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Civil Procedure II
University of California, Hastings School of Law
Amar, Vikram D.

INCENTIVES TO LITIGATE

How much litigation?

With so many civil suits being filed, should it be made easier or harder to commence or defend a lawsuit?
Remedies: for those who think that the volume should be regulated, changing the remedies available through litigation can decrease or increase the amount of suits
Access to Justice: can regulate the volume of litigation by making it easier or harder for litigants to pay for attorney’s fees and court costs

Why litigate?

People file lawsuits because they want something – remedies cure a legal harm
Two types of remedies:

Specific – seeks to restore directly and specifically that which the Δ has taken from the π

i. ex. requiring Δ to return car that he stole from π

Substitutionary – seeks to provide the π with a reasonable substitute

i. ex. requiring Δ to pay π an amount sufficient purchase an equivalent car

Substitutionary Remedies

Most remedies in the modern US legal system are substitutionary

most seek monetary damages – ex. claims for debt will always result in a damage judgment
for many common claims, specific remedies are impossible

i. ex. replacing an injured limb

Compensatory Damages

MONETARY/ECONOMIC – most common, and seek to replace what has been lost by π or what he has had to pay

i. can include pain and suffering

Courts seek compensatory damages that are as accurate as possible because

i. accuracy creates the right incentives and has a certain moral appeal
ii. the goal is to give exactly what has been lost à no more and no less
1. Δ will have an incentive to not victimize again
2. no incentive for π to be victimized b/c won’t profit from it
iii. the ultimate goal is to make the victim whole

Liquidated Damages

agreement by parties to litigate a provision that specifies what the remedies would be in the way of damages in the event of a breach

i. really only comes into play in breach of contract cases b/c breach is anticipated by the parties involved in the contract

limitations:

i. can only agree to liquidated damages if the actual damages would be difficult to calculate
1. ex. agreeing to liquidated damages for $1000 for failure to repay a $500 debt
ii. cannot impose a penalty – if they do, they’re not enforceable
1. they must instead be a good-faith estimate of what damages might have been, and must be in a setting where actual damages are hard to prove (or else they wouldn’t have had reason to contemplate these damages beforehand)

Statutory

statutes sometimes set minimum damages not specifically tied to the loss suffered
designed to offset the costs of litigation over matters that are often smaller in dollar amount and to encourage the πs to enforce public policy by bringing suit

Punitive Damages

aims entirely at punishment for wrongful behavior by Δ (as opposed to compensating the π)

i. designed to send a message to Δ in order to punish and deter him from doing it again

may require the Δ to pay much more than what is required to make the π whole
punitive damages as being between civil and criminal realms

i. ordinary civil case: π required to establish the elements of the cause of action by a “preponderance of the evidence” – more likely than not or 50%+
ii. criminal: state obligated to establish guilt “beyond a reasonable doubt”
iii. punitive damages: more than mere negligence, but “willfulness” or some malicious intent is generally required and by “clear and convincing evidence”

generally want to know how wealthy a Δ is

i. ex. a $1M fine on Bill Gates would not deter future conduct
ii. so what it takes to deter conduct and punish to send a message depends on Δ’s wealth
iii. BUT evidence of Δ’s net worth is only admissible once the jury has already found Δ liable by the required standard
1. introducing it earlier may be prejudicial – jury may have Δ pay just because he is rich, regardless of whether or not he caused the harm

State Farm v. Campbell (pg. 270): Sup Ct’s move from procedural requirements to substantive limitations (in terms of the award of punitive damages)

i. facts: Campbell, in order to pass, drove into oncoming traffic lane and caused two cars to hit each other. State Farm, C’s insurer, declined offers to settle by estates of victim drivers and instead took the case to court on behalf of C and told them that they had no liability. When found liable, they refused to pay on C’s behalf. C brought suit against SF for bad faith, and was awarded $1M in compensatory damages and $145M in punitive
ii. issue: in the circumstances of this case, is an award of $145M in punitive damages excessive and in violation of the Due Process Clause of the 14th amendment?
iii. holding: punitive award of $145M was neither reasonable nor proportionate to the wrong committed, and it was an irrational and arbitrary deprivation of the property of the Δ
iv. Three Guideposts to award punitive damages from BMW v. Gore
1. the degree of the reprehensibility of the Δ’s conduct
a. questions to consider:
i. how wrongful was Δ’s conduct?
ii. was the harm caused physical or economic?
iii. did the conduct evince an indifference to or a reckless disregard of the health or safety of others?
iv. did the target of the conduct have financial vulnerability?
v. did the conduct involve repeated actions or was an insolated incident?
vi. was the harm the result of intentional malice, trickery, or deceit – or mere accident?
b. here, ct held that punitive damages should only be awarded if the Δ’s culpability, after having paid compensatory damages, is so reprehensible as to warrant the imposition of further sanctions to achieve punishment or deterrence
c. Yes, SF was culpable, but a more modest punishment for the conduct could have satisfied the state’s objectives
d. instead, the case was used as a platform to expose and punish the perceived deficiencies of SF’s operations throughout the country – Δ should be punished for conduct that harmed the π, not for being an unsavory individual or business
2. the disparity between the actual or potential harm suffered by the π and the punitive damages award
a. no bright-line rule for ratio, but single digit multipliers are more likely to comport with due process while achieving state’s goals of deterrence and retribution
i. here, this case was 145 to 1; maybe okay if particularly egregious, but in this case it wasn’t really so
b. the compensatory award here was already substantial enough — $1M for a year and a half of emotional distress. Court finds this is complete compensation.
3. the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases
a. Ct found that the most relevant civil sanction under UT state law for wrong done to Campbells was $10k fine for an act of fraud
v. Dissent
1. Scalia: neither the Due Process Clause nor other constitutional provisions authorizes the court to control a state’s award of punitive damages
2. Ginsberg: Constitution shouldn’t be used to legislate on a matter that is traditionally left to the legislature. Also, Δ’s reprehensible conduct warranted the punitive damages awarded.
Specific Remedies

Injunctionsà court ordering a person to do (affirmative injunction) or not to do something

most common form of relief
enforcement through contempt proceedings

i. a party who is held in contempt of court for refusing to obey an injunction may be fined or put in jail until he/she obeys the order

sometimes thought that an injunctive remedy is to be reserved for special occasions

i. it is “stronger medicine” than a damage award

Preliminary vs. Permanent Injunctions

i. permanent: not perpetual, but after a resolution on the merits of the case
ii. preliminary: ct issues while the case is going on, before knowing who wins (see provisional remedies below)

Other types

replevin – recover personal property
ejection – to recover land wrongfully in the possession of another
quiet title – sue to determine who is the rightful owner of property
writ of mandamus – court orders a lower court or a public official to perform an act required by law
habeas corpus – civil writ
rescission, cancellation, or reformation of contract
accounting – in order to determine losses in account under Δ’s control

Is there a remedial hierarchy? à are some remedies more easily available (and thus preferred)?

most believe that legal remedies (damages) are the rule, and equitable remedies are the exception

i. courts sometimes require a π seeking an equitable remedy (usually an injunction) to show that legal remedy (usually damages) are inadequate
ii. others will require the π to demonstrate that the harm is “irreparable”
1. show that money damages will not provide an adequate remedy
2. when dam

done to respond to problem of remedy coming in too late b/c it would be useless
ex. battered spouse – needs protection immediately, not months from now
or small business owner being threatened by competitor’s unlawful action

Problem of and questions for provisional remedies

judge must base decision on incomplete information
so how should a court decide whether to grant temporary relief when all the relevant information is not available?
when does the curtailment of ordinary procedures in grant provision relief amount to a denial of due process?

William Inglis & Sons Baking Co. v. ITT Continental Baking Co. (pg. 313) à Problem of Preliminary Injunctions and Temporary Restraining Orders

facts: π and other baking companies sued Δs and other competitors for violation of federal antitrust laws. π moved for a preliminary injunction, but it was denied by the district ct. π appealed.
issue: did the district ct abuse its discretion or commit an error of law by not granting the PI?
holding: dist ct committed error in not granting the preliminary injunction because it did not consider the “alternative test”
original test used by dist ct:

i. π is entitled to preliminary injunction only if
1. π will suffer irreparable injury if injunctive relief is not granted
2. the π will probably prevail on the merits
3. in balancing the equities, Δs will not be harmed more than π is helped by injunction
4. granting the injunction is in the public interest
ii. dist ct ruled against π’s motion for PI b/c it had “serious reservations as to the probability of success on the merits”

“alternative test” that should have been considered:

i. person moving for PI assumes the burden of demonstrating:
1. either a combination of probable success and the possibility of irreparable injury
2. or that serious questions are raised and the balance of hardships tips sharply in his favor
ii. since this ct adopts the alternative test, they remand the case back to dist ct
1. but they make it clear that they don’t side with a particular party

Provisional Remedies and Due Process

In some cases, provisional remedies might violate a person’s due process rights because it may cause or exacerbate the threatened harm

i. ex. Δ accused of battering a spouse might instigate new harm if a preliminary restraining order is issued

Common case: Replevin

i. gaining or regaining property that has come into the possession of another wrongfully
ii. Fuentes v. Shevin (pg. 317): à Notice and hearing required before seizure of property
1. facts: πs challenged the constitutionality of FL and PA statutes that allowed seizure of property upon submittal of an application. The statutes did not provide for an opportunity for a hearing prior or immediately after seizure.
2. issue: does 14th amendment due process require hearing prior to seizure?
3. holding: due process requires that an opportunity for a hearing be given prior to the seizure of property
4. Due Process inquiry:
a. was there a constitutionally protected interest to “life, liberty or property” at stake?
b. How much process is required before possession is taken away?
5. BUT Amar says that Due Process clause does not always require a deprivation hearing
a. there are some cases where there is no need to go to trial
b. question depends on how much is at stake, how much the process would cost for the state, and accuracy of result
c. in this case, though, b/c π had a lot at stake, and because the hearing wouldn’t be that costly, it is required by due process