall, (1972). WHAT IS THE RULE
     HERE????

e.    CASE: Golden State Bottling Co., Inc. v. NLRB, (1973). A bona fide
     purchaser, acquiring, with knowledge that the wrong remains
     unremedied, the employing enterprise which was the locus of the unfair
     labor practice, may be considered in privity with its predecessor.

                     4.    Notice Requirement

a.    A TRO or preliminary injunction is binding only on those who receive
     actual notice of the order by personal service or otherwise.

b.    CASE: The Cape May & Schellinger’s Landing R.R. Co. v. Johnson,
     (1882). Where the charge is that the defendant has willfully contemned
     the authority of the court, all that need be shown is that he knew of the
     existence of the order at the time he violated it. Notice, to be sufficient,


                      10
     need possess but two requisites – first, it must proceed from a source
     entitled to credit; and second, it must inform the defendant clearly and
     plainly from what act he must abstain.

c.    CASE: Midland Steel Products Co. v. International Union, United
     Automobile, Aerospace and Agricultural Implement Workers of
     America, Local 486, (1991). Criminal contempt must be proven beyond
     a reasonable doubt. Proof of the elements of criminal contempt may be
     established by circumstantial evidence.

d.    CASE: Vermont Women’s Health Center v. Operation Rescue, (1992).
     Plaintiffs must show that defendants acted in concert or participation
     with named parties, that the order was specific and unambiguous, and
     that they violated the order with actual knowledge of its mandate.

                     5.    Bond Requirement

a.    One who obtains a preliminary injunction or a TRO must usually post
     security to protect the defendant against loss.

b.   CASE: Coyne-Delany Co., Inc. v. Capital Development Board, (1983).
     A prevailing defendant is entitled to damages on the injunction bond
     unless there is good reason for not requiring the plaintiff to pay in the
     particular case. A good reason for not awarding such damages would
     be that the defendant had failed to mitigate damages.

c.    CASE: Smith v. Coronado Foothills Estates Homeowners Ass’n, Inc.,
     (1977). The majority holds that recovery for wrongful injunction is
     limited to the amount of the bond unless malicious prosecution is
     shown. A minority allows for damages in excess of the bond amount
     when the bond amount is patently inadequate.

d.   CASE: Continuum Co., Inc. v. Incepts, Inc., (1989). If a defendant
     might suffer damages in excess of the bond amount, the bond amount
     may be increased if it doesn’t impose an undue hardship on the
     plaintiff.

                     6.    Stays

a.    One who believes that a TRO or preliminary injunction was
     improperly granted can seek relief from the court that issued the order
     if done within 2 days.

b.   If the trial court refuses the relief, the party against whom the relief
     was granted can seek a stay from an appellate court.

c.    CASE: Sierra Club v. United States Army Corps of Engineers, (1984).
     A court may modify a final or preliminary injunction only where
     conditions have so changed as to make such relief equitable, i.e., a
     significant change in the law or facts.

d.    CASE: Washington Metropolitan Area Transit Commission v. Holiday
     Tours, Inc., (1977). Criteria regarding stays: (1) Has the petitioner
     made a strong showing that it is likely to prevail on the merits of its
     appeal? (2) Has the petitioner shown that without such relief, it will be
     irreparably injured? (3) Would the issuance of a stay substantially harm
     other parties interested in the proceedings? (4) Where lies the public



                      11
                     interest? A court may exercise its discretion to grant a stay if the
                     movant has made a substantial case on the merits.

C.   Framing the Injunction

                                      1. Every order granting an injunction and every
            restraining order shall set forth the reasons for its issuance; shall be specific in
            terms; shall describe in reasonable detail, and not by reference to the complaint
            or other document, the act or acts sought to be restrained.

                                     2. CASE: Murray v. Lawson, (1994). Injunctions are
            supposed to be specific in terms; and describe in reasonable detail the act or acts
            sought to be restrained.

                                     3. CASE: Peggy Lawton Kitchens, Inc. v. Hogan,
            (1989). To constitute civil contempt, there must be a clear and undoubted
            disobedience of a clear and unequivocal command.

                                     4. CASE: Madsen v. Women’s Health Center, Inc.,
            (1994). When evaluating a content-neutral injunction, we think that our standard
            time, place, manner analysis is not sufficiently rigorous. We must ask instead
            whether the challenged provisions of the injunction burdens no more speech
            than necessary to serve a significant government interest.

D.   Experimental and Conditional Injunctions

          - In some cases, courts are moved by the balance of equities to enter partial
              (experimental) injunctions or conditional injunctions.

                                     1. CASE: Boomer v. Atlantic Cement Company,
            (1970). When the granting of an injunction would place an undue hardship on a
            defendant industry as a whole, the court should grant the injunction on condition
            of the payment of permanent damages to plaintiffs which would compensate
            them for the total economic loss to their property present and future caused by
            defendant’s operations.

                                       2. CASE: Spur Industries, Inc. v. Del E. Webb
            Development Co., (1972). Conditional injunctions allow courts to consider the
            following remedial options: 1) deny all relief (defendant wins); 2) grant an
            injunction permanently abating the nuisance (plaintiff wins); award Boomer-
            style injunctive relief, but award plaintiff damages (partial win for each side);
            and award Spur-style injunctive relief, but only if plaintiff pays for the cost of
            abatement (a win for both sides?).

E.   Permanent Injunctions

          - CASE: Garcia v. Sanchez, (1989). For removal of trees as a nuisance, the
             damage must encompass more than just damage to plaintiff’s plant life in
             order for an injunction to be ordered.

                                     1.     Decrees Affecting Third Parties

                a.    CASE: Hills v. Gautreaux, (1976). In the event of a Constitutional
                     violation all reasonable methods are available to formulate an effective
                     remedy, and every effort should be made by a federal court to employ
                     those methods to achieve the greatest possible degree of relief, taking
                     into account the practicalities of the situation.



                                       12
                     b.    CASE: General Building Contractors Association, Inc. v.
                          Pennsylvania, (1982). Remedial powers of the federal courts can only
                          be exercised on the basis of a violation of the law and can extend no
                          further than required by the nature and the extent of that violation.

                                          2.    Modification

                     -     On motion, and in such terms as are just, the court may relieve a party
                          from a final judgment for the following reasons: it is no longer
                          equitable that the judgment should have prospective application.

                     a.    CASE: Ladner v. Siegel, (1930). The modification of a decree in a
                          preventative injunction is inherent in the court which granted it, and
                          may be made, (a) if, in its discretion judicially exercised, it believes the
                          ends of justice would be served by a modification, and (b) where the
                          law, common or statutory, has changed, been modified or extended,
                          and (c) where there is a change in the controlling facts on which the
                          injunction rested.

                     b.    CASE: Board of Education v. Dowell, (1991). Compliance with an
                          injunction may sometimes be enough to have the injunction terminated
                          if the compliance was enough to allow the injunction to dissolved (look
                          at the purpose of the injunction and the current effects after
                          compliance).

                     c.    CASE: Rufo v. Inmates of the Suffolk County Jail, (1992). A party
                          seeking modification of a consent decree must establish that a
                          significant change in facts or law warrants the revision of the decree
                          and that the proposed modification is suitably tailored to the changed
                          circumstance.

                                          3.    Statutory Injunctions: The Effect of Legislation
                 on Equity

                     a.    CASE: Weinberger v. Romero-Barcelo, (1982). In determining
                          whether statutes allow injunctive relief that violates a statute, the
                          question becomes one of statutory construction and legislative intent.

     F.   The Limits of Equity

                                           1. CASE: Lynch v. UHlenhopp, (1956). “Religion
                 Rearing Case” A court will strike portions of an injunction, thus making them
                 unenforceable, if they are vague or uncertain. In this case, the mother was to
                 raise the child in the Catholic religion. Rearing the child in a religion is to vague
                 a concept to enforce.

V.    INJUNCTIONS IN CONTEXT

     A.   Injunctions Against Criminal Activity

               - In general, courts have been reluctant to enjoin the commission of future crimes.

                                            1. CASE: State v. Samuels Company, Inc., (1973). A
                 repeated violation of a statute may receive equitable relief, not because the acts
                 are in violation of the statute, but because they constitute in fact a nuisance.




                                           13
                                      2. CASE: Goose v. Commonwealth, (1947). If the
            statutory violation can be construed as a nuisance, a court of equity can grant
            appropriate relief.

B.   Injunctions Against Litigation

                                      1.    State Court Injunctions Against Foreign State
            Litigation

          - Assuming that a state court can obtain personal jurisdiction over the parties, a
             state court may have the power to order parties not to proceed with foreign
             litigation (enjoin them from).

                 a.    CASE: James v. Grand Trunk Western Railroad Company, (1958).
                      Courts generally recognize foreign court’s efforts to prevent litigation
                      in the native court as an impediment to their jurisdiction and are free to
                      disregard the foreign state.

                 b.   CASE: Vanneck v. Vanneck, (1980). At least where the claim of a
                      sister state is colorable, the court must heed the statutory command to
                      defer adjudicating the dispute and communicate with the foreign court.

                                      2.    State Court Injunctions Against Federal
            Litigation

                 a.    CASE: Donovan v. City of Dallas, (1964). Generally, state and federal
                      courts should not interfere with or try to restrain each other’s
                      proceedings. An exception has been made in cases where a court has
                      custody of property, that is, proceedings in rem or quasi in rem. Here
                      the court has no power to restrain federal-court proceedings.

                                      3.    Federal Court Injunctions Against State
            Litigation

                 a.    CASE: Younger v. Harris, (1971). A court of the United States may
                      not grant an injunction to stay proceedings in a State court except as
                      expressly authorized by Act of Congress, or where necessary in aid of
                      its jurisdiction, or to protect or effectuate its judgments. Even
                      irreparable injury is insufficient unless it is both great and immediate.

                 b.    CASE: Mitchum v. Foster, (1972). In order to qualify under the
                      “expressly authorized” exception to the anti-injunction statute, the test
                      is whether an Act of Congress, clearly creating a federal right or
                      remedy enforceable in a federal court of equity, could be given its
                      intended scope only by the stay of a state court proceeding.

                                      4.    Injunctions Against Officials

          - These structural injunctions are designed to eliminate past violations and
             regulate the way a school, prison, or police department functions in the future.

                 a.    CASE: Rizzo v. Goode, (1976). Must show that there is immediate and
                      irreparable harm that the officials are conducting, not just those
                      activities of persons under the officials.

                 b.    CASE: Hutto v. Finney, (1978). Here the officials themselves were
                      conducting the irreparable harm via non-compliance with an earlier
                      injunction. Therefore, it was enforced against them.


                                       14
                 c.    CASE: Missouri v. Jenkins, (1995). Federal judges cannot make the
                      fundamentally political decisions as to which priorities are to receive
                      funds and staff, which educational goals are to be sought, and which
                      values are to be taught.

C.   Extra-territorial Decrees

                                      1.    Decrees Affecting Land

                 a.    CASE: Deschenes v. Tallman, (1928). A court cannot convey title to
                      land located in a foreign jurisdiction. A court of equity, having
                      authority to act upon the person, may indirectly act upon real estate in
                      another state, through the instrumentality of the authority over the
                      person.

                 b.    CASE: Burnley v. Stevenson, (1873). Courts cannot enforce the
                      performance of foreign decrees by compelling the conveyance through
                      its process of attachment; but when pleaded in our courts as a cause of
                      action, or as a ground of defense, it must be regarded as conclusive of
                      all the rights and equities which were adjudicated and settled therein.

                 c.    CASE: The Salton Sea Cases, (1909). A court of equity can never
                      compel a defendant to do anything which is not capable of being
                      physically done within the territorial jurisdiction of the court. Effects of
                      the defendant’s acts felt within the territorial jurisdiction suffice.

                                      2.    Decrees Affecting Personal Property

                 a.   CASE: Madden v. Rosseter, (1921). Personal property may be
                      managed with the help of the federal government and other states.

D.   Injunctions Against Defamation

                                     1. CASE: Near v. State of Minnesota, (1931). A
            greater evil is committed by placing prior restraints on a publication that that of
            the publication. The appropriate punishment should take place after such abuses
            of the publication.

                                       2. CASE: Kramer v. Thompson, (1991). The courts
            will not enjoin a retraction of libelous claims.

E.   Privacy

                                      1. CASE: Eastwood v. Superior Court, (1983). Any
            person who knowingly uses another’s name, photograph, or likeness, in any
            manner, for purposes of advertising products, merchandise, goods, or services,
            or for purposes of solicitation of purchases of products without such person’s
            prior consent shall be liable for any damages sustained by the person injured as a
            result thereof.

                                       2. CASE: Galella v. Onassis, (1972). The
            Constitution creates a “right to be left alone.” The law of privacy comprises four
            distinct kinds of invasion (1) commercial appropriation of one’s name or
            likeness, (2) intrusion, (3) public disclosure of private facts and (4) publicity
            which places the plaintiff in a false light in the public eye.

F.   National Security



                                       15
                                             1. CASE: New York Times Company v. United States,
                  (1971). Prior restraint may only arise when the nation is at war, during which
                  times no one would question but that a government might prtevent actual
                  obstruction to its recruiting service or the publication of the sailing dates of
                  transports or the number and location of troops.

      G.   Leafleting

                                             1. CASE: Organization for a Better Austin v. Keefe,
                  (1971). Any prior restraint on expression comes to the court with a heavy
                  presumption against its constitutional validity. A prior restraint on peaceful
                  leafleting is unconstitutional.

      H.   Injunctions Against Obscenity

                                            1. CASE: Times Film Corporation v. City of Chicago,
                  (1961). The liberty of speech is not absolute. Submission to a licensing board of
                  a film prior to exhibition is valid.

                                           2. CASE: Freedman v. State of Maryland, (1965).
                  Submission of a film to a censor is only valid if 1) the burden of proving that
                  film is unprotected expression rests on the censor and 2) the manner in which it
                  is administered cannot lend an effect of finality to the censor’s determination
                  whether a film constitutes protected expression.

      I.   Admission Cases

                                           1. CASE: Falcone v. Middlesex County Medical
                  Society, (1961). Generally, courts will not interfere with membership
                  associations, however, here there was an association that is viewed as “an
                  economic necessity” which advanced the public welfare. Therefore, a properly
                  qualified applicant could not be denied membership.

                                            2. CASE: Blatt v. University of Southern California,
                  (1970). Here there was no indication that the association was one of economic
                  necessity and thus plaintiff was properly not admitted.

      J.   Expulsion

                                          1. CASE: Board of Curators of the University of
                  Missouri v. Horowitz, (1978). To be entitled to the Due Process protections of
                  the 14th Amendment (notice and opportunity to be heard) it must be shown that
                  you were deprived of either a liberty or a property interest.

                                           2. CASE: Tedeschi v. Wagner College, (1980).
                  Guidelines and rules conditioning the membership to an association must be
                  observed, but the violator is still entitled to review by a board if the rule calls for
                  one.

VI.    RESTITUTION

      A.   General Principles

                - The purpose of restitution is simply to prevent a defendant from retaining
                   benefits unjustly derived from plaintiff (“unjust enrichment”).

                                          1. CASE: Beacon Homes, Inc. v. Holt, (1966). Even
                  though a reasonable mistake of fact resulted in a house being built on another’s


                                             16
            property, the owner of the property must pay the amount by which the value of
            the property was increased.

                                    2. CASE: Stewart v. Wright, (1906). If defendants are
            more culpable than plaintiffs then defendant’s unjust enrichment may be
            recovered.

                                      3. CASE: Western Coach Corporation v. Roscoe.
            (1982). A person who without mistake, coercion or request has unconditionally
            conferred a benefit upon another is not entitled to restitution, except where the
            benefit was conferred under circumstances making such action necessary for the
            protection of the interests of the other or of third persons.

B.   Measuring the Enrichment

                                         1. CASE: Frambach v. Dunihue, (1982). A court of
            equity may give restitution to a plaintiff and prevent the unjust enrichment of a
            defendant by imposing a constructive trust or by imposing an equitable lien
            upon the property in favor of the plaintiff. However, where the plaintiff makes
            improvements upon the land of another under circumstances which entitle him
            to restitution, he is entitled only to an equitable lien upon the land and he cannot
            charge the owner of the land as constructive trustee and compel the owner to
            transfer the land to him.

                                      2.   CASE: Bron v. Weintraub, (1964). Can’t figure out
            the rule here.

                                    3. CASE: Iacomini v. Liberty Mutual Insurance
            Company, (1985). An equitable lien may be imposed to prevent unjust
            enrichment in an owner whose property was improved, for the increased value
            of the property. Measured by defendant’s gain.

C.   Special Restitutionary Remedies

                                     1.    The Constructive Trust

                a.    CASE: Sieger v. Sieger, (1925). Constructive trusts arise by operation
                     of law, without any reference to any actual or supposed intention of
                     creating a trust, and frequently directly contrary to such intention.

                b.   CASE: Fletcher v. Nemitz, (1966). A constructive trust is one that
                     arises by operation of law against one who, by fraud, actual or
                     constructive, by duress or abuse of confidence, by commission of
                     wrong, or by any form of unconscionable conduct, artifice,
                     concealment, or questionable means, or who in any way against equity
                     and good conscience, either has obtained or holds the legal right to
                     property which he ought not, in equity and good conscience, to hold
                     and enjoy.

                                     2.    Equitable Lien

                a.    CASE: Leyden v. Citicorp Industrial Park, (1989). An equitable lien is
                     a creature of equity, is based on the equitable doctrine of unjust
                     enrichment, and is the right to have a fund or specific property applied
                     to the payment of a particular debt. A person has notice of a
                     constructive trust or equitable lien on a property when he knows them,
                     or should have known them thru reasonable inquiry.



                                      17
    b.    CASE: Jones v. Sacramento Savings and Loan Association, (1967). A
         general doctrine of equity permits imposition of an equitable lien where
         the claimant’s expenditure has benefited another’s property under
         circumstances entitling the claimant to restitution.

    c.    CASE: Rolfe v. Varley, (1993). Where debts or claims against property
         are paid in good faith by another on the express or implied request of
         the owner of the property, the one so paying is entitled to an equitable
         lien on the property for his reimbursement. However, a person is not
         entitled to such a lien if he voluntarily pays the debts of another without
         such other’s request.

                         3.    Special Advantages of Constructive Trusts and
Equitable Liens

    a.   Tracing

             a.    CASE: G & M Motor Company v. Thompson, (1977). Where
                  the wrongdoer mingles wrongfully and rightfully acquired
                  funds, owner of wrongfully acquired funds is entitled to share
                  proportionately in acquired property to the extent of his
                  involuntary contribution.

             b.   CASE: In re Allen, (1986). Neither an equitable lien nor a
                  constructive trust is available against a bona fide purchaser for
                  value. They can extend to 3rd parties if the 3rd party is not a
                  bona fide purchaser.

             c.    CASE: Mattson v. Commercial Credit Business Loans, Inc.,
                  (1986). Tracing doctrine operates against innocent transferees
                  who receive no legal title and transferees who are not bona
                  fide purchasers and receive legal but not equitable title. An
                  innocent purchaser is one who has no reasonable grounds to
                  suspect that the person from whom he buys an article did not
                  have good title.

    b.    Priority Over Other Creditors

             a.    CASE: In re Radke, (1980). A person defrauded is allowed a
                  preferred claim over general creditors.

             b.   CASE: Cunningham v. Brown, (1924). Constructive trusts and
                  equitable liens get precedence over unsecured creditors who
                  can go after what is left.

    c.   Circumvention of Debtor Exemptions

             a.    CASE: Palm Beach Savings & Loan Association, F.S.A. v.
                  Fishbein, (1993). Can’t force the sale of a property unless
                  through mortgage or government tax lien.

    d.    Subrogation

             a.    CASE: Wilson v. Todd, (1940). Subrogation is the
                  substitution of another person in the place of a creditor, so that
                  the person in whose favor it is exercised succeeds to the right
                  of the creditor in relation to the debt.



                          18
                                    b.    CASE: Banton v. Hackney, (1989). Where property of one
                                         person is used in discharging an obligation owed by another or
                                         a lien upon the property of another, under such circumstances
                                         that the other would be unjustly enriched by the retention of
                                         the benefit thus conferred, the former is entitled to be
                                         subrogated to the position of the oblige or lien-holder.

VII.    DECLARATORY JUDGMENTS

       A.   Generally

                                             1. The basic purpose of declaratory judgment is to
                   determine rights, obligations or status.

                                               2.    A declaratory judgment does not act coercively.

                                               3.    Declaratory judgments primary purpose is to
                   eliminate uncertainty.

       B.   Case or Controversy

                                            1. Declaratory judgments operate only in “a case of
                   actual controversy.” There is no exemption from requirements of standing,
                   subprinciples of mootness and ripeness and the prohibition against collusive
                   actions or advisory opinions.

                                             2. CASE: Aetna Life Insurance Co. v. Haworth,
                   (1937). The controversy must be definite and concrete, touching the legal
                   relations of parties having adverse legal interests.

                                            3. CASE: United Public Workers of America v.
                   Mitchell, (1947). Courts will not issue advisory opinions through declaratory
                   judgments.

       C.   Jurisdiction

                                              1. Absence of personal or subject matter jurisdiction
                   is fatal to declaratory judgments.

                                              2. CASE: Skelly Oil Co. v. Phillips Petroleum Co.,
                   (1950). Jurisdiction means the kinds of issues which give right of entrance to
                   federal courts (diversity, federal question).

       D.   Standards of Review

                                               1.    Adequacy of Remedy

                           a.    Unlike injunctions, declaratory judgments generally are not
                                conditioned upon the inadequacy of remedial alternatives. Although
                                inadequacy of other remedies is not a prerequisite for a declaratory
                                judgment, courts properly exercise their discretion in denying such
                                relief if convinced that it would be less effective than another
                                methodology or is unnecessary.

                           b.   CASE: Community for Creative Non-Violence v. Hess, (1984). Sound
                                discretion withholds a declaratory judgment where it appears that a
                                challenged continuing practice is, at the moment adjudication is sought,




                                                19
                    undergoing significant modifications so that its ultimate form cannot be
                    confidently predicted.

               c.    CASE: Provident Tradesmens Bank & Trust Co. v. Patterson, (1968).
                    A federal district court should, in the exercise of discretion, decline to
                    exercise diversity jurisdiction over a declaratory judgment action
                    raising issues of state law when those same issues are being presented
                    contemporaneously to state courts.

               d.    CASE: Katzenbach v. McClung, (1964). In cases where the state
                    criminal prosecution was begun prior to the federal suit, the same
                    equitable principles relevant to the propriety of an injunction must be
                    taken into consideration by federal district courts in determining
                    whether to issue a declaratory judgment, and that where an injunction
                    would be impermissible under these principles, declaratory relief
                    should ordinarily be denied as well.

               e.    CASE: Wilton v. Seven Falls Co., (1995). The propriety of declaratory
                    relief in a particular case will depend upon a circumspect sense of its
                    fitness informed by the teachings and experience concerning the
                    functions and extent of federal judicial power.

                                    2.    Judicial Discretion

               a.    The UDJA explicitly authorizes courts to refuse a declaratory
                    judgment or decree when such judgment or decree would not terminate
                    the uncertainty or controversy giving rise to the proceeding. Other
                    factors may include the availability of more effective relief, existence
                    of another action that will resolve the issue more comprehensively,
                    tactical maneuvering calculated to harass, delay or achieve res judicata,
                    procedural fencing, an inadequately developed record and demands of
                    federalism.

               b.    CASE: National Wildlife Federation v. United States, (1980). Among
                    the factors to be considered in deciding whether to grant declaratory
                    relief in a particular case is the public interest vel non in resolving the
                    controversy.

E.   Declaratory Judgments in Context

                                    1.    Written Instruments

               a.    A contract may be construed by a declaratory judgment either before
                    or after there has been a breach thereof.

               b.    CASE: Federal Kemper Insurance Company v. Rauscher, (1986). This
                    was a dispute over the terms of coverage of an insurance policy. Once
                    the case in controversy requirement and diversity jurisdiction were
                    established, the court concluded that it could issue a declaratory
                    judgment.

                                    2.    Intellectual Property]

               a.    CASE: Treemond Co. v. Schering Corporation, (1941). An “actual
                    controversy” does not exist until the patentee makes some claim that
                    his patent is being infringed.

                                    3.    Constitutional Claims


                                     20
                        a.    Although not statutorily prohibited, federal courts have been reluctant
                             top resolve constitutional controversies by means of declaratory
                             judgments. Such reticence is driven by the judiciary’s generally
                             professed inclination to avoid constitutional controversies whenever
                             possible.

                        b.    CASE: Penthouse International, LTD. v. Meese, (1991). Where it is
                             uncertain that declaratory relief will benefit the party alleging injury,
                             the court will normally refrain from exercising its equitable powers.
                             This is especially true where the court can avoid the premature
                             adjudication of constitutional issues.

        F.   The Effect of Declaratory Judgments

                                               1. Declaratory judgments, like any final judgment
                    entered by a court bind the parties. Although a declaration of rights, obligations
                    or status effectively may resolve a controversy, both the UDJA and FDJA
                    provide for further relief to the extent necessary and proper. Both federal and
                    state law establishes that a request for declaratory relief does not preclude other
                    remedies, essential to a full resolution of the controversy, even if coercive in
                    nature.

VIII.    CONTRACT REMEDIES

        A.   General Damage Principles

                                             1.    Monetary Compensation

                        a.    The primary objective of contract damages law is to provide monetary
                             compensation that will place an aggrieved party in the same position
                             that would have been realized had the breaching party fully performed.
                             Contract damages are premised on compensation of the aggrieved party
                             rather than compulsion of the breaching party.

                        b.    CASE: Peevyhouse v. Garland Coal & Mining Company, (1962). In
                             building and construction contracts, the owner is entitled to the money
                             which will permit him to complete, unless the cost of completion is
                             grossly and unfairly out of proportion to the good to be attained. When
                             that is true, the measure is the difference in value.

                                             2.    The Expectation Interest

                        a.    The expectation interest is protected by awarding the benefit of the
                             bargain, or “profit,” that would have been realized through
                             performance.

                        b.    CASE: Vitex Manufacturing Corporation, LTD. v. Caribtex
                             Corporation, (1967). In a claim for lost profits, overhead should be
                             treated as a part of gross profits and recoverable as damages, and
                             should not be considered as part of the seller’s costs.

                                             3.    Other Protected Interests

                        a.    Reliance Interest

                                  1.    The reliance interest seeks to place the aggrieved party in as
                                       good a position as would have been realized had the contract



                                              21
              not been created. This is good when the aggrieved party
              changed his or her position on reliance of the contract.

         2.    CASE: Security Stove & Mfg. Co. v. American Ry. Express
              Co., (1932). Where a party is aware of peculiar circumstances
              under which the contract is made, which will result in an
              unusual loss by the other party, the breaching party is
              responsible for the real damage sustained from the non-
              performance.

b.    Restitution Interest

         1.    Restitution interest seeks to restore to the aggrieved party any
              benefit that he or she has conferred upon the breaching party.
              It is not generally preferred by plaintiffs because it is limited
              to the amount that the plaintiff has conferred upon defendant.

         2.    CASE: Campbell v. Tennessee Valley Authority, (1969). To
              protect a party’s restitution interest, damages can be measured:
              1) by the reasonable value to the other party of what he
              received in terms of what it would have cost him to obtain it
              from a person in the claimant’s position, or 2) the extent to
              which the other party’s property has been increased in value or
              his other interests advanced. Restitution is not available when
              the breach gives rise to only a claim for partial damages.

                     4.     Other Loss and the Applicable Limitations

-     In addition to the benefit of the bargain, an aggrieved party is entitled
     to recover any other loss that was caused by the other party’s breach of
     contract. The availability of any recovery for expectancy damages is
     subject to the traditional limitations of avaiodability, foreseeability, and
     certainty.

a.   Avoidability

         1.    The aggrieved party cannot recover damages for any loss that
              he or she could have reasonably avoided.

         2.    CASE: Oloffson v. Coomer, (1973). When defendant has
              materially breached the contract, the aggrieved party can 1)
              for a commercially reasonable time await performance by the
              repudiating party; or 2) resort to any remedy for breach.

b.    Foreseeability

         1.    CASE: Sun Maid Raisin Growers of California v. Victor
              Packing Co., (1983). If a breaching party knew or should have
              known that the breach would have resulted in consequential
              damages of plaintiff, the breaching party is responsible for
              those damages. Knowledge or reason to know can be
              established by the ordinary course of business practice, or by
              special circumstances beyond the ordinary course of business.
              The aggrieved party must still cover in order to minimize
              losses.

                     5.     Certainty



                       22
                a.    Any element of loss that cannot be proven with a reasonable degree of
                     certainty cannot be recovered; but other elements (general damages)
                     can still be recovered.

                b.    CASE: Handi Caddy, Inc. v. American Home Products Corporation,
                     (1977). There are three general principles which the courts apply to
                     determine when lost profits will be allowed as compensation: 1) in both
                     tort and contract actions, lost profits will be allowed only if their loss is
                     proved with a reasonable degree of certainty, 2) in both contract and
                     tort actions, lost profits will be allowed only if the court is satisfied that
                     the wrongful act of the defendant caused the lost profits, and 3) in
                     contract actions, lost profits will be allowed only if the profits were
                     reasonably within the contemplation of the defaulting party at the time
                     the contract was entered into.

                                     6.     Liquidated Damages

                a.    Subject to certain limitations, the law generally permits parties to a
                     contract to agree on the amount or the manner in which damages may
                     be recovered for a breach.

                b.   Contract remedies are intended to be compensatory in nature, not
                     punitive. Thus, the validity of a liquidated damages clause may be
                     challenged on the theory that it constitutes a penalty.

                c.    CASE: Greenbach Bros., Inc. v. Alfred E. Burns, (1966). For a
                     liquidated damages amount to be upheld, the amount agreed upon must
                     represent the result of a reasonable endeavor by the parties to estimate a
                     fair average compensation for any loss that may be sustained. The
                     damages amount must also be difficult to ascertain.

B.   Contracts In Context

                                     1.     Sales of Goods

          - Contracts for sale of goods retain the basic common-law measure of expectation
             damages, but incorporate some additional measures.

                a.   Buyers’ Damages

                         1.    Cover

                                             i. The preferred damage measure awards the
                                          buyer the difference between the cost of cover and
                                          the contract price together with any incidental or
                                          consequential damages, but less expenses saved in
                                          consequence of the seller’s breach.

                                             ii. CASE: Huntington Beach Union High School
                                          Dist. v. Continental Information Systems Corp.,
                                          (1980). The test of proper cover is whether at the
                                          time and place the buyer acted in good faith and in a
                                          reasonable manner, and it is immaterial that hindsight
                                          may later prove that the method of cover used was
                                          not the cheapest or most effective. Consequential
                                          damages resulting from the seller’s breach include



                                       23
                       any loss resulting from general or particular
                       requirements and needs of which the seller at the time
                       of contracting had reason to know and which could
                       not reasonably be prevented by cover or otherwise.

        2.   Damages for Breach of Warranty

                          i. CASE: Chatlos Systems, Inc. v. National Cash
                       Register Corporation, (1982). The correct measure of
                       damages is the difference between the FMV of the
                       goods accepted and the value they would have had if
                       they had been as warranted. Award of that sum is not
                       confined to instances where there has been an
                       increase in value between date of ordering and date
                       of delivery.

                          ii. CASE: Nelson v. Logan Motor Sales, Inc.,
                       (1988). A common method for establishing the
                       difference in value between the goods as warranted
                       and as delivered is to prove the cost to repair the
                       deficient aspects of the goods.

        3.   Consequential Damages

                          i. CASE: Erdman v. Johnson Brothers Radio
                       and Television Co., Inc., (1970). In order to get
                       consequential damages it must be shown that there
                       was 1) a breach of a contract that 2) proximately
                       caused the injury complained of.

b.   Sellers’ Damages

        1.   Resale

                          i. CASE: Coast Trading Company v. Cudahy
                       Company, (1979). Under this formula, if the seller
                       resells in good faith and in a commercially
                       reasonable manner he is entitled to recover the
                       difference between the resale price and the contract
                       price together with any incidental damages allowed
                       under the provisions, but less expenses saved in
                       consequence of the buyer’s breach.

        2.   Lost Profits

                          i. CASE: R.E. Davis Chemical Corporation v.
                       Diasonics, Inc., (1987). A volume seller can recoup
                       lost profits that are an extension from buyer’s non-
                       acceptance.

        3.   Action for Price

                           i.   CASE: Integrated Circuits Unlimited v. E.F.



                      24
                          Johnson Company, (1989). When the buyer fails to
                          pay the price as it becomes due the seller may
                          recover, together with any incidental damages, the
                          price: 1) of goods accepted or conforming goods lost
                          or damaged within a commercially reasonable time
                          after risk of their loss has passed to the buyer; and 2)
                          of goods identified to the contract if the seller is
                          unable after reasonable effort to resell them at a
                          reasonable price or the circumstances reasonably
                          indicate that such effort will be unavailing.

         4.    Limitation on Specific Restitution

                             i. A seller who sells goods to a buyer on credit
                          generally does not have the right to repossess the
                          goods if the buyer does not pay for them. If the buyer
                          misrepresented his credit or is insolvent, the seller
                          may reclaim the goods if done with notice and within
                          10 days of the receipt.

                            ii.   Only unique items warrant specific restitution.

                     2.     Executory Land Sale Contracts

a.    A variety of remedies are available when a contract for the sale of land
     is breached including specific performance and damages.

b.   The standard contract measure of damages applies, namely the
     difference between the contract price stated in the contract and the
     market value of the real property on the date of the breach.

c.    CASE: Kramer v. Mobley, (1949). Where the seller under an
     executory contract for the sale of personal property breaches his
     contract by failing to deliver the property, the measure of damages is
     the difference, if any, between the contract price and the market value
     of the property either at the time of the breach or at the time fixed for
     delivery. However, if the seller is not guilty of bad faith or fraud in the
     sales failure then the buyer may recover any consideration he has paid,
     with interest, and any legitimate expenses he has incurred, but he can
     recover nothing for the loss of his bargain.

                     3.     Construction Contracts

a.   Alternatives to Lost Value

         1.    If the breach results in defective or unfinished construction
              and the loss in value to the injured party is not proved with
              sufficient certainty, he may recover damages based on: 1) the
              diminution in the market price of the property caused by the
              breach, or 2) the reasonable cost of completing performance or
              of remedying the defects if that cost is not clearly
              disproportionate to the probable loss in value to him.

         2.    CASE: Prier v. Refrigeration Engineering Company, (1968).
              For defective or unfinished construction the injured party can
              get judgment for…1) the reasonable cost of construction and



                      25
              completion in accordance with the contract, if this is possible
              and does not involve unreasonable economic waste.

         3.    CASE: Jacob & Youngs, Inc. v. Kent, (1921). “The Pipe
              Case” In this case, the measure of the allowance is not the cost
              of replacement, which would be great, but the difference in
              value, which would be either nominal or nothing. A property
              owner should not be relegated to this measure unless the
              contractor has substantially performed.

b.    Losing Contracts

         1.    CASE: Kehoe v. Rutherford, (1893). As an alternative to the
              measure of damages based on the expectation interest, the
              injured party has a right to damages based on his reliance
              interest, including expenditures made in preparation for
              performance or in performance, less any loss that the
              breaching party can prove the injured party would have
              suffered even if the contract had been performed. This is a
              good measure when the cost of complete performance would
              exceed the compensation promised by the breaching party.

c.   Delays

         1.    CASE: W.G. Cornell Company of Washington, D.C. v.
              Ceramic Coating Company, Inc., (1980). When the other party
              delays in performance of a contract, the aggrieved party can
              recover the fair rental value of either the equipment or the
              property that is idle as a result of the delay.

         2.    CASE: Lorch, Inc. v. Bessemer Mall Shopping Center, Inc.,
              (1975). When a landlord prevents a tenant from going out of
              business, the landlords actions amount to an unreasonable
              delay even if the terms were specified in the lease. This is
              based on the complexity and supervision involved in enforcing
              the business to stay open.

         3.    CASE: Northern Delaware Industrial Development Corp. v.
              E.W. Bliss Co., (1968). Specific performance of adding more
              workers to cure a delay will not be enforced because of the
              complexity and supervision involved in enforcement.

                    4.    Employment Contracts

a.    CASE: Sullivan v. David City Bank, (1967). For a wrongful discharge,
     the plaintiff cannot recover ‘wages’ for services constructively
     performed. He can recover only damages for the breach of the contract
     of employment. The employee may recover his full damages even
     where the action is tried before the expiration of the term of the
     employment.

b.   CASE: Mr. Eddie, Inc. v. Ginsberg, (1968). An employee who has
     been wrongfully discharged before the termination of his contract of
     employment must endeavor to reduce the loss or damage by seeking
     other employment. He may, however, recover the reasonable costs
     expended in seeking that other employment. Generally, an employee is
     not required to accept a position that is different or inferior to the



                     26
                           position under the contract, and the employee is not required to leave
                           the same geographic area for a substitute.

                      c.    Covenants not to Compete Unless there exists special circumstances
                           warranting protection, a business activity has no protectable interest in
                           its employees leaving and working elsewhere. Must show no adequate
                           remedy at law and that irreparable harm would result.

                      d.   Suits by Employees Agreements to perform a personal service will not
                           be specifically enforced in favor of the employer. One situation in
                           which the courts will order an employer to reinstate an employee is
                           when the employee has been discharged in violation of civil rights laws
                           or free speech.

IX.    DAMAGES: INTERFERENCE WITH PROPERTY AND ECONOMIC INTERESTS

      A.   General Principles

                                          1.     Types of Damages

                      a.   Compensatory Damages designed to place plaintiffs in the same
                           position they would have been in had the wrongful interference not
                           occurred.

                      b.   Consequential (“Special”) Damages may be awarded to more fully
                           compensate the victim of wrongdoing.

                      c.    Nominal Damages awarded in order to vindicate a right.

                      d.   Supercompensatory Damages awarded in the form of punitive or
                           exemplary damages.

                                          2.     Requirement of Certainty

                      a.    CASE: James Mastandrea v. Chicago Park District, (1994). A loss
                           need not be proven with absolute certainty, but speculation, remote or
                           uncertain amounts are improper.

                      b.   CASE: Bigelow v. RKO Radio Pictures, Inc., (1946). Juries are
                           allowed to act upon reasonable and inferential, as well as direct and
                           positive proof in computing estimates of damages.

      B.   Interference With Real Property Interests

                - Interference with real property interests may be litigated on a number of theories
                    including trespass, private and public nuisance, and negligence. The measure
                    of damages remain the same.

                                          1.     Compensatory Damages

                      a.    CASE: Stevinson v. Deffenbaugh Indus., Inc., (1993). A nuisance is
                           temporary if it may be abated, and it is permanent if abatement is
                           impracticable or impossible. Damages for a permanent nuisance are
                           measured by the difference in the land’s market value immediately
                           before and after the injury. Damages for temporary nuisance are the
                           decrease in rental or usable value of the property as well as any special
                           costs (repair, loss of use, etc.).




                                            27
                 b.    CASE: Terra-Products v. Kraft Gen. Foods, Inc., (1995). In the
                      context of environmental contamination of land, although deemed a
                      temporary nuisance, a party should be entitled to recover as damages
                      any proven reduction in the fair market value of real property
                      remaining after remediation.

                 c.    CASE: State of Ohio v. United States Department of the Interior,
                      (1989). In environmental restoration cases subject to CERCLA, the
                      correct measure of damages is restoration costs because natural
                      resources are not fungible goods.

                 d.    CASE: Scantlin v. City of Pevely, (1987). There is no requirement that
                      loss of use damages be specifically pled.

                 e.    CASE: Dodd Properties (Kent) v. Canterbury City Council, (1980). If
                      an award is given to cover future repairs, the award should be
                      discounted to its present value.

                 f.    CASE: Coty v. Ramsey Assocs., (1988). As a general rule, the mere
                      unsightliness of a thing, without more, does not render it a nuisance,
                      however, when malice or spite were the motivation, nuisance liability
                      attaches. The purpose of punitive damages are to punish those culpable.
                      In order to award punitive damages, plaintiff must demonstrate actual
                      malice on part of the defendant.

                 g.    CASE: Riblet v. Spokane-Portland Cement Co., (1954). In an action
                      for damages for maintaining a nuisance, recovery may be had for
                      inconvenience, physical discomfort, and illness to the occupant of the
                      property resulting from the nuisance. This is so even though damages
                      for property value or rental value are awarded.

                                      2.    Consequential Damages

                 a.    CASE: Lunda v. Matthews, (1980). Distinct from or in addition to
                      damages compensating plaintiffs for the diminution in property value
                      as a result of a nuisance, it is proper to award consequential damages
                      for discomfort, annoyance, inconvenience and personal injury.
                      Consequential damages are also recoverable in an action for trespass.

                 b.   CASE: Davey Compressor Co. v. City of Delray Beach, (1993). In tort
                      cases, plaintiff may recover all damages which are natural, proximate,
                      probable or direct consequence of the act, but do not include remote
                      consequences. Abatement costs are allowed.

C.   Interference With Personal Property Interests

          - If the trespass causes harm to the chattel, the trespasser is liable for all damges
              proximately caused by the act. In conversion or trover the basis of the tort is
              the conversion of the plaintiff’s property to the defendant’s own use (forced
              sale). Plaintiff can then receive its full value.

                                     1. CASE: Paccar Fin. Corp. v. Howard, (1993). The
            theory of trover (“conversion”) was that the defendant, by “converting” a chattel
            to his own use, appropriated the plaintiff’s rights, for which he was required to
            make compensation.




                                       28
                                      2. CASE: Ehman v. Libralter Plastics, Inc., (1994).
            The value of the chattel converted is the FMV of the item at the time of
            conversion plus interest. If there is no regular market value for the item, the
            measure is the value of the property to the owner at the time of the conversion
            plus interest.

                                       3. CASE: Goodpasture, Inc. v. M/V Pollux, (1982).
            Damages in a conversion action should compensate for the loss actually
            sustained as a result of the tortfeasor’s wrong, and a plaintiff may generally
            recover the reasonable market value of the goods converted, as of the time and
            place of conversion.

                                      4. CASE: Caballero v. Anselmo, (1991). Damages
            recoverable for the conversion of property are limited to the value of the
            property at the time of the conversion. However, an exception applies to
            property of fluctuating value, such as shares of stock; the measure of damages
            for conversion of stock certificates is the cost of replacement within a reasonable
            period after the discovery of the conversion, regardless of when the conversion
            may have occurred.

                                      5. CASE: Broadwater v. Old Republic Sur., (1993).
            The New York Rule: Sets the measure of damages as the highest market price of
            the stock between the date of the conversion and a reasonable time following
            notice of the conversion. The reasonable time requirement varies with the
            particular facts and circumstances of each case.

                                       6. CASE: Badillo v. Hill, (1990). The span of time for
            loss of use damages is limited to the period of time reasonably necessary to
            procure parts and make repairs and the amount should not exceed the amount of
            the greater injury of total destruction.

D.   Tortious Interference With Economic Interests

          - Tort law has powerful remedial weapons, not available in breach of contract
             cases.

                                       1. CASE: Hinkle v. Rockville Motor Co., (1971). The
            “Flexibility Approach” in fraud and negligene cases: 1) If the defrauded party is
            content with the recovery of only the amount that he actually lost, his damages
            will be measured under that rule; 2) if the fraudulent representation also
            amounted to a warranty, recovery may be had for loss of the bargain because a
            fraud accompanied by a broken promise should cost the wrongdoer as much as
            the later alone; 3) where the circumstances disclosed by the proof are so vague
            as to cast virtually no light upon the value of the property had it conformed to
            the representations, the court will award damages equal only to the loss
            sustained; and 4) where the damages under the benefit-of-the-bargain rule are
            proved with sufficient certainty, that rule will be employed.

                                      2. CASE: Texaco, Inc. v. Pennzoil, Co., (1987). One
            who is liable to another for interference with a contract is liable for damages for:
            1) the pecuniary loss of the benefits of the contract; and 2) consequential losses
            for which the interference is a legal cause. Because this suit was brought in tort
            and not in contract the measure of damages was the pecuniary loss of the
            benefits it would have been entitled to under the contract. Moreover, punitive
            damages are recoverable in tort actions where there exists ingredients of malice,
            fraud, oppression, insult, wanton or reckless disregard of plaintiff’s rights, or
            other circumstances of aggravation. The exemplary damages must be reasonable



                                      29
                 (look to surrounding factors, the wrong, defendant’s conduct, public policy,
                 etc.).

     E.   Punitive Damages

                                           1. CASE: BMW of North America, Inc. v. Gore,
                 (1996). The Due Process Clause of the 14th Amendment prohibits a state from
                 imposing a grossly excessive punishment on a tortfeasor. Grossly excessive
                 damages can be determined by looking at the degree of reprehensibility of the
                 act, the disparity between the harm or potential harm and the amount of the
                 award, and sanctions for comparable conduct.

X.    DAMAGES FOR PERSONAL INJURIES

     A.   General Principles

                                           1. CASE: Seffert v. Los Angeles Transit Lines,
                 (1961). For an appellate court to overturn trial court damages, the verdict must
                 be so out of line with reason that it shocks the conscience and necessarily
                 implies that the verdict must have been the result of passion and prejudice.

                                         2. CASE: Sharman v. Evans, (1977). The appropriate
                 criterion for damages must be that such expenses that plaintiff may reasonably
                 incur should be recoverable from the defendant. Double compensation is to be
                 avoided.

     B.   Economic Losses

                                         1.    Earning Capacity

                     a.    CASE: Jones & Laughlin Steel Corp. v. Pfeifer, (1983). An award for
                          impaired earning capacity is intended to compensate the worker for the
                          diminution in the stream of income he would have earned; including
                          fringe benefits. The award should be calculated pertaining to after-tax
                          wages. Work related costs (uniforms, etc.) should be deducted from the
                          award. Also, the award should be discounted by the discount rate which
                          is based on the rate of interest that would be earned on the best and
                          safest investments.

                                         2.    Collateral Benefits

                     a.    CASE: Helfend v. Southern California Rapid Transit District, (1970).
                          The collateral source rule allows plaintiff to receive benefits from an
                          insurance policy and the award from defendant. This is because the
                          tortfeasor should not garner benefits of the victim’s providence of
                          buying insurance.

     C.   Non-economic Losses

                                         1. CASE: McDougald v. Garber, (1989). Some
                 degree of cognitive awareness is a prerequisite to recovery for loss of enjoyment
                 of life.

     D.   Loss of Consortium

                                            1. CASE: Belcher v. Goins, (1990). “Parental
                 consortium” refers to the relationship between parent and child and is the right
                 of the child to the intangible benefits of the companionship, comfort, guidance,


                                          30
            affection, and the aid of the parent. Courts are split on this, but the modern trend
            is to allow recovery for this to minors and handicapped children who rely on the
            parents for care.

                                      2. CASE: Whittlesey v. Miller, (1978). Marital
            consortium concerns the loss of society and services of the spouse and includes
            impairment for sexual intercourse. Either spouse has a cause of action for loss of
            consortium with the other spouse as a result on injury caused to the other spouse
            by a third party tortfeasor’s negligence.

E.   Mitigation

                                      1. CASE: Baker v. Morrison, (1992). The mitigation
            theory requires the consideration of the doctrine of avoidable consequences and
            whether the plaintiff should have anticipated the defendant’s negligence before
            the accident occurred. Comparative negligence is now the rule in most
            jurisdictions. Comparative negligence decreases the award by the percentage of
            negligence attributed to the plaintiff. Proximate cause of plaintiff’s negligence is
            required.

F.   Punitive Damages

                                     1. CASE: Sturm, Ruger & Co., Inc. v. Day, (1979). In
            order to recover punitive damages, the plaintiff must show the wrongdoer’s
            action were done with malice or bad motives or a reckless indifference to the
            interests of another. They are meant to punish and deter. The amount must bear
            some resemblance to the proportion of actual damages.

G.   Torts and Damages at the Frontier

                                      1. CASE: Sterling v. Velsicol Chemical Corporation,
            (1988). In order to collect damages for environmental contamination, plaintiff
            must show that the defendant actually caused the contamination and that the
            contamination resulted in, or will likely result in, the medical injuries. Mental
            anguish damages will be awarded only where such distress is foreseeable or is a
            natural consequence of, or reasonably expected to flow from, the present injury.

                                     2. CASE: Marciniak v. Lundborg, (1990). Damages
            caused by a negligently performed sterilization practice may be recovered until
            the child reaches age of majority and benefits of having that child may not be
            deducted from that award.

H.   Wrongful Death

                                     1. CASE: Green v. Bittner, (1980). For the loss of a
            child, damages should not be limited to the pecuniary loss of the child (chores,
            etc.) and should extend to the loss of companionship as they grow older.

                                      2.   CASE: DeLong v. County of Erie, (1982). What is
            the rule here?

                                     3. CASE: Lamm v. Lorbacher, (1952). The plaintiff
            in a wrongful death action may recover such damages as are a fair and just
            compensation for the pecuniary injury resulting from such death.

                                      4. CASE: Murphy v. Martin Oil Co.¸ (1974). An
            action for conscience pain and suffering prior to death is recoverable as a
            separate action, and in addition, to the wrongful death action.


                                      31
I.   Reform of the Law of Damages




                                    32

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:8
posted:11/9/2012
language:Unknown
pages:32