remedies goodman 2013 outline

8/17/2019 Remedies Goodman 2013 Outline

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REMEDIES

GoodmanFall 2013

A remedy is anything a court can do for a litigant who has been wronged or is about to be wronged *be able to explain why the rule exist; don’t blindly apply the rule if it doesn’t make sense to

Law Equity

Declaratory

Judgment

Tort damages (economic,noneconomic, etc.)

injunction

Contract damages (exectancy! reliance)

specific performance

"n#u$t Enric%ment(&'e$titution)

. * %old$ title+i. writ of replevin(er$onal roerty)

ii. writ of ejectment (real roerty)

. Title i$ -+i. assumpsit (ca$%)ii. quantum meruit

($er/ice)

. %old$ title+i. constructive

trust (* reain$leal title)

not re$on$ile 4or reac% o4 4iduciaryduty, $uroation,equitale lien$

reformation/rescission are reliminary o$er/ation$ (not remedie$)5 t%ey are declaratory in nature ut

are not declaratory #udment$. 'e4ormationre$ci$$ion are rerequi$ite$ to determinin i4 remedy i$ leal

or equitale (con$equence o4 re4ormation i$ almo$t alway$ re$titutionary)

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6. C!!SI"# $E#%$ &S' E()I*%+$E REMEDIES . Generally 7 t%e irrepara,le injury rule $tate$ t%at court$ will not rant an equitale remedy i4 a

leal remedy would e adequate5 a leal remedy i$ inadequate i4 t%e lo$$ i$ unique(%ard to /alue) ! $carce (not readily relaceale in t%e mar8et) or t%e leal remedy i$

not &a$ comlete, ractical and e44icient a$ equitale remedy

7 in ractice, court$ only ay li $er/ice to t%i$ rule+ today, court$ are willin to i/et%e etter o4 t%e two remedie$ (ad/ocate9$ arument : 66' ! larer dri/in 4orce)

7 %owe/er, er t%e undue ,urden defense, i4 t%e %ard$%i to ;' Court i$ undue,equitale relie4 will not e ranted5 a urden i$ undue i4 t%e urden i$di$roortionate to any ene4it t%at * will recei/e 4rom in#unction

7 %owe/er, t%e undue urden de4en$e i$ -;T a/ailale to 9$ w%o acted deli,eratelyto %arm *5 a act$ delierately i4 t%ey could %a/e corrected a mi$ta8en elie4 yta8in &rea$onale care

7 -rd parties+ Equitale relie4 may e denied a$ed on it$ e44ect on 3rd artie$. 6nreard$ to order$ to de4endant t%at merely a44ect 3 rd artie$, law $eem$ to e t%atinnocent 3rd artie$, can e a44ected $u$tantially, ut not to t%e oint o4 einre$tructured (t%at i$, %a/e t%e court ta8e o/er and tell 3rd arty w%at to do). common law court wa$ older $o traditional remedy wa$ damae$ and writ$ (writ$ are

/ery $eci4ic, %owe/er, $o court$ didn9t want to 8ee creatin new one$ equity

court$ $tarted u$in eneral in#unction$) >66' rule created to re$ect rulin cla$$e$ durin 1?1? (t%i$ i$ not imortant today) C. Equity /$. Law >equita,le remedy. court$ o4 equity do not i/e artie$ ri%t to a #ury (#u$t @in and

contemt ower 4or /iolatin order) i. in#unction$order$ ii. specific performance. $ecialiAed 4orm o4 in#unction t%at order$ to er4orm

t%e contract5 court$ 4requently rant $eci4ic er4ormance o4 8 i4 $carcity, timecon$traint$, or t%e $%eer $iAe o4 8 ma8e it /ery di44icult to co/er

legal remedy. court$ o4 law i/e artie$ ri%t to a #ury trial and doe$ not contain contemt ower 4or /iolatin #udment

i. damae$ ii. writ$ (rele/in, tre$a$$, e#ectment, e/iction) >replevin+ %a$ a narrower $coe t%an in#unction$5 it i$ only u$ed to reco/er

roerty, not to re/ent a t%reatened de$truction or di$o$$e$$ion . Pardee v. Camden umber B3 .E. D2

>4act$+ * $ued to en#oin 4rom cuttin down timer on *9$ land. * want$ reliminary4orm o4 relie4 c i$ tryin to cut down timer now

>i$$ue+ i$ an in#unction roer o/er damae$ >%oldin+ ye$5 t%e court rein$tated t%e in#unction, and remanded t%e action. >old rule wa$ t%at * mu$t ro/e wa$ in$ol/ent e4ore awardin in#unction court

re4u$e$ to adot t%i$ rule c it allow$ to commit $uc% act$ a$ lon a$ could a44ord to >leal remedie$ were inadequate to re>con/ert lo$ and lumer into li/e, $tandin tree$

>damae$ are adequate in in$tance$ in w%ic% roerty t%at i$ in#ured may e $u$tantially relaced wmoney reco/ered a$ it$ /alue

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>%ere, damae$ are inadequate c * cannot u$e t%e money to relace tree$ >i4 er$onal roerty %a$ a /alue eculiar to it$ owner, or &rice o4

a44ection, equity will /indicate and u%old t%e ri%t to o$$e$$ion E. !rook v. "ames Cullimore # Co. 3? *.2d 32 0use writ to avoid IRR rule >4act$+ aealed TC9$ #udment t%at ordered to deli/er roerty to *5 arue$ t%at

roerty $%ould e /alued and money damae$ are roer remedy.

>i$$ue+ can $u$titute in#unction order 4or money damae$ >%oldin+ -o5 * %ad ri%t to elect eit%er return o4 roerty or money damae$ >$ucce$$4ul litiant entitled to eit%er t%e return o4 roerty or money damae$ >i4 roerty cannot e returned, * can t%en c%oo$e money damae$ >i4 return i$ o$$ile, mu$t e returned i4 t%o$e are *9$ wi$%e$

>%ere, * i$ a$8in 4or writ o4 rele/in (t%i$ i$ a leal remedy not equitale remedy)5t%ere4ore, c rele/in i$ a leal remedy5 it i$ not $u#ect to t%e 6'' rule

F. Continental Airlines v. $ntra !rokers 2 F.3d 10>4act$+ Continental uli$%ed couon oo8$ wno>$ale ro/i$ion, ut told 6ntra t%at it wouldn9t

en4orce it. Later c%aned o$ition and told 6ntra, w%ic% re4u$ed to comly. -oe/idence o4 %armene4it a$ a re$ult, al$o no e/idence o4 exen$e$ y 6ntra in relianceon old olicy5 TC rant$ in#unction aain$t 6ntra not to $ell couon$

>i$$ue+ 6ntra arued in#unction wa$ not roer c * %ad adequate leal remedy (lo$$e$4rom a$$ener$9 u$e o4 couon$)

>%oldin+ damae$ are not an adequate remedy >/ery %ard to determine w%et%er * wa$ %armeddi44iculty and exen$e o4 e$tali$%in

economic %arm $uort$ arument t%at damae$ would e inadequate remedy >* i$ entitled to ma8e u$ine$$ deci$ion$ (not and not court) 7 real lo$$ wa$ o4

ower o/er u$ine$$ >note+ deci$ion %old$ on to $ome $emlance o4 6'' y $ayin t%at it9$ di44icult to determine

t%e money amount5 ut i4 6'' wa$ really determinati/e t%e court would o t%rou% t%e ain o4 determinin damae$

G. Campbell %oup v. &ent' 1B2 F.2d D0 specific performance4act$+ Camell contracted w HentA to uy carrot$. =ar8et rice $%ot u HentA reac%ed.

Camell $ou%t in#unction and $eci4ic er4ormance o4 8. >i$$ue+ i$ $eci4ic er4ormance o4 8 roer >%oldin+ ye$5 unique 1 scarcity 2 equita,le relief justified >inadequacy i$ determined y an examination o4 t%e 4act$ in eac% in$tance >%ere, ene4it o4 8 to Camell wa$ reliaility and con$i$tency t%e$e articular

carrot$ were a unique and $carce roduct t%at t%ey contracted 4or $o t%ey coulda/oid $cramlin to 4ind t%em on t%e mar8et

>it would e etter 4or Camell to et equitale remedy, ut leal remedy i$adequate $%ow$ t%at e/en in t%e u$ine$$ world, w%ere it$ money>dri/en, weare $till willin to o44er equitale remedie$

>note$+ in t%e minority o4 $tate$, you cannot con$ider 9$ inaility to ay w%enc%oo$in etween equitale and leal relie45 C i$ in t%e ma#ority (i4 can9t

ay it doe$n9t ma8e $en$e to u$e leal remedie$). i$$ue+ i$ $eci4ic er4ormance o4 8 roer >%oldin+ no5 damae$ are adequate ! undue %ard$%i to >uniqueness. t%ere i$ a di44erence etween %y$ical di44erence and economic

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interc%aneaility and t%e oint at w%ic% reac% i$ redre$$ale y * doe$n9t lie in %y$ical uniquene$$, ut in uncertainty o4 /aluin it

>%ere, /alue o4 commercial illoard $ace i$ not $eculati/e >rantin * in t%i$ ca$e would al$o %arm di$roortionately comared to %ow

muc% it would ene4it * 6. &hilock v. +ilgander ,oods B20 -.E.2d 302 deli,erate e3ception to undue ,urden

>4act$+ * ranted ermi$$ion to uild wall on roerty line * noticed &4ootin$ extendedto *9$ roerty ut a4ter con/er$ation w. , elie/ed in ood 4ait% t%at wouldreimur$e *. *artie$ could not reac% areement. * $ue$ 4or in#unction. TC award$ J to, 4indin t%at encroac%ment wa$ unintentional and * unrea$onaly delayed 4ilin $uit

>i$$ue+ did act delierately w%en uttin 4ootin on *9$ roerty >%oldin+ remand5 in eneral, TC mu$t alance t%e %ard$%i to t%e aain$t t%e ene4it to t%e

* "T i4 9$ ad act i$ delierate, t%e court may i$$ue t%e in#unction reardle$$ o4t%e %ard$%i to

>%ere, alance o4 %ard$%i clearly 4a/or$ wall already uilt/ery exen$i/e

>reardle$$, mi$ta8en elie4 y would not $a/e it 4rom in#unction i4 could%a/e 4iured it out wit% &rea$onale care

>* alerted and continued e/en a4ter otained 8nowlede

> %a$ lac%e$ de4en$e i4 %e can $%ow t%at * unrea$onaly cau$ed delay in $uit J. Co-perative $nsurance %ociety v. Argyll %tores 0undue 4ards4ip to court

>4act$+ a4eway decided t%at numer o4 $tore$ were no loner ro4itale and decided toclo$e t%em. T%i$ wa$ a reac% o4 t%eir lea$e, w%ic% contained an oliation to8ee t%e remi$e$ oen 4or retail trade durin u$ual %our$ o4 u$ine$$.

>i$$ue+ $%ould t%e $tore e ordered to continue oeratin at a lo$$ >%oldin+ no5 damae$ are a etter remedy t%an $eci4ic er4ormance >t%e i$$ue o4 $uer/i$in $eci4ic er4ormance %ere i$ an undue %ard$%i on t%e

court c 4orcin a u$ine$$ to $tay oen w%en it9$ executi/e$ t%in8 it i$unro4itale will di$courae t%e executi/e$ 4rom manain t%e $tore roerly

>counter$+ ot%er $tore$ relied on a4eway to draw cu$tomer$ into t%e $%oincenter5 and in#unction would %a/e allowed artie$ to lan a tran$ition

>court$ are not $uited to run u$ine$$e$

66. C!M5E"S%*!R6 D%M%#ES . Generally 7 Comen$atory damae$ are de$ined to ma8e * a$ well o44 a$ i4 t%ere %ad een no

wron5 t%e oal i$ to ut * ac8 in t%eir &ri%t4ul o$ition (not &made w%ole). *erreac%in arty ecau$e t%ey relied on t%e

contract and (2) rea$onaly 4ore$eeale to t%e de4endant. E3pectancy damages cature$ t%e ene4it o4 t%e arain t%at would %a/e occurred i4 contract wa$ not reac%ed K see exception for lost volume sellers.

7 limits on damages. 6n eneral, t%ere are $e/eral limitation$ on damae$. 6n recontractual limitation$, t%e rule i$ t%at artie$ are allowed to contract limitation$ onremedie$ ut cannot arain $o muc% a$ to e44ecti/ely eliminate any remedy 4or reac%.


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1. Liquidated damae$ 2. General limitation$ (a/oidale con$equence, remotene$$, uncertainty, etc.) 3. *er$onal 6n#ury*ain M u44erinHron4ul eat% . Con$titutional 4act$+ o/ernment aent$ came in aain$t order$, too8 %or$e$ owned y *>-ati/emerican$ and $old t%em to lue 4actory

>%oldin+ 10t% cir. ruled t%at * mu$t ro/e exactly t%e amount o4 damae$ $u44ered, w%en o$$ilewo reci$ion, award$ mi%t e a wind4all to $ome *$ w%ile it would

$to $%ort o4 re$torin ot%er$ . Nalue a$ a mea$ure o4 t%e &'i%t4ul *o$ition ($esser of 8*wo9 Rule)

i. rule+ * w%o$e roerty %a$ een in#ured reco/er$ t%e le$$er o4 &two+a. diminution of mar;et value (mar8et /alue immediately rior to in#ury 7 /alue a4ter)

. cost of replacement (relacement /alue immediately rior to in#ury) c. cost of repair 1 loss of use -;TE+ we do not o44er lo$$ o4 u$e a$ a damae y it$el4 c it i$ u to * to

mitiate it$ lo$$e$

0004owever all t4ree options provide for prejudgment interest000 ii. excetion$ a. unique property e3ception > w%en roerty i$ unique or de$ined to e u$ed in a /ery $eci4ic way, and t%ere

i$ no rou$t mar8et /alue, t%en we ta8e away diminution o4 mar8et /alueotion and aly eit%er t%e ot%er two otion$ or any rea$onale /aluation

>special purpose rule 4or item$ t%at %a/e reater /alue to t%eir $eci4ic ownert%an to t%e eneral mar8et not wildly adoted (ex. 4amily ortrait$)

. specialty/lu3ury carscar$ unique c e/en w%en reaired er4ectly, t%eir /alue i$ ne/er 4ully re$tored

>many court$ under$tand t%i$ and allow * to reco/er repair costs 1 loss of use 1

residual loss of value ($ome extra amount to ma8e u 4or mar8et) i4 t%i$c%eae$t otion (T6LL **LO LEE' ;F TH; '"LE)

>residual loss of value : /alue e4ore accident 7 /alue a4ter reair>ractical e44ect i$ t%at re$idual lo$$ o4 /alue ta8e$ reair co$t otion o44t%e tale c it enerally ma8e$ it more exen$i/e t%an ot%er two otion$

>insurance. %owe/er, i4 you collect 4rom your own in$urance, * enerally et$t%e le$$er o4 reair co$t or t%e mar8et /alue o4 car

c. lemon effect &lemon e44ect dere$$e$ t%e u$ed>roduct mar8et c uyer$ are weary o4 t%e

uncertainty o4 uyin u$ed dud$ (mu$t e ale to urc%a$e new /er$ion o4u$ed>ood)

>replacement value of new product < 3 num,er of years for depreciation of

t4e defective product 7determined ,y e3pert: >not ma#ority rulenot adoted in C >only adoted in $tate$ t%at %a/e adoted t%e re$tatement

>doe$ not aly to car$d. 4luctuatin /alue$ ($toc8$, etc.) 7 don9t worry aout t%i$ excetion

iii. eneral note$ a. enerally, co$t o4 relacement P diminution o4 mar8et /alue . co$t or relacement Q diminution in only 1 $cenariospecial and unique items

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c. co$t o4 relacement : diminution w%en t%ere i$ total de$truction i/. $n re %eptember 11th I0 F. u.2d I3I

Goodman doe$n9t t%in8 11 ca$e i$ a ood alication o4 t%e law ut ,isher ca$e i$ a$trai%t4orward alication o4 le$$er o4 two rule

>4act$+ tenant $ou%t damae$ (relacement co$t ! lo$$ o4 u$e a8a rental ayment$) a4terterrori$t attac8$

>%oldin+ * not entitled to lo$t rental ayment$ >unique roerty excetion doe$ not aly c t%ere wa$ recently an auction t%at

aed mar8et /alue >court alied rule wit%out reard to 4act attern, %ere * arued it $%ould et lo$$

o4 u$e (rental mt$) c it would ta8e an excetionally lon time to reuild and* wa$ in t%e u$ine$$ o4 rentin ut court arue$ rental /alue i$ uilt into t%e

rice * aid 4or and t%at * et$ re>#udment intere$t durin litiation> ,isher ($trai%t4orward alication o4 rule)

>1.03 = relacement co$t >D0 8 diminution le$$er o4 two

>diminution %ere wa$ muc% lower c Nictorian %ou$e$ were not de$iredin t%e nei%or%ood

>co$t o4 reair (not mentioned in ca$e) i$ t%e t%ird and la$t way to /alue /. 2rinity Church v. "ohn +ancock I02 n.e.2d I32 Goodman t%in8$ court me$$ed u in 11 ut ot 2rinity ri%t5 t%i$ i$ a ood examle o4

one way to $ol/e an i$$ue w%en t%e rule doe$n9t ma8e $en$e >4act$+ Jo%n %oldin+ court alie$ $ecial roerty excetion5 u$e a rational and rea$onalealternati/e w%en current otion$ don9t ma8e $en$e

>*9$ $tratey wa$ to mea$ure c%urc% in term$ o4 li4e$an o4 c%urc% (&100Rta8edown) and t%e R o4 ta8edown t%at occurred e4ore and a4ter 9$

exca/ation ro#ect ean.>100R ta8edown : co$t o4 relacement

> owe$ (di44erence in ta8edown R) x (/alue o4 100R ta8edown) >di$$ent+ damae$ are aroriate only w%en t%ere i$ lo$$5 %ere, t%e uildin i$ #u$t a$

u$ale a$ it wa$ e4ore we 8now * i$n9t oin to u$e damae$ to 4ix c%urc% C. Reliance and E3pectancy (Contract reac%) i. rule+ * w%o i$ in#ured 4rom a contract reac%, may reco/er reliance ! exectancy damae$ >er Goodman, we don9t worry aout duty to mitiate (uyer i$n9t oliated to $u$titute) >reliance. co$t cau$ed y reac% and incurred y non>reac%in arty c t%ey relied on 8 >reliance damage 2 pro3imately caused ,y ,reac4 1 reasona,ly foreseea,le

>alway$ entitled to re>#udment intere$t >al$o 8nown a$ &incidental or &con$equential

>e3pectancy. ene4it o4 t%e arain (non>reac%in arty entitled to t%e ene4it o4 t%e arain t%at would %a/e occurred i4 8 wa$ not reac%ed)

>in eneral, we loo8 at 4air mar8et /alue >in re lost volume sellers, we loo8 at ro4it c t%ey li8ely %a/e inroad$ w%ere

t%ey %a/e %eaer co$t$ t%an 4air mar8et rate$ >&in t%e u$ine$$ o4 $ellin x roduct$ trier$ lo$t /olume $eller >$u$titute ood$ mu$t e $u$titute$ (not urade$) >negative e3pectancy+ occur$ w%en $uin o/er your own lo$in 85 wort% it c it$

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een reac%ed and reliance damae$ P 8 lo$$e$ >ex. remedy : exectancy (neati/e) ! reliance5 Kreliance /alue reduced

c o4 neati/e exectancy ii. 3eri v. 4etail )arine Corp. 2DI -.E.2d 311 don=t forget parties entitled to restitution $trai%t 4orward alication o4 8 damae$ >4act$+ uyer ay$ deo$it (S2I0) 4or oat re$cind$ order re4u$e$ to re4und

deo$it c oat i$ already on t%e way. uyer $ue$ 4or deo$it return5 $eller counter$ue$ 4or

reac% o4 contract damae$. >%oldin+ in reac% o4 8, $eller i$ entitled to ot% exectancy and reliance5 uyer i$

entitled to damae$ re$titution >deo$it : S2I0 uyer et$ deo$it ac8 on re$titution t%eory (/alue o4

unearned ene4it to )>deo$it i$ a way o4 le$$enin tran$action co$t$

>uyer et$ deo$it ac8 c onu$ i$ on to ro/e t%at t%e deo$it wa$earned (%a$ to e /ery $eci4ic)

>4oreone ro4it : S2IB exectancy 4or a lo$t /olume $eller only (t%i$ i$

di44erent 4or ot%er u$er$) >uyer arue$ $eller later on $old $ame oat and $till made ro4it (uyer

lo$e$ t%i$ arument c t%eory i$ $eller could %a/e $old two oat$ in$tead

o4 one 7 &lo$$ /olume $eller) >lo$t /olume $eller$ ma8e money y $ellin a$ many unit$ a$ o$$ile >$torae 4ee$ cau$ed y reac% : S?B reliance iii. Chatlos %ystems v. 3ational Cash 4egister ?B0 F.2d 130 imortant ca$e5 Goodman t%in8$ ca$e et$ rea$onin wron (ri%t damae$ t%ou%) >4act$+ comuter roduct wa$ in4erior to w%at wa$ ad/erti$ed >S20B,000 ad/erti$ed /alue >S?,000 8 rice (t%u$, 20B8 > ?8 : ene4it o4 t%e arain : e3pectancy)

>S?,000 actual /alue o4 roduct (reliance : ?8 7 ?8 : 08) >%oldin+ damae awarded : S201,000 entitled to ene4it o4 t%e arain K20B8>?8

! reliance K?8 7 ?8 i/. %mith v. !olles 132 ".. 12I 0do not cite>no longer good law

4act$+ * ou%t minin $toc8 at S1.I0 (rere$ented wort% : S10$%are) ut 4ound out t%atland wa$ wort%le$$

>old ca$e$ u$e to ma8e a di$tinction etween tort and contract5 t%e$e day$ we #u$tu$e exectancy ! reliance

>%owe/er, one remainin ene4it o4 $uin under tort i$ ettin uniti/e damae$(not allowed in contract)

/. !uck v. )orrow 21 .H. 3D

4act$+ = lea$ed a$ture to 4or term o4 I year$. 4ter 2 year$, t%e land wa$ $old and wa$ di$o$$e$$ed. alleed t%at %e couldn9t 4ind anot%er a$ture, $o %e %ad toraAe on t%e common$ 4or I mont%$, and %e %ad to %ire an extra %and to loo8 a4ter

t%e cattle t%ere and round t%em all u. l$o $aid t%at %e u$ed rea$onale dilience

in tryin to 8ee cattle 4rom $trayin o44, ut 1I were lo$t. >%oldin+ TC $aid mea$ure o4 damae$ : di44erence etween @ rice and rental /alue o4

a$ture 4or t%e unexired term5 court $ay$ * al$o entitled to con$equential

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damae$ (reliance) t%at are t%e natural and roximate re$ult o4 8 reac% >con4inin damae$ to di44erence in @ rice a$$ume$ t%at * can

immediately o into t%e mar8et and otain $imilar roerty >i4 * can ro/e t%e damae$ were 4ore$eeale, %e $%ould reco/er /i. )einrath v. %inger Co. DB F.'.. 22 >4act$+ * claim$ 4ailed to ay onu$ in timely manner a$ areed uon and t%at 4ailure to

ay led to co$t$ to %i$ er$onal u$ine$$e$. E$$ence o4 t%e claim i$ t%at at t%e time $ined 8, it %ad a $ecial awarene$$ o4 t%e comanie$9 4inancial li%t and t%eirdire need 4or 4und$, w%ic% created an oliation to ma8e timely onu$ mt$

>%oldin+ i$ not liale 4or con$equential damae$ 4or 4ailure o4 *9$ ot%er u$ine$$/enture$ c t%o$e u$ine$$ /enture$ are unrelated to t%e @

>w%ere reac% o4 @ con$i$t$ only o4 4ailure to ay money, remedy i$limited to rincial owed lu$ damae$ in t%e 4orm o4 intere$t

>olicy o4 %a/in an ea$y and certain mea$ure o4 damae$ (anyexcetion$ are w%ere t%ere wa$ 4ailure to ro/ide a unique article)5 orel$e e/ery @ di$ute would ecome enormou$ly comlex, wt%eorie$ o4unrealiAed ro4it$oortunitie$

>@ areement$ contain no imlicitexlicit moral underta8in$

/ii. 2exaco c. Penn'oil Co. B2 .H.2d B?D >4act$+ * and G made a deal in/ol/in urc%a$e o4 Getty ;il $toc8 ro/idin 4or di/i$ion

o4 G;9$ a$$et$. Jury 4ound t%at T tortuou$ly inter4ered wareement, and *$u44ered damae$ o4 SB.I3 illion5 3 illion in uniti/e$. T 4iled motion 4orremittitur.

>%oldin+ Tortiou$ inter4erence wexi$tin @+ * i$ not limited to damae$ reco/erale in@ action, ut al$o entitled to damae$ allowed under tort (uniti/e$). uncertainty in calculatin damae$ i$ tolerated w%en di44iculty i$ attriutale to9$ conduct

>%ere, reliance co$t wa$ minimal (co$t 4or rein aerwor8, etc.) >rat%er, t%ey are a4ter t%e ene4it o4 t%e arain (exectancy)

>@ rice : S3.0arrel5 *rice * ot%erwi$e would %a/e to ay : S10.DB >damae$ : B.xx 1 illion arrel$ o4 oil : SB.x illion >note+ t%i$ ca$e ir8$ eole c * lo$t t%e oortunity5 t%ey weren9t %armed ot%erwi$e . Limit$ on amae$ (Liquidated amae$) i. Generallymany rule$ limit damae$ to le$$ t%an *9$ ri%t4ul o$ition a. contractual limitation$+ deny con$equential damae$, include liquidated damae$, etc. . eneral limitation$+ rule$ in re a/oidale con$equence, remotene$$, and uncertainty ii. rule. artie$ are allowed to contract limitation$ on remedie$ ut t%ere are limitation$ to

arainin5 i4 artie$ arain $o muc% t%at t%ere i$ no remedy 4or reac%, court$ won9t%onor 4reedom to contract w%en court$ $u$titute t%eir own remedy, t%ey will do t%e lea$t

amount to remedy in#ured arty in li%t o4 arained 4or 8

iii. 5earny # 2recker v. )aster ngraving I2B .2d 2 >4act$+ * urc%a$ed mac%ine 4rom . @ excluded con$equential damae$, and limited

liaility to reairrelacement /alue o4 t%e mac%ine. Turned out t%at mac%inemal4unctioned all t%e time w%ic% led to lo$t ro4it.

>i$$ue+ doe$ "CC ermit contractual term$ t%at denie$ con$equential damae$ when t%econtracted remedy 4ail$ to ac%ie/e it$ e$$ential uro$e

>%oldin+ in eneral, clau$e$ t%at exclude con$equential damae$ are o8ay5 it i$ only w%en

circum$tance$ o4 t%e tran$action cau$e t%e con$equential damae clau$e to e

D


9/42

incon$i$tent wit% t%e artie$9 intent t%at it i$ aroriate to inore t%e @ >".C.C. mandate$ t%at at lea$t minimum adequate remedie$ e a/ailale w%en a

limited remedy 4ail$ to ac%ie/e it$ uro$e i/. $n re 2rans &orld Airlines6 $nc. 1I F.3d 12 liquidated damage clause >4act$+ TH lea$ed two lane$ wit% a liquidated damae clau$e5 TH exre$$ly areed

to clau$e5 6n -O, liquidated damae clau$e$ are u%eld unle$$ t%ey are

uncon$cionale or aain$t ulic olicy. >i$$ue+ were t%e liquidated damae clau$e$ aroriate >%oldin+ -o5 liquidated damages must ,e reasona,ly related to t4e li;ely damage 1

e3pressly agreed to ,e e3clusive remedy

>-O9$ ulic olicy i$ intended to a/oid clau$e$ t%at 4ix damae$ t%at are lainlydi$roortionate to t%e real damae 4ixin damae$ e$$entially 4orce$ arty

to ad%ere to @ out o4 economic 4ear >it doe$n9t matter i4 artie$ con$ent to term$5 uncon$cionale contract$ are ne/er

en4orced >TH $till owed o/er%aul deo$it c deo$it wa$ a rea$onale e$timate o4 t%e

actual co$t and wa$ conditioned on TH9$ er4ormance (w%ic% it ne/er 4ul4illed) >note$+ liquidated damages> uro$e i$ to rin deal$ to 4ruition5 it allow$ artie$ to

e$timate w%at damae$ will e >o/er>liquidated damae$ are con$idered enaltie$ and are di$allowed5 one can9t

o/er @ t%e damae$ into exce$$i/e liquidated damae$ (t%ey would ecome uniti/e damae$)

>under>liquidated damae$ are ermitted5 a$ lon a$ $ome remedy exi$t$ in @, iti$ accetale (t%e lower limit i$ t%eoretically ca$e>y>ca$e i4 court determine$ it%a$ 4ailed it$ e$$ential uro$e) "T i4 it i$ $o under>liquidated t%at t%ere i$ &noremedy at all, t%en it i$ not %onored

/. 3orthern $llinois 7as v. nergy Cooperative ?1 -.E.2d 10 0liquidated damages >4act$+ -6G romi$ed to uy nat%a 4rom EC6 ut it ecame c%eaer to uy 4rom driller$

and ieline$. -6G $toed uyin and EC6 $ued a$ed exectancy ! reliancee/en t%ou% t%ere wa$ a liquidated damae$ clau$e. TC $aid non>reac%in arty

wa$ 4ree to ur$ue eit%er liquidated damae$ in 8 or actual damae$. >i$$ue+ i4 non>reac%in arty doe$ not ur$ue t%eir ri%t4ul liquidated damae$, can t%ey

ur$ue ot%er 4orm$ o4 damae$ in$tead >%oldin+ no, parties are only allowed to o,tain t4e ,argainedfor liquidated damage

clause 7don=t 4ave to pursue clause ,ut can=t as; for greater damages t4an

t4ose ,argained for:

> "CC U2>B1+ EC6 $ay$ under t%i$, liquidated damae clau$e doe$ not ro/ideexclu$i/e mea$ure o4 damae$ unle$$ it i$ exre$$ly areed to e exclu$i/e

>Court+ U2>B1 o/ern$ limitation$ o4 remedie$, ut U2>B1D o/ern$ LC9$>n LC i$ not a limitation on a remedy c it i$ a re>determinedareed uon rice and t%ere4ore i$ not $u#ect to U2>B1

>note+ Goodman t%in8$ t%e court ot U2>B1 analy$i$ wron5 under>liquidated damae$

limit$ remedie$ w%ile o/er>liquidated damae$ exand$ remedie$ >$ome court$ $ay U2>B1D o/ern$ all LV and it$ a$$umed to e exclu$i/e5 ot%er

court$ $ay you actually %a/e to $ay in 8 t%at it i$ exclu$i/e ot%erwi$e court$will %onor ot%er remedie$ U2>B1()

>$tratey 4or arty w%o i$ recei/in under>liquidated damae$+ 4ir$t, arue notrea$onaly related5 $econd, c%ec8 to $ee i4 it $ay$ LV are to e &exclu$i/eremedy in @

>$tratey 4or o/er>liquidated i$ only to arue it i$ a enalty


10/42

/i. 5ersonal Injuries (5ain ? Suffering: a$ a limit on remedie$ >rule. damae$ w%ere /alue cannot e mea$ured in dollar$ i$ enerally a limit to %ow

muc% damae$ a arty can reco/er5 %owe/er, one can utiliAe tec%nique$ $uc% a$ er diem calculation$ to otain larer #ury /erdict$

5?S 2 economic damages 1 noneconomic damages

> 8ebus v. 7rand 0nion %tores ?21 .2d 12DD 0per diem approac4

>4act$+ * et$ in#ured in $tore c $tore cler8 accidentally 8noc8ed o/er et 4ood 20R ermanent di$aility. TC allowed #ury to t%in8 o4 a er diem aroac%to /aluin damae$ (t%e amount aroriate to $ati$4y * er day x t%e numero4 day$ le4t in *9$ li4e)

>i$$ue+ are er diem calculation$ unduly re#udicial >%oldin+ no, t%ey are ermi$$ile i4 t%ey are made under t%e $uer/i$ion o4 t%e TC >oo$in arty can rotect aain$t craAy award$ y re4utin e/idence

>court$ al$o %a/e mec%ani$m$ li8e remitter to deal wit% ro$$ #ury award$ >damae$ mu$t e arri/ed at a$ed on t%e e/idence at t%e trial, not arument >di$$ent+ coun$el $%ould e ale to roo$e er diem calculation ut $%ould not e

ale to ro/ide $ue$ted 4iure$5 court $%ould i/e cautionary in$truction to

#ury c $ue$ted 4iure$ aear to e 4act w%en t%ey are not in e/idence. >note$+ additional note$ on *er iem calculation$

>not allowed to arue durin oenin $tatement$5 in clo$in $tatement$ you areallowed and you $%ould

>no one i$ allowed to te$ti4y durin e/idence %a$e aout dollar 4iure$ in re ainM $u44erin (e/en exert$ aren9t well>/er$ed to tal8 aout ain M $u44erinWe$$entially t%e $ame le/el o4 exerti$e a$ any #ury memer)

>rou%ly %al4 t%e $tate$ allow t%e er diem (C included) >note$+ discounting for present value >a dollar today i$ wort% more t%an a dollar tomorrow due to oortunity to re> in/e$t, %owe/er, #ury /erdict$ are not nece$$arily di$counted to *N

>mo$t #uri$diction$ (includin C) do not exlicitly in$truct #urie$ to

di$count 4or / >t%i$ tend$ to o/er>comen$ate *9$ >roonent$ 4or not di$countin arue t%at #urie$ are alway$ under> comen$atin 4or er$onal in#urywron4ul deat% and t%i$ under> comen$ation i$ way le$$ t%an any ain 4rom not di$countin *N >de4en$e lawyer$ rarely ma8e arument to #urie$ to di$count c+ 1. t%ey don9t t%in8 #ury will under$tand and t%at t%ey need to

4ocu$ on more 8ey e/idence 2. %a$ an e44ect o4 admittin de4eat >intere$t /$. in4lation >in4lation dere$$e$ /alue o4 money o/er time5 on a/erae, intere$t eat$

out in4lation and it$ $till wi$er to accet a dollar now t%an a dollar later

>lawyer9$ 4ee$ are not di$counted >note$+ golden rule approac4 (%ow muc% would #ury ay to a/oid t%i$ articular in#ury)

i$ not allowed c it i$ /ery re#udicial and can9t really ma8e counter>arument

t%at a$8 #ury %ow muc% t%ey would ay to in4lict t%e in#ury/ii. @rongful Deat4 a$ a limit on remedie$

>rule. /erdict tend$ to e $maller c /ictim i$ no loner in ain and $u44erin (M$ cuto44 at oint at deat%) mo$t o4 t%e damae$ t%en are economic not non>economic

10


11/42

>t%e youner t%e /ictim t%e le$$ clear w%at $omeone will do wit% t%eir li4e t%i$dere$$e$ economic damae$

>c%ild laor law$ too8 away /alue >$ome tort$ a/ailale 4or $ur/i/or$ $uc% a$ lo$$ o4 con$ortium >e$tate will $ue5 i4 t%ey win, t%ey will di$triute t%e winnin$ (t%u$, do not doule

count 4or e$tate and 4amily) >e3' 11 Nictim$ /iii. *ort Reform a$ limit on remedie$ >tort re4orm u$ually win$ on con$titutional round$5 e$t arument$ aain$t it are olicy

a$ed > Arbino v. "ohnson # "ohnson DD0 -.E.2d 20 >4act$+ * $u44ered $eriou$ in#urie$ 4rom JJ9$ irt% control atc%. ;< %a$ limit$ on

damae$ unle$$ t%e in#urie$ are &/ery ad (doe$n9t limit medmal)>i$$ue+ are ;%oldin+ no >$tatute$ did not o44end *9$ ri%t to a #ury trial c t%ey only required court$ to

aly $tatutory limit$ to 4act$ 4ound y a #ury (limit$ don9t alter 4act$)

>$tatute$ did not /iolate t%e Xoen court$X and Xri%t to a remedyX ro/i$ion$ o4;%io Con$t. c+

1. alt%ou% it limit$ $ome non>economic damae$, t%ey did not w%ollydeny a remedy

2. * $till 4ree to ur$ue a claim >$tatute$ did not o44end due roce$$ c t%ey were rationally related to limitin

uncertain damae award$ and were not aritrary 1. General economic concern$ 2. -on>economic damae$ are di44icult to calculate and $u$cetile to

in4luence 4rom irrele/ant 4actor$ 3. Co$t$ o4 in4lated damae$ et a$$ed on to eneral ulic >$tatute$ did not o44end equal rotection c, under a rational a$i$ te$t, t%ey were

rationally related to a leitimate $tate intere$t in ma8in t%e $tateY$ ci/il #u$tice$y$tem 4airer.

>it i$ a #udicial 4unction to decide 4act$ in a ca$e, ut t%at 4unction i$ not $oexclu$i/e a$ to ro%iit lei$lature 4rom reulatin t%e amount o4 damae$ incertain circum$tance$

>concur+ %i$tory $ue$t$ lei$lature %a$ t%e ower to re/i$e common law a$ it deem$nece$$ary to re/ent #udicial ia$

>di$$ent (;9onnell)+ ca i$ 4undamentally di44erent t%an a remittitur>remittitur+ court i$ ermitted to reduce a #ury /erdict i4 t%ey elie/e it i$un$uorted y e/idence and it order$ a new trial5 * can ta8e court9$ damaeamount or can o t%rou% a new trial

>di44erence+ ca$ don9t i/e otion o4 new #ury>4urt%er, i4 we %a/e remittitur$, we don9t need ca$ in t%e 4ir$t lace

>additur+ only remedy 4or an unrea$onaly low #ury /erdict new trial5 $imlyaddin damae$ to /erdict /iolate$ ri%t to #ury trial

>di$$ent (*4ei4er)+ inorin 4actual 4indin$ i$ t%e equi/alent o4 c%anin t%em >C% *ort Reform> limit alie$ only to med>mal and ca$ damae$ to S2I08

(economic ! non>economic)5 more *>un4riendly t%an ot%er #uri$diction$

11


12/42

>tort re4orm $tatute$ ne/er que$tion liaility5 t%ey only taret remedie$ maye tortre4orm $%ould addre$$ liaility to 4ix t%e$e i$$ue$ (%arder to ma8e lei$lation re liaility)

>i4 t%e rolem i$ t%at we are 4indin liale w%en it9$ t%e *9$ 4ault, we$%ould addre$$ liaility

>%ere, we are allowin t%e liaility and limitin all remedie$ (Goodman di$li8e$)>roonent$ o4 ca$ arue t%at t%e a/erae #ury /erdict %a$ increa$ed in$urance

remium$ 8ee increa$in>y law, in$urance comanie$ mu$t 8ee ca$% on %and and %a/e a 4iduciary dutyto in/e$t t%at ca$% on %anddue to t%e mar8et turndown, t%e$e in$urancecomany9$ made ad lo$$e$ on in/e$tment$

>$tudie$ $%ow t%at remium$ increa$ed t%en c in$urance comany9$ need toma8e money and ma8e u 4or t%e$e lo$$e$totally unrelated to #ury /erdict$

loo$e liaility rule$ >t%ere are no $%owin$ t%at t%e tort re4orm $tatute$ t%at %a/e een a$$ed %a/e

%ad a neati/e e44ect on in$urance remium$5 in$tead t%ey are $till oin u >w%o ene4it$ T%e in$urance comany ene4it$5 not doctor$ or *9$

ix. Constitutional arms a$ a limit on remedie$ >6n eneral, con$titutional %arm$, wit%out more, will only et you nominal damae$ (S1)5

* $till need to $%ow actual in#ury wa$ cau$ed y con$titutional /iolation to et 4urt%erdamae$

>i4 you9re not $ee8in damae$ (ex. an in#unction) don9t need S1 >ot%er limit$+ caed damae$, equalitati/e limitation (8 $eci4ie$ w%at9$ not allowed)

> evka v. City of Chicago BD F.2d 21 0noneconomic damages >4act$+ 4emale * wa$ $u#ected to a $tri $earc% * claim$ $%e wa$ $o emotionally

damaed t%at $%e could not o out alone at ni%t and could no loner wor8 a$ a

oo8in aent at ni%t, re$ultin in lo$t earnin$>i$$ue+ wa$ a #ury /erdict o4 I08 in damae$ exce$$i/e (S0 4or economic lo$$5 SI08 4or

emotional)

>%oldin+ ye$5 court adoted a remittitur o4 2I8>to determine i4 t%e #ury award i$ ro$$ly di$roortional, court loo8$ to re/iou$ca$e$only 3 ca$e$ in/ol/in 4emale $tri $earc%e$ exceeded 308, and t%o$eca$e$ %ad more ara/atin 4act$

>#urie$ are not allowed to do w%at court did5 t%at i$, comare ca$e to a$t ca$e$ >to recover for emotional distressA 5 must s4ow somet4ing more t4an

negligence. intentional tortA negligence 1 p4ysical impactA o,jective

manifestationA severityA fear of diseaseA in contract (emotional di$tre$$ i$enerally not comen$ale in contract5 ut mo$t court$ treat ad>4ait% reac% o4an in$urance contract a$ a tort5 t%i$ oen$ t%e door to emotional di$tre$$ and uniti/e damae$)

>Carey v. Piphus 3I ".. 2B

>4act$+ i$$ue+ H%et%er a * mu$t ro/e actual in#ury y a deri/ation o4 %i$ con$titutionalri%t$ e4ore %e may reco/er $u$tantial non>uniti/e damae$

>%oldin+ Oe$5 in a$ence o4 any roo4 o4 actual in#ury only nominal damae$ may ereco/ered.

12


13/42

>w%ile * can reco/er 4or emotional di$tre$$, neit%er t%e li8eli%ood o4 $uc% in#urynor t%e di44iculty o4 ro/in it i$ $o reat a$ to #u$ti4y awardin comen$atorydamae$ wo roo4 t%at $uc% in#ury actually occurred

>* mu$t con/ince t%e trier o4 4act t%at %e actually $u44ered di$tre$$ ecau$e o4 t%edenial o4 rocedural due roce$$ it$el4.

>"T denial o4 rocedural due roce$$ $%ould e actionale 4or nominal

damae$ wo roo4 o4 actual in#ury $ince t%e ri%t to due roce$$ i$ a$olute >note$+ >%arm $u44ered : deri/ed o4 con$titutional ri%t$

>*9$ emotional di$tre$$ claim i$ a$ed on %i$ deri/ation o4 ri%t$5 t%ere4ore,dollar 4iure $%ould e t%e $ame w%et%er or not $tudent wa$ actually culale o4carryin mari#uana

>w%y mi%t t%i$ ca$e e wort% tryin ll you need i$ a dollar in damae to oent%e door 4or uniti/e damae$ (not li8ely in t%i$ ca$e)

666. 5RE$IMI"%R6 &S' 5ERM%"E"* I"J)"C*I&E RE$IEB . Generally 7 in#unction$ are ot% re/enti/e and coerci/e remedie$5 t%ey are court order$,

en4orceale y $anction$ 4or contemt o4 court, directin to dore4rain 4rom an act.

Temorary in#unction$ are ranted re>trial in in$tance$ w%ere t%ere will e in#ury i4we wait until a /erdict to i$$ue in#unction5 ermanent in#unction$ are awarded at t%eclo$e o4 trial and are not nece$$arily inde4inite.

. *ermanent 6n#unction$ i. u$tanti/e Law+ 1. 'iene$$ 2. 6rrearale 6n#ury 'ule eay i$ tec%nically t%e law, ut court$ ay li $er/ice to it ii. *rocedural Law 1. 4actor 1+ * i$ li8ely to $ucceed on t%e merit$ >4actor 2+ * i$ li8ely to $u44er irrearale %arm in t%e a$ence o4 reliminary relie4 >4actor 3+ alance o4 equitie$ ti$ in *9$ 4a/or >4actor + in#unction i$ in t%e ulic intere$t court$ mu$t alance t%e cometin claim$ and mu$t con$ider t%e e44ect on

eac% arty o4 t%e rantin or wit%%oldin o4 t%e in#unction2. 6n#unction ond$ (ac8end)

ii. *rocedural Law 1. -otice to oo$in arty 2.


14/42

in#unction i$ merited, *lainti44 mu$t ro/e t%e riene$$ o4 t%e ca$e and $ati$4y t%eirrearale in#ury rule

7 ripeness. To $ati$4y riene$$, a * mu$t ma8e a t%re$%old $%owin t%at re/entati/eorder i$ nece$$ary (t%at t%e t%reat o4 in#ury i$ &rie). 64 t%e %arm i$ imminent , *need$ &$u44icient e/idence t%at t%e %arm will occur5 i4 t%e %arm i$ down the road , *need$ &$u$tantially certain e/idence. *a$t /iolation$ or actual t%reat$ will reatly

$imli4y *9$ urden o4 roo4. KC%ec8 to $ee i4 in#unction $ou%t i$ re/entati/e,rearati/e, or ro%ylactic

7 irrepara,le injury rule+ see Choosing 4emedies section above. 7 rig4ts of t4ird parties. 6n reard$ to order$ to 8 that affects 9rd parties, law $eem$

to e t%at innocent 3rd artie$, reardle$$ i4 it9$ an in$titution or indi/idual, can ea44ected $u$tantially, ut not to t%e oint o4 ein re$tructured (t%at i$, %a/e t%ecourt ta8e o/er and tell it w%at to do).


15/42

>4act$+ TC 4ound t%at comany wron4ully di$c%ared emloyee in 1 lant a$ed on

ae di$crimination law awarded nationwide in#unction aain$t comany

>i$$ue+ i$ it roer to i$$ue a nationwide in#unction >%oldin+ no5 nationwide or companywide injunctions are appropriate only

w4en t4e unlawful acts indicate a companywide policy or practice in

violation of t4e statute >in#unction i$ a $e/ere enalty >t%e e/idence i$ con4ined to t%e $inle act$ one manaer

>ein too road 4ail$ roen$ity requirement c an order t%at i$ too wide i$not tailored to 9$ li8eli%ood o4 doin t%e ad act

. 'i%t$ o4 3rd *artie$ >trateically, court$ $train to ma8e t%e order directed at >exam ti+ 4iure out Ht%e milde$t admittance o4 wrondoin neate$ 3rd arty $tatu$ and turn$ arty to > +ill v. 7autreaux 2I ".. 2D

>4act$+ Fed et. o4 i$$ue+ doe$ =ili8en 6 ar a remedial lan t%at include$ conduct eyond t%e oundarie$ o4 C%icao (court ruled t%at c %arm only occurred in etroit, a

roer remedy cannot in/ol/e ad#acent innocent nei%or%ood$) >%oldin+ no5 remedial lan in t%i$ ca$e i$ o8ay (eora%ic oundarie$ are not

determinati/e) >=ili8en 1 wa$ determined on con$titutional round$ (no con$titutional

/iolation : court doe$n9t %a/e remedial ower)>* rument 1+ remedial order a44ectin it$ conduct eyond C%icao wouldcon$titute a relie4 t%at doe$n9t matc% t%e %arm

>%ere, unli8e =ili8en, court can order * rument 2+ remedy %a$ t%e e44ect o4 con$olidatin o/ernmental unit$ not

imlicated in t%e /iolation$ >c local %ou$in aut%oritie$ mu$t aly to


16/42

>court $ay$ t%at t%ey %ad no way to 8now o4 t%e di$criminatory nature o4t%e li$t$ created y union$ c t%ey #u$t 4ollowed t%e union$9 order$ andu$ed t%e li$t$. H%en /iewed a$ a cla$$, emloyer$ weren9t aware o4 t%edi$crimination. ut it would e di44icult to ro/e t%at e/ery $inleemloyer 8new o4 it

>emloyer$ mi%t %a/e /iolated Title N66 ut emloyee$ would %a/e %ad

to ex%au$t admini$trati/e remedie$>concur+ aree$ wit% court t%at remedial lan may not require quarterly reort$

4rom t%e emloyer$ detailin t%eir comliance, ut t%in8$ ot%er reort$may e aroriate5 want$ reort$ ro/idin emloyment $tati$tic$ t%at$%ow w%et%er or not in#unction i$ ein roerly imlemented (t%i$ i$minor and ancillary)

>=odi4ication o4 6n#unction$ >ermanent in#unction$ can e re/i$ited and modi4ied /ia new law $uit >court %a$ a road $coe to modi4y >Con$equence$ o4 Failin to d%ere to 6n#unction$ >contemt i$ a criminal o44en$e i4 done will4ully

>coerci/e ci/il contemt+ court imo$e$ conditional enaltie$ to coerce into oedience

( %a$ to %a/e aility to a/oid t%em) >oey t%e law in#unction$ are too road and are in/alidated (. 2?I note 2+ * wa$ $ee8in

reliminary in#unction$ not to de$troy e/idence (t%i$ i$ already a rule) court re#ect$ *)

. 5reventive Injunctions 7 %a$ roen$ity to enae in %arm4ul conduct $ometime in t%e 4uture>rule. normal roen$ity requirement

C. Reparative Injunctions 7 rule. roen$ity i$ already $ati$4ied c %arm i$ onoin

>* can claim interim compensatory damages 4rom time o4 initial %arm until courtdeci$ion (damae ein$ w%en t%e %arm ean)

> ,orrester v. !oss B F.3d 112B 0dou,le recovery >4act$+ * : uyer5 : $eller. TC awarded * ot% damae$ and in#uncti/e relie4.

arue$ t%i$ i$ doule reco/ery.

>Fraud claim+ rere$ented to * t%at t%ey could et oat doc8in ermit w%en

8new t%ey could not c %ad oat doc8in ermit court awarded damae$+

>S10,000 uniti/e damae$ >S12,2I0 comen$atory >* et$ ermit >reac% o4 contract+ romi$ed t%ey would remo/e $wim doc8 ut didn9t

>S2,I00 comen$atory >in#unction to remo/e doc8 >i$$ue+ i$ t%i$ doule reco/ery >%oldin+ ye$5 * cannot recei/e doule reco/ery >on remand, * need$ to c%oo$e etween in#unction and damae$ ut $%ould

retain punitive damages c 9$ action wa$ au$i/e (uniti/e damae$ arede$ined to deter 4uture acti/ity not to re$tore * to ri%t4ul o$ition5 t%u$, itwa$ not a doule reco/ery)

>note+ comen$atory #u$t need$ to e 1 dollar to anc%or t%e uniti/e >concur+ worried t%at i4 * elect$ damae$, won9t e ale to et ac8 t%e ermit

t%at %a$ already een ta8en>note+ * can collect interim comen$atory damae$ (/alue lo$t durin t%e litiation

eriod) t%i$ i$ not doule reco/ery c it co/er$ two di44erent time

1?


17/42

eriod$ t%i$ i$ ;-LO alicale i4 * c%oo$e$ in#unction$ (comen$atorydamae$ already include t%i$ /ia re>#udment intere$t)5 in addition, court$%a/e 4ound t%at S1 nominal damae i$ in$u44icient doule reco/ery to arin#unction

. 5rop4ylactic Injunctions 7 %a$ roen$ity to enae in law4ul e%a/ior t%at will li8ely re$ultin unlaw4ul re$ult$ (%ere, we $to law4ul e%a/ior)

>rule. * %a$ to do more t%an $%ow t%at t%e %arm i$ ine/itale harm must be imminent4 inevitable : facts must be sufficiently developed so we know what the

harmremedy should be

>0nited %tates v. &.2. 7rant Co. 3I ".. ?2 >4act$+ o/t. rou%t action$ aain$t allein %e wa$ in/ol/ed in 3 cororation$

and t%at t%e cometiti/e relation$%i t%e comanie$ con$tituted interloc8incororate directorate$ in /iolation o4 t%e Clayton ct (%e %a$ 4iduciary dutyto 3 cor$). 4ter comlaint$ 4iled, re$ined 4rom $ome o4 t%e oard$.

>i$$ue+ i$ t%e matter moot c re$ined5 t%at i$, i$ t%e in#unction no loner needed >%oldin+ w%ile t%e matter i$ not moot, a44irmed t%e TC9$ di$mi$$al$ o4 o/t.9$ J >8moot9+ t%ere i$ no remedy t%at t%e court can ro/ide

>9$ /oluntary ce$$ation i$ one common $ource o4 claim$ t%at t%e ca$e i$

moot, or t%at no in#unction i$ needed >to successfully mootA D 4as to c4ange t4e facts so t4at it=s impossi,le

to repeat it in t4e future 74eavy ,urden:

>court will con$ider 3 4actor$ to determine mootne$$+ 1. ona4ide o4 t%e exre$$ intent to comly (crediility) 2. E44ecti/ene$$ o4 di$continuance

3. *a$t /iolation$ >court $ay$ ot% and * 4ailed * %a$ not $%own roen$ity in t%e 4uture5 * can

come ac8 later w%en t%ey do > 3icholson v. Connecticut +alf-&ay +ouse 21D .2d 3D3 >4act$+ wanted to oen %al4>way %ou$e 4or ri$on arolee$ in *9$ nei%or%ood.

>i$$ue+ (1) 6$ *9$ 4ear t%at 9$ law4ul conduct may turn into a wron4ul actrea$onale

(2) 6$ *9$ arument t%at %ome /alue will dereciate rea$onale >%oldin+ no, no >*9$ 4ear o4 4uture wron4ul conduct i$ too $eculati/e >need e/idence o4 $eci4ic act$ or attern$ o4 e%a/ior >dereciation i$ not ood enou% rea$on to warrant in#unction >in#unction$ are $e/ere enaltie$ >e44ect i$ $eculati/e > Pepsi Co. v. 4edmon I F.3d 12?2 >4act$+ u$e to wor8 4or *e$i and $ined con4identiality areement. acceted

o44er 4rom ri/al Vua8er. * want$ to en#oin 4rom a$$umin %i$ dutie$ atVua8er and to re/ent %im 4rom di$clo$in trade $ecret$

>%oldin+ in#unction i$ roer5 * can ro/e a claim o4 trade $ecretmi$aroriation y demon$tratin t%at 9$ new #o will ine/italylead %im to rely on t%e *9$ trade $ecret$

> cannot %el ut rely on trade $ecret$ a$ %e lot$ cometitor9$ new cour$e,

and t%e$e $ecret$ will enale cometitor to ac%ie/e a $u$tantial ad/antae y 8nowin exactly %ow * will rice, di$triute and mar8et it$ roduct$

1B


18/42

>TC 4ound t%at 9$ action$ in reard$ to * $%owed %e wa$ untru$twort%y>Counter+ would arue actual mi$aroriation o4 trade $ecret$ /$. t%reat

E. Structural Injunctions 7 lon $erie$ o4 re/entati/erearati/e in#unction$ t%at alie$ toin$titution$ (not a $earate cateory o4 in#unction$)

>&inston tyle con$er/ati/e rule5 in#unction$ $%ould e narrowly tailored to return * tori%t4ul o$ition

> !ailey tyle i/e$ court$ equitale di$cretion to e more 4lexile >Hin$tonailey di$tinction i$ not re$tricted to #u$t $tructural in#unction$ >we currently %a/e I> court t%at lean$ Hin$ton>$tyle >ot% $tyle$ o4 in#unction$ aim to ut * in t%e ri%t4ul o$ition >Ju$tice T%oma$ roac% in $ome circum$tance$, court$ don9t %a/e t%e ower under

con$titution to i$$ue any in#unction >in#unction %ere i$ /aue

>only alie$ to *"L6C in$titution$>not ma#ority rule

>court cannot comletely ta8e o/er TTE>run in$titution$ >&inston 4esearch v. )innesota )ining 4act$+ =inin allee t%at Hin$ton de/eloed a $imilar recorder wit% it$ 4ormer

emloyee$ and u$ed con4idential in4ormation $ou%t in#unction !damae$5 TC award$ ermanent in#unction 4or 2 year$

>i$$ue+ i$ t%e lent% o4 in#unction aroriate $%ould damae$ al$o e awarded >%oldin+ aroriate5 damae$ $%ould not e awarded >duration o4 t%e in#unction wa$ aro/ed on aeal a$ a$ed uon t%e

aroximate time t%at it would require a leitimate cometitor to de/elo a

$ucce$$4ul mac%ine a4ter ulic di$clo$ure o4 t%e $ecret in4ormation (w.trade $ecret$ it too8 1 mont%$, t%u$ court rea$on$ wo trade $ecret$ it9ll

roaly ta8e two year$) >4urt%er, 3m lo$t it$ enineer$ to Hin$ton5 roduct didn9t reac%

mar8et a$ quic8ly a$ it could %a/e

>in4inite in#unction would e un4air to Hin$ton5 need to let $8illed wor8er$u$e t%eir $8ill$

>no in#unction would e wind4all to Hin$ton5 culale indi/idual$ wouldo ununi$%ed

>damae$ not aroriate c Hin$ton %ad no a$t ro4it$ (determinationwould e too $eculati/e)

>%owe/er, t%ere i$ an interim comen$atory arument+ t%ere i$lo$t /alue c 3m de/eloed t%e roduct later t%an it $%ould

> !ailey v. Proctor 1?0 F.2d BD +ailey Injunctions >4act$+ Gro$$ au$e o4 tru$t y t%e o44icer$ and tru$tee$ led t%e tru$t into

court recei/er$%i and e/entual liquidation. T%e $%are%older$ 4iled $uit, ro44erin reoraniAation lan$ and conte$tin t%e TCY$ liquidation order.

>%oldin+ TCY$ action in orderin t%e tru$t into recei/er$%i wa$ a ermi$$ileexerci$e o4 it$ in%erent equity #uri$diction

>TCY$ #uri$diction in recei/er$%i did not la$e y /irtue o4 an imro/ementin t%e tru$tY$ 4ortune$ $u44icient to ma8e it $ol/ent

>-eit%er did t%e TC au$e it$ di$cretion in 4indin t%at none o4 t%e$%are%older$Y ro44ered reoraniAation lan$ were X4air and 4ea$ile.X T%ecourt concluded t%at, t%ere ein no adequate reoraniAation lan, t%e trialcourt roerly ordered t%e liquidation and di$triution o4 t%e tru$t a$$et$.

>note$+ durin recei/er$%i, di$trict court i$ e$$entially owner o4 comany

1D


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>arument aain$t court9$ deci$ion i$ t%at t%e court i$ not remedyin t%e%arm t%at rou%t t%i$ ca$e (%arm wa$ 4raud and $el4>dealin)

>rie4 de jure segregation. cau$ed y aut%oritie$ and i$ uncon$titutional >de facto segregation. cau$ed y natural 4actor$ and i$ con$titutional

>%wann+ neutrally drawn attendance Aone$ would not ac%ie/e truly

nondi$criminatory a$$inment o4 c%ildren to $c%ool. TC %a$ road ower to 4a$%ion a remedy t%at will a$$ure a unitary $c%ool $y$tem. Led

to eneration o4 u$in to de$ereate ( !ailey style in>unction) > )illiken $ + $coe o4 t%e remedy i$ determined y t%e nature and extent o4 t%e

con$titutional /iolation. 64 $ereation occurred in etroit $c%ool$y$tem only, remedy mu$t e limited to t%at5 re/er$ed order to %a/e$urroundin $uuran di$trict$ made artie$ (&inston style)

> )illiken $$ + court a44irmed educational>quality remedie$ (ex. remedial trainin)5$ome arued t%at t%i$ exceeded t%e $coe, ut in#unction %ad a

con$equential damae$ 4eel to it > )issouri v. "enkins I1I ".. B0 Justice *4omas %pproac4

>4act$+ *>$c%ool oard alleed >$tate$urroundin $c%ool di$trict$ %ad cau$ed eretuated $y$tem o4 racial $ereation o4 $c%ool$ in @an$a$ City area.TC 4ound t%at $tate and @C were lialearo/ed manet $c%ool lan

(exten$i/e lon>rane caital imro/ement$ lan wort% o/er SI0=) >i$$ue+ wa$ remedial lan too exten$i/e >%oldin+ ye$5 inter>di$trict oal i$ eyond t%e $coe o4 t%e intra>di$trict /iolation

identi4ied y t%e TC>%ere, t%ere i$ no inter>di$trict /iolationt%ere4ore roer re$on$e y t%e TC would t%ere4ore %a/e een to eliminate to the extent practicable t%e /e$tie$ o4 rior de #ure $ereation win t%e >TC created t%e manet di$trict in order to $er/e t%e inter>di$trict

oal o4 attractin nonminority $tudent$ 4rom $urroundin $c%ooldi$trict$ and redi$triutin t%em wit%in t%e @C 7 ur$uin&de$ereati/e attracti/ene$$ i$ eyond remedial aut%ority

>racial imalance, alone, i$ not uncon$titutional >con$ent (T%oma$)+ %ere, we $%ouldn9t ut * ac8 to ri%t4ul o$ition c

con$titution will not allow it u$e ot%er ranc%e$ to correct

t%i$ $eci4ic %arm restraint on judicial power 2 federalism 1 separation of powers

>w%ene/er o$$ile, court$ $%ould i$$ue uni4ied remedie$ in $inlederee$5 #udiciary $%ouldn9t e in#ected into day>to>day manaement o4in$titution$ and local olicie$

> +utto v. ,inney 3B ".. ?BD +ailey arguments in re prisons

>4act$+ TC 4ound ri$on condition$ uncon$titutional remo/ed remedy a4ter it4ound $u$tantial imro/ement$5 C re/er$ed TC9$ deci$ion to wit%draw$uer/i$ory #uri$diction5 court 4ound /iolation$ %ad not een cured entered order t%at laced limit$ on numer o4 men in cell, required eac% to

%a/e a un8, di$continue oor diet, 30 day$ max i$olation $entence. >%oldin+ remedial lan wa$ roer >TC %ad i/en reeated oortunitie$ to remedy5 a$ed on t%e %i$tory o4

t%e litiation, court wa$ #u$ti4ied in enterin a comre%en$i/e order to

1


20/42

in$ure aain$t t%e ri$8 o4 inadequate comliance>di$$ent+ di$tinui$%e$ etween ri$on$ and $c%ool $y$tem$ ($tudent$ can recei/e

$ecial in$truction in later rade$) >ma#ority deci$ion doe$n9t comly w=illi8en 66 >ma#ority doe$n9t #u$ti4y t%at con4inement de$cried ecome$

uncon$titutional on t%e 31$t day 7 need$ ot%er #u$ti4ication$, ot%erwi$e

it9$ #u$t a ro%ylactic order >not remedial 7 doe$n9t re$tore /ictim$

>need to let $tate and local aut%oritie$ manae t%eir own a44air$ > ewis v. Casey I1D ".. 33@inston arguments in re prisons >4act$+ Cla$$ action y [ ri$oner$ comlainin t%at inadequate law lirarie$

and leal a$$i$tance in $tate ri$on$ inter4ered wt%eir ri%t o4 acce$$ tot%e court TC i$$ued in#unction reulatin detail$ o4 law lirarie$ in

e/ery ri$on in t%e $y$tem>%oldin+ in#unction too exan$i/e

>not t%e role o4 court$ to $%ae in$titution$ o4 o/ernment >remedy mu$t e limited y t%e wron >actual in#ury to only one *

>anot%er * wa$ &unale to 4ile a leal action>2 in$tance$ are atently inadequate a$i$ 4or conclu$ion o4 $y$tem wide/iolationimo$ition o4 $y$tem wide relie4

>TC 4ailed to i/e $u44icient deference to leitimate enoloical intere$t$a$$erted y ri$on aut%oritie$

>4ailed to i/e aut%oritie$ $u44icient oortunity to roo$e t%eir ownremedy

>too intru$i/e >note$+ it doe$n9t matter w%et%er it i$ rou%t a$ a cla$$ action 7 $till loo8in 4or $eci4ic in$tance$ o4 %arm >0.%. (irgina I1D ".. I1I >4act$+ N=6 ca$e w%ere TC remedy wa$ to create a women9$ only counterart to

a male>only $c%ool 7 i$$ue i$ $u44iciency o4 t%e Homen9$ 6n$titute >i$$ue+ doe$ Homen9$ 6n$titute a44ord women w%o want male N=6 trainin, t%e

$ame oortunity5 t%at i$, did t%e in#unction do enou% >%oldin+ no5 remedies t4at leave original injury untouc4ed do not matc4 t4e

constitutional violation

>/iolation %ere i$ t%e cateorical exclu$ion o4 women 4rom extraordinaryeducational oortunity a44orded men

>N didn9t eliminate olicy 7 le4t it untouc%ed >$c%ool$ not comarale

>remedy doe$n9t o44er any cure 4or oortunitie$ad/antae$wit%%eld 4rom women w%o want a N=6 education and can ma8e

t%e rade

N. 5RE$IMI"%R6 I"J)"C*I!"S . Generally 7 To otain a reliminary in#unctiontemorary re$trainin order, a * mu$t $ati$4y

t%e Hinter te$t y $%owin+ (1) a li8eli%ood o4 $ucce$$ on t%e merit$, (2) ali8eli%ood o4 immediate and irrearale %arm in t%e a$ence o4 an in#unction, (3)t%at t%e equitie$ alance in *9$ 4a/or, and () t%at t%e ulic intere$t would not e%armed i4 an in#unction i$ i$$ued e4ore trial. - * mu$t ut u ond money(amount o4 money i$ li8ely to $u44er i4 reliminary in#unction i$ imro/idently

20


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ranted) 7 5rocedurallyA t%ere mu$t e notice to oo$in arty and a %earin.

7 *emporary Restraining !rder 7*R!:+ are de$ined to re/ent irrearale %armt%at will occur e/en e4ore a reliminary %earin can e %eld. T'; can e

otained ex>arte in emerency $ituation$. T%e T';, i4 ranted, will la$t 4or 10>

1I day$, deendin on t%e alicale rocedural rule$. %earin on a motion 4or reliminary in#unction, wit% ot% artie$, mu$t t%en e %eld, w%ereuon t%e court

will determine w%et%er to 8ee t%e in#uncti/e relie4 in lace. To otain a T';, a *

mu$t $ati$4y t%e Hinter te$t. . &inter v. 3atural 4esources 8efense Council 12 . Ct. 3?I u$tanti/e tandard >4act$+ -a/y u$e$ acti/e $onar w%ic% mi%t %arm marine mammal$ TC entered

reliminary in#unction on -a/y9$ trainin exerci$e$ >%oldin+ a * $ee8in a reliminary in#unction mu$t e$tali$% t%at

(1) %e i$ li8ely to $ucceed on t%e merit$,>&li8ely re4er$ to on t%e merit$ (ca$e), -;T li8ely to et in#unction a8a

6'' (remedy)

>4act$ on exam will li8ely $ati$4y t%i$ c t%i$ i$ not a remedie$ que$tion(2) t%at %e i$ li8ely to $u44er irrearale %arm in t%e a$ence o4 reliminary relie4,

>&li8ely (%i%er $tandard t%an ermanent in#unction) ! *roen$ity ! 6''

>t%i$ only alie$ to irrearale %arm t%at occur$ *'6;' to trial5 don9tcon$ider %arm t%at would %aen a4ter trial

(3) t%at t%e alance o4 equitie$ ti$ in %i$ 4a/or,>t%e irrearale %arm t%at t%e * will $u44er i4 in#unction were notranted P t%e irrearale %arm to i4 in#unction i$ ranted

() and t%at an in#unction i$ in t%e ulic intere$t >in ractice, 4actor rarely come$ u (on exam, do not manu4acture

arument$ t%at aren9t a/ailale)5 t%e$e arument$ are re$er/ed 4or artie$

out$ide o4 t%e ca$e >lower court$ %eld t%at w%en a * demon$trate$ a $tron li8eli%ood o4 re/ailin on t%e

merit$, a reliminary in#unction may e entered $olely on a &o$$iility o4 irrearale%arm5 t%i$ i$ incorrect * need$ to demon$trate t%at irrearale in#ury i$ likely to occur

(t%i$ i$ roer c in#unction$ are a $eriou$ remedy) >reardle$$, t%i$ ca$e wa$ decided on t%e ulic intere$t$ and t%e -a/y9$ intere$t in

e44ecti/e trainin >$tandard 4or reliminary in#unction$ /$. ermanent in#unction$ i$ larely t%e $ame excet

* mu$t $%ow a li8eli%ood o4 $ucce$$ in re reliminary in#unction$ in$tead o4 actual

$ucce$$>note+ all 4actor$ need not e met5 court$ %a/e treated t%i$ >art te$t a$ a alancin te$t

C. -ote on 6n#unction ond *ayment$ >* $%ould $ee8 reliminary in#unction$ wit% extreme caution5 mu$t e $ure you will win

cau$e t%ere can e de/a$tatin lo$$e$ to * >i4 $u44er$ =;'E t%an * aid 4or in#unction ond, doe$n9t et extra money 4rom * . -ote$ on *rocedural 'equirement$ 'i%t to eal >i4 * cannot 4ind a4ter due dilience, notice can e con$idered i/en and reliminary

in#unction can e i$$ued in 9$ a$ence (in ractice, %ow o4ten do you need an

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reliminary in#unction aain$t a non>exi$tent ) >. I ()(1) t%ere are 2 $ituation$ w%ere T'; can e i$$ued wo notice (don9t e/en need

due dilience %ere) can9t 4ind er$on ! don9t %a/e time to do due dilience ;' no

notice c it will accelerate 4urt%er %armwould endaner * >rig4t to appeal+ t%ere i$ a ri%t to e %eard in court ut i$ limited5 t%ere i$ no ri%t to

aeal) >ermanent in#unction$ are aealale c t%ey are 4inal #udment$ >reliminary in#unction$ are aealale and create an aealale moment

4or e/eryt%in t%at %aened rior to e aealed >T'; doe$ -;T create aealale moment$ (can e aealed a4ter a reliminary

in#unction create$ an aealale moment) >anot%er way to et around non>aealale i$$ue $ee8 t%e aellate court9$ oriinal

#uri$diction (&let9$ $ue t%e trial court5 t%i$ i$ not an aeal, t%i$ i$ a new ca$e)

&petition for writ of review/mandamus/pro4i,ition >artie$ can do t%i$ w%ene/er >real arty in intere$t i$ t%e nominal arty (t%e winner o4 t%e ot%er ca$e) >t%e$e are al$o quic8er t%an aeal

>w%y don9t lawyer$ do t%i$ e/ery time court$ do not %a/e to ta8e t%e$e ca$e$(a$8in 4or a remedy t%at i$n9t nece$$ary i4 t%ey can wait 4or aealalemoment) &irrearale %arm will not occur i4 we deny t%i$ etition

>Carroll v. President and Commissioners of Princess Anne 33 ".. 1BI notice

>4act$+ H%ite $uremaci$t rou %eld racially c%ared rally. County otained reliminary T'; aain$t next $c%eduled rally. TC awarded ermanentin#unction 4or 10 mont%$5 C re/er$ed 10>mont% order on t%e round$t%at t%e eriod o4 time wa$ unrea$onale and t%at it wa$ aritrary toa$$ume t%at a clear and re$ent daner o4 ci/il di$turance and riot would er$i$t 4or 10 mont%$

>i$$ue+ w%et%er and to w%at extent t%e aut%oritie$ o4 local o/ernment$ may

re$trict etitioner$ in t%eir rallie$ulic meetin$ >%oldin+ t%i$ ca$e doe$n9t e/en et to i$$ue, c in#unction wa$ ranted on

rocedural error >10>day in#unction wa$ i$$ued wo notice to and wo any e44ort to

in/ite t%em to articiate in t%e roceedin$ >order mu$t e tailored a$ reci$ely a$ o$$ile to t%e exact need$ o4 ca$e >di$$ent+ no T'; could re$train 4ree $eec% >note$+ 8capa,le of repetition yet evading review9 excetion to moot

doctrine5 court$ can /iew t%e$e ca$e$ e/en i4 moot >%ampson v. )urray 1I ".. ?1 ri%t to aeal >4act$+ Vue$tion a$ to w%et%er * wa$ entitled to more elaorate rocedural

rotection$ in re %er di$c%are5 TC ranted T'; 4rom 4irin * until

o/ernment roduced te$timony 4rom t%e o44icial t%at 4ired %er.>%oldin+ court %eld t%at re$ondentY$ $%owin 4ell 4ar $%ort o4 t%e Xirrearale

in#uryX required to #u$ti4y i$$uance o4 a re$trainin order temorarilyen#oinin re$ondentY$ termination

>court di$areed t%at eit%er lo$$ o4 earnin$ or damae to reutationwould a44ord a a$i$ 4or a 4indin o4 irrearale in#ury and t%u$ ro/idea a$i$ 4or temorary in#uncti/e relie4

>#ude #u$t call$ T'; a reliminary in#unction $o it can %ear aeal >in ractice, t%i$ doe$ not %aen court$ di$mi$$ w%ene/er t%ey can

22


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>di$$ent (t%i$ e$$entially ecame t%e rule)+ T';$ are not aealale, excet in

extraordinary circum$tance$ w%ere t%e denial actually decide$ t%e merit$ o4 t%eca$e or i$ equi/alent to a di$mi$$al o4 t%e $uit

>court$ will not re/iew error$ made y TC9$ unle$$ t%e error %a$ een rou%t to TC9$ attention TC need$ to %a/e c%ance to correct it

>denial o4 t%e oortunity to %a/e a reliminary in#unction i$ aealale >note+ lawyer$ $%ould treat =ar$%all9$ di$$ent a$ a rule and ad/ocate 4or t%at

N6. DEC$%R%*!R6 J)D#ME"*S (*'ENE-T6-G


24/42

>in#unction$+ an order re/entin4orcin acti/ity >J+ #udment clari4yin t%e artie$ ri%t$ iii. H%at are t%e con$equence$ i4 inore$ order#udment >in#unction+ contemt, re$ #udicata (4inal #udment) >J+ no contemt5 re$ #udicata, i4 4ail$ aain t%en * can $ue t%em 4or in#unction i/. eclaratory Judment ro$+

1. -o 6'' /. eclaratory Judment con$+ 1. -o contemt ower 2. -o reliminary relie4 3. =ay not et a #ury (court $ee$ i4 it9$ clo$er to law or equity+ i4 law #ury5 i4

equity no #ury li8e all in#unction ca$e$)

. tructural$uer/i$ory a$ect o4 equity i$ a$entC. 'emedie$ T%at re eclaratory 6n -ature+

i. -ominal damae (recei/in S1 4or %arm i$ almo$t li8e declarin t%at * wa$ ri%t) ii. Vuo Harranto iii. Hrit o4 Corim -oi$ 7 allow$ court to o ac8 and correct oinion$ t%at %a/e error$

a4ter t%ey %a/e ecome 4inal

er Goodman, t%e$e la$t two are in t%e oo8 ut %e will not te$t on t%i$ i/. 'e4ormation'e$ci$$ion (equitale remedy)

. eclaratory Judment Ca$e$ > 3ashville 4ailway v. &allace 2DD ".. 2 con$titutionality o4 J >4act$+ railroad maintained $torae 4acilitie$ in Tenne$$ee 4or a$oline t%at it

$%ied to ot%er $tate$. T%e $tate le/ied taxe$ on t%e a$oline and t%erailroad 4iled an action 4or a declaratory #udment, claimin t%at t%e taxwa$ uncon$titutional c it imo$ed an imermi$$ile urden uoninter$tate commerce c t%e a$oline wa$ only $tored in Tenne$$ee a4ter ein $%ied 4rom ot%er $tate$ and e4ore ein $%ied to ot%er $tate$.

>i$$ue+ t%i$ i$ c%allened on it$ con$titutionality a$ed on &ca$e or contro/er$yt%eory t%at #udiciary i$ only allowed to rule on contro/er$ie$ wo $imly

#u$t i/in ad/i$ory oinion$5 mu$t e an ad/er$arial roceedin >%oldin+ declaratory #udment$ are con$titutional

>t%i$ roceedin maintain$ t%e ad/er$arial nature o4 a reular ca$e5 it #u$tdi44er$ a$ to remedie$ (remedie$ are not o/erned y t%e con$titution)

>can9t %a/e a declaratory #udment t%at doe$n9t $ol/e ca$e or contro/er$y

>note+ in rem roerty roceedin$ (w%ic% really are not ca$e$ or contro/er$ie$)are con$titutional too

>Cardinal Chemical Co. v. )orton $nternational I0D ".. D3 >4act$+ atentee $ued t%e alleed in4riner 4or atent in4rinement. T%e alleed

in4riner 4iled a counterclaim 4or a declaratory #udment t%at t%e atent$ at

i$$ue were in/alid. TC entered #udment 4or t%e alleed in4riner anddeclared t%at t%e atent$ in/alid. ;n aeal, t%e lower court a44irmed t%e4indin o4 no in4rinement ut /acated t%e #udment o4 in/alidity.eci4ically, t%e lower court, con/inced t%at t%e 4indin o4 non>

in4rinement %ad entirely re$ol/ed t%e contro/er$y etween t%e litiant$,di$mi$$ed t%e declaratory #udment a$ moot. * i$ 8een on ettindeclaratory #udment t%at atent i$ /alid to re$er/e it$ /alue in t%emar8etlace

>i$$ue+ can a 4ederal court u$e it$ 4indin t%at a atent %a$ not een in4rined a$ a

2


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er $e #u$ti4ication 4or u%oldin t%e /alidity o4 t%e di$uted atent$>%oldin+ -o

>two que$tion$ o4 law do not alway$ nece$$arily cancel eac% ot%er outw%en only one i$ re$ol/ed (in matter$ o4 atent law, non>in4rinementand in/alidity are two $earate que$tion$) T%ere4ore, t%e C may 4ind

t%at a atent %a$ not een in4rined ut it may not rely on $uc% adetermination a$ a er $e a$i$ 4or /acatin a #udment %oldin t%e $ame

atent in/alid.>rocedurally, counter claim$ %a/e t%eir own ca$e or contro/er$y (i$e$$entially a di44erent ca$e)not moot, t%ere i$ relie4 t%at can e

ranted a remedy can e ro/ided, a ca$e i$ not moot

E. 'e4ormation /$. 'e$ci$$ion >reformation. court$ re4orm 8 w%en t%e artie$9 meetin o4 t%e mind$ i$ not re4lected in

t%e 85 enerally, in re re4ormation t%e artie$ %ad an actual areement and t%e writindoe$ not re4lect t%at areement $o we re4orm t%e writin to re4lect t%e actual areement.

>%ere, court$ re4orm t%e 8 wo real analy$i$ o4 irrearale %arm

>rescission+ court$ re$cind t%e entire 8 w%en t%ere wa$ no meetin o4 t%e mind$. 64 t%erei$ no mutual areement or one $ide made a mi$ta8e, t%i$ create$ a /oid 8

> +and v. 8ayton-+udson BBI F.2d BIB >4act$+ uon 4irin aellant, aellee made an o44er to ay %im S 3D,000 i4

aellant areed to relea$e aellee o4 any claim$. TC 4ound t%at *4raudulently altered relea$e t%at ot% artie$ $ined re4ormed t%e relea$e

to con4orm to it$ oriinal meanin >i$$ue+ can a court re4orm a 8 w%en t%ere i$ not a mutual mi$ta8e (t%at i$, * ne/er

areed to t%e term$)>%oldin+ ye$5 re4ormation o4 8 i$ allowale enerally w%en t%ere i$ a mutual

mi$ta8e o4 4act ut w%ere t%ere i$ mi$ta8e on one $ide and 4raud or

inequitale conduct on t%e ot%er, re4ormation can e roer o/erre$ci$$ion

>note+ e/en t%ou% t%ere wa$ no meetin o4 t%e mind$, t%e court$ $till c%oo$ere4ormation o/er re$ci$$ion (roaly c t%ey di$li8ed t%e lawyer9$ c%aracter

4eel$ equitale)

N66. REMEDIES %"D SE5%R%*I!" !B 5!@ERS . Generally 7 Equita,le Relief. T%e 11t% mendment reclude$ indi/idual$ 4rom $uin anot%er

$tate under any circum$tance$.


26/42

con$titute a wai/er ut i4 $tate (1) accet$ 4ederal money and (2) t%ere i$ aconre$$ional $tatute t%at $ay$ accetance re$ult$ in an exlicit wai/er, t%en t%e$tate i$ no loner immune. -;TE+ t%e indi/idual accetin 4und$ i$ t%e one w%oi$ liale and %e, not t%e $tate, %a$ to e t%e named de4endant

7 Monetary Relief 7sovereign immunity "!* waived:. 64 a lainti44 de$ire$monetary relie4 and $o/erein immunity %a$ een wai/ed, t%en we do not need to

o into a quali4ied immunity analy$i$. 64 $o/erein immunity %a$ not eenwai/ed,

%owe/er, a lainti44 can otain monetary relie4 y $uin an indi/idual o4 t%e $tatein t%eir er$onal caacity (not t%eir o44icial caacity) $o lon a$ lainti44 (1)name$an o44icial w%o in %i$ personal caacity, (2) /iolate$ clearly e$tali$%ed $tatutoryor con$titutional ri%t$ o4 w%ic% (3) o#ecti/ely a rea$onale er$on would %a/e8nown. o/erein immunity doe$ not aly ecau$e and indi/idual actin in %i$

er$onal caacity i$ not a $o/erein. ome $tate$ will 4und t%e er$onal exen$e$o4 it$ liale o44icial$.

7 Culpa,le Defendants. 'ule+ t%ere i$ no ri%t o4 a citiAen o4 any $tate, to $ue e/en t%eir own $tate 4or money

damae$ (it i$ o8ay to $ue your own $tate, i4 you $ee8 equitale ro$ecti/e relie45 note+equitale relie4 i$ alway$ ro$ecti/e)

>


27/42

>di$$ent (=ar$%all)+ y articiation in t%e roram$, t%e tate$ wai/e immunityt%ey mi%t %a/e ot%erwi$e %ad 4rom 4ederal court order$requirin retroacti/e ayment o4 wel4are ene4it$

C. uit$ ain$t ;44icer$ in T%eir *er$onal Caacitie$ >'ule+ o/ernment o44icial$ er4ormin di$cretionary 4unction$ enerally are $%ielded

4rom liaility 4or ci/il damae$ in$o4ar a$ t%eir conduct (1) doe$ not /iolate clearly

e$tali$%ed $tatutory or con$titutional ri%t$ o4 w%ic% a (2) rea$onale er$onwould %a/e 8nown

>;ld 'ule+ rolem wa$ rule wa$ not wor8in in ractice, too %ard to $%ow &ood 4ait%ne/er will et J lon trial$ 1. @new or rea$onaly $%ould %a/e 8nown aout t%e rule 2. u#ecti/e ood 4ait% > +arlow v. ,it'gerald IB ".. D00 >4act$+


28/42

N666. RES*I*)*I!" (E-EF6T T; T


29/42

>$tatute o4 4raud$ $tate$ tran$action$ in/ol/in land %a/e to e in writin >note+ traditionally, court$ %ardly aly irrearale in#ury rule in re re$titution

. =ea$urin 'e$titution 1. T%e increa$ed a$$et$ in t%e %and$ o4 t%e 4rom t%e receit o4 t%e roerty 2. T%e mar8et /alue o4 $er/ice$ or intanile$ ro/ided to t%e , wo reard to w%et%er

t%e 9$ a$$et$ were actually increa$ed5 t%at i$, t%e amount w%ic% it would co$t to otain

$imilar $er/ice$, w%et%er t%o$e $er/ice$ ro/e to e u$e4ul or not3. T%e u$e /alue o4 any ene4it$ recei/ed, a$ mea$ured y (i) mar8et indicator$ $uc% a$

rental /alue or intere$t or (ii) actual ain$ to t%e 4rom u$in t%e ene4it$, $uc% a$ t%eain$ identi4ied in item I

. T%e ain$ realiAed y t%e uon $ale or tran$4er o4 an a$$et recei/ed 4rom t%e * >counter+ at lea$t $ome o4 t%e ro4it$ were due to 9$ e44ort$ I. Collateral or $econdary ro4it$ earned y t%e y u$e o4 an a$$et recei/ed 4rom t%e *,

or, w%at i$ muc% t%e $ame t%in, t%e $a/in$ e44ected y 9$ u$e o4 *9$ a$$et E. Limit$ ;n "n#u$t Enric%ment >rule+ court$ re4u$e to ermit reco/ery o4 re$titution e/en w%en un#u$t enric%ment i$ 4ully

e$tali$%ed, i4 a re$titutionary award would inter4ere wit% t%e d9$ own ri%t$ orwould e inequitale on t%e articular 4act$ o4 t%e ca$e+

> protecting 8’s autonomy 9$ autonomy intere$t mu$t e 4ully re$ected5 mu$t not

e made to ay re$titution 4or $omet%in %e did not ta8e, did not want, and did not arain 4or (e3' %ou$e ainter aint$ in 9$ a$ence)

> protecting 9rd party innocent purchaser t%e innocent urc%a$er 4or /alue mu$t e

rotected w%ere leal title %a$ a$$ed 4rom * (e3' \ 4raudulently et$ title to lac8acre4rom * and $ell$ to innocent urc%a$er. * not entitled to reco/er lac8acre 4rom 3rd arty ut can et S 4rom )

> protecting 8’s who have changed position innocent 9$ mu$t e rotected w%ere t%ey

%a/e c%aned o$ition a4ter recei/in t%e enric%ment and w%ere t%ey would e lacedunder $ini4icant %ard$%i i4 re$titution i$ required (extremely di44icult to $ati$4y)

>D=s c4anged position defense (reliance), need$+ 1. Lac8 o4 actual or con$tructi/e notice 2. ctual c%ane o4 o$ition reconiAed under t%e law (unu$ual receit o4

money romt$ unu$ual exenditure t%at normally would not %a/e een made)

> protecting public policy F. =i$ta8e Ca$e$ >rule. ene4it$ con4erred y mi$ta8e o4ten ro/ide round$ 4or re$titution > !lue Cross +ealth %ervices v. %auer D00 .H.2d B2 0mista;en payment >4act$+ * wa$ an in$urance ro/ider. * %ad mi$ta8enly mailed ?? c%ec8$ to 9$.

;nce * di$co/ered it$ mi$ta8e, * demanded ayment 4rom 9$ on

re$titution t%eory. >%oldin+ * entitled to re$titution5 a er$on w%o ay$ money to anot%er y

mi$ta8e i$ entitled to re$titution 4rom t%e ene4iciary e/en i4 t%emi$ta8e wa$ due $olely to t%e ayer9$ lac8 o4 care5 can %a/ea44irmati/e de4en$e t%at t%eir o$ition %a$ c%aned $o t%at it would eun#u$t to require re$titution

>%ere, * a$8$ 4or a con$tructi/e tru$t (equitale remedy) to a/oid a #urytrial c in$urance comanie$ are di$4a/ored y #urie$

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>counter+ to et t%i$ ac8 on t%e leal $ide (#ury trial), wouldarue 6'' (leal remedy would e er4ectly adequate c it$ #u$t

aout money) >note$+ i4 re$titution remedy i$ $imly ca$%, t%an *9$ le/el o4 mi$ta8e doe$ not

$eem to matter c ca$% i$ $o ea$ily returned (a$$um$it)

>lue Cro$$+ mi$ta8en ayment #u$t money>omer/ille+ mi$ta8en imro/ement roerty ain

>$imle$t way to 4ix t%i$ i$ to 4orce to et ac8 w%at t%ey ot+ uy imro/ement or $ell t%eir lot

>note$+ money not returned to * i4 t%ere wa$ no mi$ta8e, or t%ere wa$ 4raud, etc. >%omerville v. "acobs 1B0 .E.2d D0I 0mista;en improvement

>4act$+ * accidently con$tructed uildin on 9$ roerty. did not realiAe t%i$until a4ter uildin wa$ comlete and claim roerty intere$t in uildin

>%oldin+ * win$5 equity will rant relie4 to one w%o, t%rou% a rea$onalemi$ta8e o4 4act and in ood 4ait%, lace$ ermanent imro/ement$ uon

land o4 anot%er, wit% rea$on to elie/e t%at t%e land $o imro/ed i$ t%at

o4 t%e one w%o ma8e$ t%e imro/ement$ remedy+ court $aid to t%e you lo$e, ut c you9re not re$on$ile 4or t%i$, you %a/e t%e otion o4

two c%oice$+ (1) $ell land to * at 4air mar8et /alue wo /alue 4orimro/ement (&4orced $ale) ;' (2) uy t%e imro/ement (w%en uyin t%e imro/ement, %a$ t%e c%oo$e$ t%e le$$er o4 two+ co$t o4 uildin ware%ou$e ;' 4air mar8et /alue o4 t%e imro/ement)

>unli8e mi$ta8en o/erayment ca$e$, in mi$ta8en er4ormance ca$e$ *9$culaility ;E matter

>*9$ mi$ta8e mu$t e rea$onale (we don9t care i4 * i$ an idiot,we care i4 * will4ully lind or rec8le$$ly ma8e$ mi$ta8e)

>actual notice to * ar$ un#u$t enric%ment claim e/en i4 * did notunder$tandcomre%end noticecourt$ are un$ure aoutcon$tructi/e notice)

>di$$ent+ ta8in t%e roerty o4 $omeone /iolate$ a con$titutional ri%t >%ere, remedy i$ de$ined to rotect t%e * (arty w%o made t%e mi$ta8e) >note$+ analoou$ rolem >3 o44iciou$ intermeddler$ >i4 ainter ma8e$ mi$ta8e, %omeowner i$ liale 4or le$$er o4 1. /alue o4 o4 $er/ice or 2. /alue o4 imro/ement

>note$+ lying and wait 7culpa,le defendants: >i4 i$ culale, $till %a$ election ut $li%tly di44erent+ can $ell t%e

lot ;' can ay 4or t%e reater o4 (1) eit%er t%e co$t o4 t%e $er/ice or(2) t%e 4air mar8et /alue o4 t%e imro/ement

>court$ are $lit on t%i$ >note$+ doe$n9t %a/e otion to $ell t%e land i4 * ne/er t%ou%t t%e %ou$e wa$

t%eir$ to own (e3' %ou$e ainter$ aint ot%er eole9$ %ou$e$ notexectin to 8ee t%em, $o $%ouldn9t e 4orced to uy t%em)

>note$+ w%at %aen$ w%en c%o$e$ to $ell t%e lot ut * i$ in$ol/ent (Goodmandoe$n9t 8now)

>%tate v. A3& %eed Corp D02 *.2d 13I3 0court mista;e >4act$+ $tate won a de4ault #udment and executed on t%e #udment durin t%e

endency o4 aeal. T%e #udment wa$ re/er$ed a4ter t%e $tate $old

30


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roerty at a dee di$count. C a44irmed t%e determination t%at eed Co.wa$ entitled to re$titution at t%e 4air mar8et /alue o4 t%e roerty $eiAed.

>i$$ue+ w%en a * execute$ on an un$uer$eded #udment w%ic% i$ later re/er$ed,w%at i$ t%e mea$ure o4 re$titution+ roceed$ o4 t%e $ale or 4air mar8et /alue

o4 t%e roerty $old

>%oldin+ roceed$ 4rom $ale5 ma#ority /iew a$ re4lected in 'e$tatement and olicy rea$on$ $ue$t /alue : roceed$ o4 $ale

> 4estatement + a er$on w%o %a$ con4erred a ene4it uon anot%er incomliance wit% a #udment, or w%o$e roerty %a$ een ta8ent%ereunder, i$ entitled to re$titution i4 t%e #udment i$ re/er$ed or $eta$ide, "-LE re$titution would e inequitale or t%e artie$ contractt%at ayment i$ to e 4inal under a$$um$it, * i$ only entitled to et

t%e /alue t%at t%e enric%ed arty () actually en#oyed ($o i4 %e didn9ten#oy and de/alued un#u$t enric%ment, oo$in arty limited to t%ede/aluation ! intere$t)

>%ere, $tate $old roerty at a di$count $o * can only et ac8w%at wa$ actually enric%ed y

> policy reasons+ aut%ority to act uon a /alid #udment would ee$$entially neated i4 t%e #udment creditor ri$8ed liaility 4or t%euncertain and er%a$ una$certainale mar8et /alue o4 t%e roerty

>note$+ t%i$ doe$n9t aly i4 it9$ #u$t money and lo$e$ it5 $till liale 4or t%eamount lo$t

>note$+ ona 4ide urc%a$er$, t%at i$ 3rd arty indi/idual$ w%o urc%a$ed in ood4ait%, cannot e $ued 4or un#u$t enric%ment

G. reac% o4 Contract Ca$e$ >general rule+ uon 9$ $u$tantial reac% or reudiation o4 an en4orceale 8, a * w%o

%a$ artly er4ormed i$ entitled to reco/er re$titution o4 any ene4it %e %a$con4erred in er4ormance o4 t%e 8 HELL any reliance damae$ creliance damae$ are enerally $een a$ not /iolatin doule reco/ery (e3'

rice aid ! intere$t, mar8et /alue o4 $er/ice, or $eci4ic re$titution o4 articular item con/eyed5 exectancycomen$atory damae$ /iolatedoule reco/ery rincile)

unenforcea,le ;. w%en 8 i$ unen4orceale, re$titution i$ u$ually *9$ only otion 4or t%e ene4it$ %e con4erred (e3' /iolate $tatute o4 4raud$, one arty i$ a minor, 8 %a$ ecomeimracticale, etc.)

>specific restitution. re$titution 4or reac% o4 8 u$ually re$ult$ in money reco/ery%owe/er * i$ entitled to $eci4ic re$titution w%en+

1. * %a$ tran$4erred a $eci4ic t%in t%at can e returned2. H%en t%e $eci4ic ood or roerty t%at * con4erred i$ unique or %a$ $ecial

qualitie$ (e3' *ica$$o aintin)5 or3. * %a$ a $ecurity intere$t in t%e ood tran$4erred

>e3pectancy or ; price as a limit on restitution >rule. in eneral, to rotect e44icient reac% t%eory, re$titution i$ -;T mea$ured

y t%e ene4it otain$ collateral to %i$ reac%, ut y t%e /alue o4 *9$ art er4ormance5 t%u$, re$titution in exce$$ o4 t%e *9$ exectancy (8 rice) i$ denied w%en (1) * $ee8$ to reco/er t%e 9$ collateral ro4it$re$ultin 4rom 9$ reac% or (2) * %a$ 4ully er4ormed and 9$ onlyremainin oliation i$ to ay a $um o4 money (note+ i4 only artial er4ormance, * can $ee8 /alue o4 artial er4ormance e/en i4 it$ reatert%an 8, ut once %e %a$ 4ully er4ormed %e i$ caed at 8 rice)

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>restatement approac4 to partial performance. *9$ re$titutionary remedy i$caed at t%e 8 rice ('.3d i$ not yet law ut li8ely will e in t%e 4uture)

>ex. +oomer 4ypo . ?2 >* uild$ dam and i$ IR done w%en uyer reac%e$. T%i$ wa$

al$o a neati/e exectancy 8.>8 : S3338

>IR comleted co$t$+ SIB18 >%oldin+ * i$ awarded t%e entirety o4 9$ ain (SIB18) law

>'.3d remedy : (S3338)(IR) : 31?.3I8 >note$+ T%e traditional rule i$ t%at i4 * i$ wai/in %er 8 claim, t%en we comletely

inore t%e 8 term$ and * i$ entitled to re$titution o4 %er artial er4ormance, e/en i4 %er er4ormance exceeded t%e areed uon 8 rice.

e3ception to e3pectancy ceiling. disgorging D=s profits1. i4 intentional tort exi$t$, t%an $%ould di$ore ro4it$ 4rom reac% to *

>i4 wai/in t%e tort claim in 4a/or o4 re$titution claim (and intentionally cau$ed tort) * entitled to di$ore 9$ ro4it

>i4 you are wai/in t%e tort claim in 4a/or o4 re$titution claim (ut didn9t not intentionally cau$e t%e tort) * not entitled to 9$ ro4it$

>i4 %ad notice o4 mi$ta8e and went t%rou% wit% it * entitled todi$ore 9$ ro4it c inorin notice can ecome a tort

2. i4 ; claim, t%en we don9t care aout culaility * not entitled to di$ore9$ ro4it$

>exception 1+ 8 comined wit% tort or 4iduciary reac% * entitled todi$ore 9$ ro4it$

>exception ?+ * acquire$ a roerty ri%t in t%e 9$ romi$ed er4ormance (equitale con/er$ion) 64 ro4it$ y

con/ertin and u$in *9$ ood$, * i$ entitled to reco/erre$titution 4rom t%e mea$ured y %i$ ro4it$

3. i4 t%ere 8 4act$, ut wai/e 8 claim 4or restitution claim * entitled to

di$ore 9$ ro4it$ i4 (1) too8 away oortunity 4rom * to ma8e money and

(2) * cannot reain t%i$ oortunity . mi$cellaneou$ note$+

>i4 $ee8in con$tructi/e tru$t, di$orin ro4it$ i$ not an i$$ue c wetrace

>t%ere i$ no di$orement o4 ro4it$ wit% mi$ta8en imro/ement c i4 itwa$ a tort (tre$a$$) it wa$n9t an intentional tre$a$$ (mi$ta8e)

> )ay v. )uroff D3 o.2d BB2

>4act$+ in t%e interim etween enterin into 8 and t%e 4inal clo$in o4 deal,

imroerly $old S20,000 wort% o4 4ill 4rom t%e land. TC ruledt%at * wa$ entitled to S122,0?B (di44erence etween t%e /alue o4t%e land e4ore and a4ter t%e in#ury)

>%oldin+ no, * i$ entitled to S20,000 ro4it>9$ reac% wa$ delierate and %e $%ould not e ale to ro4it c

%ere, t%e court elie/e$ t%e 9$ culaility %a$ one too 4ar (t%e

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4ill i$ $o $u$tantial to t%e uro$e o4 land t%at t%e reac% denie$* t%e oortunity to ro4italy er4orm t%at cannot $imly erelaced wit% damae$)

>'.3d+ i4 a delierate reac% o4 8 re$ult$ in ro4it and t%e a/ailaledamae remedy ro/ide$ inadequate rotection, * %a$ a claim to 9$ ro4it$

i. ro4itale+ reac% %a$ to e ro4itale (ain$ net o4 otentialliaility in 8 damae$, reater t%an reac%in arty could%a/e earned y er4ormance)

ii. delierate+ mu$t %a/e intentionally eac%ed iii. inadequate remedy+ Goodman t%in8$ remedy i$ inadequate

w%en $teal$ an oortunity losing contracts 7negative e3pectancy: issues

>enerally, $uin 4or damae$ i$ a wor$e otion t%an re$titution in re lo$in 89$5%ere, etter to do not%in t%an $ue 4or damae$ under a lo$in 8 c exectancy/alue i$ neati/e > )obil il xploration v. 0% I30 ".. ?0

>4act$+ * $ou%t re$titution 4or money aid 4or lea$e 89$ i/in t%em

ri%t$ to exlore 4or and de/elo oil. T%e ri%t$ were not a$olute,

ut were conditioned on etitioner$Y otainin 4urt%er ermi$$ion$.

* claimed t%at t%e " reudiated t%e 89$ w%en it denied t%emt%e ermi$$ion>$ee8in oortunitie$ t%ey were romi$ed.

>%oldin+ * entitled to re$titution (re$ci$$ion o4 8)>%ere, i4 t%e " reac%ed a contractual romi$e, t%en t%e "mu$t i/e t%e comanie$ t%eir money ac8 e/en i4 it wa$ alo$in 8 4or *

>damae$ : neati/e exectancy5 re$titution : 1I?= $e/eral tort$, will entitle * to re$titution+ >4raud >emeAAlement >con/er$ion (act$ y 1 er$on incon$i$tent wit% t%e owner$%i ri%t$ o4 anot%er) >reac% o4 4iduciary duty i4 it yield$ ain$ to t%e 4iduciary >coyri%ttrademar8 in4rinement >tortiou$ inter4erence wit% 8 >in reac% o4 8 ca$e$, intentional tort$ will enale * to $ee8 t%e ro4it$ re$ultin 4rom 9$

reac% ( see xception to xpectancy Ceiling/ 8isgorging 8’s Profit above: 6. -ote$ on Con$tructi/e Tru$t$ rule. * w%o ro/e$ %i$ con$tructi/e tru$t claim y clear and con/incin e/idence win$

an order t%at require$ t%e to tran$4er leal title o4 $eci4ic roerty or intanile$

to t%e *. Court 4ir$t declare$ to e con$tructi/e tru$tee, t%en order a$ tru$tee toma8e a tran$4er o4 t%e roerty to t%e ene4iciary o4 t%e con$tructi/e tru$t, t%e *.c o4 CT9$ tracin 4eature, i4 roerty4und increa$e$ t%an * i$ entitled toincrea$e$5 i4 it decrea$e$, t%en * et$ t%e decrea$ed amount, not t%e oriinalamount.

>Constructive *rust C4aracteristics 1. 3o "ury+ CT claim$ are traditionally /iewed a$ equitale claim$

>do not need to $ati$4y 6''

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2. 2racing + * may otain not merely w%at %e lo$t, ut ain$ recei/ed y t%e 4rom t%e roerty9$ increa$e in /alue4rom it$ tran$4er4rom it$ u$e in a u$ine$$ ! re#udment intere$t

>to et t%i$ ene4it, * mu$t trace %i$ money or roerty to $ome articular

4und$ or a$$et$ (di44icult to ac%ie/e)

>e3' i4 too8 S108 and cominled it in an account wit% SI08, 4or

a total o4 S?085 * need$ to account 4or %ow entire S?08 wa$ $ent >note+ CT i$ al$o a/ailale w%en ta8e$ C< 4rom * (e/en

w%en * didn9t %a/e leal title) a$ lon a$ * can trace w%ic% i$o4ten imractical

>in term$ o4 tracin, we are tracin t%e 4orm o4 t%e roerty (not tracin4rom er$on to er$on)

>we i/e * t%e mo$t 4a/orale re$umtion$ 3. Property in specie/ CT may allow reco/ery o4 t%e $eci4ic roerty ta8en 4rom

* or any roerty $u$tituted 4or it

. Priority+ CT i/e$ * riority o/er ot%er creditor$ to t%e extent t%at t%e * canidenti4y a roerty$u$titute a$ t%at w%ic% in ood 4ait% elon$ to %im

>counter aain$t CT+ ot%er creditor$ %a/e intere$t$ too and it would eun#u$t to i/e * wind4all i4 ot%er creditor$ are not $er/iced

>Reasons 5 @ants Constructive *rusts. 1. Tran$4er o4 title5 or 2. reac% o4 4iduciary duty (accountant$, lawyer$, 4inancial lanner$ in $ome

ca$e$, not doctor$) trace, don9t loo8 at culaility

2.I &uty o4 Tru$t in &$ecial relation$%i$ created y ne >Constructive *rust vs' %ssumpsit >a$$um$it doe$n9t trace t%e 4orm$5 it9$ #u$t a #udment t%at $ay$ owe$ \

amount o4 money (u to to 4iure out %ow to ay it)

>not wi$e to u$e a$$um$it i4 t%e /alue rew (lo$e ene4it$ o4 tracin ain$)5 oodw%en t%e /alue decrea$ed (tracin under CT will i/e * decrea$ed /alue)>i4 it9$ %ard to tell i4 t%ere i$ rowt%lo$$ c o4 cominlin o4 4und$, court$ try tomaximiAe t%e *9$ ain (t%e * i$ entitled to t%e re$umtion o4 ain)

>court$ will aortion 4und >%nepp v. 0nited %tates ".. I0B >4act$+ $ a condition o4 %i$ emloyment wit% C6, areed not to di/ule

cla$$i4ied in4o and not to uli$% any in4o wo reulication clearance. reac%ed duty and uli$%ed oo8 wo clearance C6 want$ CT o/er oo8 ro4it$5 TC reac% ! awarded CT5 C aree$ ut in/alidate$

CT c t%ou%t t%at 9$ fiduciary duty extended only to re$er/incon4idential material (limited damae$ to nominal damae$ ! uniti/e$)

>%oldin+ re/er$e5 C denie$ * t%e mo$t aroriate remedy 4or 9$ reac% o4tru$t and will lea/e * wit% no reliale deterrent to 4uture reac%e$

>CT rotect$ * 4rom unwarranted ri$8$ CT remedy $imly require$ to di$ore t%e ene4it$ o4 %i$ 4ait%le$$ne$$

>actual damae$ are unquanti4iale >nominal damae$ are %ollow alterati/e t%at will deter no one >uniti/e$ are $eculati/e and unu$ual and ear no relation to

eit%er *9$ lo$$ or 9$ un#u$t ain (4urt%er, roo4 o4 tortiou$conduct mi%t require * to di$clo$e con4idential in4o)

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>di$$ent+ did not reac% %i$ 4iduciary duty to rotect con4idential in4o. 'at%er,%e reac%ed %i$ contractual duty to otain re>ulication clearance. 6norder to #u$ti4y CT, ma#ority attemt$ to equate contractual duty wit%4iduciary duty %ere, did not ain un#u$tly 4rom %i$ reac% (e/en i4

$umitted oo8 4or re/iew, C6 would %a/e to clear it c itcontained no con4idential in4o) t%u$, C6 i$ un#u$tly enric%ed y CT

>note$+ %nepp $tretc%e$ t%e oundarie$ o4 CT (tyically, we ne/er di$ore ro4it$

in re con$tructi/e tru$t$) c i$ not a 4iduciary (#u$t an emloyee).e3' D disposes of legal title 4ypo (i4 * 4ail$ to et CT, can $ue a$ a reular creditor) >i4 otain$ lac8acre 4rom * y 4raud and $u$equently et$ rid o4 it to a 3rd

arty, no loner %a$ leal title to lac8acre and cannot e a con$tructi/etru$tee. may $till e liale 4or t%e 4raud, ut at t%i$ oint, i$ only a detorand * i$ only an un$ecured creditor. uin only a$ an un$ecured creditor,

remedies goodman 2013 outline

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