Remedies Outline Putt Spring 2012 1. The Pattern of Analytical Thought a. Rights i.

. Rights when vested are statements of duties/relationships b. Duties/Relationships i. Statements made by authorities c. Wrongs/Injuries i. You can only injure vested rights ii. When you are injured you have a cause of action d. Remedies i. The study of remedies is the study of outcomes 1. No outcome=no right e. *Looking for a clear statement made by an authority that other people/things have a duty imposed not to commit a wrong or an injury to their rights. If there are no consequences or no wrongs, then there are no rights. 2. Chapter 1 = Values, Goals, and Mechanisms (pg. 1-23) a. Should There Be a Civil Remedy? i. Harris v. Time, Inc. 1. In this case the judge focused on the wrong/injury and there is really no injury worthy of the Judges time or the value of resources of the courts a. De Minimis Theory ii. There are some injuries that are not feasible to remedy 1. Lack of feasibility of a judicial remedy, in a sense, is the courts inability to deal adequately with the subject. 2. Ask the question - is a judicially imposed remedy feasible? a. Is there doubt that a jury could come up with a remedy? i. Turpin v. Sortini 1. In this case the judge determined that there is no feasible remedy to a childs claim of wrongful life. b. What Form Should the Remedy Take? i. Common Remedial Mechanisms 1. Agreed Resolution a. Resolution without intervention by the courts 2. Mediation a. Disinterested 3rd party is called in to mediate the dispute 3. Arbitration a. Arbitration is a matter of contract except in the few instances where it is required by a particular statue or court law 4. Self-Help a. Taking matters into your own hand; resistance likely, practical only when force is not required 5. Declaratory Relief
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a. Declaratory relief allows a party to obtain a judicial resolution of the dispute before harm is done and liability incurred. i. It announces the rights and obligations of the parties in the controversy 6. Damages a. The most common form of remedy b. Monetary relief 7. Restitution a. Remedy where plaintiffs may recover defendants unjustifiable enrichment 8. Specific Relief a. A court in some circumstances may grant specific relief, a court command to the defendant to refrain from, or engage in, described action. i. It is enforceable against the defendant through the judicial power of contempt, and a court may fine or imprison the defendant who violates the order b. The most common forms of specific relief are injunction and specific performance of contracts. c. Value Judgments in Determining the Form of Remedy i. Marbury v. Madison 1. Where there is a legal right there is also a legal remedy a. This must be read as distinguishing legal remedies from equitable remedies i. The court has much more discretion in granting equitable relief d. Public and Private Remedies i. Should There be a Private Remedy? 1. Private Remedies a. Focuses on individual/personal rights i. Available for the invasion of individual rights b. Punitive damages are often a private regulatory deterrent c. There can be private remedies for the result of an action when that action is primarily regulated by a government entity Silkwood v. Kerr-McGee Corp. 2. Public Remedies a. The power and authority to administer a public remedy comes from governmental entities and their subsidiaries b. The regulation of broad scope of human activity c. Fines, fees, injunctions, criminal penalties, etc. are the outcome d. Administered by federal and state governments i. A public agency may impose administrative sanctions or grant the equivalent of judicially awarded damages or specific relief
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3. How to determine if both private and public remedies are complementary or exclusive: a. First look at the statute to determine whether private remedies are available or public remedies are available or both b. Second if the statute does not expressly eliminate a private remedy i. Determine if allowing the private remedy is inconsistent with the public remedy ii. Determine if allowing the private remedy frustrates any purpose of the federal remedial scheme c. Example: Silkwood v. Kerr-McGee Corp. i. The issue in this case is if the federal government is intending to occupy the entire an entire industry, does this mean there can be no private remedy for someone injured in this industry? ii. The public remedies available are fines, shutting down the plant, etc. iii. All statutes create rights, by defining duties. iv. The majority says that the statue itself does not expressly eliminate a private remedy. 1. The Supreme Court held that there is no inconsistency between a public and private remedy. a. Paying for both federal fines and punitive damages for the same incident is not impossible. 2. Nor does exposure to punitive damages frustrate any purpose of the federal remedial scheme. ii. Should a Private Right of Action be Implied? (pg27-35) 1. Implied Rights of Action a. First determine if the statute is a federal or state statute i. Federal Statutes = Federal Court = focus on congressional intent 1. First determine the legislative intent of a statute, both with respect to whether remedies are clearly expressed or are silent a. If remedies are clearly expressed determine if the express remedy is exclusive or supplementary to otherwise available common law remedies i. If the statute (and/or legislative history) is express in either providing for private
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enforcement or declaring that only public enforcement is available, the judicial choice is limited to that express intent b. If the statue is silent regarding both exclusivity, and the availability of a private remedy determine if an individual federal right has been created? i. Federal right = an individual entitlement c. If the statute is silent with regard to any remedy determine if there is both a private federal right created and a right of action available to enforce the right i. If a private right of action does not exist = no cause of action exists d. If the statute is silent regarding private federal remedies, but there is a right of action and the remedy is public enforcement determine if a private remedy is still available? i. No 2. Example Davis v. Monroe County Board of Education a. In this case, the statute created a federally protected individual right i. A private right of action may be inferred from the Spending Clause legislation, here, under Title IX with regard to discrimination in public schools th 3. 11 Amendment a. State officials are immune from private action i. Exception where there is an infringement of a federally protected individual right by statute, constitution, etc. ii. State Statute = State Courts = focus on adequacy of the remedy

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1. Steps in analyzing whether a state statute intended to create a private remedy but is silent on the a. First determine if the plaintiff is a member of the class for whose benefit the Act was enacted b. Second determine if applying a private remedy is consistent with the underlying purpose of the Act c. Third determine if the plaintiffs injury is one the Act was designed to protect d. Fourth determine if applying a private remedy is necessary to provide an adequate remedy for a violation of this Act 2. Example: Corgan v. Muehling 2. QUESTIONS 1-26 difference between Corgan state test and Cort v. Ash Supreme Court test? a. Same is the P of the class meant to be protected b. Same is applying a private remedy consistent with the underlying purpose of the Act c. Difference: i. Corgan Test 1. States must determine if not only the plaintiff is a member of a protected class, but also, if the plaintiffs injury was also meant to be protected by the Act 2. allows states courts to create a private remedy if it is necessary to provide for an adequate remedy ii. Cort v. Ash Test 1. Federal courts must look to the legislative intent when determining if a private remedy is available a. Federal courts are not allowed to create private remedies that are intended by the legislature no matter how inappropriate that may be 2. If the cause of action is traditionally regulated to state law making, then federal cause of action will be deemed inappropriate 3. QUESTION 1-27 3. Boomer v. Atlantic Cement Co. (pg 640-645) a. Injunction granted, but could be avoided upon the payment of permanent damages to property owners.
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4. Remedies for Government Taking or Interference with Private Property (pg 649-656) a. Introduction i. The 5th Amendment of the United States Constitution, extended as a limitation on the power of the states by the 14th Amendment, provides: nor shall private property be taken for a public use without just compensation. 1. A governmental taking of private property must be for public use b. Condemnation i. The dominant remedy in condemnation actions (sometimes referred to as eminent domain) is the award of damages 1. The amount a hypothetical willing buyer would pay a hypothetical willing seller if the property were to be put to its highest and best use (fair market value) a. Precludes measuring damages by particular value to the owner or gain to the condemning agency b. Similarly, lost profits and consequential losses are generally not recoverable ii. Remedy by way of injunction restraining the taking is rare 1. Only where the taking clearly lacks legislative authority may it give rise to a remedy by way of injunction c. Inverse Condemnation i. When the government takes private property without just compensation, then the private property owners suit seeking compensation is called inverse condemnation. 1. Injunction may sometimes be an available remedy to restrain governmental conduct which would otherwise result in inverse condemnation 2. In most cases, the remedy will be damages a. Fair market value i. Some states also award attorneys fees and litigation expenses, plus interest from the date of the taking ii. Example: Pacific Bell v. City of San Diego 1. A successful inverse condemnation suit plaintiff must prove: a. That a public entity has taken or damaged its property for a public use i. It does not matter if the damage was foreseeable or not 1. The presence or absence of fault by the public entity is usually irrelevant d. Temporary Takings i. The damage period must focus on a finite period 1. The most common measure is a calculation of lost rental value to the owner during the period of the taking 5. Chapter 2 Introduction to Damages (pg 43 95) a. Specific v. Substitutional Relief i. Substitutionary Relief
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1. An award of monetary damages ii. Specific Relief 1. Order performance of the contract a. Equitable Remedy i. Its availability is severely restricted by the necessity o meeting the traditional prerequisite of equitable relief a showing that the available legal remedies would be inadequate 1. Three explanations of the laws restrictions on specific performance: a. The laws commitment to the compensation goal may be less than complete b. Damages may generally be fully compensatory i. Current doctrine authorizes specific performance when courts cannot calculate compensatory damages with even a rough degree of accuracy c. Concerns of efficiency or liberty may justify restricting specific performance i. Specific performance might generate higher transaction costs or interfere with the liberty interests of promisors b. Compensatory Damages and Contract Cases i. General Rule Compensatory damages seek to place the plaintiff (victim of legal wrong) in the position that they would have occupied if the defendant had not breached the contract. 1. This is not the same as putting the plaintiff in the same position as they were prior to the contract ii. Three Define Rights of Contracts: 1. Contracts are voluntarily agreements in which contracting parties can negotiate and agree voluntarily how to allocate the risk of loss 2. If all three rights of contracts are in existent then there are three different causes of actions and three different calculations for damages a. Expectancy i. The expectation that promises will be kept 1. A plaintiff has a right to what was negotiated for, and what they expected to gain from the formation of the agreement

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a. A plaintiffs damages would put them in the position they expected to be in upon completion of the contract i. The benefit of the bargain ii. Can only get compensatory damages b. Reliance i. Actions taken in reliance that promises would be kept 1. Right to enforcement of the contract if breached ii. Refers to an actual loss or detriment 1. Seeks to put the plaintiff into the position he would have been in had the contract never been formed iii. Can get compensatory and consequential damages c. Restitution i. The plaintiff conveys a benefit, and then the defendant breaches the contract 1. The plaintiff has a right to the value of any benefit conveyed ii. Measure of damages: 1. Whatever the plaintiff alleges the benefit was worth, the plaintiff is entitled to monetarily 3. Example Spang Industries, Inc v. Fort Pitt a. The contract has to do with purchase and agreement to deliver fabricated steel to a contractor who is building a bridge. i. There are expectations that the steel will be delivered, and that the purchase price will be delivered. ii. There was reliance on not only the deliver, but also of a timely delivery (cold weather impacts construction) iii. Fort Pitt hired other contractors and used their employees to unload in an attempt to mitigate (Mitigation is a good faith effort to limit damages) iv. Fort Pitt (plaintiff) was not able to establish reliance; but they were able to establish expectancy and ultimately had to pay a lower contract price. v. They are made whole only to the evidence as to the extent of their expectancy. 1. Any loss profits or any other losses are not included iii. Three Limitations on Calculating Compensatory Damages: 1. Foreseeability
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a. Plaintiff cannot recover damages for loss that defendant did not have reason to foresee as a probable (natural) result of the breach at the time the contract was made. b. General vs. Special Damages i. General Damages 1. Damages arising naturally from the breach a. Only their amount need be calculated i. Usually can be calculated at the time of injury ii. Special / Consequential Damages 1. Damages not arising naturally but contemplated and communicated at the time the contract was made a. Knowledge of an expectation by the breaching party required i. Knowledge may be imputed 2. Not presumed to flow from the damages 3. The plaintiff must prove with certainty, usually reasonable certainty 4. Example: Hadley v. Baxendale a. Special damages for breach of contract are not recoverable unless they can fairly and reasonably be considered as arising naturally from the breach or as being within the contemplation of the parties, at the time the contract was made, as the probable result of the breach 2. Certainty a. Existence of damages is reasonably certain i. Plaintiff cannot recover damages that exceed the amount that the evidence establishes with reasonable certainty ii. Certainty Doctrine: 1. Where serious doubt exists as to whether plaintiff suffered a loss at all, the certainty doctrine precludes recover, at least as to that element b. Drews Co. v. Ledwith Wolfe Associates, Inc. i. New business rule is said to go the weight of the evidence presented for lost profits, not a per se rule that they are not recoverable 1. Rule is the same for both new and old businesses ii. Lost Profits

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1. In order to recover for lost profits, a person must establish the lost profit with reasonable certainty a. Cannot be conjectural or speculative b. Must consist of actual facts from which a reasonably accurate conclusion regarding the case and the amount of the loss can be logically and rationally drawn 2. Lost profits are consequential or special damages if the breach occurs after completion of the performance 3. Lost profits are general damages if the breach occurs during the performance 4. New businesses can establish loss profits with reasonable certainty by: a. Expert testimony b. Economic and financial data c. Market surveys and analysis d. Business records of similar enterprises c. Example: Grayson v. Irvmar Realty Corp. i. A woman inspiring to be an opera singer slips and falls and lost her hearing and is now arguing that he lost the revenue or income from her career. ii. There must be evidence of reasonable certainty that these damages resulted from the injury 1. She must show with reasonable certainty that but for her injury she would have made revenue with her opera singing. a. There is no evidence in this case 2. Courts make a distinction between two types of future careers: a. One requires intelligence and highly specialized training i. This type of career has a high probability of playing out in the future b. Two is a career based upon natural talents, such as musicians, actors, and athletes. i. This is a much lower probability that their talents will be recognized to the scant few opportunities available to these people
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d. The judge determines whether the damages were reasonably certain e. The jury determines the amount of damages 3. Mitigation / Avoidable Consequences a. There is an obligation once injury has occurred on behalf of the plaintiff to use reasonable efforts to reduce the damages b. The purpose of mitigation is to preclude recovery for losses that could reasonably have been avoided c. Rule of Avoidable Consequences i. A party may not recover for losses that could have been avoided by the use of reasonable means d. Burden of Proof i. The defendant has the burden of proof by the preponderance of the evidence to show that the plaintiff had not used reasonable efforts and that damages could have been lessened 1. If the defendant does not raise his defense then it is waived a. No ability to argue avoidance and therefore is not entitled to a jury instruction ii. If the defendant alleges specific unreasonableness, the plaintiff has a burden to rebut 1. If successful, the defendant may receive a jury instruction to limit damages beyond the injury e. The plaintiff can recover damages for their efforts to minimize damages i. In contracts cost of mitigation cannot be recovered if the cost to mitigate exceeds compensatory damages c. Compensatory Damages and Tort Cases i. General Rule: Compensatory damages in torts are the purpose of placing the injured person, as close to possible, in the same situation they were before the injury occurred. ii. Tort liability are based on public policy, rather than promises iii. Limitations on Calculating Compensatory Damages 1. No foreseeability limitation in torts a. Foreseeability focuses on the dutites i. Eggshell Theory we take the injured party as we find them 1. While a plaintiffs particular susceptibility to harm need not be foreseeable, she herself must be a. The damages may not totally unforeseeable
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b. Foreseeability is not the same as proximate cause i. Proximate cause is the question of whether an injury is proximately related to an action or inaction of someone who had a duty to protect or avoid the injury 1. Proximate cause relates to duty and breach of duty a. Preponderance of the evidence must show that the i. Negligent act cause the injury ii. Injury caused the damages c. Example: Petition of Kinsman Transit Co. i. Admiralty case. The issue is whether private damages apply. 1. Ship breaks its moorings and drifts entangles with other ships which float down stream and entangle themselves with a bridge the bridge partially falls and causes damage this ultimately causes flooding of properties downstream. a. Foreseeability ended when it hit the other ship i. The issue is once the act occurred, how far do we carry the duty to compensate for loss 2. Certainty a. Same requirement as Contracts 3. Mitigation / Avoidable Consequences a. Same requirement as Contracts d. PROBLEM E-2 e. Punitive and Non-Pecuniary Damages: (pg 99-161) i. Punitive Damages in Tort Actions 1. Controversial topic a. Quasi-criminal punishment for conduct that is not criminal 2. Functions: a. Punishment b. Deterrence i. Deterrence is not emphasized in practice c. Regulation d. Retribution 1. Fundamentally punitive damages are civil fines that are designed to punish and regulate a. Most of the enforcement is for punishment and regulatory purposes
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3. Elements of Punitive Damages a. There must be an underlying compensatory damage award i. The same evidence that gave rise to an award of compensatory damages will not give rise to a punitive damage award b. Punishable Conduct i. More than negligence, but something that deserves punishment 1. Knowledge: (actual or imputed) of events or injuries a. Reckless or intentional disregard of that knowledge 4. Standard of Conduct a. Punitive damages should be awarded when there is i. Wanton, willful, or reckless disregard for the rights of others 1. Malice/intent to cause harm ii. Knowledge and disregard that the conduct will result in harm 1. Knowledge can me imputed iii. There is a separate and distinct harm 1. There is no relationship between the underlying injury and the separate cause of action for punitive damages a. Even when the underlying injury was from negligence 5. Burden of Proof a. Clear and convincing evidence 6. Example: Wangen v. Ford Motor Co. a. Punitive damages are recoverable in product liability suit based on negligence or strict liability. b. Analysis of punitive damages rests not on the underlying tort but the nature of the wrongdoers conduct. i. Nature of conduct is generally characterized as malicious or willful or wanton conduct in reckless disregard of rights or interests of others (often referred to simply as outrageous) c. The issue of whether punitive damages are appropriate is a question of law to be decided by the judge. i. The judge decides whether there is sufficient evidence that a reasonable jury could conclude that the defendants conduct was outrageous (jury is instructed by the judge whether or not they may award punitive damages) d. Standard of proof is clear and convincing evidence

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i. Even if jury makes this finding, they do not have to award punitive damages 1. Can never be reviewable as unreasonable low a. Judge may reduce excessive awards 7. Entities/Agency Principles (employers and punitive damages) a. Should an entity face tort damages for the misconduct of its employee? i. Yes b. Should an entity face punitive damages for the misconduct of its employee? i. No constitutional limitation from an entity 1. Requires knowledge real or imputed a. Some form of actual knowledge will almost always rise to punitive damages from the employer b. Some form of an imputed knowledge will rise to punitive damages from the employer on the basis of agency principles i. Jurisdictions differ ii. Liable merely on a showing that the employee was acting within the scope of employment iii. Others insist on some showing of fault by the employer foreseeably contributed to plaintiffs injury iv. Must show evidence that the principal authorized, ratified, or participated in the actual tortious conduct of the agent v. Some would subject employer to punitive damages only on a showing that the employer was reckless in employing or retaining an unfit agent or if the agent was employed in a managerial capacity and acting within the scope of employment 8. Punitive Damages Against an Estate: a. Some states statutorily prohibit it
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b. Majority of courts have reached the same conclusion absent a statute 9. Determining the Amount of Punitive Damages: a. Compensatory damages are a base point when determining whether punitive damages are excessive i. Without compensatory damage award there is no punitive damage award b. States are subject to federal constitutional limitations on punitive damages i. 14th Amendment Due Process 1. The punishment must meet the wrong and cannot be excessive a. Denial of property without due process c. Test for determining when a fine is grossly excessive: i. The reprehensibility of the conduct 1. Most important factor a. Only tied to the measure of harm to the plaintiff and not to the harm of other persons i. Physical and emotional harm more reprehensible than economic harm ii. The ratio of the punitive damage award to the actual compensatory damage award 1. The disparity between the harm or potential harm suffered and the punitive damages iii. The difference between this remedy and the civil penalties authorized or imposed in comparable cases d. Damages are limited to states interest i. Punitive damages for act in other jurisdictions is not permitted e. Example: BMW of North America, Inc v. Gore i. The Supreme Court held that focusing on the conduct outside of Alabama was not permitted, and evidence from outside of the state could not be a factor in determining the punitive damages 1. Punitive damages are entirely jurisdictional a. Conduct in other states is outside of Alabamas jurisdiction and the individual plaintiff cannot introduce evidence of the other wrongful acts from outside the state ii. Inherent in the analysis of determining when punitive damages are grossly excessive:
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1. The person receives fair notice that the conduct will subject him to punishment a. Also on notice of the severity of the punishment f. Example: State Farm Mutual Automobile Insurance Co. v. Campbell i. A state cannot punish a defendant for conduct that may have been lawful where it occurred. Nor does it have a legitimate interest in punishing unlawful acts outside of its jurisdiction. 1. Basically need to limit punitive damages to the harm inflicted on a party to the action g. Example: Mathias v. Accor Economy Lodging, Inc. i. 37.5 to 1 ration was ok. ii. Wealth can be considered for their economic capability to correct the conduct causing the harm h. Punitive Damages and Federal Maritime Law i. Exxon Shipping Co. v. Baker 1. Held that punitive damages awards are excessive if the ratio of punitive damages to compensatory damages is greater than 1:1, at least in cases where the compensatory damages are substantial. a. The criterion of substantial (actual damages justifying a lesser ration as set forth in State Farm) takes into account the role of punitive damages to induce legal action and pure compensation may not be enough to encourage a suit i. Example: A class recovery of $500 million is substantial 2. Is the court holding only that 1:1 is the maritime-law ceiling, or is it also signaling that any ration higher than 1:1 will be held to exceed the constitutional outer limit? i. Standard of Review i. Standard of review for punitive damages on appeal if the defendant at trial raises the constitutional issue of damages 1. De Novo ii. Standard of review absent a constitutional issue of damages 1. Abuse of discretion ii. Punitive Damages for Breach of Contract 1. Early Application
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a. First Restatement flatly prohibited the recovery of punitive damages in contracts i. Exception: 1. Courts frequently will grant punitive damages when the breach of contract amounts independently to a tort for which the assessment of punitive damages would be appropriate under tort law a. Fraud b. Promissory Fraud i. Punitive damages allowed when a contractual promise is made without the present intent to perform in many jurisdictions 2. Bad Faith Breach of Contract a. When a good faith effort is not made i. Every jurisdiction recognizes a bad faith breach of contract 1. insurance companies: a. Third Party Claims i. Most courts grant punitive damages in the context of third party insurance claims because they see the insured as working as fiduciaries on their behalf to settle within policy limits b. First Party Claims i. About half accept this doctrine ii. Courts see the duty to settle claim with the policy holder as more adversarial in nature c. Duties: i. Duty to defend good faith effort to investigate the claim ii. Duty to pay iii. Duty work on behalf of the insured d. Punitive Damages and Employers with respect to insurance cases: i. Takes some knowledge or ratification on the part of the company

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ii. Acting on behalf of the principal iii. Respondent Superior iv. Insurance= fiduciary relationship ii. Example: Egan v. Mutual of Omaha Ins. Co. 1. The availability of punitive damages is warranted against an insurance company as they are a quasi-public organization selling a public service rather than a manufactured product. a. Kind of like a fiduciary 2. Acted maliciously with intent to oppress a. Punitive damages award ok, but $5 million in this instance is grossly excessive 3. Bad faith claims against insurance companies is the most significant extension of punitive damages in contract breach cases 4. Employees dismissed by appeals court because they were not a party to the contract a. They should have sued the employer via the employee for respondent superior i. They did not do that here iii. Example: Freeman & Mills, Inc v. Belcher Oil Co. 1. A breach is a breach is a breach. Minus some special relationship, only tort-like conduct can bring forth punitive damages. No difference between bad faith denial of a contract and bad faith denial of liability under a contract. 3. Non-pecuniary Damages in Contract Actions a. Traditional contract law provides very limited opportunity for a plaintiff to recover for non-pecuniary loss that may result from contract breach i. Non-pecuniary loss: 1. Emotional distress 2. Inconvenience 3. Annoyance ii. Exceptions: 1. Mishandling the body 2. Providing a defective casket 3. Failure to deliver promptly a message concerning the death of a relative or close friend
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4. Breaches that hold plaintiff up to public embarrassment or humiliation 5. The contract breach affects the plaintiffs physical condition b. Example: Gagliardi v. Dennys Restaurants, Inc. i. Breach of an employment contract may not be used to recover for emotional damages 1. The focus for emotional damages should not be on the type of breach, but rather on the nature of the contract and whether emotional damages would be likely from such a breach c. Standard for when a breach may result in emotional damages: i. Gagliardi Standard 1. Contracts which are uniquely intended to protect some personal interest or security and incapable of compensation by reference to the terms of the contract ii. Restatement Second of Contracts 1. Contracts that are of such a kind that serious emotional disturbance was a particularly likely result 6. Chapter 3 Introduction to Equitable Remedies (pg. 205-320) a. Four Principles of Equity i. Equitable remedies are in personam as opposed to in rem 1. In Personam Judgment a. A judgment of a persons duty i. The court orders the defendant to do, or refrain from doing, some act. b. Jurisdiction extends into enforcement i. A defendant who refuses to comply can be held in contempt and subject to prison or fine 2. In Rem Judgment a. Legal Remedies i. Judgment of property rights (personal or real) or ii. Judgment of substitution compensation (damages) iii. Jurisdiction ends at judgment 1. The judgment is not automatically enforcing and defendant cannot be held in contempt for his refusal to pay a. It is up to the plaintiff to pursue collection ii. Equitable remedies are entirely discretionary 1. Almost always, the discretion seems to be driven by major concerns over efficiency and practicality of the judgment a. Can it be enforced?
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b. Will the outcome satisfy the claim? 2. Feasibility a. Contempt i. Cannot feasibly coerce compliance if the defendant lacks the ability to comply and will continue to lack this ability over the future ii. Enforcement of contempt in equitable relief judgments require: 1. Jurisdiction and 2. Physical Presence a. Cant fine or jail someone that is unreachable 3. Judicial Resource Limitations a. Equitable remedies may be denied where the call upon judicial resources, incident to continued judicial participation, by a successful plaintiff who seeks the courts coercion by contempt, is out of proportion to the importance of the interest protected by the decree. i. Balancing Test: 1. Balance of the social and personal value of the interest protected against the call upon judicial resources in the administration of equitable relief ii. Grayson-Robinson Stores, Inc. v. Iris Construction Corp. 1. Courts are likely to grant an equitable remedy: a. Where the rights and responsibilities are clear on the face of the contract b. There is no dispute over consideration c. There is no dispute over the liability under the contract iii. Equitable remedies are unavailable if the legal remedy is sufficient 1. Legal remedies are preferred over equitable remedies 2. Before granting equitable remedies, the court must find that legal remedies are nonexistent or inadequate and thus that a denial of equitable relief will result in irreparable harm. a. Irreparable harm i. Means harm that cannot be rectified or compensated for by damages or any other legal remedy b. Adequate legal remedy i. An adequate legal remedy means a remedy as complete, practical, and efficient as the equitable remedy

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1. When equitable an legal remedy is equal than legal remedy is taken a. Because no continuing enforcement obligation ii. Determining the adequacy of a legal remedy 1. Factors that will require equitable remedy over legal remedy: a. The plaintiff must be restored to, or have transferred to him, property that is unique in that it cannot be obtained on the open market b. The harm from the defendants conduct or threatened conduct cannot be redressed except by multiple lawsuits c. Damages that are adequate in theory are actually not so because of the defendants insolvency d. Damages are so speculative and difficult to ascertain that the remedy will be ineffective 3. Example: Tamarid Lithography Workshop, Inc. v. Sanders a. A jury awarded Sanders $25,000 for a breach of contract, reasoning that the damages were for all damages (past and future). i. The remedies available to Sanders were inadequate as a matter of law because an accurate assessment of damages would be far too difficult and require much speculation; and any future exhibitions of the film in the controversy might be deemed a continuous breach of contract. b. Any award for damages for loss of publicity is contingent upon those damages being reasonably certain, specific, and unspeculative. i. The court found that irreparable injury would follow the failure to give credit if he was entitled to it. 1. They then found specific performance through injunctive relief to remedy the dilemma posed by the ambiguous jury verdict. 4. Example: Gerety v. Poitras a. Equity affords relief where the law does not furnish a remedy. b. Ordinarily, if the law affords a remedy which is adequate, a cause may not be made the basis of a suit in equity.
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i. Specific performance is usually denied unless the circumstances are unique. 5. Example: Johnson v. North American Life and Casualty Co. a. Plaintiff is entitled in all cases to the most complete, practical, and efficient remedy. i. If a legal and an equitable remedy are equally complete, practical, and efficient, the legal remedy shall be used. iv. Includes a balancing of hardships between litigants and the inclusion of public interest 1. Generally based on the economics of performance 2. Before a court will grant an equitable remedy, the court must assure that it will not impose an undue hardship on the defendant. a. Focused on the outcome i. How will remedy x affect the plaintiff and the defendant 3. Example: Boomer v. Atlantic Cement a. If the hardship is disproportionate to the defense then the injunction will not be granted and a substitute remedy will be in place i. Permanent on time damages substituted for an injunction ii. Conditional injunctive relief until the damages are paid iii. Give defendant servitude on the land (cuts of future claims) b. There are certain industries; particularly energy and construction which do pollute, but as to private property interests they are subsumed into public interest. i. Private property owners are not in a good bargaining position b. Defenses to Equitable Remedies i. Defenses to prevent an award of equitable relief 1. Unclean Hands a. Common Law - He who comes to equity must come with clean hands. i. Plaintiffs who come with unclean hands should be denied relief 1. Unclean hands a. Include all misconduct and wrongdoing that is sufficiently related to the plaintiffs claim i. Almost any conduct considered to be unfair, unethical, improper, or

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illegal, can be raised as a bar against equitable relief. ii. The misconduct must be serious enough to justify withholding an equitable remedy, which would otherwise be available 2. Equitable Estoppel a. May be used either offensively or defensively i. The plaintiff may use the defense of equitable estoppel in anticipation of the defendant barring the claim through the Statue of Limitations b. Estoppel applies when the recipient of the representation must have justifiably relied upon the fact asserted, and this reliance must substantially prejudice the party who relies i. Detrimental reliance c. Elements: i. A party misrepresented or concealed material facts ii. The party knew at the time they made their representations that the representations were untrue 1. Actual or constructive knowledge of the true facts iii. The other party detrimentally relied on that misrepresentation 1. Justifiably and detrimentally relied iv. If being used to toll the SOL = the maker of the statement intended to induce that person not to file a lawsuit d. Equitable estoppel applies to both legal and equitable claims e. Example: Parks v. Kownacki 3. Laches a. Any unreasonable delay by the plaintiff in instituting or prosecuting an action under circumstances where the delay causes prejudice to the defendant. i. Elements: 1. Passage of time a. Entirely a discretionary issue 2. Prejudice to the defendant a. Change conditions or change positions are prejudicial to the defendant i. Reliance is not a factor ii. Almost always economic in nature ii. Laches applies as a defense only to equitable claims
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iii. Laches tack on with the sale of the property 1. If previous owner would be barred by laches, so would the new owner 2. Deemed to have constrictive knowledge a. Problem 3-I 4. Unconscionability a. The principle is one of the prevention of oppression and unfair surprise and not of disturbance of allocation of risks because of superior bargaining power i. If the court determines the contract or any term of the contract to have been unconscionable at the time it was made, the court may refuse to enforce the contract, or it may enforce the remainder of the contract without unconscionable term, or it may so limit the application of any unconscionable terms as to avoid any unconscionable result c. Right to Jury Trial i. Historical Approach 1. The 7th Amendment to the Constitution guarantees the right to trial by jury in suits at common law, where the value in controversy shall exceed twenty dollars. a. Preservation of the right to trial by jury i. Most jury trial provisions preserve the right to jury trial as it existed at the time they were adopted. 1. When the 7th amendment was adopted in 1791, equity cases were generally tried to a judge while legal cases were tried to a jury. ii. The Federal Approach 1. When legal and equitable claims are joined, the federal courts display a significant preference for a jury trial. iii. The Order of Trial Significance and Approaches 1. Focus on the remedy a. If the remedy is equitable in nature = no jury trial i. Neither federal nor state court provide a preservation for jury to an equitable remedy b. If the remedy is legal in nature = jury trial c. If there are both equitable and legal issues (offensively or defensively) the court must i. Determine by examining the remedies available if the outcome requires the application of remedy at law or equity 1. Equitable remedy = no jury a. Collateral Estoppel 2. Remedy at law a. First, try the equitable claim before the judge
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b. Then proceed with the legal issue in front of the jury d. If neither party requests a jury trial then the preserved jury trial right is waived d. Enforcement of Equitable Decrees The Power of Contempt i. Contempt 1. Two Purposes: a. Punishment for contempt is a mechanism by which the judiciary protects and vindicates its authority b. Punishment for contempt is also a mechanism by which the court enforces the rights of a party who is entitled to the benefit of an equitable remedy 2. Two Types of Contempt: a. Civil i. Based on compensation for past behavior or coercion future action ii. The party benefited by the civil contempt has the burden to petition for contempt 1. The burden of proof is a. Preponderance of the evidence i. Federal courts and minority of states b. Clear and convincing evidence i. Majority of state courts iii. Punishments 1. Fines 2. Imprisonment a. The imprisonment provides for compliance or mitigation b. An order of commitment incarcerating a person until he complies with a valid order of court is coercive and not penal in nature i. Its purpose is not to punish but to enforce an order of court made by it to comply with its legal obligation iv. Elements 1. There must be an order or decree 2. The contemnor must have knowledge of the order a. Actual or constructive notice i. Constructive notice is given when the order is published in the docket b. Proof of noncompliance
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i. Some testimony that the order has not been met c. The order must be clear and specific on its face i. Require the contemnor know whether the contempt is civil or criminal and, if civil, know how to purge the contempt d. The ability to comply i. Self-induced incapability is not the inability to comply v. Limitations on Civil Contempt Sanctions 1. Payment of debts a. Almost all states have enacted statutes banning imprisonment for failure to pay a debt i. This is voluntary debt only ii. Contracts are voluntary b. Does not include spousal/child support i. These are actually not considered debts because they are imposed by law ii. They arise out of status and not by agreement vi. Example: International Union v. Bagwell 1. Civil contempt is something that is coercive, a fine or jail time to get someone to comply with a court order, to take an affirmative act. a. The contemnor can purge himself of the contempt by performing this affirmative act b. The plaintiff is the moving party 2. Criminal contempt is more prohibitory a. A person cannot purge themselves of the fine by taking some affirmative act b. A criminal contempt gets all the procedural safeguards of a criminal trial guaranteed by the constitution c. The judge is the moving party b. Criminal i. Based on past behavior ii. The contempt sanction is framed for punishment purposes iii. The judge is the petitioner for contempt
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1. The application of criminal contempt requires minimum due process as a separate criminal cause of action because it is a crime a. Right to trial by jury b. Notice c. Right to counsel d. Right to an appeal e. Burden of reasonable doubt on the state iv. Punishment 1. Fines 2. Imprisonment a. The imprisonment does not provide for mitigation or compliance v. Burden of Proof 1. Beyond a reasonable doubt vi. Elements 1. The same as for civil contempt vii. Example: In Re Farr 1. A coercive civil contempt can turn penal. a. That happens when there is an absence of a substantial likelihood that continued commitment rests. i. Once this point is reached, an individual can be held for only the maximum amount of days allowable by criminal contempt proceedings. e. The Collateral Bar Rule Review of Equitable Orders and the Duty to Comply Pending Review i. The Duty to Obey Court Orders 1. An ordered issued by a court with jurisdiction over the subject matter and person must be obeyed by the parties until it is reversed by orderly and proper proceedings. a. Violations of an order are punishable as criminal contempt even if the order is set aside on appeal, and even though the basic action has become moot. 2. Example: Walker v. City of Birmingham a. A state court enjoined civil rights protestors from engaging in demonstrations, parades or picketing. i. Petitioners, believing that the injunction was constitutionally invalid, chose to violate it. ii. The United States Supreme Court held that the constitutional questions did not insulate defendants against liability.

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1. The way to raise the question was to apply to the Alabama courts to have the injunction modified or dissolved. a. The injunction in all events clearly prohibited mass parading without a permit, and the evidence shows that the petitioners fully understood that prohibition when they violated it. ii. Transparently Invalid orders 1. If an injunction/order is clearly invalid, than a person may not be punished with criminal contempt for violating it a. It is difficult to determine if the order is transparently invalid as opposed to merely invalid iii. The Requirement of Specificity of the Decree 1. Federal Rule of Civil Procedure a. 65(d) Every order granting an injunction and every restraining order shall set forth the reasons for its issuance; shall be specific in its terms; and shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained i. Note 3-96 page 288: Order must allow contemnor to know whether contempt is civil or criminal iv. The Requirements of Willfulness and Ability to Comply 1. Ability to comply is an element of contempt in some jurisdictions a. It is an affirmative defense in other jurisdictions f. Injunctions as a Provisional-Procedural Remedy: Temporary Restraining Orders and Preliminary Injunctions i. The Legal Provisional Remedies: The Requirements of Due Process 1. The Nature of the Legal Provisional Remedies a. Types of provisional remedies for action at law i. Attachment / Garnishment 1. Orders to some officer of the court, commonly the sheriff or marshal, to take possession of property of the defendant and hold it pending the outcome of the litigation ii. Replevin 1. Applies where the plaintiff has some interest in property in possession of the defendant iii. Lis Pendens 1. A devise by which a plaintiff may record, and hence give constructive notice of, a claim involving title or right to possession of real property 2. The Constitutional Limitations on the Legal Provisional Remedies a. Due Process Requirements i. Parties whose rights are affected are entitled to
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1. Notice a. Meaningful time and fashion 2. A hearing a. The importance of the interests involved and the nature and availability of subsequent proceedings, if any, determine the nature of the hearing that must be granted ii. Garnishment of wages are so important to the worker that he must have notice and hearing before any deprivation can occur 1. Pretrial notice and hearing from Sniadach extends to all pretrial seizure of property a. Exceptions are narrow and few i. Limited to immediate danger that the debtor will destroy or conceal it b. Example: Connecticut v. Doehr i. Consideration of the private interest that will be affected by the prejudgment measure 1. Property interests affected are significant ii. An examination of the risk of erroneous deprivation through the procedures under attack and the probable value of additional or alternative safeguards 1. Risk is substantial in this case iii. Principal attention to the interest of the party seeking the prejudgment remedy and due regard to any ancillary interest of the government 1. Interests of plaintiff are minimal c. Things the Court likes to see when Due Process is Satisfied i. Judge issuing the attachment/writ ii. Detailed, not conclusory statements of justification for pretrial deprivation iii. Exigent circumstances iv. Notice and opportunity v. Bond by the plaintiff g. Equitable Provisional Remedies: Temporary Restraining Orders, Preliminary Injunctions, and Receiverships Pendente Lite i. Temporary Restraining Orders 1. Short term injunction designed to preserve a situation in place in the time from filing a complaint until a noticed motion can be heard which will determine whether its life should be extended or its scope modified by a preliminary injunction

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2. TROs are filed before the beginning of trial (when the complaint is filed) a. In the Federal System, a TRO is only good for no longer than 10 days b. May be an ex parte determination i. Granted without notice 3. Federal Rule 65(b) and (c) pg 301 a. In order to obtain a TRO, plaintiffs must show i. Elements: 1. That unless the restraining order issues, they will suffer irreparable harm a. Immediate harm 2. That they have no adequate remedy at law a. between the date the TRO is filed and the time of the hearing on a preliminary injunction 3. Bond ii. Matters of Procedure 1. Notice a. Good faith notice must be attempted to the defendant i. Can be informal ii. Telephone call, a visit, etc. 2. Certification a. The plaintiffs attorney must certify under oath that the following circumstances are accurate 3. Bond a. Plaintiff offers a civil monetary bond in case a TRO is granted and it is not true ii. Preliminary Injunctions 1. Preliminary injunctions are granted during the filing of the complaint and the judgment of the case a. Not based on a set period of time i. At the discretion of the judge may extend for a definite period of time 1. Almost always based on conditions a. Typical condition: i. Final judgment in the case b. Elements: i. Irreparable Harm 1. Is there a remedy at law in damages such that if the judge denied the preliminary injunction the damages can suffice for the injury?
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a. If not an adequate remedy at law, then there is irreparable harm 2. The damages must be definable/measurable 3. A violation of a constitutional right is irreparable harm ii. Balance of Hardships 1. In contrast to irreparable harm factor, the balance of harms analysis examines the harm of granting or denying the injunction upon both parties to the dispute, as well as to other interested parties a. Examines the harm of both parties i. Which party has the greatest hardship and will suffer the most iii. Substantial Likelihood of Success on the Merits 1. Cannot be adequately decided at the TRO level but it can be here because it will not be granted without a full evidentiary hearing 2. Entirely depends upon issues of law a. How likely is it that the plaintiff can prove as a matter of law the allegations of the complaint? iv. Public interest in the outcome of the case v. Bond 2. Standard for an appeal for either the denial or grant of preliminary injunction a. Abuse of discretion iii. Permanent Injunction 1. Granted at the end of trial 2. Determining whether permanent injunction is an adequate remedy a. Cost-Benefit Analysis i. If the cost to the defendant for compliance with the injunction is disproportionate to the benefit of the plaintiff, then the judge will deny a permanent injunction ii. If the cost to the plaintiff of harm or injury caused by not granting the injunction is disproportionate to the defendant, then the judge will grant a permanent injunction iii. If the hardships are going to be equal to the plaintiff and defendant 1. Could grant permanent damages h. Persons Bound by Equitable Decrees (pg. 343-352) i. An equitable decree generally acts against the person of the defendant by compelling her to do an act or to refrain from doing an act
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ii. Federal Rule of Civil Procedure 65(d) 1. Form and Scope of Injunction or Restraining Order a. Every order granting an injunction and every restraining orderis binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise. 2. Example: Vuitton et Fils S.A. v. Carousel Handbags a. Two things need to be proven to bring a party not named in an injunction within the scope of that injunction: i. The party has actual knowledge of the terms of the injunction; and ii. He was acting in concert with the named party of the injunction 1. Personal service is not required 7. Chapter 4 Introduction to Restitution (pg. 379-393) a. Restitution in General i. Restitution = unjustifiable enrichment 1. When one is benefited without any expectation of compensation at the expense of another a. Source of Liability i. The receipt of an economic benefit under circumstances such that its retention without payment would result in the unjust enrichment of the defendant at the expense of the plaintiff 1. Either return benefit or pay money in the amount to offset the unjust enrichment b. Unjustifiable Enrichment i. Enrichment that has no adequate legal basis 1. Defendant does not have a justifiable reason to retain the benefit ii. Elements 1. Gratuitous a. The plaintiff confers a benefit without any expectation of a return or anything else from the defendant 2. Compensation a. The plaintiff confers a benefit with an expectation that something will be returned from the defendant i. The defendant has not justifiable reason to retain the benefit without some compensation from the plaintiff
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3. Reliance a. Plaintiff relies on promises, or actions taken, or inactions taken i. The defendant must have knowledge that the plaintiff is acting on reasonable reliance on something that induced the plaintiff in acting in the matter in which he/she did b. If plaintiff confers a benefit to the defendant in reliance on compensation in return, then the defendant has not justifiable reason to retain the benefit without compensation iii. Two areas where restitution fits with remedies 1. The sole basis of the cause of action a. Restitution is the only remedy and it is the cause of action 2. Where restitution as a remedy is coupled with other remedies a. May be coupled with a tort or breach of contract b. Must always be brought as an alternative remedy: i. Example: Cannot have both damages for breach of contract and damages for restitution for recession of contract 3. Example: Harris v. Metropolitan Mall a. Restitution can be used as an alternative to breach of contract. b. Also may be used where contracts are voided for reasons such as incapacity, minority, mistake, etc. i. In this case, plaintiff did buylease-back agreement. ii. The mall breached. iii. Plaintiff gave the mall $388,100 down. iv. Instead of pursing the breach, he just wanted his money back. v. The court ordered restitution

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4. Example: Kossian v. American Nation Ins. Co. a. Plaintiff rendered service on a piece of land. b. Defendant later came to own the land and received insurance proceeds to cover, at least partially, the service rendered by plaintiff. i. Plaintiff can recover in restitution at least as far as defendant was compensated for it in insurance proceeds iv. Right to jury trial for restitution 1. Because remedy for restitution is remedy at law a. Money damages/value of benefit in money i. Unless: remedy sought is constructive trust or equitable lean b. Measures of Unjust Enrichment (pg. 428-451) i. When liability in Restitution is based upon receipt of a benefit as opposed to cash money, the best way to measure the benefit may be: 1. The value of the benefit in advancing the purposes of the recipient 2. The cost to the claimant of conferring the benefit 3. The market value of the benefit, or 4. A price fixed by agreement between the claimant and the recipient a. The measure of recipients unjust enrichment may depend on his level of fault ii. Example: Earhart v. William Low Co. 1. The defendant owned a tract of land and a woman owned another adjacent. 2. Defendant commissioned plaintiff to begin constructing a mobile home park on both parcels 3. Can plaintiff recover restitution for benefits from defendant rendered to a property not owned by defendant? a. Yes, restitution is to be paid by the party who made the request that services be rendered iii. Example: Maglica v. Magical 1. Quantum meruit allows recovery for the value of beneficial services, not the value by which someone benefits from those services a. The services must be beneficial before recovery is possible i. Implied in-fact contracts are at play here as well for unjust enrichment c. Affirmative Defenses in Restitution
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i. First National City Bank v. McManus 1. Defense of changed position a. Doctrine reads: whether overpayment of funds caused such a change in the position of the other party that it would be unjust to require him to refund the money i. Who, in equity and good conscience, does the money belong to? 1. Need to look at the behavior of the person who received the money a. Change must be detrimental, not able to bring the payee back to the status quo before payment i. If reversible and status quo can be changed without expense, it is not detrimental, ii. Burden is on the payee to prove d. Asset-Based Remedies for Unjust Enrichment i. Equitable Lean 1. If a recipient is unjustly enriched by a transaction in which the: a. The claimants assets or services are applied to enhance or preserve the value of particular property to which the recipient has legal title, or more generally, b. The connection between unjust enrichment and the recipients ownership of particular property makes it equitable that the claimant have recourse to that property for the satisfaction of the recipients liability in restitution i. The claimant may be granted an equitable lien on the property in question 2. An equitable lien secures the obligation of the recipient to pay the claimant the amount of the recipients unjust enrichment as separately determined 3. A claimant who would be entitled to ownership of particular property via constructive trustmay elect to obtain an equitable lien on the property instead 4. The remedy of equitable lien may also be used to limit the claimants recovery, in cases where restitution via personal liability or constructive trust would exceed the limits to recovery 5. The plaintiff attaches an unjustifiable benefit to a property of the defendant a. The plaintiff may then seek an equitable lien on that property to either seek payment or selling of the property to gain payment i. Example: Plaintiff builds a deck on defendants house but is not paid. If plaintiff is not paid through breach of contract/restitution for benefit and
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equitable lien may be put on the house. Then plaintiff can foreclose the house, sell it and get the value of the benefit (the deck). ii. Constructive Trust 1. The Restatement Third of Restitution and Unjust Enrichment a. If a recipient is unjustly enriched by the acquisition of legal title to specifically identifiable property at the expense of the claimant or in violation of the claimants rights, the recipient may be declared a constructive trustee, for the benefit of the claimant, of the property in question and its traceable product i. The obligation of a constructive trustee is to surrender the constructive-trust property to the claimant, on such conditions as the court may see direct 2. Constructive trust is authorized as a means to rectify or avoid unjust enrichment of the recipient at the expense of the claimant a. Where constructive trust would yield a recovery greater than the claimants loss, the remedy is subject to limitation to protect innocent recipients and certain third parties 3. An unjustifiable benefit (property) rests in the hands of a party and the plaintiff seeks an order from the court to receive that property or its value a. Failure of the defendant to meet the order will result in contempt 4. Elements: a. A wrong was committed by a party i. Violation of a duty, crime, etc. b. An unjustifiable benefit rests in the hands of the defendant as a result of the wrong c. The plaintiff is the rightful possessor of the benefit 5. Example: Hirsch v. Travelers Insurance Co. a. Constructive trust = i. A wrongful act 1. Violation of a duty ii. Resulting in the transfer of property and consequent unjust enrichment of another. 1. Restitution then follows b. Bona-fide purchasers are protected c. Gratuitous transferees are usually not d. Must be able to trace the funds to the property to impose the constructive trust i. Constructive trustee must surrender the property to the aggrieved claimant according to such conditions laid out by the court

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1. From this you get a decree commanding that defendant transfer property to plaintiff a. Noncompliance can be backed up with contempt power 6. Example: Rogers v. Rogers a. Husband told first wife that he would make her and children irrevocable beneficiaries of a life insurance policy in a separation agreement. He let the policy lapse, took out an additional policy and named second wife the beneficiary. b. First wife and kids can get constructive trust c. The tracing is sort of rudimentary i. First wife had rights to 15K insurance policy via a divorce decree ii. When husband died there was a 15K policy to second wife. iii. First wifes right carried forward over second wifes because she had the initial right via the divorce decree 7. Example: a. In a case where an intentional, fiduciary or non-fiduciary, converter uses 43K in converted funds toward a total of 290K paid to insurance premiums, the victims may gain not only their 43K back, but may instead elect to take their proportional share of what the 43K represents of the total fund iii. Mechanics Lien 1. Stautory remedy 8. Chapter 5 Remedies for Harms to Person (pg. 465-494) a. Damages for Personal Injury: An Overview i. Limiting Damages 1. In personal injury cases there is an assumption on uncertainty in damages a. Include a calculated risk factor to make up for uncertainty i. If risk is not included there is overcompensation b. Time value of money must be calculated i. Interest rate must be calculated to reduce future damages to present value 1. See Notes b. Damages for Medical Expense and Loss of Earning Capacity i. Measurement of the Loss 1. Medical expenses consist of the reasonable cost of medical care, services and attention made necessary by the tortuously cause injury

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a. This includes the cost of attending physicians, nurses, hospital care, medication, and curative or alleviating devices such as braces and the like 2. Earning losses, whether actual or the capacity to earn compensation if the injured person is not employed at the time of the tortuously imposed injury, are also recoverable c. Inflation i. The rate of inflation in the future is extremely difficult, if not impossible, to predict with any accuracy. ii. Understandably, in light of the complexity and uncertainties inherent in these projections, the approach of the courts to the question has not been uniform iii. Example: Jones v. Pfeifer 1. By its very nature, the calculation of an award for lost earnings must be a rough approximation. Sustained price inflation can make the award substantially less precise. 2. The question of lost earnings can arise in many different contexts. a. As long as inflation continues, the amount of the offset against the market rate should be chosen on the basis of the same factors that are used to estimate the lost stream of future earnings. i. If full account is taken of the individual and societal factors (excepting price inflation) that can be expected to have resulted in wage increases, then all that should be set off against the market interest rate is an estimate of future price inflation d. Structured Settlements and Periodic Payment of Judgments i. Structured settlements have become very popular in personal injury cases in recent years. 1. There are significant tax advantages to structured settlements e. The Collateral Source Rule i. Evidentiary rule that prohibits the admission of evidence that a victims damages were or will be compensated from some source other than the damage awarded against the Defendant 1. Example: In a personal injury action, evidence that the plaintiffs medical bills were paid by medical insurance, or by workers Compensation, is generally not admissible ii. Right to collateral sources funding for a lawsuit 1. Money from someone other than the defendant a. Does a defendant have a right to gain access to and disclose the collateral sources of a plaintiffs sources? i. No 1. Exception a. Testimony by a plaintiff that influences a jury that he is financially suffering
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