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Equitable Remedies
Wayne State University Law School
Chardavoyne, David G.

EQUITABLE REMEDIES SUMMER 2012 – CHARDAVOYNE
I.                  Class Overview
·         Why do we have this class?  Equitable remedies are distinctly different from legal remedies
o   Can be much more complex, yet still have tremendous impact on the courts, and may attorneys/judges don’t understand them
·         TWEN will be main form of communication
o   Course materials will be posted
·         Assignments will be communicated through email
·         Will be looking at a few case studies
o   Higgins Lake – riparian rights
o   Hank Williams family
o   Rose Carmen
o   Sherwood v. Walker
§  Enforcing a contract through equity rather than damages
·         Legal remedies vs. Equitable remedies:
o   Legal remedies are very rigid and formulaic, Law tends to be specific and enforce specific rights (know what it is and what it isn’t)
§  Example – statute of limitations, just math basically
§  In equity parallel is laches = left something behind.  No specific time period.  Question of court’s discretion
o   Equity has grown to include maxims of equity (see handout) – don’t need to memorize.  They give an idea of how equity works
II.               What is an Equitable Remedy Anyway?
A.                Frederick William Maitland, The Origin of Equity
·         Three courts of the 13th Century: King’s Bench; Common Bench or Court of Common Pleas; and the Exchequer
·         Equity grew out of unhappiness w/ CL system in medieval times (focused on damages and specific causes of action – cases had to fit or got no relief)
·         Chancery
o   Chancellor was King’s assistant (usually priest / bishop), people went to him to get help and created a conflict between judges and chancellor à based more on justice and right, not just with law (ad hoc what’s right)
o   Issued writs whereby actions are begun in the courts of law
o   Court of Chancery
§  Two sides: a common law side and an equity side
§  Chancellor would consider a petition or bill, and would issue a “subpoena” to order the adversary to come before him and answer the complaint
o   Was allowed to enforce uses, trusts and confidences
o   King James issued a decree whereby the Chancery could prevent men from going to courts of law, whereas the courts of law could not prevent men from going to the Chancery.
o   Continued through the beginning of the 20th century as separate legal systems
o   Around that time, realized that having two separate systems were inefficient
§  Some states have held out, including the state of Delaware
·         Most corporate cases go to the court of chancery in Delaware
§  In most states, were merged, but not entirely
·         Same judges, clerks, etc., and may consider legal and equitable claims in the same case
·         Distinction has remained, remedies for equity, but still carry some of the same advantages/burdens as in separate courts:
o   Equity can act only when there is not an adequate legal remedy at law
o   Law acts in rem, whereas Equity acts in personam
§  A judgment for damages is not an order to the defendant to pay you that money.  Simply a statement that the order can be enforced against the property.
·         If you can find the defendant’s things, you can take them
§  An equitable decree is directed at the person of the defendant
·         An order for the defendant to turn over a piece of property; order by the court that binds that person to deliver that property to the plaintiff, and if doesn’t then can be punished by contempt
B.                 Types of Equitable Remedies
1.      Injunctions: An order by a judge to a person to do something or not do something that is punishable by contempt
2.      Specific Performance
3.      Contempt itself
o   Civil
o   Criminal
4.      Equitable Restitution (as opposed to legal restitution)
5.      Constructive Trust
o   Tracing
6.      Rescission
–          Historically, there were other equitable remedies: quiet title and partitions; guardianships, divorces, adoptions, etc.
C.                Maxims of Equity
1.      Equity regards as done that which ought to be done
2.      Equity will not suffer a wrong to be without a remedy
a.       cornerstone of equity
3.      Equity is Equality
4.      Equity regards substance rather than form
5.      One who seeks equity must do equity
a.       Can’t be unjust and turn to the court to expect justice is done
6.      Equity aids the vigilant, not those who slumber on their rights
7.      Equity imputes an intent to fulfill an obligation
a.       Example: assume that you meant to sign the contract
8.      Equity acts in personam.
9.      Equity will not concern itself with abstract wrongs
10.  Equity abhors a forfeiture
11.  Equity does not require an idle gesture
12.  One who comes into equity must come with clean hand
13.  Equity delights to do justice and not by halves
14.  Equity will take jurisdiction to avoid a multiplicity of suits
15.  Equity follows the law
16.  Between equal equities the law will prevail
17.  Between equal equities the first in order of time shall prevail
18.  Equity will not aid a volunteer (i.e., an intermeddler)
 
D.                Grupo Mexicano v. Alliance Bond Fund, 527 U.S. 308 (1999)
·         Alliance Bond Fund, Inc., an investment fund, purchased approximately $75 million in unsecured notes (Notes) from Grupo Mexicano de Desarrollo, S. A., (GMD) a Mexican holding company involved in a toll road construction program sponsored by the Government of Mexico. Four GMD subsidiaries guaranteed the Notes. After GMD fell into financial trouble and missed an interest payment on the Notes, Alliance accelerated the Notes' principal amount and filed suit for the amount due in Federal District Court. Alliance requested a preliminary injunction restraining GMD from transferring its assets alleging that GMD was at risk of insolvency, or already insolvent, that it was preferring its Mexican creditors by its planned allocation to them of its most valuable assets, and that these actions would frustrate any judgment that Alliance could obtain. Alliance sought monetary damages and no lien or equitable interest was claimed. The District Court issued the preliminary injunction and ordered GMD to post a $50,000 bond. The Court of Appeals affirmed.
·         Issue: Does the District Court, in an action for monetary damages, have the authority to issue a preliminary injunction preventing the defendant from transferring assets in which no lien or equitable interest is claimed?
·         Holding: Court lacked the authority to issue a preliminary injunction preventing defendants being sued by creditors from

  Federal Rule of Civil Procedure 38
(a) Right Preserved. The right of trial by jury as declared by the Seventh Amendment to the Constitution–or as provided by
a federal statute–is preserved to the parties inviolate.
(b) Demand. On any issue triable of right by a jury, a party may demand a jury trial by:
(1) serving the other parties with a written demand–which may be included in a pleading–no later than 14 days after the last pleading directed to the issue is served; and
(2) filing the demand in accordance with Rule 5(d).
(c) Specifying Issues. In its demand, a party may specify the issues that it wishes to have tried by a jury; otherwise, it is considered to have demanded a jury trial on all the issues so triable. If the party has demanded a jury trial on only some issues,
any other party may–within 14 days after being served with the demand or within a shorter time ordered by the court–serve a demand for a jury trial on any other or all factual issues triable by jury.
(d) Waiver; Withdrawal. A party waives a jury trial unless its demand is properly served and filed. A proper demand may be withdrawn only if the parties consent.
§  Must use it or lose it (can’t raise on appeal)
(e) Admiralty and Maritime Claims. These rules do not create a right to a jury trial on issues in a claim that is an admiralty or maritime claim under Rule 9(h).
 
E.                 Federal Rule of Civil Procedure 39 – Trial by Jury or by the Court
(a) When a Demand Is Made. When a jury trial has been demanded under Rule 38, the action must be designated on the docket as a jury action. The trial on all issues so demanded must be by jury unless:
(1) the parties or their attorneys file a stipulation to a nonjury trial or so stipulate on the record; or
(2) the court, on motion or on its own, finds that on some or all of those issues there is no federal right to a jury trial.
(b) When No Demand Is Made. Issues on which a jury trial is not properly demanded are to be tried by the court. But the court may, on motion, order a jury trial on any issue for which a jury might have been demanded.
(c) Advisory Jury; Jury Trial by Consent. In an action not triable of right by a jury, the court, on motion or on its own:
(1) may try any issue with an advisory jury; or
(2) may, with the parties' consent, try any issue by a jury whose verdict has the same effect as if a jury trial had been a matter of right, unless the action is against the United States and a federal statute provides for a nonjury trial.
 
o   In equity action, court can impanel an advisory jury whose function is to act like normal jury, but give opinion and judge can accept or reject.