I. Introduction:
a. General thoughts on damages:
i. Damages provide a moral force to underlying substantive rights.
ii. If the damages they must pay exceed the harm they inflict, potential D’s will obey the law even when it is inefficient to do so.
iii. Damages should be set exactly equal to harms inflicted and then if an illegal act’s expected profit exceed the expensed damages, the will go ahead.
1. Example: Ford pinto case. $50 million for cost of accidents and $137,500,000 for prevention. They said screw it and they let the car blow up instead of fixing the engine. Why punitive are so important.
iv. Is it an effective way to police conduct or does it award useful things from happening? Can’t be total prevention, but there should be a societal level of prevention.
II. Compensatory Damages:
a. Substitutionary remedy designed to restore the P to their rightful position. (applies to tort and K cases)
i. Compensatory Damages
1. Idea is to restore the P to his rightful position.
2. Don’t say:
a. These damages are meant to make them “whole,” or
b. Put them back to the position they were in before the accident.
3. Compensatory damages are a substitutionary remedy b/c the person that was wronged is asking for something else, not what they lost.
a. Example: Lost an arm in an accident. Can’t ask for the arm back. Substituting it with money.
b. Example: Injunctive relief is a specific remedy b/c the P gets exactly what they are asking for.
b. Compensatory Damages in Tort:
i. 2 types of compensatory damages
1. General Damages: Non economic loss. No tangible way of proving your loss. Tort reform is trying to cap general damages.
a. Pain and Suffering
b. Emotional Distress
c. Hedonic Damages (quality of life damages)
d. Increased Risk
e. Medical Monitoring
f. If you are making a per diem argument, it would be here. What the day to day pain and suffering of your client would be worth.
2. Special Damages: Economic Loss, tangible evidence can be used to prove your loss. (objective losses) not subject to tort reform.
a. Medical Bills
b. Hospital Bills
c. Lost Wages
3. Purpose: to protect society’s interest in freedom of harm.
a. Tort principles such as negligence are better suited for resolving claims i
e w/ what the actual damages turned out to be. Is there a close relationship?
b. If there is, it’s enforceable. Did the parties put in a one size fits all provision? Or, like Ashcraft case, the amount was elevated as he became more senior in the firm. This is often enforceable. Went w/ the attorney’s value w/ the firm, not just a number for everyone.
c. Some people tend to think that crts should be deferential to liquidated damages provision, assuming the parties are on an equal bargaining plane.
2. Shouldn’t the crts defer to the parties intent? Look at justice Pollack’s statement in Spring Motors: generally speaking when talking about consequential loss, we are more willing to allow a more far flung measure of consequential loss in tort b/c by definition it’s an unanticipated event and as long as you can show proximate cause in tort, you get emotional distress, punitives, broader array of recovery. Whereas in K cases, you can allow for consequential loss, you continue to recognize a contract based duty is about promises made b/t parties. Parties control their destiny, unlike tort cases.
