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Remedies
University of Iowa School of Law
Osiel, Mark J.

 
Remedies
Osiel
Fall 2011
 
Damages
 
1.     Introduction to the Course, and the “Rightful Position” Standard, pp. xxiii-xxvi, 1-18
 
Remedies 8.25.11
 
Key themes
                        Rightful Position
                        Individualization of Relief
                        Market as “objective” measure of Plaintiff’s loss
                        Undercompensation/ Overcompensation
                        “Lesser of two” Rule
 
Judicial Remedies 
                        Cases have already had a trial generally – we know wrongdoer – what can Plaintiff get as relief
 
Key questions for Remedies
                        What are the alternative remedies avail for the Plaintiff?
                        Why does the ct. choose this over another?
                        What is the position we want to restore to Plaintiff? (what was his position before and after def’s wrong)                      
                        What are the dangers of each possible remedy (i.e of undercompensation or over?
                        What are the economic or moral principles that fuel the choice of remedy: efficiency or fairness?
 
Types of Remedies
                        Compensatory: Money
                        Coercive: Injunctions, specific performance
                        Declaratory: Defining Rights
                        Restitutional: Giving Plaintiff what the def gained
                        Punitive
                        Ancillary: in aid of major remedies (attorneys fees, contempt, power)
 
Typology
                        Substitutionary Remedies ($)
1.)      compensatory damanges
2.)      Attorneys fees
3.)      Restiution of $ value of defendants gain
4.)      Punitive Damages
Specific Remedies
1.)      Injunctions
2.)      Specific Performance of Contracts
3.)      Restitution of Specific Property
4.)      Restitution of a sum of money (refund of purchase price)
 
Commerical Outline by Russell Weaver and Michael Kelly (Thomson/West) – may be helpful.
 
United States v. Hatahly
                        Indians horses taken by federal government and were taken and destroyed without warning. This hurt the Indians (price of animals and their ability to raise livestock and transport, also some dignity and mental anguish)
                        Indians felt it emotionally degraded them and deprived them of emotional health (mental anguish). Horses were specifically bread to participate in their environment – put time into breading where they lived.
                        They needed travel in order to seek medical care and attend religious ceremonies – so there were consequences that followed from them that weren’t as direct as the death of the animals themselves.
                        The trial court paid a flat amount of 395 per animal and 3500 per plaintiff for mental anguish.  The trial court had a tough time getting the dollar amount (as Induans didn’t actually pay dollars for the horses and they never sold them – and they weren’t the same as other horses in the area)- The court awarded them the same amount for each one regardless of age – didn’t look at a bigger market and the replacement costs. Trial court made a fixed amount for pain and suffering without testimony from the Plaintiffs
                        Apellate Court is not satisfied with the trial courts ruling – seems to think the replacement costs should have been introduced – and even though the horses have been trained a certain way look at general horses. Just because unique doesn’t mean there is no market value.  The trial courts ruling wasn’t individualized enough – it just gave a per amount regardless.  Court says they need to consider other horses on the market and the specific elements that make them unique – the time for training can have a dollar amount put on it. We shouldn’t give up to easily on market values
                        Goal is to get them to the rightful position.  Look at what their bartering value – that would be helpful. But to what extent do we depart from market values bcause they have failed
 
The market provides an objective measure for the Plaintiffs Loss
                        To show that this is the value that a large number of people would attach to this value. The trial court should have looked to the value of the animals and the time it would take.
 
What if the Plaintiff feels there is no market value (and is able to make a strong argument that it is not enough)
                        What about the religious ceremonies that they could not have conducted? Obviously no dollar value – so try to put a dollar amount of the time it takes to find other transportation (Because the goal is to start with the market and then we get to elements of recovery like this – we are reluctant to say “too bad” – we try to individualize things further).
1.)      The mental anguish of the navajoes over the loss – animals had spiritual signifigance (how do you look at this à look at their suffering and crying, etc)
2.)      But when are these damages not being for mental anguish but becoming punitive (when is it appropriate to punish?) And when do we try to protect defendants
3.)      Beware of the Plaintiff hyping his or her injuries – our system is going to trust the juries to  evaluate the case – not necessarily to punish the defendant for his ignorance
 
Now we look at what happens when there is no market – there are things that are non-marketizable
                        What about like photo’s in a fire negligently caused in the
 
Why go into so much trouble – what is wrong with a lump-sum – these Plaintiffs are individuals – it is unfair to the defendant as it follows (more damage then he has actually caused)
                        Appellate court is that the defendant is not supposed to be punished – it should be to rememdy – not punish
 
What about the larger injustice? The trial judge went off on the treatment of native americans – having original right. Public appeal on behalf of Plaintiff was made by the judge
 
Us V. Hatahley
 
Elements of Damages
1.)      Horses ad Burros
2.)      Use value of animals until replacement
3.)      Loss of livestock – basic rule: Plaintiffs are entitled to market value of or the replacements cost, the taken animals plus the use value during the time between their taking and the time the animals could have been replaced
4.)      Travel problems
5.)      Missed religious ceremonies
6.)      Mental anguish
 
Do you do the market would do or a reasonable Navajo? Seems weird to make them think they wouldn’t do what they would normally do.
 
One feature of Hatahley is that there is no right to a jury trial under Federal Tort Claim Act (judge has to explain why he did what he did – jury wouldn’t have too)
 
Loss to a group? What happens when many people in a group injurd – (but not everyone ) – still the village itself falls apart as some flee – others get hurt, other just lose their community. Court says they have still suffered loss
 
In Re September 11th litigation
                        Larry Silverstein purchased 99-year lease on WTC to privatize it – renting it out etc, from the Port Authority – 2 months into lease by time towers fell. Sues airlines, airport authorites and operator of airports for income and loss of opportunity to get income.
                        What is his rightful position? He would have had buildings itself and the profits of the rents for the next 99 years
                        What does he get as a remedy? Replacement cost or just the cost of the building (market value for what was lost)
                        This brings in the lesser of two rule – Plaintiff gets market value (of building and the stream of rents – discounting present value 2.8 billion) or replacement costs. Replacement (costs would be 16_ billion)
                        Typically it’s the lower of the two but there is an exception for “Special” things that have no market value (generally churches, etc)
                        He argues there is no regular available market for its value (specific purporse, cant be used for other purposes)
                        What is the argument that WTCP has to make? No real market value – given history and iconic nature – not just an office building as the court ends up treating it – so unique and special – not able to come up for sale very often)
 
Court says at this time it has been privatized (another office building) – with a market value (it was just purchased!!)
 
What about covenants of P’s lease? – They are obliged to rebuild the towers in contract with port authority if destroyed. Court says no – defendant doesn’t assume the Plaintiffs contractual responsibility.  Defendants would have no reason to anticipate.
                        He had huge bindigs to authority to rebuild
                        What about future potential repayments for  rents? Those amount to nearly 4 billion (need to discount to get to present value – court says that would be a double recovery)
 
 Key themes
                        Rightful Position
                        Individualization of Relief
                        Market as “objective” measure of Plaintiff’s loss
                        Undercompensation/ Overcompensation
                        “Lesser of two” Rule
 
Judicial Remedies 
                        Cases have already had a trial generally – we know wrongdoer – what can Plaintiff get as relief
 
Key questions for Remedies
                        What are the alternative remedies avail for the Plaintiff?
                        Why does the ct. choose this over another?
                        What is the position we want to restore to Plaintiff? (what was his position before and after def’s wrong)                      
                        What are the dangers of each possible remedy (i.e of undercompensation or over?
                        What are the economic or moral principles that fuel the choice of remedy: efficiency or fairness?
 
Types of Remedies
                        Compensatory: Money
                        Coercive: Injunctions, specific performance
                        Declaratory: Defining Rights
                        Restitutional: Giving Plaintiff what the def gained
    

        Multiple ways to measure compensatory damages
b)       Does it make sense to exclude/include some things?
c)        Is it necessary to do justice to Plaintiffs under circumstances? Measure harm this way rather then that way?
d)       Damage based on value are very common –generally common sense – value of before  and after.
e)        Market measures sometimes work well but we are looking at when they don’t (when do we look, replacement is hard, value is tough to determine, shifts over time, what do we do?)
5)       Overwhelmingly say the used value is enough and courts are relunctant to give more
a)        But there are exceptions (soybean prices fluctuate a lot in value – disputes arise over long period of time)
b)       When they fluctuate unpredictably rules break down – look to other ways. If predictable will stick to black letter generally (people wouldn’t want to sell when supply is up and price is low though)
 
3.     Consequential Damages, pp. 52-67.
6)        Consequential Damages
a)        Buck v. Morrow
i)         Morrow leased pasture to buck. Contract says if sold the land he would compensate buck for any loss. Morrow does sell the land and Buck makes reasonable effort to find new place and couldn’t
ii)       Buck hurt because eventually finds other land and its more expensive and he had to hire another hand to look after after his cattle while they grazed openly
(1)     T1 Contract
(2)     2 years later T2 Morrow Sells
(3)     T2-T3 is 5 months and that’s the period in dispute (should Buck get the damages for hired hand and lost cattle
(4)     T3 Buck gets replacement land
(5)     T4 2  years and 7 months later contract expires. Buck recovers difference between market-cover price and contract (increase in rent)
iii)      Defendant argues that the Buck shouldn’t get special damage because this is a contract and contracts don’t give special damages generally
iv)      Generally you just get damage from contract. Other harm that arises is fault of both for not protecting themselves
(1)     Think about the exact opposite is flipped around in personal injury cases (general damages are what we would think of as special damages in contract
b)       Meinrath v. Singer
i)         Meinrath had a deal with Singer and Singer knew Meinrath had other business ventures. Singer was late with payments and some of Meinrath’s other business ventures failed
ii)       Nothing in contract that has anything to do with other businesses, completely different
iii)      Not enough that this defendant even knew that he would be hurting Plaintiff by being late
iv)      Just liable for payment and interest, the other thing was outside of the contract
v)       If don’t do this it would open door for Plaintiffs to do whatever they want. Issues of causation would be merky. (businesses could have failed anyway). Plaintiff who is late ingetting paid would say he could have invested in something that would have made lots of money
c)        But there could be harder examples
i)         Solvent small lender who cant afford to not get paid back. Courts may find basis for exceptions
ii)       Consequential damages ARE ALLOWED in breaches of contracts to lend money (because lending institutinos could screw people) .. they know what borrowers are  going to do with money and they know consequences for borrowers  not getting their money on time .
iii)      More specific – BAD FAITH BREACH of Insurance tort – takes it out of the realm of contracts
d)       Texoco
e)        The tort by texoco is by interfering with the performance of the contract. Getty breaches the contract
i)         Jury adopts a replacement costs theory for (price they would have to pay for getting the barrels to replace what they wont have lost
ii)       Stock value is way less then assets on the ground. Why are the two numbers so different (well under the ground)
iii)      Oil reserves themselves  trade in different markets
Because defendant liable in tort – he gets consequential damages which are not predictable in tort (losing the oil was a consequence of losing the stock – need to give plaintiff value of the oil