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Towards an Improved Judiciary—Decisionmaking Consistency on Constitutional Remedies

Katherine Mims Crocker, Constitutional Rights, Remedies & Transsubstantivity, 110 Va. L. Rev. __(forthcoming 2024), available at SSRN.

Faith in judicial decision-making is waning to say the least. Intense skepticism and criticism reign the day. Charges of unbridled power grabs abound, whether one decries the erosion of stare decisis or applauds perceived course corrections in constitutional law and remedies. All recognize victories may be fleeting as we increasingly unmoor from judicial norms and doctrines of restraint. Perceptions of more overt partisanship and consequential decision-making do not uplift the role of Article III judges or align with judicial independence. Is all hope lost? If one wishes to understand and improve the judiciary, Professor Katherine Mims Crocker’s article, Constitutional Rights, Remedies & Transsubstantivity, is for you.

Professor Crocker argues that federal courts should provide comparable options for securing remedies for discrete constitutional wrongs. The promotion of generality and neutrality to foster consistent application across distinct substantive areas is part of the transsubstantivity paradigm. The article’s focus is constitutional remedies—specifically, doctrines for preventing or punishing encroachments of constitutional rights or, when proper, remedies effectuating constitutional rights. And this moment in history poses an ideal opportunity to recenter on the transsubstantivity paradigm given its apolitical nature.

Judicial vacillation on constitutional rights and remedies is destabilizing. It is anxiety- inducing. Crucial remedies are no longer available. Inconsistency exists on whether and the extent remedies are available for gun rights, abortion rights, and religious rights. The public’s constitutional priorities show deep division across the country, and recent Supreme Court rulings deepen the divide. Though the modern Court trend is relatively consistent in narrowing access to and the extent of remedies for most constitutional rights (except Free Exercise claims), the Court is inconsistent in treatment of remedial doctrines in constitutional rights cases. Professor Crocker’s article is necessary because it provides systematic scholarly criticism and recommendations for enhanced consideration of transsubstantivity for constitutional remedies.

To improve performance and perception of the federal judiciary, Professor Crocker provides a descriptive framework and normative lessons for enhancing the judiciary’s approach to remedial transsubstantivity. The article offers rich definitional aids as well as a novel framework to classify various instances of non-transsubstantivity. As a fresh descriptive analysis, for example, Professor Crocker shows that existing judicial reasoning on remedies principles is sometimes transparent, but other times, “translucent” only shedding partial light without details or “opaque” only providing cloudy and questionable rationales. (Pp. 22 & 29.) Whether translucent or opaque, courts are failing to sufficiently acknowledge and explain doctrinal inconsistencies in constitutional remedies. Normatively, the article shows how increased transparency of judicial reasons for departure in all constitutional-remedies cases will improve judicial craft and enhance accountability. Assessing judicial analysis occurs both at the time of the opinion and to future applications. Courts and critics will evaluate the soundness of the justifications for departure. Professor Crocker also contributes value with concrete examples throughout the work. Notably, this article does not promote one interpretive methodology over any other. Rather, according to Professor Crocker all conventional methods allow for “generality and neutrality” in constitutional remedies doctrines where reasonable minds may disagree on the best interpretative method to resolve questions not clearly answered by existing law. (P. 39.) Consistency, with room for reasoned deviation, is the name of the game. Specifically, the article advances consistency in the approach and availability of remedies in constitutional cases.

The emphasis on consistency is not intended as a rigid stricture. Here, Professor Crocker maintains that we are wise to examine the extent to which federal courts do and should offer similar opportunities for securing relief for violations of constitutional rights. The article provides examples showing how the Supreme Court has departed from the transsubstantivity paradigm in constitutional remedies cases. For example, Professor Crocker analyzes indeterminate remedial standards including the political question doctrine for justiciability and the plan-of-the Convention doctrine in state sovereign immunity cases. From Baker v. Carr to Rucho v. Common Cause and from Hans v. Louisiana to Central Virginia Community College v. Katz and many more cases, Professor Crocker shows the Court’s missteps in using indeterminate tests. Overall, Professor Crocker delivers in-depth analysis of inconsistencies and faulty logic. The article’s insightful commentary advances the scholarly dialogue. And deeper theoretical and doctrinal treatments of remedies law like Professor Crocker’s work warrant serious attention.

A key justification for the transsubstantivity paradigm is that greater overarching principles across remedies issues would reduce politics and the perception of playing favorites in constitutional decisions. Even where variation of doctrines is preferable or necessary, greater transparency in judicial reasons for any departure will aid judicial, public, and scholarly debate on the validity of judicial approaches and reasoning. In a more normative stance, Professor Crocker presents recommendations with the goal of a providing increased ability to debate and assess judicial legitimacy. All proposals include emphasis on viewing transsubstantivity in constitutional remedies decision-making as vital, though not absolute.

Professor Crocker offers four specific suggestions for how courts could improve their approach to constitutional remedies, with special focus on the Supreme Court: (1) enhance attention to “transsubstantivity in the constitutional-remedies context by spotlighting occasions for adherence and emphasizing the importance of explaining departures,” (2) increasing transparency where lacking by having judges explain any disconnect between a doctrine’s rationale and the method of application (the “range”), (3) decreasing overdetermination, which is where judges provide multiple lines of reasoning that are sometimes unnecessary and unjustified, and (4) reconsidering foundations where the Supreme Court makes context-specific distinctions and exceptions. (Pp. 39, 42, 45, 48.) Each of the four improvements is worth serious dialogue and, at least the first two, worth immediate adoption.

For the first point, enhancing attention to transsubstantivity in the constitutional-remedies context, Professor Crocker showcases instances for adherence to remedial doctrines, but also defends certain instance of deviation. Variation may make sense where warranted and well-explained. Professor Crocker explains that, in the wake of cases like Dobbs v. Jackson Women’s Health Organization, now is an ideal moment for increased attention on transsubstantivity given its apolitical nature. Further, Professor Crocker compares Professor Zach Price’s article advancing a theory of symmetric constitutionalism to show how the transsubstantivity doctrine for constitutional remedies can align with the ends sought with symmetrically constitutional rights, but not the preferred means. For example, if indeterminacy remains, Professor Price suggests consideration of partisan consequences whereas Professor Crocker prefers inclusion of political considerations only as an output rather than an input of the presumption of remedial transsubstantivity.

The second point aims to enhance judicial candor and democratic accountability. Here, Professor Crocker identifies Miranda v. Arizona, as an example of helpful transparency about non-transsubstantive decision-making. The justiciability analysis in Los Angeles v. Lyons, is illustrative of insufficient clarity of analysis as it failed to adequately distinguish relevant doctrines. Two specific failings, for example, are that the Court never mentioned the plaintiff was Black or that most who had died from police chokeholds were Black. With more complete explanation, courts could better grapple with application of these remedial doctrines in future cases.

For her third normative recommendation, Professor Crocker critiques the judicial method of giving multiple rationales, which places transsubstantivity at risk. To be sure, a court providing several reasons can be a good thing. It is transparent, which is good. Providing multiple reasons may show the court took litigants’ arguments seriously and may also help on appeal as alternative bases for upholding the ruling where one justification fails. Accordingly, Professor Crocker focuses on negative consequences that can occur where overdetermination includes unnecessary reasons. As a quintessential example, the article provides the special-solicitude rationale in Massachusetts v. EPA, because the rationale is unclear and unnecessary. In fact, three other doctrines justify the opinion: proprietary standing, sovereign standing, and quasi-sovereign standing. Another example provided is the unnecessary ticking-time bomb language in Grutter v. Bollinger, in which the Court indicated that in 25 years, racial preferences shouldn’t be necessary. If the Court’s statement amounts an expiration date, then the doctrine at issue is non-transsubstantive rather than a principle that should endure.

Last, the article suggests reconsidering, though not necessarily rejecting, foundational doctrines that become less transsubstantive due to excessive exceptions and debatable distinctions. This subsection focuses on cases like Seminole Tribe of Florida v. Florida, where the Court triggered a revolution in sovereign immunity jurisprudence by concluding that Congress cannot abrogate state sovereign immunity via Article I authority. The reasoning was opaque yet repeated by the Court as canonical until recently when the Court began whittling away at it. This pattern may make Seminole Tribe ripe for reconsideration.

This is not a time to surrender on core principles such as expecting judges to provide clear rationales for departures from doctrines and precedent. It’s a time to double down on meaningful principles. A time to refocus, reexamine, and reassert ideals. No doubt, “transsubstantive decision-making about constitutional remedies seems less and less common but more and more crucial.” (P. 50.) We must continue to debate proper judicial decision-making and reach for ideals that will enhance judicial reasoning. If the federal judiciary listens to Professor Crocker, it will  do a better job of applying consistent approaches to constitutional remedies across types of constitutional rights. As Professor Crocker notes, “Courts, and especially the Supreme Court, can do better.” (P. 4.) Then perception and reality will align to bolster the legitimacy of the federal judiciary and, vitally, restore faith in the Supreme Court.

Cite as: Caprice Roberts, Towards an Improved Judiciary—Decisionmaking Consistency on Constitutional Remedies, JOTWELL (May 16, 2023) (reviewing Katherine Mims Crocker, Constitutional Rights, Remedies & Transsubstantivity, 110 Va. L. Rev. __(forthcoming 2024), available at SSRN), https://lex.jotwell.com/towards-an-improved-judiciary-decisionmaking-consistency-on-constitutional-remedies/.

Expanding the Remedial Toolbox: A Legal Analogue to Preliminary Injunctions

Gideon Parchomovsky & Alex Stein, Preliminary Damages, 75 Vand. L. Rev. 239 (2022).

In a recent essay, Preliminary Damages, Professor Gideon Parchomovsky and Justice Alex Stein have not only come up with a creative way to help indigent and/or poorly-financed plaintiffs finance their lawsuits against intransigent and deep-pocketed defendants, but in the process, they have plugged an important philosophical gap in the remedies literature by proposing the novel remedy of “preliminary damages,” a legal remedy mirroring its equitable counterpart “preliminary injunctions.” There is a lot in this essay that should be of particular interest to Remedies scholars. This Jot cannot do justice to their piece in so short a space, but I hope to offer the reader at least a small taste of this delicious article, which may entice some readers to sit down and enjoy the full course.

In short, their argument is as follows: it is a mere historical accident that courts of equity, whose primary form of relief was the injunction, and courts of law, whose primary form of relief was money damages, grew up independently. However, as these two courts have long since been merged in most states, there is no good reason for a court today to offer one type of remedy (i.e., preliminary injunctions) that happens to have developed in a court of equity while failing to offer its legal counterpart (i.e., preliminary damages). Or, as the authors ask in their article, “If courts can award plaintiffs preliminary injunctions before the conclusion of a trial, why can’t they award preliminary damages? Or, contrariwise, if no damages can be awarded until liability is found, how is it that preliminary injunctions can be granted?” (P. 242.) The answer, to be sure, is purely historical, and by bringing this new form of damages to the attention of judges and scholars, they hope to not only correct this historical anomaly, but to make it easier for indigent plaintiffs to overcome the sometimes nefarious tactics of sophisticated defendants whose deep pockets, intransigence, and policy of “deny, delay, defend,” (P. 256) rather than the strength of their defense, keeps many legal wrongs from being righted by our courts.

Another strength of their article is that, rather than confining their proposal to the purely theoretical, they offer several real-world examples where courts have, in fact, awarded something akin to preliminary damages, as with interim payments for personal injuries for tort victims in the United Kingdom (P. 243) or preliminary money awards in divorce cases in the United States. (P. 244.) Although these examples admittedly make up a small portion of a court’s remedial offerings, they at least illustrate that preliminary damages are possible, and that judges ought to at least consider awarding them in appropriate circumstances.

Which brings us to the following question: what, exactly, are the circumstances in which an indigent or poorly financed plaintiff should get preliminary damages? According to the authors, preliminary damages should be awarded to help poor plaintiffs finance legitimate lawsuits against much better funded defendants. Preliminary damages should be awarded whenever the plaintiff is able to show (1) likelihood of success on the merits, (2) irreparable harm (if such damages are denied), (3) a balance of equities tipping in their favor, and (4) that such an award is consistent with the public interest. (P. 262.) Remedies scholars will immediately recognize that these are the same four factors that the Supreme Court requires a plaintiff to prove to obtain a preliminary injunction, but one wonders whether preliminary damages aren’t sufficiently different from preliminary injunctions so as to justify their own test.

For instance, one of the risks courts will face should they award preliminary damages to indigent plaintiffs is that, as with preliminary injunctions, the court might get it wrong and erroneously grant preliminary damages to a plaintiff that subsequently loses its case on the merits. If plaintiffs only need demonstrate a “likelihood of success on the merits,” or a greater than 50% chance of prevailing on their underlying claim against defendant, there will be many false positives (i.e., erroneously awarded preliminary damages). Because the plaintiffs are indigent, those wrongly-awarded preliminary damages will, in all probability, never be repaid to the defendant, even though the court has found the defendant free of liability. An equitable court easily solves this problem by requiring the plaintiff to post an injunction bond making it liable for any irreparable damages caused to defendants via a court’s erroneous grant. However, the authors do not require such a bond in cases of preliminary damages and, in any case, requiring one would prevent many indigent plaintiffs from bringing their suits in the first place, which would defeat the goal of the authors’ proposal. Similarly, at another point, the authors “propose that preliminary damages be capped at forty percent of the total damages sought by the plaintiff,” (P. 267) but this number seems arbitrary and is nowhere supported in their otherwise excellent essay. Finally, the authors are primarily concerned with, and therefore seem to confine their proposal to, indigent plaintiffs seeking preliminary damages, but the authors’ own theoretical justification for preliminary damages suggests that these damages should be available whenever awarding them makes sense (i.e., wherever doing so could prevent irreparable harm to the plaintiff).

But these are minor quibbles. Professor Parchomovsky and Justice Stein have made an important contribution to the literature that should be of interest not only to Remedies scholars, but to judges and litigants alike. I will surely find ways of working the contributions of this article into my own Remedies course and cannot recommend their essay highly enough.

Cite as: Marco Jimenez, Expanding the Remedial Toolbox: A Legal Analogue to Preliminary Injunctions, JOTWELL (November 21, 2022) (reviewing Gideon Parchomovsky & Alex Stein, Preliminary Damages, 75 Vand. L. Rev. 239 (2022)), https://lex.jotwell.com/expanding-the-remedial-toolbox-a-legal-analogue-to-preliminary-injunctions/.

Conceptions of Privacy Shouldn’t Stand in the Way of Privacy Standing

Ignacio Cofone, Privacy Standing, 2022 U. Ill. L. Rev. __ (forthcoming 2022), available at SSRN.

Data breaches abound, but not every breach results in a cognizable claim. Which violations should constitute actionable injuries? What injury allegations satisfy standing requirements in federal courts? How should courts articulate sufficient cognizable injuries to warrant relief? Professor Ignacio Cofone, in a forthcoming article titled Privacy Standing, offers a framework for answering these questions and guiding courts to more consistent opinions for similarly situated victims.

Standing challenges confound courts resulting in inconsistent rulings. As Cofone notes, “No standing means unenforced rights.” Identifying privacy harms, however, is difficult. The primary obstacle lies in assessing privacy harms, for which Cofone proposes a conceptual solution. Cofone first notes the doctrinal woes of the courts. Courts tend to conflate the issue of privacy loss with Article III standing analysis. The Supreme Court, in Spokeo v. Robins, clarified that plaintiffs seeking relief for privacy injury must pose a cognizable real-world harm. The Court emphasized that the harm must be concrete, but did not further guide lower courts in rendering this assessment. Some circuits find standing doctrines satisfied based on a violation of a statutory privacy right, while other courts find standing not met unless plaintiff shows an additional kind. Examples of additional harm are financial harm or reputational harm. Cofone asserts that both approaches have flaws and should be replaced by a three-step framework that considers the fact-dependent nature of privacy injuries.

With useful illustrations from Urban Outfitters to real-world controversies like Grindr, Cofone guides readers through the proposed framework. First, a judge must identify the loss of privacy. Next, the judge should identify the privacy harm, and last, the judge should determine when the harm rises to an actionable privacy injury. Cofone suggests that the second step of whether a privacy loss constitutes a privacy harm is to examine any intrusion on normative values. For example, the jurist must ask whether the privacy loss violated normative privacy values such as the right to be let alone, autonomy, secrecy, control over personal information, protection of one’s dignity, and intimacy. For the final step, the judge must determine whether the privacy harm is actionable based on judicial precedent and the existence or nonexistence of statutes granting standing. Cofone asserts that the synthesis of both equates to applying a reasonable person standard.

The core problem, and Cofone’s solution, matter because of increased collection of personal information and data breaches. The increased risk and occurrence of privacy loss necessitate clearly defined standards by which parties may seek remedies for violations of common law and statutory privacy rights. Still courts must engage in proper line-drawing to determine which claims are actionable. Implementing Cofone’s solution will enable courts to hear and redress meritorious claims of privacy violations without opening the door to unfounded or incognizable claims.

Cofone’s framework is purposefully narrow to alleviate the concern that finding standing for every privacy injury case would open the floodgates to all kinds of privacy complaints. By judiciously excluding cases in which no privacy loss occurred, or the loss of privacy was not a privacy harm, or the harms are reasonable under the circumstances, courts will be free to recognize some injuries as constituting standing while avoiding the slippery slope of recognizing any privacy loss as an actionable claim. The shift to a nuanced conception of privacy loss and privacy injury—rather than a binary notion—is a central theme of Cofone’s project.

To conceptualize the harms inherent to mass data collection, aggregation, and potential data breaches, Cofone introduces the idea of a probabilistic privacy injury. To illustrate the point, the Article uses a graph to show two normal distribution curves: one relatively flat and wide representing an individual in low danger of suffering a privacy injury, another steep and narrow in grave danger of suffering a privacy injury. This illustration includes Bayesian statistical analysis, and Cofone helpfully explains the graph and its underlying bases.

Cofone likens privacy harms to environmental torts, which Cofone argues, suffer from similar problems of temporal and evidentiary separation of cause and effect. The comparison provides a lens through which Cofone advocates for establishing enhanced legal protections of statutory privacy rights. Cofone explores the common law recognition of probabilistic standing as a useful model. According to Cofone’s contention, recognizing probabilistic privacy injuries the same way the law recognizes diffuse environmental harms would overcome challenges that probabilistic privacy injuries are too general to meet standing doctrine’s particularized harm requirement.

This article demonstrates that privacy injuries should be independently assessed. Courts should not require an additional showing of another kind of harm (like financial or reputational harm) because doing so misses the point of privacy rights. The normative values of privacy, Cofone explains, are what Congress sought to protect when it created statutory rights of privacy. Citing Justice Thomas’s dissent in TransUnion v. Ramirez, Cofone argues that Courts should defer to Congress’s power to create and define rights.

With Privacy Standing, Cofone renders valuable contributions to collective legal knowledge. Namely, Cofone creates opportunity for scholarly and judicial advancement from the article’s conceptualization of privacy harm as a probabilistic injury, its three-step framework for identifying actionable privacy injuries, and its synthesis of the misguided rationale underlying the circuit split on standing doctrine pertaining to privacy injuries. Overall, Cofone’s work will inure to the benefit of federal court standing doctrines. It also will ensure that those with proven violations of privacy rights do not go without a remedy. With luck, Cofone’s work will foster further scholarship developing privacy law and refining judicial treatment of similar difficult-to-prove injuries.

Cite as: Caprice Roberts, Conceptions of Privacy Shouldn’t Stand in the Way of Privacy Standing, JOTWELL (July 22, 2022) (reviewing Ignacio Cofone, Privacy Standing, 2022 U. Ill. L. Rev. __ (forthcoming 2022), available at SSRN), https://lex.jotwell.com/conceptions-of-privacy-shouldnt-stand-in-the-way-of-privacy-standing/.

Private State Actions to Disgorge the Wrongful Gains of Insider Trading

Jeanne L. Schroeder, Taking Misappropriation Seriously: State Common Law Disgorgement Actions for Insider Trading (Feb. 11, 2021) Cardozo Legal Stud. Rsch. Paper No. 625, available at SSRN.

The disgorgement remedy strips a defendant of unjust profits. Disgorgement is gaining prominence as a civil remedy across a varied body of substantive laws, including intellectual property, contracts, fiduciary duties, as well as in government enforcement litigation to battle fraud and corruption. Disgorgement’s provenance ties to restitution and the equitable accounting for profits remedy. Even as memory of its equitable history fades, modern and novel applications of disgorgement flourish. Disgorgement relies on restitutionary principles because its primary goal is to undo unjust gain. It also deters opportunism and disincentivizes misconduct.

But if not applied properly, the danger is that disgorgement may punish, which is explicitly not a goal of the law of unjust enrichment and restitution. The Securities and Exchange Commission (SEC) has faced, and continues to face, an array of criticisms for aggressive uses of its disgorgement remedy pursuant to statutory authorization. Such concerns led to several Supreme Court rulings requiring adjustments to the SEC’s approach to disgorgement—most recently in Kokesh v. SEC, 137 S. Ct. 1635 (2017) and Liu v. SEC, 140 S. Ct. 1936 (2020). Congress subsequently amended the remedy to solidify the SEC’s authority to seek disgorgement, though the clarification oddly appears to classify the statutory disgorgement remedy as legal rather than equitable. This congressional revision is housed in a massive piece of unrelated legislation, the 2021 National Defense Authorization Act (“NDAA”), which Congress passed over a presidential veto. A parallel expansion of disgorgement remedies by the Federal Trade Commission (FTC) faced increased judicial scrutiny and ultimately a rebuff by the Supreme Court in AMG v. FTC, No. 19-508 (April 22, 2021) (narrowly interpreting the statute’s injunction power as not encompassing FTC authority to seek equitable disgorgement), with congressional restoration of full disgorgement power anticipated.

Much is changing rapidly, and it is unclear how successful the SEC will be at navigating new strictures while advancing enforcement goals. To be clear, the landscape is complex. In a forthcoming article, Taking Misappropriation Seriously: State Common Law Disgorgement Actions for Insider Trading, Professor Jeanne Schroeder seeks a solution to the complexities. She advances private state common law actions for disgorgement as a cleaner way to remedy insider trading violations. The potential advantages of private state-based litigation with application of the disgorgement remedy are worth serious consideration. And the notion of parallel pursuit of state common law remedies may well be a wise approach for other governmental enforcement regimes.

To lend credence to this proposal, Professor Schroeder argues that a state common law disgorgement action would align with the Supreme Court’s “largely property-based theory of insider trading.” Regardless of the asserted narrative fit, Professor Schroeder offers six compelling reasons why an action at common law for restitution would avoid many of the complexities of federal insider trading enforcement actions. For example, the Supreme Court’s insider trading jurisprudence requires fraud, violation of a fiduciary duty, as well as misappropriation of information. Under state law, each of those elements provides an independent ground for private redress.

The common law of restitution therefore streamlines the inquiry to “the person to whom the duty is owed or the owner of the information who should have a cause of action.” In highlighting such improvements, Professor Schroeder provides a useful, thorough overview of federal and state insider trading jurisprudence. According to Professor Schroeder, state common law of restitution would simplify remedying insider trading wrongs. Specifically, a state disgorgement approach would eliminate the Supreme Court’s multi-factor standard for insider trading and provide much greater flexibility in proof thresholds. For restitution and disgorgement, state common law standards are less onerous than federal statutory requirements and the Supreme Court’s strictures. Still, federal law leaves space for concurrent jurisdiction and the continuation of common law efforts to disgorge improper gains.

Of course, to suggest that this alternative approach could replace the SEC’s enforcement regime would be extreme. Professor Schroeder wisely notes that her solution of private disgorgement actions should supplement SEC enforcement, not supplant it entirely. The SEC would remain responsible for a host of remedial efforts including injunctions, bars, suspensions, penalties, and more. Meanwhile, state courts could continue to develop the contours of the common law of restitution and the important remedy of disgorgement.

The force of Professor Schroeder’s approach is that it offers viable alternatives with much simpler proof requirements. Additional benefits may flow from a state common law restitution approach. Such benefits are not the focal point of the article but include the potential avoidance of Liu constraints. For example, a state law approach would obviate the mandate to present evidence of concerted wrongdoing in order to obtain joint and several disgorgement liability as well as the Supreme Court’s directive to return funds to victims, both of which present unique challenges in insider trading cases.

Still, it is worth considering whether the Supreme Court’s commands are wise policy. Though not bound by those strictures, state common law decisions would be free to engage in parallel tightening. But any such efforts can vary by state and would tie to the goals of restitution and unjust enrichment rather than the language of federal statutes. No matter what the underlying frame of the cause of action and remedy sought, courts must balance the law’s mission against concerns about overreach, plaintiff windfalls, and punitive results.

Professor Schroeder emphasizes a core restitution principle: that her approach will restore the private claimant to the status quo ante. In some of these cases though, courts should conduct more refined analysis to evaluate whether the application of restitution works if the property—material nonpublic information—is of less value when it is not traded than when it is. In some cases, the inside trader’s proceeds may not be “the fungible equivalent of personal property previously transferred to the other party,” because material nonpublic information that has not been traded upon does not (yet) have monetary value to the issuer. Still, as Professor Schroeder’s work demonstrates, meaningful and powerful remedies for wrongdoing such as insider trading are worthy state law aims. Thus, Professor Schroeder’s work will still resonate as the state common law continues to honor the goals of restitution while working in the shadows of federal statutes.

Professor Schroeder’s scholarship is vital in that it reminds readers to consider forgotten remedies and lesser worn paths. Federal enforcement should not be the sole vehicle to strip gain, deter wrongdoing, and benefit victims. If private litigants can effectively pursue remedies on the state level, the SEC may be able to direct its resources to more challenging or important targets. Not only might those paths be easier in the pursuit, but the seeker may also more likely reach the ultimate goal of disgorging the improper gain from insider trading.

Cite as: Caprice Roberts, Private State Actions to Disgorge the Wrongful Gains of Insider Trading, JOTWELL (May 6, 2021) (reviewing Jeanne L. Schroeder, Taking Misappropriation Seriously: State Common Law Disgorgement Actions for Insider Trading (Feb. 11, 2021) Cardozo Legal Stud. Rsch. Paper No. 625, available at SSRN), https://lex.jotwell.com/private-state-actions-to-disgorge-the-wrongful-gains-of-insider-trading/.

Rethinking National Injunctions

Russell L. Weaver, Nationwide Injunctions, 14 FIU L. Rev. 103 (2020).

In a delightful article recently published in the Florida International Law Review, Professor Russell Weaver has done a great service to us all by helpfully summarizing the current state of the law concerning nationwide injunctions, drawing on and summarizing recent scholarship and numerous cases in the field. His article should prove to be of great value to the practitioner and the professor alike and, given its length and clarity (at seventeen pages, Prof. Weaver’s article packs quite a punch), those teaching in the area may even consider assigning it to their students. I probably will, because although many of my students seem to grasp the logic of compensatory damages due to some exposure in their first-year contracts and torts classes, they often seem mystified, at least initially, when it comes to injunctions, which is to say nothing of nationwide injunctions!

Part of this mystery, it seems, stems from the fact that injunctions grew up in courts of equity, whereas damages (primarily) grew up in common law courts, and the first-year curriculum (outside of a few contracts cases on specific performance) largely focuses on the latter at the expense of the former. This means that although students are familiar with the idea that compensatory damages should generally try to return an injured party to the position it would have occupied but for the wrongful harm inflicted by the wrongdoer, they have a harder time understanding why an injunction should be issued before a wrongful harm has ever come to pass. But the difficulties do not stop here. Unlike damages, which can be measured in dollars, they also find measuring the “amount” of an injunction to be counterintuitive. In theory, a court should award the “amount” of injunction needed to prevent the plaintiff from suffering from a potential future wrongful harm. But even talking about injunctions in this way seems odd, for injunctions cannot be “counted” in the same way that dollars can, and therefore determining the proper scope of an injunctive remedy is incredibly difficult.

Which brings us to another point: in theory, the scope of an injunction should not exceed the scope of the threatened harm, so that (for example) a company-wide injunction would only be appropriate where a company-wide wrong is taking place. In practice, however, it is easy to game the system, especially in the area of national injunctions, which has seen tremendous growth over the past several decades. This is so because plaintiffs can (and frequently do) seek, for example, a nationwide injunction in one jurisdiction, fail to obtain it, and then bring suit in another jurisdiction several years later. Then, in this new jurisdiction, plaintiffs win, and have their “win” extended throughout the United States (including, it should be noted, the jurisdiction in which their original suit previously failed). Although these cases are extremely interesting, productive, and fun to talk about in class, they are difficult to summarize (much less make sense of) for the students, not to say anything of the professor’s ability to understand them!

Enter Professor Weaver. Not only does his article do a fabulous job summarizing the current state of the law, but he helpfully spends a good deal of space discussing the policy implications of nationwide injunctions, canvassing the pros and cons of allowing district and circuit courts to set policy on the national legal stage.

So, for instance, against the argument that nationwide injunctions might be necessary to promote uniform laws designed to protect large numbers of otherwise powerless individuals from “unconstitutional” government policies, Prof. Weaver balances the argument that these lower-court decisions are sometimes found to have been “wrong,” in that the actions deemed “unconstitutional” by a district or circuit court is found to have been, according to the Supreme Court, perfectly legal, with the result that the uniformity that was imposed by lower courts was, in point of fact, without a legal basis. Similarly, Prof. Weaver discusses how, on the one hand, allowing a lower court to make a decision for the entire nation may promote “judicial economy” by having a “single judge hear and decide the issue” before it, which, in turn, can save the judicial resources of all the other courts around the country who no longer need to “consider and decide the same issue.” (P. 111.) On the other hand, however, Prof. Weaver points out that such judicial economy comes at a price: specifically, allowing the precipitous review of important national issues without adequately developing the issue in other districts and circuits. Sometimes, as where a more complete and thorough understanding of the issues can be developed in multiple district and circuit courts, a little inefficiency can be a good thing!

Prof. Weaver discusses a number of other important issues created by nationwide injunctions as well (the potential for nationwide injunctions to politicize courts, encourage forum shopping by litigants, and over-empowering individual district and circuit judges), and I would encourage any interested readers to check out and read his entire article. Not only is it a quick and delightful read, but it is one that I your remedies students will likely enjoy as well. It is probably the most accessible summary of these issues I have seen in a single place.

Cite as: Marco Jimenez, Rethinking National Injunctions, JOTWELL (October 14, 2020) (reviewing Russell L. Weaver, Nationwide Injunctions, 14 FIU L. Rev. 103 (2020)), https://lex.jotwell.com/rethinking-national-injunctions/.