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Understanding Remedies

fourth edition

James M. Fischer Professor of Law Southwestern Law School

Carolina Academic Press Durham, North Carolina Copyright © 2021 James M. Fischer All Rights Reserved

Library of Congress Cataloging-in-Publication Data

Names: Fischer, James M., author. Title: Understanding remedies / by James M. Fischer. Description: Fourth edition. | Durham : Carolina Academic Press, 2021. | Series: Understanding series | Includes index. Identifiers: LCCN 2021007040 (print) | LCCN 2021007041 (ebook) | ISBN 9781531021894 (paperback) | ISBN 9781531021900 (ebook) Subjects: LCSH: Remedies (Law)—United States. | —United States. Classification: LCC KF9010 .F57 2021 (print) | LCC KF9010 (ebook) | DDC 347.73/77—dc23 LC record available at https://lccn.loc.gov/2021007040 LC ebook record available at https://lccn.loc.gov/2021007041

Carolina Academic Press, LLC 700 Kent Street Durham, North Carolina 27701 Telephone (919) 489-7486 Fax (919) 493-5668 www.cap-press.com

Printed in the United States of America To Sue, Adam, Evan, Allison, and Zachary with Love, Gratitude, and Affection; without Blame or Responsibility for errors and omissions. JMF

Contents

Preface to the Fourth Edition xxiii Chapter 1 · Understanding Remedies 3 § 1.0 Basic Remedial Goals 3 § 2.0 Types of Remedies 5 2.1 Legal versus Equitable Remedy 5 2.2 Specific versus Substitutional Remedies 5 2.3 Damages 6 2.4 Injunctions 7 2.5 Restitution 7 2.6 Declaratory Relief 7 2.7 Punitive Damages 8 2.8 Nominal Damages 9 2.9 Presumed Damages 9 § 3.0 Rights and Remedies 10 3.1 Relationship between Rights and Remedies 10 3.2 Remedies 11 3.3 Statutory Remedies 12 3.3.1 Express Remedies 12 3.3.2 Implied Remedies 12 § 4.0 Public Policy 15 Chapter 2 · General Principles Concerning Compensatory Damages 19 § 6.0 The Purpose of Compensatory Damages 21 6.1 Expectancy Interest 22 6.2 Reliance Interest 23 6.3 Restitutionary Interest 23 6.4 General Damages versus Special (Consequential) Damages 24 6.5 Economic versus Noneconomic Damages 26 § 7.0 Value 26 7.1 Determining Economic Value of Property 27 7.2 Diminution in Value 30 7.3 Cost of Repair versus Diminution in Value 30 7.4 Burden of Proof 31 7.5 Betterment 31 7.5.1 Determining Betterment 32 7.5.2 Allocating Betterment 32

ix x CONTENTS

7.6 Value as a Function of Time 33 7.6.1 General Rule 34 7.6.2 Fluctuating Value 34 7.7 Value as a Function of Place 36 7.7.1 Place in Chain of Distribution 36 7.7.2 Place in Terms of Physical Location 37 § 8.0 Measuring Compensatory Damages 37 8.1 Certainty 38 8.2 Excessiveness 39 8.3 Lost Profits 40 8.4 The New Business Rule 41 8.5 Lost Volume Seller 42 8.6 Real or Hypothetical Losses 42 8.7 Harsh and Mild Measures 43 8.8 Jury Discretion and Judicial Review 45 § 9.0 Future, Post-Trial Losses 45 9.1 Future Damage 47 9.2 Future Damages 47 9.3 Discounting to Present Value 48 § 10.0 Loss Causation 53 10.1 General Principles 53 10.2 53 10.2.1 Cause-in-Fact 53 10.2.2 Contract Causation — Policy Considerations 54 10.3 Causation 55 10.4 Lost Chance 56 10.5 Occurrence Causation versus Loss Causation 57 10.6 Apportionment of Damages 59 § 11.0 Economic Loss Rule 60 11.1 Purpose and Scope of Rule 60 11.2 Property Damage 61 11.3 Products and Services 63 11.4 Pollution Caused Economic Losses 63 11.5 Other Exceptions 64 § 12.0 Noneconomic Damages 65 12.1 General Principles 65 12.2 Negligent Infliction of Emotional Distress 66 12.3 Physical Harm Requirement 68 12.4 Fear as Recoverable Damage 69 12.5 Measuring Noneconomic Loss 69 12.5.1 Excessiveness 70 12.5.2 Discretion of the Decision Maker 71 12.5.3 Quality of Evidence 73 12.5.4 Fear of Impending Death 74 CONTENTS xi

§ 13.0 Duty to Mitigate Damages 75 13.1 General Principles 75 13.2 Reasonable Efforts 76 13.2.1 Bodily Injury Claims 77 13.2.2 Employment Claims 78 13.2.3 The “Fragile” Plaintiff’s Duty to Mitigate 79 13.3 Disposal or Repair of Damaged Property 80 13.4 Continued Dealing with Defendant 80 13.5 Intentional Wrongs 80 13.6 Compensation for Mitigation Efforts 81 13.7 Special Applications of the Mitigation Principle 81 13.7.1 Leases 81 13.7.2 Lost Volume Seller Profits 82 § 14.0 Offsetting Benefits 82 14.1 Tort Claims 83 14.2 Contract Claims 84 14.3 Taxes 85 § 15.0 Collateral Source Rule 86 15.1 Nature of the Rule 86 15.1.1 Rule of Substance 87 15.1.2 Rule of Evidence 87 15.1.3 Tort or Contract 87 15.2 Collateral Source or No Damage 88 15.3 Gratuitous Benefits 88 15.4 Independent Source 89 15.4.1 United States as Defendant 89 15.4.2 Claims against Employers 89 15.5 Permissible Inquiries into Collateral Sources 90 15.6 Payments by Joint Tortfeasors 90 15.7 Collateral Source Rule and Tort Reform Legislation 91 § 16.0 Prejudgment Interest 92 16.1 Ascertainability: Liquidated versus Unliquidated Claims 92 16.2 Interest Rate 94 16.2.1 Determination of Rate 94 16.2.2 Simple or Compound 95 16.3 Accrual Date 95 § 17.0 Tax Consequences of Awards and Settlements 96 17.1 Personal Injury Awards 97 17.2 Non-Personal Injury Awards 99 17.3 Effect of Settlement Allocation 99 17.4 Consideration of Taxability of Damages in Arriving at Damages Awards 100 17.5 Enhanced Taxation as Additional Damages 101 xii CONTENTS

Chapter 3 · General Principles Concerning Equitable Remedies 103 § 20.0 The Historical Relationship between Law and Equity 104 20.1 Judicial Power 104 20.2 Right of Jury Trial 106 20.3 Merger of Law and Equity 107 20.3.1 Procedural or Substantive 107 20.3.2 Remedial Defenses 107 20.4 Law and Equity 108 § 21.0 Adequacy of the Remedy at Law/Irreparable Injury 108 21.1 Justification for the Requirement 108 21.2 The Content of the Requirement 109 21.2.1 Frustration of Relief Sought 109 21.2.2 Economic Harm 110 21.2.3 Difficulty in Measuring the Legal Remedy 110 21.2.4 Nature of the Injury 111 21.2.5 Loss of Chance or Advantage 111 21.2.6 Insolvency 112 21.2.7 Multiple Lawsuits 112 21.2.8 Uniqueness 112 § 22.0 Equity Acts In Personam 113 § 23.0 Equitable Discretion 114 § 24.0 Burden on the Court/Supervision 117 § 25.0 Nature of Rights Protected 118 § 26.0 Statutory Equitable Remedies 120 26.1 Statute Expanding Equitable Remedies 120 26.2 Statute Restricting Equitable Remedies 121 § 27.0 Injunction of Criminal Activity 123 § 28.0 Injunctions and Prior Restraints 125 Chapter 4 · Injunctions 129 § 30.0 Ripeness, Mootness, and Standing 130 30.1 Ripeness 130 30.2 Mootness 131 30.2.1 Voluntary Cessation 132 30.2.2 Capable of Repetition 133 30.2.3 Continuing Effects 134 30.3 Standing 134 § 31.0 Temporary Injunctive Relief 135 31.1 Forms of Relief 135 31.2 Traditional Tests for Temporary Injunctive Relief 136 31.2.1 Likelihood of Success on the Merits 136 31.2.2 Irreparable Injury 137 31.2.3 Balancing of Hardships or Equities 138 31.2.4 Public Policy or Public Interest 139 CONTENTS xiii

31.3 Modern Variations of the Traditional Test 139 31.4 Maintenance of the Status Quo 141 31.5 Freeze Orders 142 31.6 Notice and Hearing Requirement 143 31.7 Bond Requirement 146 31.8 Consequences of Erroneous Ruling for Temporary Injunctive Relief 147 § 32.0 Appellate Review of Orders Granting or Denying Temporary Relief 148 § 33.0 Permanent Injunctions 150 33.1 Scope of Injunctive Relief 151 33.2 Entitlement to Permanent Injunctive Relief 154 33.3 Length of Permanent Injunctive Relief 157 § 34.0 Specificity of Injunctive Relief 157 § 35.0 Persons Bound by Injunctive Relief 160 35.1 Parties 161 35.2 Parties’ Officers, Agents, Etc. 161 35.3 In Active Concert or Participation With 161 35.4 Personal Jurisdiction over Nonparty 163 35.5 Duty to Participate 163 § 36.0 Modification of Injunctions 164 36.1 Preliminary Injunctions 164 36.2 Permanent Injunctions 165 36.3 Decrees and Structural Injunctions 167 36.4 Effect of Appeal on Power of Trial Court to Supervise or Modify Injunction 168 Chapter 5 · General Principles Governing Restitution 169 § 40.0 Restitution 169 § 41.0 Restitution for Unjust Enrichment 170 41.1 The Volunteer Principle 171 41.2 Bypassing the Person Benefited 172 41.3 Mistaken Payment 173 41.4 Expectation of Payment or Compensation 173 41.5 Irreparable Injury 174 41.6 Plus-Minus Rule 174 41.7 Benefits versus Harms 174 § 42.0 Valuation of the Benefit 175 § 43.0 Apportionment of Benefit 177 43.1 Feasibility 178 43.2 Defendant’s Culpability 179 43.3 Wrongdoer’s Contribution of Time and Effort 180 § 44.0 Restitution for Wrongdoing 180 44.1 Tortious Conduct 181 44.2 Breach of Contract 183 44.3 Other Examples of Restitution in Contractual Settings 185 xiv CONTENTS

§ 45.0 Restitutionary Damages 187 Chapter 6 · Restitutionary Actions 189 § 50.0 Introduction 190 § 51.0 Disgorgement 190 § 52.0 Indemnity 191 § 53.0 Subrogation 193 53.1 Derivative Claim 193 53.2 “Superior Equities” Principle 194 53.3 Priorities 194 53.3.1 Make Whole Requirement 195 53.3.2 Settlement or Compromise 195 53.4 Loss of Subrogation Rights 196 53.5 Waiver of Subrogation 196 53.6 Splitting the Cause of Action 196 53.7 Duties to Fund Creators 197 § 54.0 Constructive Trust 197 54.1 Trust by Analogy or Metaphor 198 54.2 Elements of Constructive Trust 198 54.3 Irreparable Injury Requirement 199 54.4 Reasons for Seeking a Constructive Trust 199 54.5 Scope of Constructive Trust 200 54.5.1 Purchase of Life Insurance 201 54.5.2 Failure to Maintain Life Insurance 201 54.6 Priority 202 54.7 Time Interest Attaches 203 54.8 Fraudulent Conveyance versus Constructive Trust 204 54.9 Equitable Accounting 205 54.10 Equitable Lien 205 § 55.0 Tracing Principles for Constructive Trusts, Equitable Liens and Equitable Accounting 207 55.1 Equitable Principles 207 55.2 Nature of Tracing 208 55.3 Limitations on Tracing 209 55.3.1 Strict Rule in Bankruptcy 210 55.3.2 Lowest Intermediate Balance Rule 211 55.3.3 Tracing and Equal Treatment 213 § 56.0 213 56.1 Nature of the Action 213 56.2 Identification of Property (Accession and Confusion) 214 § 57.0 Ejectment 217 § 58.0 Quasi-Contract 218 58.1 Nature of Quasi-Contract 218 58.2 Elements of Quasi-Contract 220 58.3 Connected Relationships 222 CONTENTS xv

58.4 Recovery by Party in Breach of Contract 223 Chapter 7 · Remedy Defenses 225 § 60.0 Compared with Liability Defenses 226 § 61.0 Laches and Statutes of Limitation 226 61.1 Laches 226 61.2 Statutes of Limitation 228 61.2.1 Accrual 229 61.2.2 Discovery of Injury or Harm 230 61.2.3 Continuing Injury or Violation 231 61.3 Tolling 232 61.4 Merger of Law and Equity 233 § 62.0 Unclean Hands and “In Pari Delicto” 233 62.1 Unclean Hands 234 62.2 “In Pari Delicto” 235 62.3 Attribution of Wrongdoing 236 62.4 Merger of Law and Equity 236 § 63.0 Duress 236 § 64.0 Unconscionability 238 64.1 Procedural 239 64.2 Substantive 239 § 65.0 Estoppel, Waiver, and Election 240 65.1 Equitable Estoppel 240 65.2 Waiver 242 65.3 Election 242 § 66.0 Illegality 243 § 67.0 Defenses to Restitution 245 67.1 Change in Position 245 67.2 Hardship 246 § 68.0 Assertion of Defenses against the Government 247 68.1 Laches 247 68.2 Equitable Estoppel 247 68.3 Unclean Hands 248 68.4 Equitable Tolling 248 Chapter 8 · Remedies for Bodily Injuries 249 § 70.0 Bodily Injury Remedies 250 § 71.0 Lost Income 250 71.1 Loss Earnings 251 71.2 Loss of Earning Capacity 251 71.3 Self-Employed Plaintiffs 252 71.4 Children 253 71.5 “Stay at Home” Parent 253 71.6 Persons Subject to Deportation 254 xvi CONTENTS

§ 72.0 Medical Expenses 254 72.1 Scope of Recovery 254 72.2 Discounted Billing 255 72.3 Ownership of Claim 256 72.4 Medical Monitoring 256 § 73.0 Pain and Suffering 257 73.1 Nature of the Loss 257 73.1.1 Ability to Appreciate 258 73.1.2 Calculation of the Award 259 73.1.3 Excessiveness 260 73.2 Loss of Enjoyment of Life 260 73.3 Disfigurement 262 73.4 Hedonic Damages 262 73.5 Adaptation 263 § 74.0 Loss of Consortium 263 74.1 Loss of Services 264 74.2 Loss of Relationship 265 74.3 Parental and Filial Consortium 265 74.4 Domestic Partners 266 § 75.0 Remedies When the Plaintiff Dies 266 75.1 Survival Actions 267 75.2 Wrongful Death Actions 269 § 76.0 Conception-Related Claims 274 76.1 Wrongful Birth/ 274 76.2 Wrongful Conception/Wrongful Pregnancy 276 Chapter 9 · Remedies for Injury to Personal Property 279 § 80.0 Physical Damage 280 80.1 Complete Destruction 280 80.2 Partial Destruction 280 80.3 Loss of Use 282 80.4 Loss in Market Value Due to Stigma 282 § 81.0 Value to Owner 283 § 82.0 Pets 284 § 83.0 Damages for Loss or Interference with Possession 287 83.1 287 83.2 Replevin 290 83.3 to Chattels 292 § 84.0 Return of Possession 292 84.1 Replevin 292 84.1.1 Superior Title or Equity in Another 292 84.1.2 Statutes of Limitation 293 84.1.3 Pretrial or Judgment Remedy 294 CONTENTS xvii

84.2 Equitable Replevin 294 84.3 Genetic Material 296 § 85.0 Unjust Enrichment and Restitution 296 § 86.0 Good Faith Improvers of Personal Property 297 Chapter 10 · Remedies for Injury to Real Property 299 § 90.0 Physical Damage 300 90.1 Temporary or Permanent Injury 300 90.2 Economic and Noneconomic Losses 301 90.3 Damage to Buildings 302 90.4 Removal of or Damage to Fixtures 303 90.5 Condemnation through Eminent Domain 303 90.6 Damage to Public Property 304 § 91.0 Natural Resource Damage 304 91.1 Environmental Injury 304 91.2 Stigma Damages 305 91.3 Damage to Trees and Shrubs 305 § 92.0 Ejectment 306 § 93.0 Trespass 307 93.1 Temporary or Permanent 307 93.2 Damages 308 93.3 Injunction 309 93.4 Restitution 311 § 94.0 312 94.1 Temporary or Permanent 312 94.2 Damages 313 94.2.1 Temporary Nuisance Damages 313 94.2.2 Permanent Nuisance Damages 313 94.2.3 Annoyance and Discomfort Damages 314 94.3 Injunction 314 94.4 Public versus Private 315 94.5 Restitution 316 § 95.0 Waste 317 § 96.0 Good Faith Improvers of Real Property 319 Chapter 11 · Remedies for Injury to Relationships 323 § 100.0 Economic Relationships 323 § 101.0 Social and Professional Relationships 326 § 102.0 Personal Relationships 328 102.1 Alienation of Affection 329 102.2 329 102.3 330 102.4 to Marry 331 § 103.0 Heart Balm Statutes 331 103.1 Personal Tort Committed by Fiduciary 332 xviii CONTENTS

103.2 Intentional Infliction of Emotional Distress 332 103.3 334 § 104.0 Wrongful Adoption 335 Chapter 12 · Remedies for 337 § 105.0 Defamation 337 105.1 Presumed Damages 338 § 106.0 Reputational Injury 339 106.1 General Principles 339 106.2 “Libel-Proof” Plaintiffs 339 106.3 Incremental Harm Rule 340 106.4 Reputation Damages without Defamation Claim 340 § 107.0 Non-Reputational Damages 341 § 108.0 Enjoining a Libel 342 § 109.0 Disparagement/Injurious Falsehood 342 Chapter 13 · Remedies for Injury to Personal Rights 345 § 110.0 Privacy 345 § 111.0 Constitutional Torts 348 § 112.0 Litigation Torts 351 § 113.0 Breach of Fiduciary Duty 353 Chapter 14 · Fraud and Misrepresentation 357 § 120.0 Nature of Fraud 357 120.1 Common Law Fraud 358 120.2 Promissory Fraud 359 120.3 Negligent Misrepresentation 360 120.4 Nondisclosure as Fraud 361 § 121.0 Fraud Issues 362 121.1 Materiality 362 121.2 Loss Causation 362 121.3 Economic Loss Rule 363 121.4 Reliance 364 § 122.0 Damages 365 122.1 “Out-of-Pocket” or “Benefit-of-the-Bargain” Measure 365 122.2 Consequential Damages 366 122.3 Pecuniary Loss Requirement 366 122.4 Distress Damages 367 122.5 Attorney’s Fees and Punitive Damages 367 122.6 Statutory Fraud Actions 367 122.7 Fiduciary Actions 368 § 123.0 Injunctive Relief 368 § 124.0 Restitution 368 § 125.0 Personal Relationships 370 Chapter 15 · Rescission (Disaffirmance) of Bargain 373 CONTENTS xix

§ 130.0 Nature of Rescission 373 § 131.0 Forms of Rescission 375 131.1 Law 375 131.2 Equity 375 § 132.0 Demand for Rescission 376 132.1 Notice Requirement 376 132.2 Tender Requirement 377 132.3 Pecuniary Loss Requirement 378 § 133.0 Election of Remedies 378 133.1 Interim Relief 380 133.2 Judicial Estoppel 380 133.3 Election 380 § 134.0 Restoration of the Status Quo Ante 381 § 135.0 Scope of Remedy of Rescission 384 135.1 Rescission Damages 384 135.2 Disgorgement of Benefits Received 384 135.3 Punitive Damages 385 135.4 Losing Contracts 385 § 136.0 Grounds for Rescission 385 Chapter 16 · Breach of Contract Remedies 387 § 140.0 General Principles of Contract Remedies 387 § 141.0 Bad Faith Breach 389 141.1 Tort-Based Remedies 389 141.2 Contract-Based Remedies 391 141.3 Preliminary Negotiations 391 § 142.0 Distress Damages 392 Chapter 17 · Breach of Employment Contract 395 § 150.0 Employment Contracts 395 150.1 Common Law Principles 396 150.2 Statutory Rights 396 150.3 Restitution Remedies 397 § 151.0 Employee’s Damages against Employer 398 § 152.0 Employee Reinstatement to Position 400 § 153.0 Employer’s Damages against Employee 402 § 154.0 Employer’s Injunction against Employee 404 § 155.0 Employer’s Remedies for Employee’s Breach of Duty 406 Chapter 18 · Breach of Construction Contract 409 § 160.0 Construction Contracts 409 § 161.0 Owner’s Remedies for Contractor’s Breach 411 161.1 Incomplete Performance 411 161.2 Defective or Deficient Performance 412 § 162.0 Contractor’s Remedies for Owner’s Breach 413 162.1 Anticipatory Breach by Owner 413 xx CONTENTS

162.2 Partial Performance by Contractor 414 162.3 Change Orders 416 162.4 Delay in Completion or Disruption in Work 416 § 163.0 Losing Contracts and Restitution 416 Chapter 19 · Breach of Contract to Sell or Purchase Real Property 419 § 165.0 Breach of Contract to Sell or Purchase Real Property 419 § 166.0 Buyer’s Remedies 420 166.1 Damages 420 166.2 Specific Performance 422 166.3 Restitution 422 § 167.0 Seller’s Remedies 423 167.1 Damages 423 167.2 Specific Performance 425 167.3 Restitution 425 § 168.0 Installment Land Sale Contracts 425 Chapter 20 · Specific Performance 427 § 170.0 Introduction 427 § 171.0 Certainty 428 § 172.0 Ability to Perform 429 § 173.0 Mutuality of Remedy 430 § 174.0 Fairness 431 § 175.0 Flexibility 432 § 176.0 Abatement 433 § 177.0 Damages 435 Chapter 21 · Agreed Remedies 437 § 180.0 Introduction 437 § 181.0 Liquidated Damages 438 181.1 Damages or Penalty 438 181.2 Penalty or Condition 439 181.3 Timing of Decision 441 § 182.0 Liquidated Damages: Compensable Damage Requirement 441 § 183.0 Liquidated Damages as Exclusive or Nonexclusive Remedy 442 § 184.0 Liquidated Damages as Overcompensatory or Undercompensatory 443 § 185.0 Specifying Injunctive Relief by Contract 444 § 186.0 Negating Remedies by Contract 445 186.1 Contracts for the Sale of Goods 445 186.2 Other Contracts 447 186.3 “As Is” Clause 450 Chapter 22 · Contempt 451 § 190.0 Nature of Contempt 452 § 191.0 Types of Contempt 452 CONTENTS xxi

191.1 Criminal Contempt 453 191.2 Civil Contempt 453 § 192.0 Classification of Contempt as Criminal or Civil 453 192.1 Nature of Sanction 454 192.2 Ability to Comply 454 192.3 Initiation by Court or Party 455 192.4 Consequence of Incorrect Characterization 455 § 193.0 Elements of Contempt 455 193.1 Order 456 193.2 Prior Knowledge 456 193.3 The Order Must Be Clear and Definite 457 193.4 Noncompliance 457 193.5 Burden of Proof 458 § 194.0 Coercive Civil Contempt 458 194.1 Procedure for Obtaining Coercive Sanction 459 194.2 Coercive Imprisonment 460 194.3 Ability versus Willingness to Comply 461 194.4 Coercive Fine 461 194.5 Excessiveness 463 194.6 Recipient of Collected Fines 463 § 195.0 Compensatory Contempt 464 § 196.0 Attorney’s Fees 464 § 197.0 Defenses to Contempt 465 § 198.0 Collateral Bar Rule 465 198.1 Scope and Nature of Collateral Bar Rule 465 198.2 Exceptions to the Collateral Bar Rule 466 198.3 “Jurisdiction to Determine Jurisdiction” Rule 467 § 199.0 Attempted Contempts 468 199.1 Anticipatory Contempt 468 199.2 Evasion of Anticipated Order 469 Chapter 23 · Punitive Damages 473 § 200.0 Introduction 474 § 201.0 Purpose of Punitive Damages 474 201.1 Punish 474 201.2 Deter 475 201.3 Compensation 475 § 202.0 Scope of Punitive Damages 475 202.1 Socially Deplorable Conduct 475 202.2 Fraud 476 202.3 Intentional Infliction of Harm 476 202.3.1 Bodily Injury 477 202.3.2 Property Damage 477 202.3.3 Economic Loss 477 202.3.4 Other Invasion of Right 477 xxii CONTENTS

202.4 Aiding and Abetting 478 202.5 Breach of Contract 478 202.6 Equity 479 202.7 Arbitration 479 202.8 Public Entities and Not-for-Profit Organizations 479 202.9 480 202.10 Multiple Punitive Damages Awards 481 § 203.0 Actual Injury Requirement 481 § 204.0 Wealth of the Defendant 482 § 205.0 Due Process Limitations on Amount of Award 483 205.1 The Supreme Court’s Jurisprudence 483 205.2 Reprehensibility of the Conduct 484 205.3 Ratios between Compensatory Award and Punitive Damages Award 485 205.4 Comparable Misconduct Penalties 489 205.5 Other Factors 489 § 206.0 Standard of Review of Award 490 § 207.0 Augmented Damages Awards 490 207.1 Augmented Damages 490 207.2 Augmented Damages and Punitive Damages 491 207.3 Statutory Damages and Actual Harm 492 § 208.0 Discretion as to the Scope and the Size of the Award 494 § 209.0 Tort Reform — Punitive Damages 494 Chapter 24 · Attorney’s Fees 495 § 210.0 Attorney’s Fees — The American Rule 495 § 211.0 Exceptions to the American Rule 496 211.1 Statutory Authorization 496 211.2 Contractual Authorization 496 211.3 Common Fund 497 211.4 Third-Party Tort 498 211.5 Bad Faith 499 211.6 Inherent Power 500 § 212.0 Prevailing Party 500 § 213.0 Award of Fees 503 213.1 Calculation of Fees 503 213.2 Limitations on Attorney’s Fees Awards 505 213.2.1 Substantially Justified 505 213.2.2 Actual Damages Award as Limit on Fees Award 505 213.2.3 Retainer as Limit on Fees Award 506 213.3 Pro Se Attorney Litigants 508 § 214.0 Standing to Collect Fees Award 509 Table of Cases 511 Index 519 Preface to the Fourth Edition

These materials are intended to illuminate the basic principles of the law of Rem- edies. The materials are organized to first present the main themes of Remedies — Damages, Equitable Relief, Restitution, and Remedial defenses. The materials then present remedies issues within a number of specific contexts such as Bodily Injury claims, Property Damages claims, Fraud claims, etc. The materials conclude by examining several difficult-to-classify topics, such as Agreed Remedies, Punitive Damages, etc. Each Chapter is organized around a specific theme, e.g., Damages, Fraud. Each chapter begins with a general overview of the topic, followed by more specific and detailed discussion of the subject matter. The section discussions use numerous examples, drawn from cases, and schematics to illustrate Remedies doctrine and rules so as to make them understandable. Footnotes are generally limited to provid- ing references so the reader can quickly find where terms and principles are defined and discussed in the text or in other materials, usually judicial decisions. Remedies is a rich and complex area of the law. This text is written with the hope that it will provide an explanation and understanding sufficient to enable law stu- dents and lawyers to deal comfortably with the subject. Like all explanatory texts, this work is but the beginning of the journey toward understanding.

Reserved Sections The author has set aside Reserved Sections at the end of several chapters in Understanding Remedies as placeholders within the text for new topics to be inserted into these chapters at some time in the future. The Reserved Section num- bers do not appear in the Chapter Synopses, so in some cases this results in an apparent discrepancy in section numbering from chapter to chapter. Section num- bering is correct as is within and across all chapters.

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