REMEDIES OUTLINE – Professor Nance – Fall 2016
I. Introduction/Overview
Fundamental Principle of Remedies – The goal is to place the plaintiff back into the position that he/she was in before the wrong occurred.
U.S. v. Hatahley – In a perfect world, the market value, rental value and replacement value are all equal.
Remedy – Anything a court can do for a litigant who has been wronged or is about to be wronged
Most common types –
– Judgments that plaintiffs are entitled to collect sums of money from defendants
– Orders to defendants to refrain from their wrongful conduct or to undo its
consequences
Remedy law is substantive and procedural in nature
Courts must classify remedies as either substantive or procedural when state claims are tried in federal court or when federal claims are tried in state court
Erie Railroad Co. v. Tompkins
The law that creates the claim governs substantive issues, and the law of the forum governs procedural issues
Classifying Remedies – Classifications:
Compensatory Remedies
Compensate plaintiffs for harm they have suffered
Preventive Remedies
Prevent harm before it occurs
Two types:
Coercive Remedies
Example – Injunction
Personal command from a court to litigants ordering them to do or refrain from doing some specific thing
Example – Specific Performance Decree
Orders defendants to perform their contract
Violating a court order is punished by contempt of court
Declaratory Remedies
Resolve disputes about the parties’ rights, but do not end in a personal command to defendant
Example – Declaratory Judgment
Restitutionary Remedies
Restore to plaintiff all that defendant gained at plaintiff’s expense
Ex: disgorging profits
Punitive Remedies
Punish wrongdoers
Usually this is criminal liability
Ex: punitive damages
Ancillary Remedies
Used to aid other remedies
Ex –
Costs and attorney’s fees
Legal and Equitable Remedies
Remedies can also be classified as Legal vs. Equitable
A plaintiff cannot receive an equitable remedy if a legal remedy would be adequate
The difference is merely conceptual now; they are functionally merged
Damages is the most important legal remedy;
Injunctions and Specific Performance are the most important equitable remedy
II. Damages
Types of Damages
Includes pain and suffering
Consequential (Special)
Punitive
U.S. v. Hatahley
Facts:
Agents of government came in against orders, took horses owned by P-Native Americans and sold them to glue factory
Procedural history:
Dispute between district court and appellate court over how we should evaluate the damages
Analysis
Issue 1: precise calculation of compensatory damages
Appellate court: says DC pulled numbers out of the air; wants individualized determination of damages
Federal Tort Claims Act: no jury
Raises questions: if a jury came back with a lump sum, it would be much more difficult to scrutinize the award
Why does it matter?
Without precision, awards might be a windfall to some Ps while it would stop short of restoring others
Lends legitimacy to the system, even if it is indulging a fiction; it will get us further in most cases than if we give up at the outset
Compensatory standard itself
Ways the Court looked at the value of the horses
Hard because no market for the horses – they were very specially trained
Figured the Market value was 300 and bumped it up to 395
Disposition
Remanded
Ways to measure compensatory damages –
Market Value
The value that the object of litigation would be worth on the market
Replacement Value
The cost to the plaintiff of recovering the same or substantially similar object of litigation
Rental Value
The cost to the plaintiff of using a similar object for the time period between the damage occurred and a replacement can be found
Lesser of the Two Values Rule – When there is a difference between the market value and the replacement value, the court will award the lesser of
on
Plaintiff received market value, not replacement cost
Note – Difference between new and used goods
Lemon Effect – Buyers assume the worst about used goods, so they pay low prices, so sellers won’t sell used goods of high quality, so the used goods on the market tend to be of low quality, so buyers are justified in assuming the worst, and so on
Trinity Church v. John Hancock Mutual Life Insurance
– In this case, damage was caused to a church. Church wasn’t destroyed, but cracks occurred diminishing the life of the church.
– Court
– Employed the Takedown Method –
– The final dollar value was established by applying the change in physical damage during the period to the estimated cost of takedown and reconstruction
– Takeaway
– There was no market for the church, and the replacement cost was calculated according to the above method. The court allowed the method because it was reasonable.
Contract v. Tort Damages
While Tort damages attempt to place the plaintiff in their rightful position, contract damages aim to place the plaintiff in their expected position had the breach not occurred.
Rule – When the action is based in tort and not in contract, P only gets the reliance and not the expectancy (even if a K is involved in the case)
The Expectancy Interest
The value of the plaintiff’s entitlement under the contract
This is the basic rule that courts usually follow
Reliance Interest
Everything the plaintiff gave up in reliance on the contract
Expenditures to perform the contract
Foregone opportunities
More difficult to prove
Restitution interest
