Modern Remedies Outline

8/11/2019 Modern Remedies Outline

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Analysis 2ssue +: precise calculation of compensatory damages6 Appellate court: says * pulled numbers out of the air= ants individuali>ed

determination of damages6 ,ederal 1ort *laims Act: no #ury

8 Raises 4uestions: if a #ury came bac0 ith a lump sum$ it ould be muchmore difficult to scrutini>e the a ard

6 7hy does it matter?8 7ithout precision$ a ards might be a indfall to some Ps hile it ould

stop short of restoring others8 ends legitimacy to the system$ even if it is indulging a fiction= it ill get us

further in most cases than if e give up at the outset*ompensatory standard itself

Disposition

*. alue as measure of rightful positiona. '*ommon sense( conceptb. @asy cases: e measure value of hat as lost or destroyed ! the value re4uired to put one bac0 in rightful

position.i. *alculations: value before damage and value after damage has ta0en place$ price P paid or price P as

promisedii. Problem: you need a ell8functioning mar0et in order to determine value

+. 2s replacement cost the best ay to determine value? 1he idea is that one can be given money toreplace the item based on price

U.S. v. Fifty Acres of Land $%&'()Facts: .&. condemned landfill as part of flood control pro#ect. 2n order to replace the condemned

landfill$ the city ac4uired a ne site$ developed into larger$ better facility.Proc !"ral #istory: ury found that , of condemned property as 9--CD$ and reasonable cost of substitute

facility as 9E-FD. istrict *ourt entered #udgment for 9--CD.

*ourt of Appeals reversed/remanded$ holding that citys loss as the amount of moneyreasonably spent to create a functionally equivalent facility

Analysis: ust compensation normally G mar0et value of property at the time of the ta0ing$ unlessit is too hard to determine6 2n this case: value readily ascertainable,ear of indfall ! if ne facility is superior and more valuable$ any increase in 4ualityof the facility is a indfall6 *t of App 'solution(: discount for cost of substitute facility to account for its

superior 4uality 155 AB&1RA*16 5b#ective measure7hen ta0ing occurs$ party is entitled to , of a property provided it is reasonablyascertained$ not the cost of buying a better replacement

Disposition: udgment of *t of App G reversed

c. 3arro ness of ta0ings clause and #ust compensation #urisprudence:

i. efinition of loss is less generous to victims that hat e see in insurance mar0etsii. 2nsurance: replacement value of goods$ rather than used valueiii. Fifty Acres : has the city really been put bac0 into its rightful position if it is only given the cheaper cost

of the original landfill?Trinity Church v. John Hancock Mutual Life nsurance Co. $Mass. %&'*)Facts: *hurch as a national historic landmar0$ hich as structurally damaged during the

construction of neighboring property o nerHs building. 1he damage to church ould havere4uired disassembly and reconstruction. Before church filed its action$ neighboring

property o nerHs representative agreed to aive assertion of a statute of limitations defense.*hurch filed its action three days before neighboring property o nerHs final aiver expired.

Proc !"ral #istory: Plaintiff church filed an action against defendants$ neighboring property o ner and others$

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for excavation8related damages. 1he &uperior *ourt " assachusetts% denied neighboring property o nerHs motion for a directed verdict but directed verdicts for the other defendants.1he superior court also entered #udgment for church against neighboring property o ner.*hurch and neighboring property o ner appealed.

Analysis *hurch as entitled to be compensated for the reasonable costs of restoring church tothe condition it as in prior to the excavation$ as churchHs method of damageassessment$ based upon a percentage of reconstruction cost$ as consistent ith thedepreciated8cost8of8reconstruction standard applicable to special purpose propertycases2ssue of present value:6 &hould court reduce a ard of future damages to their present value? 3o ! the fact

that repairs ill not be done until some time in the future does not compel theconclusion that 1rinity is see0ing recovery for future damages

6 amage has been done presently6 An in#ured party is not re4uired to perform repairs in order to recover for

diminution in mar0et value of its propertyDisposition Affirmed.

d. 1imingi. 5ver helmingly courts find that used value of goods ill be sufficient as opposed to full value of

replacement goods

ii. But$ fixed rules for timing 4uestions+. *ontract cases: determine value at date of breach-. Property damage cases: value at time of rong

!ecatur Count A"#Services$ nc. v. %oun" $In!. %&'%)Facts: I contracted / ecatur in summer of +JEK to aerially apply insecticide to field. &praying

as done negligently and crop gro th as retarded. I harvested beans and stored them inhis o n bind. )eld beans for sale until after the planting period the follo ing year$ sold for amount ranging from 9L.LK/bushel to 9+;.FL/bushel. &toring until the next year as hisusual procedure.

Proc !"ral #istory: 1rial #udge found that difference bet een potential/actual yield as F


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-. &pecial damages: damages that 'proximately resulted$ but do not al ays immediately result(from violation complained of

F. 1o say that some damage al ays/necessarily resulted seemed fictional$ and standards erereformulated in terms of foreseeability and natural conse4uences$ hile retaining the overtonesof inevitability and necessity "embodied in the Restatement%


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-. @xception: suits against insurers for bad faith refusal to settle. P can sue not only for interest butalso for conse4uential damages$ emotional distress$ and punitive damages. Bad faith cases ariseunder tort rather than D la

Te+aco v. Penn-oil Co. $T . App. %&'*)Facts: *ase involving 1exacos tortuous interference /D bet een Penn>oil and Oetty entities. P

and O had made a deal involving purchase of Oetty 5il stoc0 "each buying a portion%$ providing for division of O5s assets$ if Oetty 1rust and Penn>oil ere unable to agree on

restructuring of O5. ury found that 1 0no ingly interfered /agreement$ and Pennsuffered damages of 9E.CF billion. 1 filed motion for remittitur.

Analysis 1ortious interference /existing D: P is not limited to damages recoverable in D action$ but entitled to damages allo ed under more liberal rules of tort G pecuniary loss conse4uential damages for hich interference is a legal causeury based a ard of damages on replacement cost model6 Because of 1s interference$ P as deprived of right to ac4uire portion of Os

reserves6 *ost to find e4uivalent reserves6 amages G difference bet een cost of finding e4uivalent reserves$ and cost of

ac4uiring Os reservesncertainty in calculating damages is tolerated hen difficulty is attributable to sconduct

Disposition Remittitur denied.

,. imitation of remedy clausesa. egitimate business purposes:

i. Pric conc ssion r ason: if the buyer is agreeing on a limitation$ it has been built into the price$ and itallo s for more consumers to get more things at better prices

ii. ;"y r %&'*)Facts: P purchased machine from . @lements of limitation in sale agreement: D excluded

conse4uential damages$ limited liability to repair/replacement of the machine. 1urned outthat machine malfunctioned all the time$ inoperable for -C8C;Q of time. 1estimonyintroduced estimating lost profits on customer orders unfilled because of inoperability ofthe machine.

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Proc !"ral #istory: *ourt instructed #ury that it could a ard conse4uential damages not ithstanding Dexclusion if it found that failed to ma0e the machine as arranted. /P$ Appellate ivaffirmed on the basis that #ury verdict meant that limited remedy of repair/replacement hadfailed of its essential purpose.

Analysis *ourt tal0s about - broad principles that it is trying to reconcile in this case:6 ,reedom of D bet een the parties ! ris08allocation6 inimum ade4uate remedy6 NReconciling: idea that if there is total freedom of D$ shouldnt parties be able to

agree that there ill be no minimum ade4uate remedy?*ourts that have considered the validity of exclusion clause in context of R/R arranty:t o vie s6 7holly integrated: failure of the limited remedy of R/R necessarily causes the

invalidation of the exclusion of conse4uential damages6 2ndependent: if arranty fails to fulfill its purpose$ validity of exclusion depends

on specific circumstances and probable intention f the parties8 *ourt sides here: policy reason of ensuring stability of routine business

transactions$ idea that for many sellers$ immunity from * s may beindispensable to pricing structure

8 oo0 to circumstances of transaction ! exclusion can be inconsistent/intent and reasonable expectations of the parties: ex. if seller rongfullyrepudiates repair arranty

Disposition Reversed$ remanded. ,acts do not #ustify invalidation of exclusion$ a ris0 allocation agreed

to by both parties "no contention that did not ma0e service calls hen re4uested$ testified that most problems ere fault of Ps employees%

O. i4uidated damages

Ashcraft 0 1erel v. Coady $D.C. Cir. + %)Facts: *oady as fired from the la firm because of misconduct= had to pay li4uidated damages

to the la firm. 1rying to steal clients and get into firm computer system$ conspired /anassociate ho he didnt tell the firm had left. anaging partner in the Boston office. clause: each year$ the damages increased by 9C;$;;;$ so that that hen *oady left$ it as upto 9


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ii. Promote efficient breach "penalty clauses deter this by adding to the cost of breach above damage forhich one might have to compensate by ta0ing the socially more productive deal%

iii. anger of abuse/oppressioniv. Diasdado v. Diasdado "*A *ourt of Appeals case= handout%: li4uidated damages clause that as part of a

marriage settlement court refuses to enforce as against public policy

b. nderli4uidated damages clause

&orthern L 1as Co. v. /ner"y Cooperative$ nc. $Ill. App. Ct. %&'()Facts: 32O promised to buy naptha from @*2 over +; year period$ to convert into natural gas. &eased price controls on natural gas$ because cheaper to buy from drillers and pipeline cos.

32O stopped buying and @*2 sued based on difference bet een D price and mar0et price of naptha$ plus conse4uential damages.

Proc !"ral #istory: *ourt held that * gave non8breaching party the choice of recovering either actual orli4uidated damages. @*2 chose actual and #ury a arded 9F;C . 32O argues that *

provides exclusive measure of damages.Analysis @*2s argument that because it did not ma0e demand for $ it has option of see0ing

actual damages: if non8defaulting party does not ish to demand amount$ he ont be forced to$ but it doesnt create the right to see0 greater measure of damages than

those bargained for ** -8E+J: @*2 says under this section$ * does not provide exclusive measure ofdamages unless it is expressly agreed to be exclusive and is labeled as such6 *ourt: -8E+J governs limitations of remedies$ -8E+L governs *s. An * is

not a limitation on a remedy$ therefore is not sub#ect to -8E+JDisposition Reverse court order stri0ing li4uidated damages defense.

). ictims incentivesa. *ooter M Porat: 'anti8insurance(

i. Anti8insurance for losses+. @xample: A is buying transmission from B-. 3ormally: A buys$ B arranties$ but B cant 0eep trac0 of ho A treats the transmission

F. Anti8insurance: add Frd

party$ ho buys Bs liability. 2f transmission brea0s$ then B ill have to pay F rd party

es efficiency ithin the contract

b. Affects situations here buyer ill be able to affect the ris0 that a product illmalfunction

ii. Anti8insurance for gains+. &ituations here there is a free8rider effect-. @x.: la yers$ here one has incentive to not or0 as hard

iii. 7hy arent li4uidated damages sufficient?+. Buyer has no incentive to help the seller ith performance if he is going to get the damages inany case

-. @x.: construction contracts ! hen you are on the receiving end$ there are a variety of thingsthat you can do "ex. ma0ing arrangements ith other parties%$ to ma0e sure that allarrangements come to fruition$ that could either assist builder in performance of contract$ orstymie him

iv. ictim reporting problem: if 2 stand to gain nothing$ there is no incentive to report to the third party"could combat this by instituting delayed compensation or a fee for reporting%

v. *riti4ue:

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+. )o does the anti8insurer ma0e a profit? nclear ho you ould arrive at correct pricing !unli0e insurance$ hich has substantial data as to fre4uency/nature of accidents= dont have thislevel of pricing data and ould lose 9

-. 1ransaction costsF. ight lead parties to ta0e too much care? 1hen they ouldnt derive the ideal amount of

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a. 2nsurance theory of pain and suffering damagesi. Argument that e should abolish PM& damages altogether

ii. &o long as la allo s you to recover for economic damages$ thats as far as it should goiii. oo0ing at hat people ould pay if there as no tort compensation at all and individuals had to insure

against tortuous in#ury at their o n expenseiv. 2f people ould buy it on their o n$ perhaps its inefficient for the system to provide itv. 7hy ouldnt people ant to buy the insurance?

+. @conomic intuition: trying to e4uali>e marginal utility of a dollar pre8 and post8in#ury-. Iou ould prefer 9C today$ as opposed to getting 9C hen you are in#ured and the money

ould be of less use$ so you dont ant to spend the dollar no for the chance of getting a lessvaluable dollar

vi. *riti4ue:+. tility might actually be higher-. Assumes valuation ould be same for the victim pre8 and post8in#ury: once youre in#ured$ the

utility curve changes completelyF. ight actually increase utility: ex. brea0ing your leg$ so you cant hi0e and play sports$ but

maybe you needed something to slo your life do ned$ heelchair8bound$ cannot care for herself or children. At time of trail$ had

expended more than 9F;;D for treatment= ill incur expenses for remainder of life$ / @ atFJ.J years.

Proc !"ral #istory: ury returned verdict for 9-.EC $ trial court applied statutory recovery limit and reducedverdict to 9EC;D. P appeals.

Analysis Ps argument that cap denies right to trial by #ury:6 ury has fact8finding function= #udge applies the la ! trial court applies remedys

limitation only after #ury has fulfilled its fact8finding function remedy is amatter of la

6 *ap does not infringe upon the right of #ury trial because section does not applyuntil after #ury has completed its assigned function in the process

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6 ury trial guarantee does not secure rights that do not exist at common la ! *has never recogni>ed a right to full recovery in tort

Ps argument that cap violates constitutional guarantee of P: deprived of opportunityto be hear$ creating conclusive presumption that no Ps damages exceed 9EC;D: courtsays no ! section merely affects parameters of remedy available after merits of claimhave been decided

Disposition Affirmed.

S(ith v. !epart(ent of nsurance $Fla. %&'*)Facts: , statute set 9


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C. Argument that only things in evidence can be used to calculate damages$ and putting upnumbers isnt correct

ii. Reponses to criticisms:+. uries always dra inferences ! this is no different-. Adversarial context: s counsel gets to put in their o n damages number to counteractF. Per diem argument is #ust a suggestion$ not an instruction "ordinary supervision of the trial court

to help #ury distinguish bet een evidence and argument of counsel%iii. 7hat is the measuring stic0? *an P put for ard a lump sum?

+. a#ority of #urisdictions allo it-. inority: 3 $ PA

f. &tatistical issuesi. ean vs. median ! riters sympathetic to Ps cite median verdicts$ hile those sympathetic to s cite

mean verdictsii. edians better reflect the experience of most plaintiff= half of all Ps get less than the median

iii. eans reflect hat insurers have to pay ! possible for insurers to lose money hile most Ps recoverlittle$ if a minority of very large #udgment exhausts the premiums collected

g. &plit among state supreme courts over constitutionality of damage caps: captured by $theridge versus %mithi. 1heories: aycoc0 ! open court and #ury trial claims have been the most successful theories

ii. 1ypes of caps: caps on PM& are far more li0ely to be upheld than caps on total recoveryiii. @ntire body of la has developed under state constitutions$ immune to revie by & &* ! no serious

claims that damage caps on state8la claims violate federal constitutionh. atter of perspective:

i. egislators: have some vie of the big picture$ but dont see individual cases and cant legislate for themii. urors: see individual cases and have no vie of big picture$ no sense of comparable cases

iii. 5nly actors ho have the hole perspective G #udgesi. aluing pain and suffering ! - traditional theories

i. *orrective #ustice: P should receive full value of his in#uries$ so that he is placed as nearly as may be$ inthe position he ould have occupied if he had never been in#ured "N,airness to P%

ii. *lassical economic model: P should receive full value of his in#uries$ so that ill internali>e the costsand have the optimal incentive to avoid in#uring others "N2ncentives to %

iii. &ame result ! damages should e4ual full value of harm to P?iv. Problem: damage a ards for PM& may ell undercompensate victims seriously crippled by accidents$

and in death cases$ even more so ! most people ould not voluntarily exchange comfort/lives for anysome of money

&. easures of loss:i. 'Appropriate compensation(: little guidance to the #ury

ii. ' a0e hole( measure: amount that #uror ould need if he as in Ps position ! consistently disallo edin court

iii. '&elling price( measure: amount that you the #uror ould demand to suffer these in#uries "to accept in avoluntary transactions%

iv. NN7hy arent these measures appropriate?+. 3o robust mar0et in pain/suffering-. alues are relative: single mother ould ta0e money if it meant being able to support her

childrenk. amage scheduling:

i. ,ixed matrix of value based on degree of harm "ex. or0ers compensation%ii. &ample of past verdicts: paradigmatic in#ury scenarios= place the current case some here along the

metriciii. &et specific caps on PM&$ etc.= maybe have floors/ceiling that are flexible

+. @x.: 'carve8outs( for most severe in#uries$ egregious conductiv. *riticisms:

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+. a /fact debate? iolation of reexamination clause?-. 7ould undercut reforms that provided for remedies for certain harms here there as no

compensatory element per se "ex. rongful death%F. 2s it a false consistence? Argument that #ury trials provide for an 'individuali>ed #ustice$( and

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b. *omparative verdict revie " 'evka %:i. nli0e damage schedules$ less informational demands

ii. F circuits and 3I use this in many instancesiii. s counsel: can loo0 up cases in databases= put in motion for ne trial on remittitur

Me(phis v. Stachura $%&'@)Facts: P8teacher= sho ed sex ed films and pictures of his ife during her pregnancy. Parents

sho ed up at meeting and argued that he should not be allo ed to teach$ and P assuspended /pay. 3otified P that he as undergoing administrative evaluation= reinstatedthe next fall after filing suit.

Proc !"ral #istory: ury as given instructions that it could a ard compensatory$ punitives. Also$ could a arddamages based on the value/importance of the constitutional right that as violated"instructed that they could ta0e into account the significance of the right$ its place in history$governmental system$ etc.%. &* granted cert on the 4uestion of hether *ourt of App erredin affirming in light of the *s instructions regarding damages for violations ofconstitutional rights.

Analysis nder #arey $ the abstract value of a constitutional right cannot form the basis of +JLFdamages ! there$ the issue as due process$ hich is a fundamental right$ but courtnevertheless held that no compensatory a ard could be given for a violation of theright /o proof of actual in#ury6 *larification: P tried to argue that because the right violated here as substantive

D as opposed to procedural $ it as different than #arey ! court says no such't o8tier( valuation

Also tries to curb application of presumed damages6 P are substitute for ordinary compensatory damages$ not a supplement6 7hen P see0s compensation for in#ury that as li0ely to have occurred but

difficult to established$ then P are appropriate6 )ere no rough substitute for * as re4uired$ since #ury as authori>ed to

compensate P for monetary/nonmonetary harms caused by s conductDisposition Reversed.

D. Right to #ury triala. 7hy fundamental?

i. 3ot related to number of trials "barely any cases actually reach trial%ii. 3ot really due to 'buffer( issue li0e in criminal "bet een and #udge%

iii. )istorical distrust of authority?+. Royal charters for colonies provided for #uries-. Bul ar0 against tyranny of 0ings #udges

b. - main clauses:i. Preservation clause

ii. Reexamination clausec. )o do you identify an issue falling /in E th Am?

Chauffeurs Local &o. 345 v. Terry $%&& )Facts: Ps sued employer for breach of collective bargaining agreement$ sued union for breach of

duty to fairly represent them in the grievance proceedings. istrict *t held that Ps ereentitled to #ury trial. *t of App affirmed.

Analysis 1o determine hether a particular action ill resolve legal rights$ court examines bothnature of issues involved and the remedy sought+st: compare statutory action to +L th century action brought in courts of @ngland prior tomerger of M@6 ore li0e action by trust beneficiary against trustee for B of , ? "@%6 5r$ more li0e attorney malpractice? " %6 *ourt: both M@= line is not clear - nd: examine remedy sought and determine hether it is /@ in nature6 *ourt ants to rely on this prong in its analysis

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6 Remedy sought is legal ! doesnt have any of the attributes that must be presentfor court to characteri>e damages as e4uitable8 3ot restitutionary8 3ot incidental/intert ined /in#unctive relief

Disposition Remedy of bac0pay sought is legal in nature ! considering both parts of E th Am in4uiry$ Psare entitled to #ury trial.

II. R ESTITUTION

A. Restitution$ generally:a. nderac0no ledged$ often fu>>y usage

b. - categories:i. isgorgement: s conse4uential gain= honing in on s conscious rongdoing$ as opposed to loo0ing at

Ps harm sufferedii. Reversing transactions

c. 7hen ill restitution be attractive to P?i. 7hen there is no other cause of action= restitution as underlying substantive claim

+. (eri v. )etail *arine "pp. CKC%: P asserts that he conferred benefit on $ and though P did breach$ damages ere less than amount of deposit

ii. 7here s gain U Ps loss " ant to bring suit see0ing highest recovery possible%iii. 7hen P is not interested in damages$ but in reversing a transactioniv. 7here is insolvent "trying to get preference in ban0ruptcy proceeding%

d. Remedial constructsi. Tuasi8contract: implying promise to pay for a certain benefit

ii. Accounting for profits: imposing duty on one party to account for benefitiii. *onstructive trust: impose trust on some identifiable benefit

e. 2ssues:i. 7hat does it mean to say P can recover for s benefit?

ii. 7hy ould e allo someone to recover something greater than her loss?iii. )o do e measure gain to ?

f. Are restitutionary damages a re#ection of the economic vie of the la ?i. 7ant to put resources into highest useii. Posner: encourage voluntary transactions= dont bypass the mar0et

g. arious conse4uences of s rongful actsi. doesnt profit$ so P can only sue for damages

ii. Ps loss e4ual to s gain "ex. rental value%: a ard for compensatory damages and restitution for un#ustenrichment ould be the same

iii. s gain exceeds Ps loss: P should recover s profits= must decide hy should pay damages and hyP should be the one ho receives them "criminali>e$ fine?%

B. isgorging profitsa. isgorgement: nearly al ays referring to a ard of profits that exceeds the mar0et value of hat as ta0en from P

"li0e +lwell % b. Tuasi8contract/un#ust enrichment

6l*ell v. &ye 0 &issen Co. $ as#8 %&(@)Facts: P o ned egg8 ashing machine$ as planning on having it in storage. used Ps egg

asher /o Ps 0no ledge$ for F years. P offered to sell machine to for 9K;;= counteroffered 9C;$ no sale ent through$ and P sued.

Proc !"ral #istory: 1rial court /P in the amount of 9+;/ ee0 for period covered by &5 .Analysis &aving in labor cost hich derived from its use of Ps machine constituted a benefit

6 7hile benefited from use of machine$ P thereby incurred a loss: very essence ofnature of property is the right to its exclusive use ! ithout it$ no beneficial rightremains

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6 1heory of @ is applicable in such a case6 2f as consciously tortuous in ac4uiring the benefit$ he is also deprived of any

profit derived from his subse4uent dealing ith itDisposition Affirmed.

c. n#ust enrichment/ill8gotten gains

Maier )re*in" Co. v. Fleisch(ann !istillin" Corp . $&t# Cir. %&@')

Facts: began to bre cheap beer under trademar0 that P had for distilling his0ey. Pstrademar0 as ell established /consumers.

Proc !"ral #istory: ist *t a arded damages by accounting of s profits accrued from the sale of beer underthe name 'Blac0 M 7hite.( s appeal$ arguing that Ps sho ed no in#ury$ no diversion ofsales$ no palming off/fraudulent conduct.

Analysis 2ssue: is accounting of profits the appropriate remedy? nder statute$ P only has to prove s sales$ must prove all elements of cost/deduction claimed. 2n assessingdamages$ court has discretion according to circumstances of the case1 o vie as to basis for a arding accounting of profits:6 a#ority: accounting of profits by s as method of shifting B5P as to damages for

lost/potentially lost sales from P 6 inority: more recent trend ! basis accounting on e4uitable concepts of restitution

and @

8 1hese courts have re4uired competition bet een the parties8 *ourt: does not necessarily follo that #ust because there is no direct

competition$ an accounting of profits can serve no reasonable endegislative intent: ma0ing infringement and piracy unprofitable6 7hat is loss to P? Reputation6 Restitution measure as an accounting of ill8gotten gains7hy not #ust in#unction? 3ot enough of a deterrent$ leads to 'serial infringer(Co/p tition:6 # r t# r is co/p tition: acco"ntin0 7as ! on rational o= r t"rnin0

!i1 rt ! pro=its6 No co/p tition: acco"ntin0 7as ! on UE rational


d. *onstructive trusts and accounting for profitsi. *onstructive trust: legal fiction= a remedy hereby assets are moved from the party currently using them

to the 'true o ner(ii. 7hy not punitive damages? 1oo speculative: might be too high/lo = either under8 or over8deterrence of

disputed activity

Snepp v. U.S. $%&' )Facts: 8@mployee of *2A$ signed contract that if he ever rote anything$ *2A ould prescreen$

and not divulge classified information. 7rote a boo0$ did not it to the *2A to previe .Proc !"ral #istory: ist *t found that P had breached his agreement by publishing ithout submitting it for

revie . @n#oined future breaches of s agreement and imposed a constructive trust on s profits.

*t of App upheld in#unction but held that the record did not support imposition of aconstructive trust$ because had a + st Am right to publish unclassified information$ andgovernments concession that the boo0 did not divulge any classified intelligence. imitedrecovery to nominal damages and to possibility of punitives if government could provetortious conduct.

Analysis *t of Apps decision denies government an appropriate remedy for s rong$ leavingno deterrence for breaches of security*onstructive trust: protects both government and from un arranted ris0 ! trustremedy simply re4uires to disgorge benefits of his faithlessnessVN7hat has government been deprived of ! right to screen? 1his seems #ust

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procedural$ more #arey 8li0e "in hich case only nominal damages are arranted%W7hy not punitive damages?6 1oo speculative6 7ould re4uire government to divulge classified information at trial

Disposition Reverse *t of App decision.

e. Products liability ! restitution may not be availablei. 2dea that manufacturer should have to disgorge savings from cutting safety costs "5l ell 'savings(8type

calculation%ii. octrinal obstacle: manufacturers profits do not seem to have been ta0en from consumers in any

obvious senseiii. 5ften s are careless$ but not conscious rongdoer iv. 3o cases raise the possibility

*. Rescission M the benefits re4uirementa. Rescission$ generally:

i. Rescission: cancels the transaction and reverses all benefits that have been exchanged pursuant to thetransaction

ii. As opposed to enforcing the transaction and a arding specific performance or expectancy damagesiii. Rightful position: conceived of differently ! rather than speculating about hat might have been$ simply

undo the transaction and restore everyone to their original positions b. Ps options:

i. P gets to choose hether to rescind or sue for damages: P might choose rescission because of itssimplicity "no need to litigate the value of anything% or because of personal preferences not reflected inmar0et values "ex. homebuyer that is more troubled by termites than the average person%$ or because shehas lost confidence in and the transaction

ii. 7hen values have changed: P can choose rescission if she ould lose money from performance$ orchoose expectancy if she ould ma0e money from the performance

iii. P cannot affirm the profitable parts of a D and rescind the losing parts ! must rescind the entire D orentirety of some identifiably separate exchange /in the D

Mutual )enefit Life nsurance Co. v. JM' /lectronics Corp. $+! Cir. %&'')Facts: R bought life insurance for its o ner$ but didnt disclose that he as a smo0er. ife

insurance company therefore issued a policy at the non8smo0ers premium rate$ but laterfound out about the misrepresentation.

Proc !"ral #istory: 1rial court #udge granted s motion for &/ $ dismissed Rs counterclaim for proceeds of the policy$ and ordered rescission of insurance policy and return of Rs premium

payments$ /interest.Analysis R argued that B should #ust pay out hat a smo0er ould get

6 *ourt: no basis in la . utual as induced to issue non8smo0er discounted premium policy to R precisely as a result of misrepresentations. aybe Bouldnt have issued the policy

6 ateriality of misrepresentations: the in4uiry is not made so that #ury can re ritethe terms of the insurance to conform to ne ly disclosed facts$ but to ma0e certain

that the ris0 insured as the ris0 covered by the policy agreed upon6 Public policy argument: a arding payment ould re ard those ho ma0emisrepresentations= ould have everything to gain and nothing to lose fro ma0ingmaterial misrepresentations


c. 7hy allo rescission?i. Pros

+. eterrence8based: ithout rescission$ people ould have everything to gain and nothing to lose by misrepresenting

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-. 7e should resolve uncertainty against the rongdoer: ant to 0eep possibility open that Bouldnt have offered insurance policy at all

ii. *ons+. After8the8fact reallocation of ris0 -. 2s insurance company better e4uipped/suited to bear the ris0?F. oes this give B a indfall?

d. ie ed as a mild remedy:i. 1hough$ if property values changed drastically$ it ould be stronger

ii. Raises T: should rescission be allo ed as a matter of course$ or only in certain categories?+. ,raud-. uressF. &ubstantial breach


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restitution$ benefit re4uirement must be either fictionali>ed or abandoned%

. Restitution M contract: ne frontiers or dead ends?

)oo(er v. Muir $Cal. Ct. App. %&33) 4 LOSING B ,ERE T,E ;ENEFIT CANNOT ;E RETURNEDFacts: as general contractor$ B as sub$ on a D to build hydro plant. B as to build one dam

for pro#ect$ and as to supply B /materials/e4uipment. elays and cost overruns fromthe beginning$ hich each side blamed on the other. ,inally$ /Bs dam JCQ complete$ heabandoned the or0.

D price: 9FFFD B: received 9F+FD in progress payments$ and ould have been entitled to another 9-;D ifhe finished the #ob.B: spend 9CE+D building as much as he did$ not counting any aste that as his o n fault.7ould have cost another 9-JD to finish the #ob$ ma0ing a total construction cost of 9K;;D.

Analysis )ere$ Bs expectance as negative ! if D as fully performed$ he ould have lost9-KED *ourt: B could rescind the D and sue for the value of the benefit he had conferred on

! the value of a nearly finished dam$ measured by the cost of building it 6 'Boomer rule(: not loo0ing to D price$ but costs sun0 so far

6 Recovery: 9-CLD$ difference bet een hat he had spent and hat he had already paid

NN7hy should uir have to pay 9CE+D for a benefit he as promised for less than9FFFD? 1raditional contract la says that D price is supposed to account for ris0$ i.e.D allocated to B the ris0 that the or0 might cost more than expected6 P see0ing restitution rescinds the D and sues in 4uantum meruit$ the common

count for value of services rendered cannot rely on D price because the Dhas been rescinded8 NN)o helpful/fair is this?

Disposition ury found Boomers ithdra al as #ustified by uirs material breach in failing todeliver materials. Bs recovery G "amount spent% ! "amount already paid% G 9-CLD.

/arthinfo v. Hydrosphere 'esource ConsultantsFacts: ) and @ entered into series of Ds to develop soft are. ) developed soft are and provided

technical support$ @ produced manuals and pac0aging$ handled mar0eting. @ paid royaltiesand consulting fees to ).

) claimed royalties on a ne product$ derived from earlier products described in the D. @denied that it o ed any royalty on such products$ and refused to pay any royalties accruedafter a certain date$ even on the original products$ until dispute as resolved.

Proc !"ral #istory: 1rial court held that @ o ed no royalties on derivative products$ but that its refusal to paythe royalties that it did o e as a substantial breach. Both sides sought to rescind Ds.

Analysis @ ithholding royalties as leverage in the other dispute ! as the conduct sufficientlyculpable to support disgorgement?Rescission and restitution6 Rescission as arranted: @s breach as substantial$ and damages ould be

inade4uate "due to nature of Ds and depth of disputes bet een parties%= andopinion of the court that the parties ouldnt be able to #ust resume theirrelationship in a productive manner

6 Restitution on both sides ! contract is being unmade$ so restoration of benefitsreceived under the D should follo8 )o much of s profits can P recover? )ere$ court has e4uitable discretion

! the more culpable s behavior$ and more direct the connection bet een profit/ rongdoing$ more li0ely that P can recover all of s profits

8 NN*ourt seems to be importing into contract la the la of intentional torts"supercompensatory measure%

8 )o much should be allo ed to 0eep/P be allo ed to disgorge? )ere$ @did contribute to profits ith its pac0aging$ mar0eting$ etc. ! that contribution

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should be accounted for and ithheld from disgorgement. Apportion/ nt7as ! on 1al" a!! ! 7y ac# party

Disposition Remanded for determination of value added$ so that @ only disgorges profits attributable to) "recalculation of rongful profits%.

1lendale Federal )ank$ FS) v. U.S. ! hat the boo0 means on pp. K


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iii. 2n insurance$ there is potential for damage a ard to drive up cost of premiums$ hich are passed on toothers "hence$ controversy about hether punitive damages should be insurable= in most states they areinsurable%

iv. &tandards are phrased ambiguously= #uries donHt 0no ho to calculate damages presents the problemof giving proper notice to putative = if standards are vague$ there ont be efficient deterrence "couldlead to overdeterrence= not 0no ing standard may lead to be overly cautious%

v. 5ver0ill/multiple punishments problem: has possibility of huge a ards give to each P ho comesfor ard

+. 7hen court decides hether it ill remit a ard it loo0s at hether there ill be more Pscoming for ard in the future. 1here is debate about hether appellate courts can ta0e #udicialnotice of this if it asnHt introduced into evidence

-. ill ant to bring in the a ard to sho that it has already paid punitive damages$ but alsoouldnt ant to bring in the a ard because this implies that Hs conduct as deserving of

punishmentF. ominant approach: possibility of additional a ards is someho considered in

setting/revie ing amounte corporate profits

6 7ealth of 6 Amount of compensatory damages6 Amount hich ould serve as a deterrent effect on li0e conduct by and others

ho may be so inclined: points out that government regulations are inade4uatedeterrents= P s compensate for shortcomings

6 Ratio of punitives to compensatory:


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ii. 2t is in societys interest for companies to ma0e these calculations$ but P cases demonstrate disincentivefor them to do so ! they can be introduced into evidence and ma0e the companies loo0 bad if measuresere not adopted

iii. ifference in measures: P ould not have paid 9+-C to suffer the damages. 2n theory$ compensationhas the aim of putting P bac0 in his rightful position "the 'indifference curve(%. But as soon as you enteridea of serious in#ury and death$you can argue that this is the rong calculus

d. 2nstructing #uriesi. 7hat evidentiary standard should be used?

ii. 2ntent standard: malice$ fraud$ oppression$ illfulS: terms are not precise$ but perhaps are not meant to be ! is this the best courts can do?

e. &tate immunity from punitive damagesi. *annot get P s from state

ii. ,arnes v. -orman : case under A A$ issue of hether punitive damages could be a arded against amunicipality. a#ority rationale held that A A enforcement as through &pending *lause "no programthat receives federal funds can discriminate%. Oovernment ithholding of funds is a contractual situation

! because you cannot get punitive damages in a D$ you cannot get them here#. Punitive damages M constitutional overlay

1ore v. )M2 Facts: P bought B 7= bought it presuming it as ne . 1urned out that paint #ob as defective$

but B 7 had policy that if value of car as decreased by less than certain percentage$ theyould not disclose to purchaser$ but mar0et it as ne . P too0 car to paint shop$ here heas told that the car had been repainted. Actual damages: 9


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#udgment. 7hat is the harm? 1he +L month period of uncertainty for *ampbells$ henthey ere told they should 'sell their house=( pain and suffering.

Proc !"ral #istory: 5riginal #ury a ard: 9+


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6 Punitive damages should be proportional to the rongfulness of the s actions6 &anctions should be based on the rong done rather than on the status of the 6 should have reasonable notice of the sanction for unla ful acts$ so that he can

ma0e a rational determination of ho to act= and so there have to be reasonablyclear standards for determining the amount of punitive damages for particularrongs

1his is much more similar to a dignitary harm to the extent that the compensatorydamages might be pretty lo $ hereas egregious nature of the conduct might be veryhigh "li0e the 'spitting the in face( case$ as opposed to an oil spill% filed motion in limine to exclude evidence concerning the issue of bedbugs in theother rooms in the motel ! court refused to grant the motion7ould have been helpful if parties had presented evidence of statutory penalties foroffense$ but lac0 thereof does not invalidate the a ardA ard of P s as not excessive$ although court ac0no ledges that the final amountchosen by the #ury as arbitrary


d. 7ealth of : in *athias $ Posner says that it is relevant$ but more in terms of Ps ability to bring a case$ get his dayin court "here$ t o individual Ps ere facing a comparatively ealthier ho had a bunch of resources to put

behind its defense and 0eep people from suing "refers to motions filed$ etc. as 'frivolous%%e. Reexamination clause:

i. #ooper ndustries : hen punitive damages are ruled as being unconstitutionally excessive$ federal courtsare revie ing #ury a ards de novo

+. Argument that as made that punitive damages might be different from compensatory damages ! not 'facts( in the same ay that * are$ that they involve moral considerations$ etc.$ such thatthere is no idea that federal court is getting in the ay of #ury fact8finding

-. 2ssue of hether it as #ust a matter of federal procedure$ or if it ould apply in state courts !for the latter$ it ould have to be a constitutional rule

a. &tate courts: interpret as a constitutional rule$ so they are engaged in loo0ing at themde novo hen they are ruled as constitutionally excessive

b. ove from common la to constitutional argument: ma0es a different for standard ofrevie "abuse of discretion vs. de novo standard ma0es a differenceY%

c. *hanges balance bet een #udges and #uries$ as ell as appellate vs. trial courtd. Oinsburg: brings this out in dissent ! in #ooper ndustries $ is upset that P a ard is

less of a fact than pain and suffering$ and the idea that appellate courts can no step inand instead of simply offering up remittitur$ no can #ust remit a ards and not givethe option of a ne trial

D. &plit8recovery schemes:a. arious state approaches:

i. OA: only applies to products liability cases= after deduction of attorneys fees and costs of litigation$ECQ of P recovery goes into state treasury. 5nly one P a ard per P act/omission

ii. AD: C;Q of P a ard must be placed in states general fundiii. 2 : trial court has discretion to apportion P a ard bet een P$ Ps attorney$ and 2 ept of )uman

&ervicesiv. 23: ECQ of P a ard must be put into violent crime victims compensation fundv. 2A: #ury ans ers special interrogatories ! if it finds that s conduct as specifically directed at P$ P gets

+;;Q of P recovery. 2f not$ then ECQ goes to state civil reparations trust fundvi. &: P receives C;Q of P a ard after attorneys fees$ remaining C;Q goes to tort victims

compensation fund$ ith -KQ of that going to legal services for lo 8income persons fundvii. 5R:


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F. Punitive damages in contracta. 2n addition to statutory civil finesb. 1raditional rule: no punitive damages in contractc. oo0ing at a case /an independent tort$ hy have the independent tort re4uirement? oes it or0 out as a

practical matter? &mattering of data sho s that it seems punitive damages can often or0 their ay intocontracts

d. istinction bet een torts and contracts: source of dutyi. 1ort: by la

ii. *ontract: by contract$ express or impliediii. 3ature of remedy sought by Piv. N7hen does a contract case get pushed into tort territory? Formosa ! emphasis on when decided not

to perform ! intent at the time representations ere made

For(osa Plastics Corp. v. Presidio /n"ineers 0 Contractors$ nc. $T . %&&')Facts: ,ormosa as engaged in a large8scale$ 9+.CB construction expansion pro#ect$ ith 9K;;D

bid for a contract. Presidio received invitation to bid on part of the pro#ect$ hich asaccompanied by certain representations about the foundation #ob "J; day completionschedule%. Pro#ect ended up ta0ing L months to complete= Presidio incurred substantialcosts.

Analysis Breach:6 Presidio asnt able to schedule concrete delivery hen it as supposed to be able

to6 ,ormosa scheduled mutually exclusive contractors to be in the same place at the

same time1ort: fraudulent misrepresentation6 Presidio as to be able to set its o n schedule and ,ormosa as to deliver on

target6 Pro#ect as to be completed in J; days6 Presidio alleged that ,ormosa enticed contractors to ma0e lo bids by ma0ing

misrepresentations in the bid pac0age regarding scheduling$ delivery of materials$responsibility for delay damages ",ormosa indeed admitted that it had secretly setup its o n delivery schedule in order to save money%

In! p n! nt tort r"l : Not 8 pp. *@(: For(osa #ol!s t#at t# r /"st 7 anin! p n! nt tort8 an! t# r /"st 7 tort !a/a0 s8 7"t t# !a/a0 s n ! not 7in! p n! nt =ro/ t# !a/a0 s ca"s ! 7y t# 7r ac#6 ' egal duty not to fraudulently procure a contract is separate and independent

from the duties established by the contract itself( tort damages are not precluded simply because a fraudulent representation causes only economic loss

Contract cas 0 ts p"s# ! into tort t rritory: based on ,ormosas intent at timerepresentations ere made6 &eemed to be a calculated effort$ scheming ! employees testify to substantiate the

idea that it as not the case that ,ormosa made the contract and then decided notto perform

6 Profit motive: ,ormosa made the representations in order to induce Presidio toenter into the contract at a lo bid price ",ormosa as going to be responsible forthings ithin its control$ but Presidio as supposed to be in responsible for factorsoutside control of the parties. ,ormosa knew that there ere going to be delays$and use its superior bargaining po er to ma0e Ps finish the or0 or else go a ayand settle for some lo amount%

Disposition Affirmed "Presidio chose higher tort recovery$ 9E;;D$ court affirmed #ury finding of fraudand 9+; damage a ard%.

e. 7hat is the purpose being served$ if you dont have to have additional damages for a claim in tort? ont ant'repac0aged contract claims(

i. 7hat ould be a better rule for hen e ant to apply torts?ii. Above cases use the 'independent tort re4uirement(

odern Remedies ,;


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iii. oo0 at distinction bet een opportunistic breach and efficient breach? &ounds good in theory$ butdifficult in practice "and ould #uries actually treat them differently?%

iv. ifficult to tell at hat point decided not to perform its obligations under the D v. )old firm to the rule of no punitive damages in Ds$ but reali>ing that you ill encounter torts and

contracts together$ strictly construe the independence rule?vi. 1ort damages serving as hoo0 for bad faith contract claims?

-. &tatutory damages and civil penaltiesa. *ivil penalties payable to the government: F categories

i. *riminal prosecution in disguise: argument is that this should trigger criminal procedural protections+. Almost a null set-. 2f legislature calls something a civil fine$ ill not decide that this is a criminal prosecution and

give attendant rights "&upreme *ourt has been pretty clear%b. 3ot a criminal prosecution$ but it is punishment: might trigger some 0ind of procedural protections

i. ,or a hile$ seemed to implicate the double #eopardy clause "though very narro ly defined$ if notdiscarded%

ii. @xcessive fines clause implicated: goes bac0 to discussion of applicability of the clause to civil penaltiesassessed bet een private parties ! not applicable$ but court left 4uestion in situation here funds eregoing to the state

c. 3ot a criminal prosecution/punishment$ but solely remedial: ordinary civil procedure/administrative schemesseem to suffice

i. 'Remedial( can be defined in a number of ays: preventative$ enforcement costsSetc.d. 3otes/issues:

i. Penalties seriously undermine protections of criminal procedure ! substantial fines are imposed /othem

ii. *ourt generally upholds such penalties on the ground that they are remedial$ not punitiveiii. *ourts current position seems to be that civil penalties are civil and remedial because *ongress says soiv. *ourt seems to have given up on the civil/criminal line$ but has imposed modest limits on the si>e of

civil fines under the @xcessive ,ines clausev. ouble8#eopardy cases: here s claim is that the civil penalty is punishment for purposes of the

*lause$ so government cannot impose a second punishment in a criminal prosecutione. &tatutory damages collected by private parties

i. Private litigants recovering statutory damagesii. @x. '1ruth in lending act($ copyright infringement$ Privacy Act

iii. Area in hich statutory damages are proliferating ! e need to have a sense as to hether they are punishment$ remedial in purpose= up for grabs hether the hole apparatus of %tate Farm or ,*W should apply in situations here statutory penalty seems too large

f. )o do you argue that statutory damages are different from punitive damages?i. @x.: litigant ho is able to get damages for every day

ii. 3otice: there is arguably a lot more notice that you ill incur a fine+. Arguably$ doesnt bring in same due process claims as a result-. *ounterargument: yes$ you may 0no that you ill be fined$ but do you 0no that it could be a

huge amount?iii. 2f statute is ell8drafted$ then you might be able to more effectively structure the limits of the fine !

legislature can set caps$ for example g. 7hy have statutory damages to begin ith?

i. Areas in hich harm/damages are difficult to 4uantifyii. @nforcement incentive to give to private litigants ! private attorneys general role

I?. I N>UNCTIONS

A. 2n#unctions vs. damages

odern Remedies ,;


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3. At the stage of permanent relief$ any litigant /a plausible need for specific relief can satisfy theirreparable in#ury rule

Pardee v. Ca(den Lu(,er Co. $ . ?a. %&%%)Facts: P sued to en#oin from cutting do n timber on Ps land.Proc !"ral #istory: 2n#unction dissolved= P appeals.Analysis: Iss" : evaluating the available remedies ! are they sufficient to vindicate the right

of an o ner of property to 0eep it in the condition he desires?

egal remedies inade4uate in this case because it ould allo someone to cut do nsomeone elses timber as long as he could pay the damagesamages as compensation is ade4uate in all instances in hich property that isin#ured/destroyed may be substantially replaced /money recovered as its value

Disposition: 2f personal property has a value peculiar to its o ner$ or 'price of affection$( e4uityill vindicate and uphold the right to possession "ex. trees intact vs. lumber !totally different 0inds of property%. *lear case of trespass by cutting of timbershould al ays be en#oined.

Not s: Una/7i0"o"s c#oic 7 t- n iss"in0 an in "nction or r 6"irin0 !a/a0 s i=tr s ar c"tD /onstrat s t#at t# irr para7l in "ry r"l is li/it !1imber as thought of as something$ though connected to the land$ asnt seem asa0in to property in terms of having a uni4ueness value*ourt doesnt seriously entertain that it ould be e4uivalent to allo the trees to becut do n and then bring a suit in la for money damages7hen is money an ade4uate remedy? 7e are no in this territory$ as opposed to

#ust as0ing ' hen can you bring an action in la ?( 2ts the more relevant 4uestionto modern litigation "not so much the la /e4uity distinction%

Continental Airlines$ nc. v. ntra )rokers$ nc. $&t# Cir. %&&()Facts: *ontinental published coupon boo0s /no8sale provision$ but told 2ntra that it ouldnt

enforce it. ater changed position and told 2ntra$ hich refused to comply. 3o evidence ofharm/benefit as a result$ also no evidence of expenses by 2ntra in reliance on old policy.

Proc !"ral #istory: istrict court granted &/ to *ontinental= permanent in#unction against 2ntra not to sellcoupons.

Analysis: id *ontinental have an ade4uate legal remedy? *ontinental said yes$ losses from passengers use of coupons soldery hard to determine hether * as harmed. @conomic analysis$ accountingmight be necessarily ! but doesnt mean that *ontinental as not harmedifficulty and expense of establishing economic harm supports argument thatdamages ould be inade4uate remedy cuts in favor of e4uitable relief *ontinental is entitled to ma0e business decisions ! loss as of po er over

businessDisposition: 2n#unction affirmed.Not s: 7hat is the entitlement that is being protected? Right to control ones business

1his is not exactly hat as meant by the traditional irreparable in#ury rule ! could*ontinental go and do something totally foolish$ but still have its control protected?,ol!in0 on to so/ s /7lanc o= irr para7l !a/a0 s r"l 7y sayin0 t#at it


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carrots$ had a reputation that as built in part upon uniform appearanceDisposition: Reversed.Not s: efendants: could have breached$ sold$ paid damages$ and still come out on top

i4uidated damages clause: suggests that parties had in mind that there might be ashortage in the goods= also$ that there might be incidental damages that are noteasily 4uantifiableDo - -ant to nco"ra0 pro=ita7l 7r ac# s in ti/ s o= s#orta0 or /ar9 t=ail"r s2 might have anted to try and force *ampbells into negotiation?ong term contracts ith different variables$ re4uiring efforts and inputs on bothsides ! efficient breach might be attractive$ not only limited to sales situations

7an 2a"ner Advertisin" Corp. v. S0M /nterprises $NY %&(@)Facts: P had lease for advertising space on building= P built a sign and leased it to another company.

cancelled the lease /P ! breached contract.Proc !"ral #istory: 1rial court denied specific performance= a arded money damages. P argues for &P$ says

that money damages are ade4uate but amount as improper.Analysis: Ps argument that space as 'uni4ue( in terms of location for specific advertising !

'uni4ueness( is not a magic door to &Pifference bet een physical difference and economic interchangeabilityPoint at hich breach is redressable by &P doesnt lie in inherent physical

uni4ueness$ but in uncertainty of valuing it ' ifficulty of proving damages /reasonable certainty(alue of commercial billboard space is not speculativeOranting &P in this case ould also harm disproportionately compared to homuch it ould benefit P

Disposition: Affirmed &P part of verdict$ ad#usted damages through expiration of Ps lease.Not s: 7hy are damages ade4uate here?

1he location is arguably uni4ue ! big captive audience of people stuc0 in traffic@4uitable relief ould impose disproportionate burden on the defaulting landlord7hat is the issue? )ardship on is a separate issue from hether damages areade4uate ! added consideration$ or it the case that courts arent thin0ing abouthether you could feasibly get damages relief$ substitutability on the mar0et$ or isthere something going onSthat e ant to give stronger protection to a particularentitlement or goodSor is there another substantive policy consideration "i.e. here$undue hardship on a %

,. Burdens on or the courti. ndue hardship/balancing the e4uities: embodiment of economic approach to la ! if a rong is too

expensive to correct$ then can pay damages instead0. )igh transaction costs1. Bilateral monopoly2. 3ot enough for to sho that the in#unction costs him a litt le more than it saves P ! must

impose hardship greatly disproportionate to the benefits3. efense is unavailable if s conduct is too culpable

Ariola v. &i"ro $Ill. %& &)Facts: s ere putting an addition onto their house. Ps allege that s encroached onto Ps

property. Ps had a drainage system that encroached onto s property$ but it as ruled thatthey had an easement by AP. s put up a drainage system /o Ps 0no ledge$ ended upcausing rotting and damage.

Proc !"ral #istory: 1rial court a arded Ps damages only for installation of drainage system as good as onedestroyed by s$ denied damages for in#ury/deterioration of their building.

Analysis: Remedy of mandatory in#unction: here encroachment as intentional$ courts haverefused to balance the e4uities$ and have issued 2 /o regard to relativeconvenience/hardship involved

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andatory in#unction can also be granted in order to protect an easement1rial courts determination that Ps claim re: easement as barred by laches as/o merits ere consistently on notice that they ould be encroaching

Disposition: Reversed and remanded= directions to grant the mandatory in#unction$ and a ard alldamages resulting directly from defendants intentional trespass

Not s: 7hat could be recovered here?6 alue of land ta0en6 nder intentional trespass$ liability for all the damage done "trial court limited

damage a ard to replacement of drainage system%6 Are damages an ade4uate remedy in this case?

8 2ntentional trespass8 2dea is that in#unction ould lead to further negotiation by the parties

*oase theorem: initial allocation of rights doesnt matter because parties ill gettogether and reach a bargain that ill be most efficient use of the resource6 Assumption: lo transaction costsN,arns orth study: pic0ed cases here transaction costs ere very lo $ but actually$ notmuch negotiation after #udges decision ho do you explain this?6 Acrimony built up in encroachment/nuisance cases= parties are in such a state over

everything that even if it is in their interest to negotiate$ they dont feel inclined to bargain

6 '@ndo ment effect( might be at or0 here= people less li0ely to negotiateinunctions "property right as non8fungible%$ hile they ill negotiate damageshile cases are on appeal

Co#operative nsurance Society Ltd. v. Ar"yll Stores 8Holdin"s9 Ltd. $,L %&&*)Facts: &afe ay decided that number of stores ere not longer profitable$ so decided to close them.

2t as a breach of covenant in their lease$ hich contained positive obligation to 0eep the premises open for retail trade during usual hours of business.

Proc !"ral #istory: o er court assessed damages= *ourt of Appeal reversed$ ordering that the covenant bespecifically peformed.

Analysis: 2ssue: should the store be ordered to continue operating as at a loss?Disposition: Restore order of trial #udgeNot s: 2ssue of supervision

6 ndue hardship on the court= unduly complex for the court to supervisePunishment for contempt: court calls it 4uasi8criminal6 As a result$ court feels the need to 'tread lightly( in a arding the in#unction7hy ould you ant an in#unction in this case?6 5ther stores ! &afe ay dre people into the shopping center 6 At least anted a transition= displeased ith the decision to simply breach and pac0

up/close store6 *ourt discusses concern that forcing the business to stay hen it doesnt ant to

ill discourage it from running the store properly$ and its not the courts role toma0e sure that this happens

ii. 7hat ill s ay a court /respect to granting damage/in#unctive relief? 1a0e8a ay point of Ariola and Argyll

0. 7hether money damages are ade4uate1. ndue hardship$ either for or court2. oo0ing into character/content of s action$ either at level of intent$ or presence of misconduct

in some respecta. @x.: Ariola $ here intentionally encroached on Ps property

b. oes this mean that in#unction should be granted?c. 7hat are advantages to giving in#unctive relief in this situation? ont have to put a

number on the infraction= give the po er to the individual property o ner ! protectingthat entitlement to land at a higher level than simple punitive damages "#ury/court8determined amount%

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3. *ourts ta0e on more burdens in terms of supervision here sta0es are high enough and legalremedies are sho n to be ea0 enough ! loo0 at case and contrast damages ith in#unctiverelief

a. 7hats a sta0e/ hats the nature of the entitlement? Ariola case G property right= Argyll G contract right

b. @xplains hy in#unctive relief as granted in Ariola even though it as anencroachment of several inches ! seems irrational$ but the sta0es might be perceived as

being higher because it is a property rightc. &ubstantive or procedural policy reasons

2illin" v. Ma--ocone $Pa. %&*')Facts: ore sand ich board and demonstrated in front of Ps la office$ believed that Ps had

defrauded her. Ps filed suit in e4uity see0ing to en#oin her.Proc !"ral #istory: 1rial court granted in#unction$ &uperior *t. essentially affirmed "modified the order%.Analysis: ,ree speech issue

3ot permissible to en#oin someone from spea0ing/protesting$ even if that speech isfalse,act that is indigent doesnt matter ! doesnt mean that there is no ade4uateremedy at la2n deciding hether a remedy is ade4uate$ it is the remedy itself$ not its possiblelac0 of success$ that is determining factor

Disposition: ReversedNot s: 2s a legal remedy as complete/practical/efficient as an e4uitable remedy in this case?

7hy is it that damages are not enough?6 1rial court: as indigent6 )ard to prove the monetary effect of libel6 Possibility of repeat conduct6 N5ne thing that you can get /in#unction is ide remedial coverage$ and into the

future6 2rreparable harm might not mean serious harm$ but could tell us that there is the

problem of repeat conduct here there ould only be a small damages a ard eachtime$ and hich ould not be orth it to litigate on each occurrence

*ourt reverses granting of in#unction because in#unctions are often preventative$ priorrestraint difference bet een damages and in#unction in this situation6 amages: punish individuals for statements made$ damages caused6 2n#unction: prior restraint$ future speech of is restrained "regardless of the fact

that statement has found to be false on the merits%

d. #ochran v. 4ory :i. ohnny *ochran case here &* has #ust granted cert. *ochran had been representing 1ory in A policy

shoot8out case= became disaffected /*ochrans representation. 1ory sent letter saying that if *ochran paid 9+; $ he ould go public= after publicity of 5 trial$ resurfaced ma0ing demands again. 1orymobili>ed a bunch of people "not other *ochran clients%$ transported them$ gave them food$ had them

protest saying *ochran as a croo0. *ochran sued for defamation ! court issued in#unction saying that1ory and anyone associated /him could not pic0et. *A Appeals court affirmed. 2ssue: hether

permanent in#unction in a libel action against an admitted public figure violates first amendmentii. R"l : 6"ity -ill not n oin a li7 lH

A(erican )roadcastin" Cos. 7. 2olf $NY %&'%)Facts: as a sportscaster for P= agreed to negotiate for extension hen his D ran up$ also agreed

to a right8of8first refusal clause$ but then signed a D /*B&. P sued$ see0ing &P for right8of8first refusal clause and in#unction against broadcasting for *B&.

Proc !"ral #istory: *t. of Appeals held that had violated negotiation clause$ but not right8of8first8refusalclause because he signed /*B& before beginning of J; day period.

Analysis: *ourts generally refuse to order individual to perform a D for personal services

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"difficulties of supervising%@xceptions: here there is an existing D$ and services are uni4ue or extraordinaryOeneral #udicial disfavor of anticompetitive covenants in employment Ds "public

policy favoring full and robust competition%AB*s re4uest: must fail

3o existing agreement bet een parties= already expired2n this situation$ in#unction ould unduly interfere /individuals livelihood$ inhibitfree competition$ here there is no in#ury to employer other than loss ofcompetitive edge

3ot saying that AB* asnt damaged ! can sue for monetary damages ifappropriate

Disposition: Big issue: +F th Amendment= prohibitions on involuntary servitude$ slavery$ etcS6 &ocietal aversion to forcing people to stay in contract

. Reparative in#unctions

)ell v. South*ell $ t# Cir. %&@*)Facts: @lection to fill vacancy for ustice of the Peace= one blac0 female candidate "P8Bell%$ along

/five hite male candidates$ including declared inner 8&outh ell. 2f all 4ualified blac0sho didnt vote had been added to combined vote of &outh ells opponents$ result couldnthave been changed.

Allegations: voting lists and booths ere segregated according to race$ also allegations ofvoter intimidation.

Proc !"ral #istory: Ps re4uested that *ourt declare that as not the legally elected oP$ that he be en#oinedfrom ta0ing office$ and ne election be called. 1rial court characteri>ed practices asunconstitutional$ but held that federal court as po erless/should not exercise po er to setaside a state election$ and that there as no ay to tell hether the result ould have beendifferent in absence of discrimination ! therefore$ no harm or in#ury as sho n by thecomplainants.

Analysis: *ourt has expressly recogni>ed the po er of a federal court to void a state election ! 5amer v. #ampbell 3ot blac0s alone ho suffered$ but body politic as a hole= trial court assumed thatall hite voters ould vote for hite candidates$ and same for blac0s

Oeorgia authorities insistence that relief as properly denied b/c in#unction asre4uested after election as over ! no such rule= there as no effective reliefavailable before the electionisenfranchised voters tried to engage in self8help$ but to avail= and the suit asfiled ithin a fe days of election results

Disposition: Reversed and remanded for entry of order setting aside the election and re4uiringthe calling of a special election

a. 3o rule precluding the use of in#unction to ameliorate the harm of past violations "despite any special rulesgoverning elections%

Forster v. )oss $' t# Cir. %&&@)

Facts: Arose out of sale of property. P G buyers$ G sellers. 7hen s agreed to sell property toPs$ they represented that Ps could obtain permit for boat doc0$ but s didnt 0no that theyhad a permit of their o n that made it impossible for Ps to get a permit. s didnt contestfraud in this regard. ury a arded compensatory/punitive damages.

s also promised that they ould remove their s im doc0 and didnt. ury a ardedcompensatory damages for breach of D.

Proc !"ral #istory: 2ssue on appeal: damages ere not the only relief given to Ps ! they also got permanentin#unction ordering s to remove their s im doc0$ and got their boat8doc0 permit after all.

Analysis: s argue that in#unction has made Ps hole ! they have their s im doc0 and boatdoc0 permit= therefore$ they got the property /exactly the characteristics that s

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Ps are better off then if there had been no fraud/breach in the first placePossible that Ps suffered some 0ind of damages because they had to ait F years for complete fulfillment of terms of sale ! but$ case asnt tried on this theory$ noevidence to sho ho these damages could be calculatedPs argue for distinction bet een right not to be defrauded and 'littoral rights(appurtenant to property ! in abstract it ma0es sense$ but still doesnt #ustify doublerecovery

Disposition: *ase must be remanded$ here it ill be up to Ps to elect hat remedy they ant !compensatory or in#unction. But they should be allo ed to 0eep the 9+;$;;; a ard

because s conduct as abusive. 2f it is necessary under issouri la forcompensatory damages to be a arded in order to support punitives$ then istrict*ourt must a ard Ps compensatory damages of 9+ on their fraud claim.Dornmann$ concurring: Ps have already elected a remedy ! they sought andreceived an in#unction$ and the resulting doc0 permit. 7ould have * determine ifPs elected a remedy$ and that Ps are not allo ed to receive and retain the doc0

permit as ell as the 9+-$-C;.Not s: Pretty clear in this instance that there as double recovery

Punitive damages: ho do you argue for punitives in addition to compensatoryand/or in#unction? 7ays in hich a court can figure out the 'harm( done even if itis not a arded in compensatory damages "ex.: using a 'virtual( compensatorydamage amount$ if compensatory damages had been a arded rather than thein#unction$ or #ust determine a value of harm%2n#unctive: property8li0e protectionamages: contract8li0e protectionPunitives: almost criminal8li0e protection

,. aycoc0$ 2n#unctions and the 22R i. ,isss analysis: practical differences bet een various uses of in#unctions

0. Preventative: prevents a future harmful act1. Reparative: prevents the future harmful effects of a past act2. &tructural: long series of preventative/reparative in#unctions in a single case presenting a

complex fact situation ! each individual order is part of a continuing attac0 on a larger problem"ex. school desegregation%

ii. N aycoc0: ,iss ma0es too much of his categories all do the same thing$ serving the classic role of thein#unction of preventing future harm

0. istinction that ,iss is missing: ignores the difference bet een avoiding harm altogether andcompensating for harm actually suffered

1. *an create confusion in litigationiii. aycoc0s argument:

0. Reparative in#unction is only appropriate hen P ill suffer additional harm in the future"damages can be a arded too ! let the harm happen$ but compensate but$ reverse is notal ays true= sometimes you need damages to compensate%

1. 5verlapping purposes served by reparative in#unctions and damages remain 4uite distinct

2inston 'esearch Corp. v. Minnesota Minin" 0 Manuf. Co. $&t# Cir. %&@ )Facts: ivision of * developed improved precision tape recorder/reproducer. ater$ 7inston

developed similar machine. alleged that 7 machine as developed by former employees$ using confidential info that they had ac4uired. &ued for damages and in#unction.

Proc !"ral #istory: istrict *t. found that employees based 7s development program on same approach as theyused in developing s machine. ,ound that the approach as not a trade secret of .Particular embodiment of the general concepts in machine as a trade secret$ andemployees had used them improperly in developing the 7 machine.

Oranted in#unction against disclosing any trade secrets for - years after #udgment$ but denieddamages. Both sides appealed says in#unction should have been longer/permanent.

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Analysis: ist. *t. premised its decision on determination that trade secrets ould have beenfully disclosed shortly ! record supports this finding%hellmar rule versus #onmar rule ! 7s argument ould bar any in#unction at allonce there is public disclosure$ and s argument ould re4uire in#unction in

perpetuity regardless= * verdict as compromise*s approach as soundPublic policy argument: permanent in#unction ould subvert public interest inallo ing technical employees to ma0e full use of their 0no ledge/s0ill in fosteringRM $ hile no in#unction at all ould leave faithless employee unpunishedAppropriat in "ncti1 p rio! is t#at -#ic# co/p titors -o"l! r 6"ir after

pu,lic disclosure to ! 1 lop a co/p titi1 /ac#inamages issue: * as right not to a ard ! since 7 didnt sell any of itsmachines$ there as no profit to be disgorged$ and evidence as to future profits ashighly speculative at best1 o8year in#unction deprived 7 of any benefit it might have gained fromadvantages and shielded from any potential harm from 7s competition

Disposition: Affirmed.Not s: 3othing illegal about reverse8engineering after product is out for sale

7 comes in before the four years elapse and ta0es about +< months to get productto possible salePermanent in#unction: contrast ith preliminary in#unction ! entered into as part of

the #udgment$ but does not mean that it is perpetualPerpetual in#unction: goes on forever= anted it$ and that ould mean that 7 isforever banned*ourt re#ects extremes$ comes up /- year in#unction compromise: trade secrets arenot perpetually protected= once on the mar0et competitors could develop the

product by R@

)ailey v. Proctor $%st Cir. %&(*)Facts: utual fund= organi>ed into debenture trust. Abusive capital structure ! uneven and

misleading distribution of ris0 and re ard. 2f 1rust performs badly$ stoc0holders bear muchless ris0 than debenture holders$ but if it performs ell$ then stoc0holders get all of thespeculative profit. &) thus have incentive to ta0e ris0s /debenture holders money. 1rust

became insolvent$ and control group as caught in fraud/self8dealing. Receiver appointed at

re4uested of &@*. Baileys group bought out original control group and made the 1rustsolvent again.Proc !"ral #istory: * ordered receiver to li4uidate the trust. Bailey appealed$ arguing that 1rust as no longer

insolvent$ and those responsible for fraud ere no longer associated /the 1rust. Alsoargued that court had no po er to order li4uidation in any event.

Analysis: *ourt of e4uity has inherent po er to appoint receiver to li4uidatecorporation/investment trust here fraud/mismanagement/abuse is present$regardless of whether there is insolvency2ssue: hether court loses the po er once there is intervening solvency and s itch8out of offending parties&olvency is not sufficient to defeat courts #urisdiction1he main problem here isnt the personal honesty/integrity of Bailey and theirmanagement$ but the structure of the trust itself

1he structure is the evil ! court asnt convinced that similar meltdo n couldnthappen againay be fair/e4uitable to re4uire li4uidation of the company in the absence of anacceptable plan of reorgani>ation

Disposition: Affirmed$ remanded.Not s: otivation of *ongress: rote the statute to protect investors because they might

not reali>e that they are trading above8mar0et interest rate for participation in a veryris0y investment2f there is already a statute in place$ hat is the court here trying to compensate for?*ourt invo0es court of e4uitys inherent po er here there isfraud/mismanagement in trust situations

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id *ongress automatically say that presently8existing capital structures must beli4uidated? Orandfather *lause= those that are presently existing dont have toimmediately li4uidate2s the *ourt sho ing its disagreement ith *ongress on this 4uestion$ in essencesaying that there can6t be a Orandfather *lause for this type of capital structure?Propensity for to do harm ! raises different 0inds of issues?

3ot very clear hat *ourt is acting on

@. Preventative in#unctionsa. Preventative$ not compensation for harm already suffered,. efinition: court order$ enforceable by sanctions for contempt of court$ directing to do/refrain from doing some

particular thingc. )ipeness rule : before in#unction is issued$ there must be a ripe threat of in&ury = P must sho that he personally

will be harmed by it d. *ontempt:

i. *ivil contempt: remedial proceeding$ P prosecutes it himself= court grants compensation for any harmsuffered as a result of s violation of in#unction

ii. *oercive civil contempt: court imposes conditional penalties to coerce into obedience Hu(,le 6il 0 'efinin" Co. v. Haran" $E.D. La. %&@@)Facts: entered into conspiracy ith Ps employee$ ho had access to information belonging to P.

@mployee ould tell about Ps proposed operations/ac4uisitions so that could then beatP to it$ then ould have his agent/bro0er offer to sell leases/farmouts to P or others. ac4uired huge profits$ gained royalty interests. used a corporation to conceal his role inthe transactions.

Proc !"ral #istory: P sought in#unction barring from destroying documents relating to transactions enteredinto by or s corporation$ that allegedly reflect his connection ith Ps ex8employee.

Analysis: 3ecessity of in#unction must be demonstrated clearly ! cannot be issued #ust toallay parties fears ! must be issued only to prevent irreparable in#uryP could be irreparably in#ured$ but thats true in every situation here proof ofclaim rests on documentary evidence. 2f that as the test$ then there ould bein#unctions in every case here one party has control of important docsParty see0ing in#unction must establish +% potential irreparable in#ury$ plus -%realdanger that the acts to be en&oined will occur7 that there is no other remedyavailable7 and that under the circumstances the court should exercise discretion toafford unusual relief

3o proof of imminent threat hereoesnt matter that it ould not place hardship to "i.e. hed be doing hat he hasto do any ay%

Disposition: 2n#unction denied

Marshall v. 1oodyear Tire 0 'u,,er Co. $ t# Cir. %&**)Facts: discharged r. Reed$ P "&ec. of abor% sought to en#oin further violations and recover

Reeds lost ages.Proc !"ral #istory: istrict *ourt found violation alleged and granted the relief$ including nation ide in#unction

against further violations.

primarily ta0es issue ith the scope of the in#unction= claims that the single violationfound by court involved only the actions of one store manager$ and doesnt arrant such

broad in#unctive relief.Analysis: @4ual Pay Act$ , &A$ and A @A cases all establish that nation ide/company ide

in#unction is only appropriate hen facts indicate company policy or practice inviolation of the statute

3ot present in this caseDisposition: Remand for further consideration of scope

e. &cope of in#unction:

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i. &hould bigger companies be more insulated from company8 ide in#unctions "i.e. need more in#unctions because they have$ for example$ more branches?%

ii. ,R*P KC"d%: concerns in#unctions against violating la ! says the order has to be specific and not #ustreference the complaint or the la that forbids the en#oined act "cant #ust tell : 'obey the la (%

iii. But$ the 'obey the la (8type clauses are common

U.S. v. 2.T. 1rant Co. $%& 3)Facts: 2nterloc0ing corporate directorates= )ancoc0 served as director on s three corporate

boards. After complaints ere filed under L of the *layton Act$ ) resigned from some ofthe boards.

Proc !"ral #istory: s moved to dismiss actions as moot. istrict #udge granted & $ concluding that there asnot the slightest threat that s ill attempt any future activity in violation of L if they haveviolated it already.

Analysis: 2ssue: is the matter moot because resigned? is free to return to his old aysAlso$ there is a public interest in having the legality of practices settled1o say that the case is moot means that is entitled to dismissal as a matter of right

! courts have refused to grant s such a po erful eapon against public laenforcementNBut$ case may be moot if can demonstrate that there is no reasonableexpectation that the rong ill be repeated ! heavy burden Y1here must be some cogni>able danger of recurrent violation$ more than mere

possibility $ to 0eep the case aliveDisposition: Although the actions ere not moot$ no abuse of discretion has been demonstrated in trial

court6s refusal to grant in&unctive relief . Affirmed.Diss nt $Do"0las8;lac9)

Relevant issues havent been considered= * ruling should not be entitled to presumption of validity because it disposed of the case based on mootness$ hichthe court no concedes as erroneous7e are concerned ith the proclivity of indulging in the practice of interloc0ingdirectorates

&icholson v. Connecticut Half#*ay House$ nc. $Conn. %&@@)Facts: Ps ere property o ners on bloc0= purchased one of the homes in the bloc0 to use as a

half ay house for parolees from *1 prison.Proc !"ral #istory: 1rial court en#oined as a nuisance before it ent into operation. s appeal.Analysis: 1est for nuisance: evidence must sho that s proposed use of property is

unreasonable,actual grounds offered in support: depreciative effect on land values$ fears thatresidents ill commit crimes in the neighborhoodPresent fear rests on pure supposition ! speculative and intangible fear= no evidenceoffered/alleged to prove any specific acts/pattern of behavior that ould arrantdrastic in#unctive relief 2R maybe granted only under demanding circumstances

Disposition: 2nsufficient sho ing= reverse trial court.

,. Preliminary in#unctions

LA Me(orial Coliseu( Co((ission v. &ational Foot,all Lea"ue $&t# Cir. %&' )Facts:Proc !"ral #istory: istrict *ourt granted preliminary in#unction prohibiting 3, from invo0ing


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4uestions are raised and balance of hardships tips sharply in its favor *ourt: no irreparable in#ury *oliseum alleged lost revenues due to failure toac4uire 3, team ! monetary in#ury is not normally considered irreparable"compensable by damage a ard%1rial court did not find balance of harms favoring P ! insufficient

Disposition: ReversedNot s: 7hat is *oliseums strongest possible claim of irreparable in#ury? 3o ay to

purchase an 3, team ith money$ so if they lose the chance to get the 5a0landRaiders$ then there is no ay they can be later compensated for the damages thatould be caused2ntangibles argument ! e.g. something about the Raiders$ and practical argument"above% that *oliseum couldnt get another team7hat is different about the realm of preliminary in#unction such that the in#ury isirreparable? Problem is at this point "at stage of P2%$ you dont 0no hether it isgoing to be a viable legal claim on the merits*ourt has to balance idea of potential irreparable in#ury to P /the ris0 of error ! theidea of P2 both substantively and procedurally is going to hinge a lot on this ris0 oferror ivide out the harm that can still be prevented after trial as distinct from harm thatill be suffered or inevitable before trial/hearing on the merits timing elements=courts ill orry a lot about it at P2 stage1hen$ apply the usual irreparable in#ury 0ind of concept ! assess things li0e severityof the harm and various factors"+% i0elihood of success on the merits"-% Possibility of irreparability in#ury to P if P2 is not granted: strong vie that ifyou are going to be tal0ing about lost revenues/profits is that it isnt going to fit the

bill "ex. have other sports teams$ use them as predictor$ calculate damages fromthere%

Lakeshore Hills$ nc. v. Adco+ $Ill. App. Ct. %&' )Facts: P sued to have remove a pet blac0 bear from his property in the subdivision. &ection of

restrictive covenants as amended to exclude bears one year after moved in.Proc !"ral #istory: 1rial #udge ruled that bears presence violated covenant provision$ granted P2$ finding that

potentially dangerous situation existed.

Analysis: Ooes through < elements$ all come out in favor of PDisposition: Affirmed grant of in#unction.Not s: 2ssue of altering the status 4uo: in#unction here altered it$ but that doesnt re4uire

reversal. oesnt add anything to the


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agency that benefited from a change in the la of its stateDisposition: Remand for #udge to consider/ eigh all relevant factors.Not s: 7ho bears ris0 of error at P2 stage?

7orried about potential harm to = P shouldnt have to fully compensate forrongfully issued in#unction$ because it asnt Ps rongdoing$ unless e thin0that P as rong to bring the suit in the first place "not as li0ely%2n#unction bond: compromise ! re4uire the posting of a bond$ set in advance"re4uires ex ante anticipatory calculation of hat the potential harm/ris0 should be%=most states$ only liable for the amount of the bondi0ely effect on litigation "especially plaintiff%: certain individuals ho ont beable to put up the money might be discouraged from bringing the suit "ex. civilrights Ps$ employees$ though #udge has some discretion%

Carroll v. President of Princess Anne $%&@')Facts: s G hite supremacist organi>ation= held public assembly near courthouse steps.

Authorities did not attempt to interfere /rally. 5nly a fe police ere present. ade racistspeeches on a public address system. &aid it ould continue the next day.

Proc !"ral #istory: Residents of city and county applied for and obtained a R5 from court. @x parte ! no noticegiven to s= procedure provides for it. Restrained rallies/meetings for +; days. Another in#unction as issued after +; days$ extending restraint for +; months.

*ourt of Appeals affirmed +; day order$ but reversed +; month order on the ground that period of time as unreasonable and it as arbitrary to assume the clear/present danger ofcivil disturbance/riot ould persist for +; months.

Analysis: +st Am issue: procedure provides for ex parte issuance$ but not here there is nosho ing that it is impossible to serve/notify opposing parties and give them anopportunity to participatePresumption against prior restraints of expression

3o #ustification in this case for not notifying s2mportance of adversary proceeding /both parties participating5rder must be narro ! tailored as precisely as possible to exact needs of case

Disposition: Reversed.Not s: 3o reason/explanation as to hy there as no notice ! under ,R*P KC$ 1R5 ould

be reversed

*ase constitutionali>es the rule that as inherent in ,R*P KC$ and rule that as in place in most states because they had state la e4uivalents ! holding isnt reallymomentous1R5s arent appealable ! only ay court reaches a decision on this is because its

piggybac0ed on the 4uestion of the permanent in#unction7hy might litigants dispense ith notice?&ubstantive standard: < part test seems to collapse into one 4uestion ! is the freespeech resulting in an irreparable danger that must be precluded before notice can

be given?

Sa(pson v. Murray $%&*()Facts: P as probationary employee employee /O&A$ advised in riting

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