Remedies: Heriot





Hypo – Bad person steals baby’s $100 mutual fund money (crappy mutual fund).  Person then uses money to win $1,000 gambling.  What should the Plaintiff’s remedy be?


Competing Principles:


  1. Hard Wrongs – Deterrence -  in terms of legal policy – we’re certain that our goal is to Wipe Out these Wrongs.
    1. Restore plaintiff to their rightful position
    2. Disgorgement - Make sure there is no gain on the part of the defendant
    3. Classic case – breach of contract


  1. Soft Wrongs – Focuses on solely compensating the plaintiff and not disgorging profits from the defendant
    1. Breach of Contract
    2. Design defect cases
    3. Not necessarily cause disgorgement


  1. Economic View – Judge Posner – Economic View that profitable violations of law should be encouraged so long as violators compensate their victims.




Nature of Remedies –

·         remedies law is somewhere between Procedural and Substantive law


Categories of Remedies

  1. compensatory remedies
  2. preventive remedies
    1. coercive remedies
    2. declaratory remedies
  3. restitutionary remedies (equity)
  4. punitive remedies
  5. ancillary remedies


1. Compensatory Remedies – compensate plaintiffs for the harm they suffered


2. Preventive Remedies – aimed to prevent harm before it happens, so that issue of compensation never arises – 2 forms

a)   coercive remedy – i.e. injunction – order from court to litigant ordering them to do or to refrain from doing some specific thing

a.   i.e. specific performance decree – perform a contract

b)   declaratory remedy – resolves disputes about parties’ rights; they resolve uncertainty about their rights before either side has been harmed

a.   declaratory judgments


3. Restitutionary remedies take what defendant has gained at plaintiff’s expense and give it back


4. Punitive remedies – designed to punish wrongdoers; punitive civil remedies


5. Ancillary remedies – designed in aid of other remedies

i.e. costs and attorneys’ fees, punishment for contempt


TWO More Basic Categories for Remedies

  1. Substitutionary Remedies – plaintiff suffers harm and receives a sum of money
    1. Most of Legal Remedies are substitutionary (exceptions)
    2. Damage remedies are substitutionary because they substitute dollars for what plaintiff lost.
  2. Specific Remedies – injunctions, specific performance of contracts, restitution
    1. Most of equitable remedies are specific (exceptions)




CHAPTER 2 – Compensatory Damages – Paying for Harm


1. SECTION A. Basic Principle: Restoring Plaintiff to his Rightful Position


“Rightful Position”

Corollary – One-satisfaction rule

·         Plaintiff is entitled to only one recovery for each item of damage (even though may be entitled on multiple legal theories against multiple defendants)


*Tort Damages based on Returning the plaintiff to their rightful position had the tort never occurred.  Tort Suits – no right to jury trials, judges need to give reasons

United States v. Hatahley, 257 F.2d 920 (10th Cir. 1958)


Direct damages

Consequential damages



2. SECTION B. – VALUE as the Measure of the Rightful Position


Hypo – Prof. Heriot has sentimental mickey mouse hat.  She doesn’t remember who gave it to her.  Someone negligently destroys it.  Disney Co. does not make the hat anymore.   Hat costs $9.99.


Market Value is the solution for most cases.  People’s unique subjective values are not used.  Market value and not value to Plaintiff.


United States v. Fifty Acres of Land 469 U.S. 24 (1984) – CB 19


Hypo – Prof.’s wrecked car.  $3,000 fixed car, $2,000 wrecked

Switch to Repair value from Market value?


Rule – Give the lower value.  No windfalls awards.


Look at Several Things

O’Brien Bros. v. The Helen B. Moran (2d Cir. 1947) – CB 23

“Plaintiff is entitled to be made whole in the least expensive way.”


Lemon Effect – Buyers assume the worst about used goods so they pay low prices, so sellers get used low quality goods. 


United States v. Ebinger (2d Cir. 1967) – courts award cost of replacing component parts of a larger whole. 


Trinity Church v. John Hancock Mutual Life Insurance Co. (Mass. 1987) – CB 26

Assume the Defendant Negligently destroyed the Church. 

RULE – Reasonable costs of Reconstructions or replacement are allowed as measure of damages where diminution of market value of property cannot be determined.


Mieske v. Bartell Drug Co. (Wash. 1979) – CB 33


Decatur County AG-Services v. Young (Ind. 1981)

Soybean Farmer – Agricultural Case – has crops damaged by defendant’s negligent spraying of pesticide

Speculative award of damages.

RULE – measure of damages for partial destruction of growing crop is difference in crop’s value immediately before and after the injury with market value determined at the time of harvest


3. SECTION C. - RELIANCE AND EXPECTANCY as Measures of Rightful Position

Know the Basics of Reliance and Expectation (Don’t Need to Know UCC part)


Reliance damages are not the same as out of pocket costs


Expectation damages – easier to prove,


Tort Law – you usually get reliance damages


Contracts – you usually get expectation damages


Neri v. Retail Marine Corp. (NY 1972) – CB 37

Rule – UCC – Seller of goods that rejected by breaching buyer may recover lost profits and incidental damages to put plaintiff in position he would have been without breach of contract.

Typical Tort Case – reliance and expectation are the same thing


Smith v. Bolles (US 1889) –


Think about Expectation and Reliance damages for fraud even though they are Tort.


Contract Cases – Expectation Damages

3 categories

  1. Actual Benefit conferred upon the breaching party
    1. Restaurant cooks meal; customer eats meal, then doesn’t want it.
  2. Actual Reliance
    1. Restaurant cooked the meal, but customer says he/she doesn’t want it before eating it.
  3. Purely Executory
    1. If neither , then no harm
    2. Atiyah concedes that there are some contracts (K) where there is some amount of allocated risk. 

1.   i.e. insurance policy


Contract Cases

Expectation Damages (1st Argument to think of)

1. Allocation of Risk

2. Fuller & Perdue –

  1. plaintiff’s essential reliance = form of acts essential to enforcement of contract by him (i.e. partial performance) where defendant breaks contract
    1. all other reliance is incidental
  2. reliance and expectation interests approach each other – depending on other similar opportunities to plaintiff
  3. reliance = expectation interests where breach of contract -> loss of promised value + direct harm


2nd Arguments - Exceptions (Reliance Damages)


Prof Note *!! Reliance and Out of Pocket Expenses are not the Same Thing!


Chatlos Systems v. National Cash Register Corp (3d Cir. 1982) – CB 48

Facts – Plaintiff Chatlos contended that computer system it bought from National did not function as warranted.



Smith v. Bolles (US 1889)

Facts – Defendant Smith fraudulently said stock had great value and sold it to Plaintiff Bolles for $6k.  P was originally awarded damages = fraud value of stock

Rule – The proper measure of damages for fraud in the sale of stock is the actual loss suffered due to the deception, not the purported value of the stock.




Buck v. Murrow (TX 1893)


Rule – Recovery for consequential damages reasonably anticipated by the parties for the breach of a lease of real property.

Prof. Heriot

* Distinguish between General Damages (US v. Fifty-Acres Land)

vs. Consequential Damages *


Meinrath v. Singer Co. (SDNY 1980) – CB 63

Rule – Creditor can recover only interest on late payment of money due and no consequential damages.


*Not really consequential damages case*

Texaco v. Pennzoil (TX 1987)  

Facts – Pennzoil contracted to by 3/7 of Getty Oil stock but really wanted benefit of Getty’s 1 billion reserves of oil. 

Value it according to either the Stock or Assets of the corporation

Important Fact – What is Pensoil Not Asking for?  (this should tell you a lot)

Rule – Tortious interference with contract, plaintiff is entitled to pecuniary loss of the benefit as entitled to under contract, as well as consequential and punitive damages. 


Hypo – If a Bank says customer can pick up $1 million a certain day and customer can’t pick it up, then Courts are much more willing to award consequential damages.


5. Section E. Limitations on Remedies


Restrictions on Consequential Damages

1) contractual limitations on remedies

2) rules about avoidable consequences, scope of liability, and uncertainty


*Parties power to Specify the Remedy – SPLIT of AUTHORITY among courts*

Kearney & Trecker v. Master Engraving 527 A.2d 429

Facts – Computer Machine tool malfunctioned 25%-50% of time.  Defendant Kearney had warranty provision disclaiming liability for consequential damages and Plaintiff Master’s Remedy is limited to repair, replace, or Money back at Seller’s discretion

Policies – Freedom of contract vs. minimum adequate remedies

Rule – A consequential damages disclaimer in warranty is not invalidated by the failure of a limited remedy provision unless it is unconscionable.




When is it appropriate for a seller to ask for a contract that limits consequential damages?

  1. Buyer is in Better Position to Control the Risk
    1. Buyer thinks they can treat the product better through some control.
  2. Buyer is in Better Position to Prevent the Consequentials from being High (exercising Due Care)
    1. Appropriate where the Risks of the consequentials is upon the Buyer.


Liquidated Damages


Liquidated Damages


What are the best cases/circumstances to Get Liquidated Damages?

  1. Uncertain cases that deal with stock values
  2. Emotional damages –
  3. Double Responsibility


Ashcraft v. Coady (D.C. Cir. 2001) 244 F.3d 948

Rule –





Northern Illinois Gas Co. v. Energy Cooperative, Inc. (Ill. App. Ct. 1984)




Under-Liquidated Damage Clauses


Note 6 - CB 91


Avoidable Consequences, Offsetting Benefits, and Collateral Sources

CB 92


*Exception to the “Return Plaintiff” to Rightful Position Doctrine

S.J. Groves & Sons Co. v. Warner Co. (3d Cir. 1978) – CB 92

Rule – Buyer may choose any one of several available methods of mitigating damages to recover consequential damages for the seller’s breach.


Hypo – Tort Case – automobile is banged up.  Plaintiff who was going to sue for damages to his vehicle, doesn’t have the money to repair the car.  Car goes into storage.  Damages increase for storage fees daily.





Offsetting Benefits – CB 101



Hypo – if you patient goes to get certain procedure, but surgeon removes something else too to prevent pain and suffering later.

Hypo – False story in newspaper saying Prof. Heriot was a murderer.  She sues for being fired from USD and losing her job and income.




*Bad Explanation by the CA Supreme Court of

Reasons for the Collateral Source Rule

Helfend v. Southern California Rapid Transit District (Cal. 1970) – CB 103

Rule – The collateral source rule – prohibits the intro of evidence of compensation paid to plaintiff by a 3rd party independent source (insurance) to reduce defendant’s liability. 


Torts Example

Hypo - Taxi lets passenger out of cab and runs over rider.  Ambulance takes away severely injured person to the hospital.  Doctors operate and rider dies 1 week later.

  1. Wrongful Death (Negligence) – damages from after death
    1. Relatives as specified by statutes (plaintiffs)
  2. Loss of Consortium (Negligence) – Moment of Impact -> Death
    1. Spouse’s cause of action
  3. Survival Acts (Negligence)
    1. Any cause of action for the injuries during victim’s lifetime.
    2. Plaintiff – estate, will takers,


Subrogation Clauses – let insurer assert plaintiff’s claim against the wrongdoer or get reimbursed from plaintiff’s recovery


Contract Law - Duty to Mitigate

Tort Law - Doctrine of Avoidable Consequences


Scope of Liability


Pruitt v. Allied Chemical Corp. (E.D. Va. 1981) – CB 110

Facts – Defendant Allied polluted waterways and wildlife. 



Hypo – Suppose some company dumps chemicals onto a field of land somewhere and wipes out wheat in South Dakota. 

1.  Who gets hurt?

Common Law Traditional Rule – Nobody on this lists collects remedies except for the “wheat farmer” – who was actually affected. (impacted)


2.  Act of Compensation – Causes Ripple Effect


Economic Harm Rule – plaintiffs who don’t suffer physical harm to his person or property can’t recover for – economic harm/other losses.


Hadley v. Baxendale (1854) – consequential damages will not be awarded unless the defendant was put on notice of the special circmstances


CB 117

People Express Airlines, Inc. v. Consolidated Rail Corp. (NJ 1985)


Contractual Overtones

Evra Corp. v. Swiss Bank Corp. (7th Cir. 1982) – CB 119


Rule – Plaintiff cannot recover consequential damages when such were consequences of defendant’s negligence which were Avoidable by the plaintiff.



Southwestern Bell Telephone Co. v. Norwood (Ark. 1948) – CB 126

Rules – A telephone company is not liable for special damages for failure to connect a person to fire department if it had no notice of the circumstances out of which the damages might arise.   No foreseeability.

Dissent – Monopoly telephone service has duty of reasonable care. 


*The Certainty Requirement


Bigelow v. RKO Radio Pictures (US 1946) – CB 129

Rule – A jury may make a just and reasonable estimate of damages based upon the evidence presented, and its award doesn’t need to be based on precise calculations.

Dissent – Justice Frankfurter – In the absence of proof of actual injury, no violation of the Sherman Act can be found.


Note 5 CB 137

Brink’s Inc. v. City of New York (2d Cir. 1983)


Substantive Policy Goals

Brunswick Corp. v. Pueblo Bowl-O-Mat (US 1977) - CB 138

Facts – Pueblo (P) sued Brunswick (D) because D had acquired bowling centers in violation of federal antitrust laws.  (P) contended that it was damaged by amount of profit it would have realized if the acquired bowling centers were to close down instead.

Rule – Antitrust relief is not available in every case in which a large corporation takes over smaller businesses and causes readjustments in the market share of other participants.




6. Damages where Value cannot Reasonably Be Measured in Dollars


1. Personal Injuries and Death


Hard to Value Pain and Physical Suffering

18th Century didn’t provide damages for pain and suffering


Deterrence Policy – Punitive Damages Recovery


Debus v. Grand Union Stores, 159 Vt. 537 (Vt. 1993)
Facts – Debus (P) was injured in a store owned by Grand Union Stores (D) when a palette of boxes fell on her.  (P) suggested daily pain and suffering award according to life expectancy - $346k.

Rule – Per diem damage arguments are not overly prejudicial and should be allowed.


Wrongful Death Cases – Recovery for funeral expenses, financial support, loss of inheritance, loss of society, pain and suffering, loss of companionship, loss

Courts allow recovery for emotional distress in context of constitutional and dignitary torts, but not for death of a loved one.  (monstrous verdicts fear?)

Extraordinary variations in valuation of human lives across cases and states.


Etheridge v. Medical Center Hospitals (VA 1989) – CB 162

Facts – Wilson (P) underwent surgery at (D) hospital for jawbone.  (P) was negligently injured. 

Rule – Statutory limitations on the amount of recovery for medical malpractice are constitutional.

Reasoning – Unless a statute restricts a fundamental right, the rational basis test is appropriate.  The VA statue has a reasonable relation to a legitimate public purpose. 


Smith v. Department of Insurance (FLA 1987) – CB 168

Facts – Florida enacted Tort Reform Act which limited damages for non-economic losses to $450,000.  Smith (P) sought judgment declaring §59 unconstitutional.

Rule – A statutory limitation on damages for noneconomic losses violates the Florida Constitution.  Right to redress injuries is a constitutional right, need to show public necessity.  Affordable insurance coverage not shown to be a public necessity. 




2. Dignitary and Constitutional Harms


*Dignitary Torts – assault, false imprisonment, intentional emotional distress, libel

Levka v. City of Chicago (7th Cir. 1984) – CB 181

Facts – Chicago PD subject woman to strip search.  Jury award $50k for mental anguish, humiliation, etc. 

Rule – A court may exercise its discretion in reducing a jury verdict when the evidence indicated the verdict is grossly excessive.


Prof. Heriot – Misapplication of the standard.  This result was fine.


Remittitur – procedure where trial and appellate judges reduce jury verdicts


Emotional Distress Recovery


Carey v. Piphus (US 1978) – CB 193

Piphus had a procedural right to a hearing before being suspended from school.

Rule – Absent proof of actual injury caused by a denial of procedural due process, only nominal damages may be awarded without proof of actual injury.  $1.



CB 200 Note 5

Laje v. R.E. Thomason General Hospital (5th Cir. 1982)


42 USC §1983 – Attorneys win large fees if they win these cases.

7. Taxes, Time, and the Value of Money – CB 201


Norfolk & Western Railway Co. v. Liepelt (US 1980)

Rule – It is error for a trial judge to refuse to admit evidence of the nontaxability of jury awards or to instruct the jury thereof.



What if Jury didn’t say what damages were for lost wages and what was pain and suffering?

IRS – they gave up and decided not to tax any of the damages resulting from physical injury awards.




Lump Sum Rule – Jury is going to be asked to boil damages down to a single lump sum.  Not later, but now.


*Now is Better than Later.

City of Milwaukee v. Cement Division, National Gypsum Co. (US 1995)

Rules - A genuine dispute over liability does not justify a court’s departure from the general rule that prejudgment interest should be awarded in maritime cases.


Modern Economic Reality – traditional rules gave defendants substantial incentive to delay when damages were large and interest rates were high. 






*Calculating Present Value of a lump sum award for future damages.

Jones & Laughlin Steel Corp. V. Pfeifer (US 1983) – CB 216

Rule – Federal courts may choose the manner in which to discount the present value of future earnings and are not bound by a rule of state law.


Formula – Plaintiff’s future losses should be discounted to present value at compound interest rates.  1/(1+i)^n


Courts – are split on who bears the burden of introducing evidence of an appropriate interest rate and method of discount. 


3 Categories that Work

  1. Assume Inflation = 0% / Use a discount rate that also assumes inflation is 0%

·         (Real Rate of interest = 1% - 3%)

  1. Try to Predict Inflation Rates and adjust wages accordingly/use a discount rate that also tries to approximate inflation – look at actual market rates.
  2. Offset Methods – inflation rate realistically does not offset discount rate


Need experts to testify on

1) prevailing wage rates in the industry

2) Inflation rate – investment that we would expect plaintiff to invest


Caveat – must account for inflation only once


Factors to Consider


CHAPTER 3 – Preventing Harm: Injunctions – CB 233


Equity Trumps Law

  1. Equity courts are not more fair than law courts.
  2. Not entirely true that Equity courts only use injunctions while Law courts use damages.
  3. Equity courts are much more discretionary to their approach? Not totally true.
  4. Equity Courts – the Judge was the trier of fact – no juries
    1. Common Law courts – usually juries decide


Know the histories to understand the difference between Equity and Law Courts.


Certain Rules Changed when Equity and Law Court combined.


Irreparable Harm Rule – equity courts could not issue an injunction unless it could be shown that money damages could not do “justice”.


3 Kinds of Injunctions

  1. Preventive Injunction -
  2. Reparative Injunction – where the harm has already occurred, and now we’re trying to repair that harm
  3. Structural Injunction – desegregation orders, prison litigation – attempts to restructure institutions that systematically violate the law


Injunction – Federal Rule of Civil Procedure 65(d) – must be specific in terms, reasonable detail, reasons for its issuance


Contempt Power of courts – enforces injunctions, criminal offense


Ripeness Rule

Requirements –

1) moving must prove some real likelihood that wrong will occur

2) If the wrong does occur, then will it harm the moving party?


Law Side of Injunction


Writ of Mandamus –

Writs of Prohibition – order to prevent exceeding of jurisdiction or authority


Habeas Corpus – order to a person holding another in custody to bring the prisoner to court and justify the prisoner’s further detention






Humble Oil & Refining v. Harang (E.D. La. 1966) – CB 233

Rule – A preliminary injunction will not issue absent a substantial likelihood of irreparable harm.

Note 5 – CB 236


Scope of the Injunction = Scope of past violation

Marshall v. Goodyear Tire & Rubber Co. (5th Cir. 1977) – CB 241

Rule – The scope of injunctive relief should not be broader than the evidence warranting it.


Individual and Class Injunctions


*Mootness - Cessation of illegal activity does not render injunction against it moot

U.S. v. W.T. Grant Co. (US 1953) – CB 247

Rule – For a permanent injunction to issue, there must be some cognizable danger of recurrent violations.  No evidence here was shown that violation would recur.


*Prof. Heriot’s most interesting case

Occasion where Ripeness Rule – focused on the record being “incomplete”


Nicholson v. Connecticut Half-Way House (Conn. 1966) – CB 252


Rule – Equity will not grant injunctive relief where land use is reasonable and the plaintiff is alleging the fear of future actions as its grounds for injunctive relief.

Brainard v. Town of West Hartford (Conn. 1954) – different because proposed town dump in a residential area – court is already familiar with unreasonableness.


Note 1 – CB 253 – Similar Case –

Jack v. Torrant – court held any funeral home would be nuisance no matter how it was run

Strategy – Bring a motion for an injunction even if you know the court will deny it because their reasons will be stated on the record.





Reparative Injunctions should

1.           The injunction should restore plaintiff as closely as possible to the rightful position.  (risk divided between parties)

2.           The injunction should restore plaintiff as closely as possible to the rightful position, subject to the constraint that the injunction should never make plaintiff better off than the rightful position.

3.           The injunction should restore plaintiff as closely as possible to the rightful position, subject to the constraint that the injunction should never leave plaintiff worse off than the rightful position.


These principles place the risks on the plaintiff, defendant, or on neither of them.

Burden on the Plaintiff – Civil Lawsuits


*Court can order an Injunction Repairing the harm of a past violation

Bell v. Southwell (5th Cir. 1967)

Rule – A federal court can retrospectively void a state election in which the election process and practices violated the constitutional rights of voters because of race.



Note 5 CB 200

Laje v. R.E. Thomason General Hospital (5th Cir. 1982)


“Duplicative Recovery – Election of Remedies Doctrine”

Forster v. Boss (8th Cir. 1996) – CB 264

Rule – Where two remedies would make a plaintiff whole, the defendant must choose whether it wants to receive compensatory damages or an injunction. 


*Permanent injunction not appropriate – temporary injunction 2 years 

Winston Research Corp. v. Minnesota Mining (9th Cir. 1965) – CB 271

Rule – Unfair competition should be enjoined for the amount of time it would take to develop a similar product after public disclosure.  Prevent unjust enrichment and protect trade secrets. 


“What is Plaintiff’s rightful position?”

Bailey v. Proctor (1st Cir. 1947) – CB 276

Rule - Court of equity has inherent power to liquidate an investment rust where fraud, mismanagement or abuse of trust is present – regardless if insolvency is likewise present – to protect investors.


Prophylactic Injunctive Remedy – Bailey Case, abortion clinic protesting, etc.




1. Scope of Structural Injunctions


School Desegregation Cases

De jure segregation – deliberately caused by state authorities (Constitutional violation

De facto segregation – from all other causes except from state conduct


Swann v. Charlotte-Mecklenburg BOE (US 1971) – CB 290

Rule - “school boards must ‘ achieve the greatest possible degree of actual desegregation.’” – CB 290


Milliken v. Bradley (US 1974) – CB 291


Dayton BOE v. Brinkman (US 1977)


Missouri v. Jenkins (US 1995) – CB 294

Rule – Federal court decrees exceed appropriate limits if they are aimed at eliminating a condition that does not violate the Constitution or does not flow from such a violation.


Precedent – Swan, Milliken, and Dayton Cases



Hutto v. Finney (U.S. 1978) – CB 307

Rule – A court may place limits on certain types of punishments which are not per se unconstitutional. – Justice Stevens


Lewis v. Casey (US 1996) – CB 313

Rule – The nature of the remedy is to be determined by the nature and scope of the constitutional violation.


*Remedy must match the Constitutional violation

United States v. Virginia (US 1996) – CB 318

Rule – Remedial decrees must be shaped to place persons who are unconstitutionally denied an opportunity or advantage in the position they would have occupied absent the discrimination.


2. Modifying Injunctions


*Flexible modification standard in Institutional reform cases

Rufo v. Inmates of Suffolk County Jail (US 1992) – CB 328

Swift v. Tyson (US 1842) – Harsh standard to modify a decree

U.S. v. Swift (US 1932) - High standard -> became flexible now


(*closer to Rule 60(b)(5) than it is to Swift)

Rufo Rule – “under the flexible standard we adopt today a party seeking modification of a consent decree must establish that a significant change in facts or law warrants revisions of the decree and that the proposed modification is suitably tailored to the changed circumstances.” – CB 335


3. Rights of Third Parties


Hills v. Gautreaux (U.S. 1976) – CB 346

Rule – A court may order a housing authority to correct segregation it has facilitated over an area outside the locality in question.

Jenkins –

Hard to Justify Jenkins based on the Milliken Case – it is not quite clear how 3rd parties have to be integrated into this scheme.


General Building Contractors Association v. Pennsylvania (US 1982) – CB 353

Rule – A party not violating antidiscrimination laws may not be assessed a share of the costs of implementing a decree remedying the discrimination of others.


CHAPTER 4 – Choosing Remedies – CB 363






Preventive, structural, and reparative injunctions – apply the same lessons as to Damages.

  1. over all goal to put plaintiff in his/her rightful position – had the wrong never occurred
  2. don’t lose sight of the same doctrines to limit the rightful position goal in damages and injunctions (economic, duty to mitigate, burden of proof)
    1. ripeness – new concept
    2. Nicholson Case – illustrated different options for injunctions
    3. Harang – timing case






1. Irreplaceable Losses


Historically – Irreparable Harm Rule


Irreparable Harm Rule

Support Reasons:

  1. Judicial Economy – a lot of work to administer an injunction

·   This reason cuts both ways.  The damage remedy could be the thing that causes courts trouble.  U.S. v. Hatahley.

·         Fairly complicated damage remedy. 

  1. Preservation of a Defendant’s right to a Jury Trial

·         No traditional right to a jury trial on the equity side

·         Plaintiffs are most interested in having a jury trial.

  1. Issues Should Not Be Decided Prematurely

·         Applies to preliminary injunctions and temporary restraining orders


Against it – definition of legal remedy being adequate

Be able to argue the Irreparable Harm Rule alive or dead in a given case. 


*Irreparable Harm Standard - Equity appropriate in land cases.

Pardee v. Camden Lumber Co., 70 W. Va. 68 (W. Va. 1911) CB 363

Legal remedy was inadequate, so equity intervened. 


·         An injunction against the cutting of another’s property is appropriate.


*REPLEVIN legal case - Irreparable Harm Rule does not apply

BROOK v. CULLIMORE & CO., 1967 OK 251 (Okla. 1967) – CB 374

Rule – A successful litigant in replevin action has a right to the subject property, rather than cash.




* Injunction okay when damages too hard to measure

Continental Airlines, Inc. v. Intra Brokers, 24 F.3d 1099 (9th Cir. 1994)

Rule – A party is entitled to equitable relief of injunction when economic damages would be difficult and expensive to prove.


Specific Performance – type of injunction ordering affirmative action


*Unconscionable contract – no specific performance issued
Campbell Soup Co. v. Wentz, 172 F.2d 80 (3d Cir. 1948) – CB 383

Rule – Even with a legal contract entitling both parties to legal relief, equity will not provide specific relief to any party who has driven too hard a bargain or obtained too one-sided an agreement.


CB 386 – List of cases – Campbell case was not a fluke.


Balancing the Equities – “undue hardship” vs. benefit to plaintiff


*Efficient Breach of Contract

Van Wagner Advertising Corp v. S&M Enterprises (NY 1986) – CB 394


Rule – Point of breach of contract that is addressable by specific performance lies not in physical uniqueness of a property but in the uncertainty of valuing it.


2. Burdens on Defendant or the Court


*Intentional encroachment – Then No balancing of equity- relief vs. undue hardship

Ariola v. Nigro, 16 Ill. 2d 46 (Ill. 1959) – CB 401

Rule – No traditional balancing of equities in deciding for an injunction to remove encroachment on land where the encroachment was found intentional.


*Deliberate wrong-doer – denied specific relief to plaintiff – grossly disproportionate

Peevyhouse v. Garland Coal & Mining (OK 1962) –


*Specific performance more likely when Public Interest is involved

*public interest here = timely burden on court to supervise the specific performance

 CIS v. Argyll Stores (Safeway) – CB 411

Rule – A court can’t order specific performance of a covenant to maintain business hours when lessee believes it would be financially detrimental to keep it open.


CB 419 – Judicial Economy for the Court

Note 5 *No specific performance

Corp. v. E.W. Bliss Co. (Del. Ch. 1968) – CB 419

Note 6

City Stores Co. v. Ammerman (D.D.C. 1967)





3. Reasons of Substantive or Procedural Policy

*minority view

*PA says damage remedy at law is adequate even if it can never be collected.

Willing v. Mazzocone (PA 1978) – CB 421

Rule – A court may not enjoin defamatory speech.  The propriety of equitable relief or remedies at law does not depend on a party’s insolvency.


Mazzocone v. Willing (PA 1976)

Rule – Defamation may be enjoined.  Public officials have higher standard to get past the First Amendment objections to an injunction against defamation


Collateral Bar Rule – an injunction that forbids protected speech must be obeyed;


Multiplicity of Suits – legal remedy inadequate because plaintiff would have to repeatedly sue as defendant repeated the libel


*Courts rarely compel specific performance of employment contracts

ABC v. Wolf (N.Y. 1981) – CB 435

Policy – 13th Amendment – prohibition of involuntary servitude

Rule – With terminated personal service contract, equitable relief (specific performance) is available only when a danger of unfair competition or other tortuous conduct exists. (trade secret leaks)


B. Preliminary or Permanent Relief – CB 440


Temporary Restraining Orders (TRO) – usually last 1 or 2 days


Preliminary Injunctions – require a hearing in a court room and are appeal-able

1) likelihood of success on merits, 2) irreparable harm, and 3) balance of hardships

4) advancement of the public interest

*Preliminary Injunction Case – preserve the status quo

LA Memorial Coliseum Commission v. NFL (9th Cir. 1980) – CB 440

Rule – An injunction will not issue unless the petitioning party can demonstrate irreparable harm and that the equities favor the injunction.


CB 446 – Judge Posner’s Formula – Grant the preliminary injunction if but only if

P(denial error) x Hp(harm to plaintiff) > (1 – Pdenial error) x Harm to the defendant.


*Preliminary injunction can change the status quo – minority view

Lakeshore Hills, Inc. v. Adcox (Ill. App. Ct. 1980) – CB 447

Rule – A preliminary injunction may be framed so as to change the status quo.  Preliminary injunctions usually preserve the status quo. 


*Injunction bond – deterrent to plaintiffs – bond is discretionary requirement

Coyne-Delany Co. v. Capital Development Board (7th Cir. 1983) – CB 450

Rule – A prevailing defendant is entitled to damages on an injunction bond unless good reason for not awarding damages existed.  A court shouldn’t fail to award damages to (D) merely because (P)’s failing action was filed in good faith.


*TRO requires notice so a hearing can be had – First Amendment

Carroll v. President of Princess Anne (US 1968) – CB 459

Rules – In the absence of a showing of impossibility, ex parte abridgements of First Amendment rights without notice are improper. 


*TRO > 10 days without notice = really Preliminary Injunction – FRCP 65

Sampson v. Murray (US 1974) – CB 464

Rule – A preliminary injunction is not proper in a wrongful discharge suit.  Wrongful termination leads to lost income which is compensable at law.  (not irreparable).


C. Prospective or Retrospective Relief – CB 477


1. Suits Against Officers in Their Official Capacities


*Eleventh Amendment & immunity of states against lawsuits by citizens

Edelman v. Jordan (US 1974)

Rule – A federal court cannot fashion an equitable remedy compelling a state to make payments out of its treasury, either in a legal or equitable action.


CB 489 - Ex parte Young (US 1908)


2. Sue Officers in their Personal Capacities


*Suit against officers in their personal capacities

Harlow v. Fitzgerald (US 1982) – CB 493

Facts – Fitzgerald (P) blew whistle at Air Force for questionable weapons procurement practices.  (P) sued Harlow (D) White House aide for firing him.  (D) claimed absolute immunity. 

Rule – Presidential aides have only a qualified immunity from suit for acts done in their official capacities.  US Supreme Court has held that qualified immunity would be defeated if 



Preventing Harm without Coercion: Declaratory Remedies


1. Declaratory Judgments - New – 20th century statutory


*Declaratory Judgments can issue when actual controversy exists.

Nashville, Chattanooga Railway v. Wallace (US 1933) – CB 511

Rule – Federal courts can issue declaratory judgments when an actual controversy exists. 


*Declaratory judgment requires actual case or controversy - i.e. threat of infringe suit

Cardinal Chemical Co. v. Morton International (US 1993) – CB 517

Rule – Courts can’t refrain from deciding a counterclaim for declaratory judgment regarding the validity of a patent in infringement cases.  The Desire to avoid threat of infringement action is sufficient to establish a controversy under Declaratory Judgment Act – so no mootness even if infringement action is dismissed.


Tactical Advantage and Declaratory Judgments – CB 526


Courts Do not Permit Declaratory Judgments where:

  1. If a court allows a potential defendant to bring an action, then this would be an easy way to get away from jury trials.
  2. Where the potential defendant wants to choose the venue/forum
  3. Where the plaintiff has a weak case and is not likely to sue, but in meantime – evidence is lost, or plaintiff is trying to avoid statute of limitation.


*Declaratory Relief against State Statute – Federal plaintiff must beat state prosecutor to the courthouse.

Steffel v. Thompson (US 1974) – CB 531

Rule – Federal declaratory relief may be given when threat of enforcement of a disputed state criminal statutes exists.  Declaratory relief is not coercive (no threat of contempt).  *watch ripeness – i.e. federal courts only decide actual controversies, no advisory opinions.


Ex parte YOUNG Dilemma – choice between foreiting asserted constitutional rights or risking penalties is irreparable injury. 


Younger v. Harris (US 1971) Doctrine – restriction bars almost any form of federal relief that would directly or indirectly interfere with a pending state judicial proceeding.  Federalism concerns.


Ripeness – must show real threat of prosecution before getting declaratory relief


*3 plaintiffs – M&L barred from d.relief/injunction because of Younger doctrine

Doran v. Salem Inn. (US 1975) – CB 541

Rule - A party cannot evade Younger restrictions on federal injunctions against state criminal actions by joining parties (other 2 restaurants) not affected by the restrictions. 


2. B. Quiet Title, Cancellation, Rescission,


*Okay for action to quiet title to personalty (equity besides for realty)

Newman Machine Co. v. Newman (N.C. 1969) – CB 546




Reformation – contract stays in effect with modifications

Rescission – reverses the transaction – Dayton gets $38k back and Hand can sue.


*Contract Reformation – for Fraud - Not Typical Case

Hand v. Dayton-Hudson (6th Cir. 1985) – CB 554

Rule – Reformation is allowed despite the lack of a mutual mistake if there is fraud by the other party.  General Rule was parties responsible for signed contracts, and reformation available only where mutual mistake of fact.  Exception for Fraud. 



Benefit to Defendant as the Measure of Relief – CB 565

(*putting defendant in his/her rightful position*)

Unjust Enrichment – 3 varieties


SOFT WRONGS – torts claims – Judge Learned Hand Formula –





*The Basic Principle – Simple Case – Hard Wrong – Disgorge Gain

Olwell v. NYE & Nissen Co. (Wash. 1946) – CB 569

Rule – Where defendant tortfeasor has benefited by his wrong, the plaintiff can waive the tort and bring an action for restitution (defendant’s profits + plaintiff’s loss)

·         Restitution via (savings of expense) wages of labor saved – defendant would have had to hire more labor


CB 572 – Note 5

Edwards v. Lee’s Administrator (Ky. 1936)

·         Court awarded plaintiffs - Profits attributable to the defendant’s use of Plaintiff’s 1/3 of the cave.


CB 576 – Note 15 *Strict Tort Liability Damages or Restitution ?

Vincent v. Lake Erie Transportation Co. (Minn. 1910)

·         Plaintiff has dock.  Defendant keeps his boat tied to the dock to save it from the severe storm.

·         $500 damage to plaintiff’s dock. - By-passing the market made sense


*Deterring Deliberate Infringement – Courts decide Degree of Culpability

Maier Brewing Co. v. Fleischmann Distilling Corp. (9th Cir. 1968) – CB 579

Rule – In trademark infringement, plaintiff may recover defendant’s profits even if defendant was not in direct competition with nor diverting trade from plaintiff.  Equitable concepts – restitution and unjust enrichment. 




“Quasi-Contract” – (Olwell Case) behaving as if it is a contract

    1. market rentals for a similar machine #
    2. market rental that would have been in this particular case #
    3. Value of labor saved * #

Constructive Trust – usually goes towards the higher end of the measures

    1. Profits attributable to this particular wrong

5.   All Profits – made on eggs


*Constructive Trust is a proper means to disgorge all profits - Unjust Enrichment

Snepp v. United States (US 1980) – CB 585

Rule – A constructive trust is a proper manner of disgorging the profits of one who abuses a confidential position.  Snepp was in a position of trust and harmed CIA, so profits derived there-from rightfully belong to the trustor. 


*Measuring the Profits in Proportion to Infringed Usage

Sheldon v. Metro-Goldwyn Pictures (US 1940) – CB 603

Rule – A court may apportion profits in a copyright infringement suit based upon the actual use of copyrighted material in the making of all the revenue.


*Defendant’s accounting of profits – minus – allocable expenses

Hamil America, Inc. v. GFI (2d Cir. 1999) – CB 611

Rule – A liable defendant for willful copyright infringement may exclude an allocation of general overhead expenses in calculating its profits on the infringed product.


Section B. – Restitution and Contract


Rescission and Restitution – puts each party in the position before the contract – available for fraud, mutual mistake, duress, material misrepresentation.


*Rescission of Contract - Straight forward

Mutual Benefit Life Insurance Co. v. JMR Electronics Corp (2d Cir. 1988) – CB 621

Rule – Insurers can get rescission under any insurance policy where the applicant made material misrepresentation as to their medical history.

*Quasi-Contract – Defendant need not receive benefit but merely (P)’s performance

Farash v. Sykes Datatronics, Inc. (N.Y. 1983) – CB 629

Rule – A party can recover for expenditures made in reliance on the promise of another, even though the promisor received no benefit from the expenditures.


*If benefit conferred intangible/speculative then no restitution -> reliance damages

Glendale Federal Bank, FSB v. United States (Fed. Cir. 2001) – CB 639

Rule – A non-breaching party to a contract should not be entitled to restitution when the gains of the breaching party are speculative and indeterminate.


EarthINFO, Inc. v. Hydrosphere Resource Consultants, Inc. (CO 1995) – CB 652

Rule - If defendant had intentional wrongdoing, recovery of profits maybe granted to non-breaching party, but an apportionment must limit the plaintiff to the profits attributable to his share.


Contract Damages plaintiff’s

Expectation interest – where would plaintiff have been if contract performed  

                                  – can’t be too speculative

Reliance interest – put plaintiff back in position as if contract never occurred


Equitable Equivalents

Specific performance – injunction

Rescission – (equal to restitution and reliance),  avoids valuations

     equitable counterpart of the Reliance interest

              equitable counterpart to the defendant focused Restitution remedies


Disgorgement of consequential gains from plaintiff’s performance of the contract that leads to a different and far more controversial remedy.


C. Tracing Defendant’s Benefit: RESTITUTION AND INSOLVENCY


Constructive Trusts – Makes a difference in defendant bankruptcy cases: 2 requirements

1)    Victim’s ability to identify his/her property taken  2)theft (misappropriation), fraud, or mistake

·         Equity’s remedy when one party is unjustly enriched - restitution


Strongest Remedy – Choice of Constructive trust and equitable lien – If traceable property is worth less than she lost, (P) will seek money judgment for full loss and an equitable lien on the traceable property. 


General Bankruptcy Rule – 1st Government gets its share 2nd senior creditors get priority

Exception – Defrauded parties can prove which funds were theirs.  Rescission/constructive trust award – (P) gets a higher priority against other creditors than in an award of money damages.


Hypo – Thief steals Prof.’s wallet and takes money and puts in his bank account.  The thief declares bankruptcy.  That money does not become part of his bankrupt estate; no other creditors have rights to it before the Prof.


*Free Choice of Remedies – adequacy of legal remedies vs. equitable remedies

Hicks v. Clayton (CA 1977) – CB 659

(D)Clayton was lawyer for (P).  (D) swindled certain real property in exchange for worthless stocks and notes; he failed to pay the notes, and (P) was unable to pay off his own loan on the property.  (P) sued for rescission of conveyance.  Trial court awarded damages- not equitable remedies.  (D) was insolvent. 

Rule – Equitable relief should be granted when damages will prove inadequate.  Court – If the Hicks can show that they were the victims of theft, fraud, or mistake, and if they can trace the assets, it’s theirs.


*Opposite Hicks Case

In Re North American Coin & Currency (9th Cir. 1985) – CB 662

(P)Customers who placed orders Sept 13-17. (D)NAC created special trust account for $600k received from (P).  (D) filed for bankruptcy, and (P) tried to claim constructive trust over the $600k.  general creditors

Rule – Constructive trusts will not be given effect over federal bankruptcy proceedings unless there has been actual fraud.  (D) committed no fraud – no equitable basis to distinguish the customers by order dates


*Tracing of Trust Funds: liberalized standards 

In Re Erie Trust Co. (PA 1937) – CB 665

Erie Trust Co. converted funds from Gingrich trust.  He died, and beneficiaries had a receiver that tried to get the funds from bankrupt Erie.  Trial court refused to give preference to receiver over general creditors because the funds were commingled in various deposit accounts and not traceable.

Rule  - Wrongfully converted funds may be traced into commingled accounts without precise identification.  Restatements of Trusts §202 approach - Beneficiary is entitled to a proportionate share of remaining trust funds and withdrawn funds.  Court treated all the cash accounts as “one” account.



1) Strong presumption – that the bad guy spends his own money first

2) Wrongdoer Invests (P)’s money first. When money is spent and invested – the victim can choose the money invested.

3) Lowest intermediate balance rule – if account balance drops below (P)’s money deposited, then the lowest balance the account ever reaches = limit on (P)’s claim. When money is dissipated and then replenished by thief’s earnings – it is treated as his money.

4) Direction exchanges – don’t require additional fictions – i.e. real estate sold and money used to buy stock

*Figure out the Best Range of Investments for the Victim – Higher Yield


*Prof. questions this case – Restitution – Constructive Trust

Rogers v. Rogers (NY 1984) – CB 684

1st Wife and children of man is promised $15k life insurance policy in separation agreement.  Man changes companies and insurance policies (still $15k); he remarries 2nd wife Judith who got “unjustly enriched.”  1st wife sues 2nd wife for insurance proceeds via constructive trust.

Rule – Constructive trust arises when a person holding property would be unjustly enriched by it.

The result is right but not out of traditional reasoning.  Court assumes that the life insurance policy is a piece of property.  Life insurance right was somehow converted into cash that then was used to buy the 2nd policy.  (weak argument)


*Difference Between Constructive Trust and Equitable Lien – Mistaken Improvers’ Choice

Robinson v. Robinson (Ill. 1981) – CB 690

Ann(P) and Wylie(D) built a house on (D)’s parents’ farm land.  Common Law Rule – If your mistake, then no remedy unless the real property owner knew and let it go.  Equitable Lean = money judgment/value of that improvement at the moment the court makes judgment.  Remedy for a debt; attaches to a specific property

Rule – A land owner permitting another to make improvements on his property is liable for the value thereof.



  1. claim must be paid in full (i.e. ANB must pay all of subrogor’s damages)
  2. Subrogee (ANB) must pay a claim for which a third party is primarily liable
  3. Subrogor (Investor) must have a right assertable against the third party
  4. No Volunteers – Subrogee must have had a legal duty to have indemnified subrogor. 

*Distinction between Subrogation and Indemnity – Subrogation is an equitable procedure allowing one who indemnifies another to proceed against another when normally it would be an outsider to the transaction.

Contribution – partial indemnification – if 2 or more parties are jointly liable for the same obligation, and 1 pays more than his share, he is entitled to contribution from the others, so that each pays his share


American National Bank & Trust Co. v. Weyerhaeuser Co. (7th Cir. 1982)

American National Bank is an agent of the Investment Board (Principal), takes care of the trust fund and has stock in Weyerhaeuser which offered to buy back 3.5 million.  Subrogor (Investment Board) -> Subrogee (ANB)  Board tells Agent ANB to sell but never consummated. 

Rule – An Agent who buys stock from a principal due to the negligence of a 3rd party has standing to sue that 3rd party.  Classic Subrogation – insurer pays damages to insured, and subrogation gives the insurer the right to sue the party who damaged the insured. 


VOLUNTEERS - Note 2 – Armco, Inc. v. Southern Rock (5th Cir. 1983)


1)    Replevin & Ejectment – restore to plaintiff the property lost

·         (P) has a choice to sue for the goods or for their value

·         Constitutional – Fuentes v. Shevin (US 1972) – before seizure of property – due process required some kind of hearing

2)    Trover (Conversion) – this property was converted to the use of the defendant with no intent to give it back (action for damages) – value at the time it was taken





*Conscious Wrong Doer here – Tort Conversion of a Chattel – (P) waives tort and sues in assumpsit

Welch v. Kosasky (MA 1987) – CB 713

(P)Welch had 12 lots of antique silver stolen.  (D) later bought 11 lots which he knew or should have known were stolen.  (P) recovered the silver at a dealer, but (D)’s alterations resulted in $22,000 lost value. 

Rule – Rightful owners may recover converted property and its estimated appreciated value if subsequent alterations have damaged the property.  (i.e. Estimated value $25k – Current Value at Return $3k)






Punitive damages are meant to compensate those things which the common law doesn’t.  Punitive damages always exceed > the plaintiff’s loss.  Policy of Deterrence – Rejection of Economic View on Accident law.

Measuring Punitive Damages – some courts say punitives must be in a reasonable ratio to compensatory damages, or no punitives without at least some compensatory – exception if equitable relief instead


Kennedy Case

  1. Whether sanction involves on affirmative disability or restraint
  2. Whether it has historically been regarded as a punishment
  3. Whether it comes into play only upon a finding of scienter. 
  4. Whether it’s operation will promote the traditional aims of punishment, retribution and deterrence
  5. Whether the behavior to which it applies is already a crime (*it’s impossible to draft codes to list each and every crime)
  6. Whether an alternative purpose to which it may rationally be connected is assignable for it.  – Argue that it may be compensatory.
  7. Whether they appear excessive in relation to that alternative purpose


*(D)’s conscious disregard of probability that conduct will result in injury to others

Grimshaw v. Ford Motor Co. (CA 1981) – CB 719

 (D) Ford decide to ignore inexpensive safety improvements and sell the Pinto to the public.  (P)was burned when car blew up in flames.  Punitive Damages awarded.

Rule – A company’s decision to expose the public to serious danger when inexpensive alternatives exist is a legitimate basis for punitive damages.  “Conscious disregard of possible results” – Malice defined broadly. Punitive damages awarded where malice is found

Determining whether Punitive Damages is Excessive – Shocking disproportion – Product of Passion or Prejudice?  1)wealth of defendant, 2) amount of compensatory damages, 3) proper deterrence amount


*US Supreme Court steps into State Appellate Review of a Punitive Damage Verdict

BMW, Inc. v. Gore (US 1996) –Degree of (D)’s reprehensibility of conduct

Jury had assessed very high punitive damages $4 million.  (P)Gore bought BMW and found out (D) had policy not to disclose minor damage on new cars.  BMW Standard – not very illustrative – punitive damages vary among jurisdictions.  States use statutes – to put limitations/caps on punitive damages, and different standards “clear and convincing evidence”  BMW’s conduct was not indifferent to or reckless disregard for health and safety of others.  Court’s 3 guideposts – 1)degree of reprehensibility of (D)’s conduct 2)Ration of PD award to actual harm inflicted on (P) 3)Sanctions for comparable misconduct-

Rule – Punitive damage awards must be reasonable in light of the reprehensibility of (D)’s conduct and the ratio to the compensatory amount.   Remand - $50,000 for punitive damages









3 basic kinds of use of the Contempt Power (Equity - No Jury)

  1. Compensatory Contempt (Civil) – CA does not have this, (P) prosecutes an action for (damages, restitution) – inadequate damages -> injunction (violated) -> contempt damages – no jury trail
  2. Coercive Contempt (Civil) – actor (P) sanctions (fines, jail) are avoidable through obedience

·         Coerce (D) to comply or penalty will be bigger – size of fine – consider (D)’s wealth

  1. Criminal Contempt (Punitive) – punish (D) for an act that already occurred, requires intent

·         Procedural safeguard– scienter “willful” requires prior notice of sanctions and prohibited conduct

·         Criminal fines can be imposed without a jury trial up to an undefined limit (i.e. $52 million)


Collateral Bar Rule – (D) cannot challenge the validity of an injunction when in a prosecution for criminal contempt of that injunction.  Walker Case (US 1967) Bars collateral attacks on validity of injunctions

Not applicable to civil contempt. No CBR to statutes.  Exceptions – No CBR if no procedure for appeal, No Jurisdiction, Injunction Transparently Invalid or frivolous pretense to validity (Walker US) (1st Cir)


*Retrospective Criminal Contempt Fines – Jury Trial needed for huge fine awards.

International Union, United Mine Workers v. Bagwell (US 1994) – CB 776

(D)United M Workers had 72 violations of (P)’s injunction against unlawful strike activities.  7 contempt hearings without a jury trial.  (P) wanted $52 million in unpaid contempt fines from (D). 

Rule – Contempt fines for these violations of the injunction constituted criminal sanctions entitling (D) to a jury trial.  Nature of the injunction – even though the court announced the fines before their violation, does not mean the fines were “civil in nature”.  Fines here = retrospective criminal fines – out of court violations


Anyanwu v. Anyanwu (NJ 2001) – CB 784

(D) Husband was incarcerated after failing to comply with court order to produce his 2 children in Nigeria.  (D) said it was not possible for him to comply.  (D) has burden to prove inability to comply. 

Rule – (D) cannot be held in civil contempt when jail for that purpose has lost its coercive power.  (D) unable to comply with the court order.  (D)’s refusal to comply does not transform coercive to punitive order


*Split in Circuits – 5th Cir says an actual existing order must be disobeyed for contempt to exist

Griffin v. Country School Board (4th Cir. 1966) – CB 802

(D)School Board – made tuition grants to segregated private schools.  Court order to stop, and trial whether previous year disbursements could still be made.  Before appeals court could issue decisions, (D) paid the money and had reason to believe of court prohibition.

Rule – Certain matter that is removed from a court’s jurisdiction constitutes contempt.  (D) = civil contempt

Dissent – 18 USC §401 – limits contempt to disobedience of existing lawful court orders.

US Supreme Court – Merrimack and Lamb cases – court gets mad – contempt for non-existing orders



*Collateral Bar Rule – an injunction cannot be attacked in prosecution for criminal contempt

Walker v. City of Birmingham (US 1967) – CB 812

(P)City obtained ex parte TRO prohibiting marches. (D) Walker disobeyed and had contempt citation.  (D) claimed the order was unconstitutional and not binding. 

Rule – Disobedience of a court order is punishable by contempt even if the order is unconstitutional.  Judicial order must be obeyed until reversed.  Proper solution is to attack the order on appeal.  Dissent – No greater weight for bad order than bad statute which can be disobeyed and attacked.


*3rd Party Rights and Liability

United States v. Hall (5th Cir. 1973) – CB 828

Court order to desegregate + ex parte order enjoining all persons from disrupting implementation of plan.  Anyone with notice of the order and violates it would be sanctioned for contempt.  Black Front Hall (D) violated the order and disrupted high school.  Court made controversial analysis to in rem injunctions. 

Rule – A court has power to enforce an injunctive order against a nonparty with contempt powers if it is necessary to effectuate a binding adjudication between the other parties before the court.  FRCP 65(d) does not restrict the inherent power of a court to protect its ability to render a binding judgment between parties.


Other Theories – Binding 3rd Parties – persons in active concert, successors to public office, if a successor entity is created for the purpose of evading an injunction, courts will hold the successor in contempt, in rem injunctions – bankruptcy petitions, Injunction against a state binds its citizens (with respect to public rights) – Washington Fishing Assn Case (US 1979)





“unclean hands” doctrine– Equitable defense – focus is on the plaintiff (both parties need not be guilty of the same conduct) – requires at least some connection between conduct and the lawsuit – judicial relief should be denied to wrongdoers (P) as way to deter illegality.


“in pari delicto” – Law suits for damages.  Parties are guilty of the same wrongful act/conduct.


*Unclean Hands and In Pari Delicto – legal suits

Pinter v. Dahl (US 1988) –

Pinter(D) was oil/gas producer who had (P) invest $310k in dry wells.  (P) had other purchasers invest money in the venture.  (D) sold interests without registering under Securities Act.  (P) sued for rescission.  (D) tried in pari delicto defense but court ruled for (P).  (P) merely had knowledge, no cooperation with (D)

Rule – (D) can only use “in pari delicto” when (P) is an active and voluntary participant in the unlawful activity that is the subject of the suit.  (P) needed to be a promoter, not merely an Investor.


Note3 - Precision Instrument Manufacturing v. Automotive Maint Machinery Co. (US 1945)

“unclean hands” case because conduct that the plaintiff is responsible (failure to disclose (D)’s perjury) is not the same conduct as lawsuit against (D’s infringement). (P) invents wrench; (D) perjures PTO application saying it was first.  (D) settles with (P) and assigns patent.  (P) doesn’t disclose perjury to PTO.


Note 6  Worden v. California Fig Syrup Co. (US 1903) “unclean hands case” – public harm continues - both parties’ syrup were not from CA  and not from figs.  Both engaged in fraud upon consumer –– lawsuit didn’t stop them from selling to consumers. 


Note – Best Unclean Hands Case - Highwaymen’s Case (1725) – persons would find drunk people with money – coordinate robbery and split the proceeds.  The person stealing didn’t split the profits, and the scoper (D) sued for accounting.  Not “in pari delicto” - No Remedies for criminal contracts.



19th Century of “unconscionability” only applied in Equity – law judges stretched a little with unconscionable contracts – damages can be fudged/minimized (deny specific performance).  Equity judges can’t budge.

Unconscionability – most courts require 2 elements in different degrees: 1) Procedural – oppression or surprise by unequal bargaining relationship between parties 2) Substantive – overly harsh/one-sided results


Armendariz v. Foundation Health Psychcare Services, Inc. (CA 2000) CB 969

(P) two female supervisors sued for sexual harassment and unlawful termination.  (D) invoked a contract clause requiring arbitration of the (P)’s claims but not if (D) had claims. 

Rule – Employment contracts of adhesion are unconscionable if they require arbitration of an employee’s claims but not those of the employer.  (no reasonable justification for 1 sidedness based on business reality) 






“equitable estoppel” – an act or statement inconsistent with the right later asserted combined with reasonable detrimental reliance, fraud or fraudulent/unjust effects is essential – detrimental reliance by party A upon an act or statement by party B that is inconsistent with a right later asserted by party B.

1)Res judicata (estoppel by judgement) 2)promissory estoppel (relying on (D)’s promise) 3)judicial estoppel


“waiver” – intentional relinquishment of a known right or intentional conduct that is inconsistent with claiming that right – waiver is essentially unilateral


Geddes v. Mill Creek Country Club, Inc. (Ill. 2001) – CB 978

(P) Geddes had business next to (D)Club’s golf course.  (P) was consulted on placement of golf fairway and supported the project before country planning committee.  (P) later sued for trespass and nuisance when 2,128 golf balls invaded his property. 

Rule – If a person’s statements and conduct leads a party to undertake an action he otherwise would not, that person is equitably estopped from asserting rights that would have existed but for statements/conduct.


Note 8. United States v. Georgia-Pacific Co. (9th Cir. 1970) – government led private owners to believe it had abandoned contract to forest land title.  Choice of remedies: reinstate K if gov paid G/P’s reliance


Government cannot be estopped by a (P) seeking public funds Office PM v. Richmond (US 1990)

Notes Schweiker v. Hansen (US 1981) – Hansen lost 11 months social security due to erroneous field representative advice.  Court reversed that Gov was estopped to refuse the benefits.  INS v. Miranda (US 1982) Miranda divorce.Court reversed holding that Gov was estopped to refuse visa because of INS delay.


Waiver – Some courts say the Government can waive its rights only if the official who waived had authority.

United States Fidelity Co. v. Bimco Iron & Metal Corp. (TX 1971)

Bimco (P) held insurance policy from USF (D) covering property damage but not theft.  (P)’s building was damaged and stolen property.  (D) contended it was responsible for property damage only.  (P) claimed (D) waived the late filing defense by admitting liability for property damage.  (D) did not intentionally waiver.

Rule – Effective waiver of an affirmative right must be a clear/intentional act.  Absent actual or implied intent, no waiver has occurred.  Different than Estoppel – imposed preclusion of the exercise of a right.



Laches – equitable doctrine that requires  1) unreasonable delay (awareness, could be very short compared to SOL) AND 2) some kind of prejudice to the opposing party (detrimental reliance, loss of evidence –i.e. witnesses no longer available) Defendant has to prove.  Equity should only aid the vigilant. 

Purpose of laches – to resolve disputes before pertinent evidence is lost.

Factors Negating Laches – 1)ongoing negotiations and 2) conscious fraud or bad faith by (D)


Statutes of Limitations – litigated more often than “laches” cases. SOL – limitation period begins when the cause of action accrues – when the plaintiff can bring a cause of action – applies in equity and law

Concurrency Doctrine – makes SOL applicable to equitable as well as legal remedies.  Laches - equity bar

Federal Claims – SOL – reference to analogous state SOL

Ways in which SOL can become more Standard Like and Less Rule like

  1. SOL Period starts when Cause of Action Accrues – unavoidable issue
  2. Tolling of SOL (some courts allow this) – done for things like: infancy – (SOL does not tick against an injured child, first they have to make it to adulthood)– insanity – jail potential (D) out of jurisdix
  3. Continuing Wrong – 1)violation continues 2) harm must continue 3) violation causes the harm     i.e. defendant marching sheep across plaintiff neighbor’s land – injunction for future trespasses -  Damages for past trespasses that occurred in the past 3 years (if SOL = 3)
  4. Discovery Rules –  do not confuse with Rules Against Fraudulent Concealment - broader
  5. Other jurisdictions pass Statutes of Repose – absolute max limit – sometimes bars claims outright





Rights of Legal Remedy Only

Rights of Both Legal and Equity

(P) Seeks Legal Remedy

(P) Seeks Equitable Remedy

Rights with Equitable Remedy








*Laches Defense Case – 1)substantial delay by (P) 2) (P) awareness of infringement 3)reliance by (D)

NAACP v. NAACP Legal Defense/Educational Fund (D.C. 1985) – CB 995

NAACP (P) created LDF (D) which later became independent.  (P) registered NAACP as trademark and sued (D) which said suit should be barred by laches.  (P) delayed 12 years after (D) invested in mark.  (D) wins.

Rule – Laches bars a suit where a substantial delay by (P) prejudices (D) to invest labor/resources in mark.


*Statute of Limitations – Continuing-Violation Doctrine (weak (P) argument)

Klehr v. A.O. Smith Corp. (US 1997)

(D) Smith said silo limited oxygen to prevent mold in feed stored.  (P) Klehr found mold and sued under RICO.  Predicate Act Rule – improperly extends SOL.  Continuing Violation – each new act recommences SOL (P) must prove each new act caused the harm over and above the earlier acts.  Based on Antitrust Law.

Rule – SOL does not begin to run anew on a claim based on the date of (D)’s last predicate act. 


*Discovery Rules Tolls the SOL until (P) knows enough facts.  DR do not apply to all SOL.

O’Brien v. Eli Lilly & Co. (3d Cir. 1982)

(P)O’Brien was told she had cancer 1971.  1950’s (P)’s mother took DES.  Causal Link discovery in 1976. 

(P) filed suit in 1979.  She missed SOL which was 2 years. 

Rule – In Personal Injury, SOL period begins to run at the time (P) finds out injury, operative cause of the injury, and causative relationship between the injury and (D)’s operative conduct. (objective)


*Fraudulent Concealment – equitable estoppel to SOL – (D) conceals existence of cause of action

Knaysi v. A.H. Robins Co. (11TH Cir. 1982)

Knaysi (P) sued (D) where company knew of dangers with Dalkon Shield and intentionally suppressed such information.  (P) miscarried twin fetuses.  Justifiable reliance on (D)’s misrepresentations.

Rule – Equitable estoppel is sufficient to bar the SOL when (D) fraudulently conceals action/conduct unknown to (P).  (D) induces (P) to forbear suing on a known cause of action, (D) may be estopped - SOL