Equitable and Legal Remedies Outline
I. Introduction
A. Remedies is about what parties get when they win and what they have to do when they lose
B. Remedies effect whether people will pursue their rights – i.e. will you sue for $100K or just an apology
C. Overview
1. Two major questions
a. What remedy or combination of remedies should be awarded?
b. What is the measure or the scope of the remedy chosen?
2. 6 main remedies
a. Compensatory damages – compensate for harm suffered
b. Injunction – coercive remedy – personal command to act or avoid acting
i. Subject to contempt if disobeyed
c. Declaratory judgment – statement of what your rights are
d. Restitution damages – literally try to restore something, prevent unjust enrichment, measured by Δ’s gains rather than Π’s losses
e. Punitive damages – to punish and deter
f. Ancillary remedies – anything to aid a remedy, court costs, attorneys’ fees, etc.
3. Rules surrounding each remedy are different
II. Paying for Harm: Compensatory Damages
A. Restoring Π to her rightful position
1. Example
a. US gov’t took Πs (Navajo Indians) horses and burros and turned them into glue
b. Losses sustained by Πs
i. Actual value of h & b
1) FMV as of the time of taking – compare to similar animals in training, area, etc.
2) Don’t look at other figures when it can be replaced on the market, just use FMV
ii. Loss of use of h & b
1) Period is from the date of loss to the date RP would’ve replaced the h & b
2) Liable for the amount of damage you proximately cause
iii. Mental pain and suffering
1) Have to individualize the pain and suffering
a) This is a personal injury, not common to the group, so you can’t just treat all members of the group alike
2) Pain and suffering must be proximately caused by gov’t wrongs
a) Judge can’t do his sense of justice for the Navajo Indians and all of the wrongs that the gov’t has perpetrated against them, it has to be just from this wrong, the taking of the h & b
2. Reasons for going through this and not just picking a “fair” number
a. Judicial power too great
b. Arbitrary outcomes
c. Inconsistency
d. Π must prove the harm caused to them
e. Getting as fair a result as possible
3. The fundamental principle of 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
B. Value as the measure of the rightful position
1. You typically don’t get fair replacement value, you get FMV
2. When you go to fair market value, sometimes you aren’t truly placing the Π in the position she would have been in but for the Δ’s wrong
3. Why?
a. Potential for windfall
b. FMV is objective and easy to apply, replacement value is harder to value and you aren’t necessarily improving the process
4. Exceptions
a. Cost of replacing component parts of a large whole
i. Typically you would measure the FMV of a building w/ A/C to a building w/o A/C, which is what Π would be entitled to
ii. But since a building w/o A/C is uninhabitable (would require abonandonment), the court in gave the cost of replacement of the A/C
iii. Typically, we use the cheapest way to effectuate the remedy
b. Special value property
i. Example
1) Structural damage to a church
a) No FMV for churches
b) Use “takedown” theory of damage assessment
i) Point at which the church has to be taken down
ii) Was at 26% of takedown → now at 65% of takedown
iii) Value of repairs for that increase in takedown – repairs must be reasonable and reasonably needed in terms of the damage
2) Totally destroyed church
a) There isn’t a FMV, so you have to go with replacement value, but what do you replace it with?
i) What the church decides to do with their money is their choice – they can repair, move to the suburbs, etc., but that choice is with Π and Π alone
ii) Once you are looking at replacement cost, courts often do want to look at what you actually did to try and judge what is reasonable
b) When you have special use property, there is no FMV, so you typically go to replacement cost to assess damages and that gets fuzzy and difficult
c. Valuing something whose value fluctuates over time – when do we value things for purposes of measuring damages?
i. Crops = at the time of harvest
ii. Ks = value at the date of br/K
iii. Property damage = value at the date of the wrong
iv. When values fluctuate unpredictably, some courts will look to other rules to do justice
5. Present Value
a. All awards for future pecuniary loss must be reduced to present value
b. See Unit 2, Handout #2
C. Reliance and expectancy as measures of the rightful position
1. Expectancy
a. What you expect to benefit from a K
b. Damages are what the benefit of the bargain is
i. Expected profit, use, etc.
c. Π gets what he would have gotten if the K had been performed
d. Where can the expectations come from?
i. Typically from the K or the seller’s representation
e. Reasons against expectancy damages
i. People should be able to change their minds and get out of promises without having to pay expectancy
ii. It’s a good idea to let things ebb and flow
iii. Encourages over-reliance and no investigation
f. Reasons for expectancy damages
i. We want people to rely on Ks
ii. Puffery has no place in the world of promises that can be enforced in court
2. Reliance
a. What the Π has expended in performing the K that has been breached
3. Often times, expectancy overlaps with reliance – you have to try and categorize reliance and expectancy damages separately to get both
4. In fraud cases you only get reliance damages, not expectancy damages
D. Consequential damages
1. General damage
for economic harm when there is no direct damage to their person or their private property
1) However, here the Δ didn’t challenge the fishermen, so they recovered
2) Court allowed recovery for boat, tackle, and bait shop owners
3) Court did not allow recovery for the seafood wholesalers, retailers, processors, distributors, and restauranteurs
iii. Court makes a distinction between those on the water and those off the water – kind of a proximate cause distinction, but really kind of just an arbitrary line to limit liability
1) Why?
a) This will go back to infinity
b) Double counting
i) Fishermen are already being compensated and the fish would be sold several times between the fishermen and the wholesalers and the processors, etc
(a) Since each link in the chain makes a separate profit, this may not really be such a problem
ii) Issue of certainty as to damages
(a) But uncertainty falls on the Δ
c) Cover – seafood dealers could buy seafood from somewhere else
d) Potential judgment is just too high – we can’t let things get out of hand, we have to cut off liability at some point
e) We want to have corporations in existence and in a way it is a subsidy to the corporation not to make them pay all of their damages
c. Should it matter if Π files in tort or K?
i. Typically you can get around a lot of the limits imposed by K law, by going into tort
ii. Don’t get hung up on distinguishing between tort and K b/c the lines aren’t clear
3. The certainty requirement
a. More aptly termed the not exactly certain requirement
b. When there is no way to determine Π’s actual damages, the jury has to make a just and reasonable estimate, they can’t just speculate
i. Why?
1) If we required absolute certainty, Δ’s would almost be encouraged to do wrongs
2) Lost profits are difficult to assess
3) Even more difficult in things like antitrust cases because there is no comparison if a free market had existed
c. Δ caused the lost profits AND the Π’s inability to prove the damages precisely
d. The wrongdoer shall bear the risk of the uncertainty which his own wrong has created
i. Δ bears the uncertainty as to the amount of damages, but Π has to prove by a preponderance of the evidence that there was injury, in other words, Δ does not bear the risk of uncertainty as to the presence of damages
