REMEDIES OUTLINE
Professor: David Blankfein-Tabachnick
Book: Laycock
Fall 2013
Rules of the cases in the book and some definitions for each topic.
Restoring P to his rightful position
Hatahley: base of tort damages (principle)
– An award of damages based on the commission of a tort must be based on the principle that the injured party must be restored to the same position he was in had the tort not been committed.
Value as the measure of the rightful position
September 11th litigation and Trinity Church
– Recovery for property damage is the lesser of the replacement cost or the diminution of the property’s market value.
– Reasonable costs of reconstruction or replacement are allowed as a measure of damages where the diminution of market value of property cannot be determined.
Expectancy and reliance as measures of the rightful position
Neri, Chatlos System and Smith
– Under the Uniform Commercial Code, the seller of goods rejected by a breaching buyer may recover his lost profits and incidental damages caused by the breach.
– For breach of warranty, the correct measure of damages is the difference between the fair market value of the goods accepted and the value they would have had if they had been as warranted.
– The proper measure of damages for fraud in the sale of stock is the actual loss suffered due to the deception, not the purported value of the stock.
Neri: Lost profit claims: This case as one of a “lost-volume” seller. The “lost-volume” seller has made one less sale than he would have had the buyer performed, thus his damages are necessarily the lost profits. 2. The same reasoning may be applicable to custom order manufacturers as well. 3. The phrase in UCC 2-708 “due credit for payments or proceeds of resale” refers to a manufacturer who, when he learns of the buyer’s breach, has not completed the product, and decides that it is better to sell what has been completed the product, and decides that it is better to sell what has been completed so far as scrap. The manufacturer is entitled to the lost profits he would have made less the amount he recovered from sale of the scrap.
Difference entre reliance and expectancy damages – How do they function?
Clear difference:
Which damages are lost when the contract is breach? Reliance
Expectancy: what the party would have received if the breaching party wouldn’t have breached
Measure of damages: monetary compensation that may be awarded by the court to a party who has sustained injury or loss to his person, property, or rights due to another party’s unlawful act, omission, or negligence.
Consequential damages:
Buck, Meinrath and Texaco
– A party may recover any consequential damages reasonably anticipated by the party for the breach of a lease of real property. (See Evra for exception)
– A creditor may recover only interest on late payment of money due and no consequential damages are recoverable.
– The P in an action for tortious interference with an existing contract is entitled to recover the full pecuniary loss of the benefit it would have been entitled to under the contract, as well as consequential and punitive damages.
Compensatory damages: measure of damages necessary to compensate victim for actual injuries suffered.
Punitive damages: damages exceeding the actual injury suffered for the purposes of punishment of the D, deterrence of the wrongful behavior or comfort to the P.
Tortious interference with contractual relationship: an intentional tort whereby a D intentionally elicits the breach of a valid contract resulting in damages.
Consequential damages: monetary compensation that may be recovered in order to compensate for injuries or losses sustained as a result of damages that are not the direct or foreseeable result of the act of a party, but that nevertheless are the consequence of such a
Proximate cause: the natural sequence of events without which an injury would not have been sustained.
Proximate damages: damages that are the direct and foreseeable result of a particular act.
Requirement of reasonable certainty
Bigelow
– A jury may make a just and reasonable estimate of damages based on the evidence presented, and its award need not be based on the precise mathematical calculations.
Dignitary and constitutional harms
Levka and Carey
– A court may exercise its discretion in reducing a jury verdict when the evidence indicated the verdict is grossly excessive.
– Absent proof of actual injury caused by a denial of procedural due process, only nominal damages may be awarded.
Remittitur: the authority a court has to reduce the amount of damages awarded by the jury.
Net present value of future damages
Jones
– Federal courts may choose the manner in which to discount the present value of future earnings and are not bound by a rule of state law.
Punitive remedies – common law and statutes
Exxon
– In federal maritime law cases, the ratio of punitive damages to compensatory damages shall be 1:1.
Punitive remedies – the constitution
State Farm and Philip Morris
– A punitive damages award of $145 million, where the full compensatory damages are $1 million, is excessive and violative of the due process clause of the constitution.
– A jury may not use punitive damages to punish a D directly for harm the D caused to non-parties to the litigation.
