Remedies
MODERN AMERICAN REMEDIES: CASES AND MATERIALS
Laycock, Concise Fourth Edition
PROFESSOR KEELE FALL 2016
The Role Of Remedies
Remedy = anything a court can do for a litigant who has been wronged or is about to be wronged.
Two most common are judgments that plaintiffs are entitled to collect sums of money from defendants [damages] and orders to defendants to refrain from their wrongful conduct or to undo its consequences [injunctions].
Courts are required to classify remedies as either substantive or procedural when state claims are tried in federal court and when federal claims are tried in state court.
The law that creates the claim governs substantive issues and the law of the forum governs procedural issues.
Classifying Remedies
The most important category of remedies are:
Compensatory remedies
Preventative remedies
Coercive remedies
Declaratory remedies
Restitutionary remedies
Punitive remedies
Ancillary remedies
Remedies can be categorized by their function [what they do] or by their form [how they are worded].
Compensatory remedies are designed to compensate plaintiffs for harms they have suffered.
Most important are compensatory damages [sum of money designed to make plaintiff as well off as he would be if he never had been wronged].
Preventative remedies are designed to prevent harm before it happens.
Come in two forms: coercive and declaratory.
Most important coercive remedy is the injunction [personal command from a court to litigants, ordering them to refrain from doing some specific thing].
A specific performance decree is a specialized form of injunction.Others specialized coercive orders, thought of as injunctions, include: writs of mandamus, prohibition, and habeas corpus.
Declaratory remedies authoritatively resolve disputes about the parties’ rights, but they do not end in a personal command to defendant.
Generally prevent harm to the litigants by resolving uncertainty about their rights before either side has been harmed by erroneously relying on its own view of the matter.
Most important declaratory remedy is the declaratory judgment. But there are other specialized orders, such as bills to quiet title.
Restitutionary remedies are designed to restore to plaintiff all that defendant gained at plaintiff’s expense.
In many applications, they reverse mistaken or voidable transactions, restoring both sides to their original positions.
In more ambitious applications, they award to plaintiff the profits defendant earned by conscious wrongdoing, even if the profits exceed plaintiff’s damages.
Punitive remedies are designed to punish wrongdoers.
Best known is punitive damages.
Ancillary remedies are designed in aid of other remedies.
Important ones include: costs and attorney’s fees. Others include contempt, writ of execution, garnishment, and receivership.
Substitutionary And Specific Remedies
Remedies may be divided into two more basic categories:
With substitutionary remedies, plaintiff suffers harm and receives a sum of money.
Include: compensatory damages, attorney’s fees, restitution of the money value of defendant’s gain, and punitive damages.
Specific remedies seek to prevent harm to plaintiff, repair the harm in kind, or restore the specific thing that plaintiff lost.
Include: injunctions, specific performance of contract, restitution of specific property, and restitution of a specific sum of money.
Legal And Equitable Remedies
Remedies may also be classified as legal or equitable.
The U.S. inherited separate courts of law and equity and their separate bodies of law from England. [But are now merged in nearly all the states.]
The merged courts have largely combined the two sets of substantive rules and adopted a single set of procedures, except that the right to jury trial is generally guaranteed only in cases that would have been legal before the merger.
Remedies are still classified as legal or equitable, and the rule that plaintiff cannot have an equitable remedy if a legal remedy would be adequate is still on the books everywhere.
Damages are the most important legal remedies; in general, compensatory and punitive remedies are legal.
Injunctions and specific performance decrees are the most important equitable remedies.
However, some of the specialized coercive remedies, such as mandamus, prohibition, and habeas corpus, are legal.
Declaratory judgments were created by statute after the merger, so they are not classified either way; most of the older, more specialized declaratory remedies are equitable.
Restitution was developed independently in both sets of courts; some restitutionary remedies are legal, some equitable, and some both.
Receiverships are equitable.
PAYING FOR HARM: COMPENSATORY DAMAGES
The Basic Principle: Restoring Plaintiff To His Rightful Position
The purpose of awarded damages is to restore the injured party, as nearly as possible, to the position he would have been in had it not been for the wrong of the other party. U.S. v. Hatahley
Written another way: the position plaintiff would have been in “but-for” the wrong.
This is the essence of compensatory damages.
Damage remedies are often described as “substitutionary,” because they substitute dollars for what the plaintiff lost.
Sometimes dollars is exactly what plaintiff lost.
Sometimes dollars can be used to replace what plaintiff has lost.
The traditional argument for restoring plaintiff to his rightful position is based on corrective justice: Plaintiff should not be made to suffer because of wrongdoing, and if we restore plaintiff to her rightful position, she will not suffer.
In the classical economic view, the function of compensatory damages is to force law violators to take account of the harm they inflict.
If damage liability is less than the harm inflicted, potential defendants will violate the law when it is inefficient to do so.
If damage liability exceeds the harm inflicted, potential defendants will obey the law when it is inefficient to do so.
A corollary to the rightful-position standard is the one-satisfaction rule.
Refers to the settled core that plaintiff cannot recover the same item of damage more than once.
If plaintiff collect a judgment from one defendant, he cannot collect it again from any other.
Remedial Interests:
Ex Ante
Ex Post
Victim
Protective Interest
Restorative Interest
Wrongdoer
Coercive Interest
Retributive Interest
Value As The Measure Of The Rightful Position
Notes on Market Value
Determinations based on value are persuasive in damage measures.
Familiar damage measures include:
The value of property taken or destroyed;
The difference between the value of property before damage and the value after damage; and
The difference between the contract price and the market value of property promised but not delivered.
Disparities Between Value and Replacement Costs—Real Property
Damages based on market value might enable plaintiff to buy another set of office towers, or another large Victorian home, but, perhaps not, and certainly not in the same location.
Equitable remedies—specific performance of real estate contracts and injunctions against interfering with real
he contract (reliance interest); or [2] the position plaintiff would have occupied if the contract had been performed (expectancy interest).
The expectancy interest is the value of plaintiff’s entitlement under the contract
Plaintiff has a gross expectancy, measured by the full payment or performance she was promised under the contract, and which she expected would cover the full cost of her own payment or performance plus a profit margin.
Plaintiff also has a net expectancy, measured by her expected profit on the contract—her gross expectancy less the cost of her own payment or performance.
The reliance interest includes everything plaintiff gave up in reliance on the contract.
This includes expenditures necessary to perform the contract.
They call all other reliance “incidental reliance.”
The first-level statement of the rule is that plaintiff may elect recovery based on expectancy, reliance, OR restitution.
In tort cases, the proper measure of damages is the loss sustained by the plaintiff as a result of the fraudulent misrepresentations. Smith v. Bolles
Liability in tort does not include damages for what the plaintiff expected to obtain.
The Restatement (Second) of Torts provides that the victim of fraud may always recover his reliance damages: the difference between what he paid and the value of what he received, plus any incidental reliance expenses.
In addition, the recipient of a fraudulent misrepresentation in a business transaction is also entitled to recover additional damages sufficient to give him the benefit of his contract with the maker, if these damages are proved with reasonable certainty.
The federal courts do not follow this trend. Under that measure, damages are calculated as the difference between the actual—fraud tainted—transaction price and the true value of the security measured on the date of the transaction.
Consequential Damages
A tenant may recover special damages for a breach of a lease that are the natural and proximate result of the breach. Buck v. Morrow
General damages for breach of a lease consist of the difference between the contract price and the value of the unexpired term.
A landlord is also responsible for special damages as may have been contemplated at the time that the lease agreement was entered into.
Notes on the Vocabulary of Damages
General damages are occasionally called “direct damages; special damages are commonly called “consequential damages.”
General damages are often characterized as those that flow directly and necessarily from a wrong, or that are a natural result
Special damages are secondary or derivative losses arising from circumstances that are particular to the parties.
The bench and the bar developed standardized measures of general damages
The difference between contract price and market value, the difference between the value of the goods as delivered and as warranted, and interest on detained money are such measures.
Special damages are damages that are reduced to a sum certain before trial.
