Tag Archives: Remedies
Stephen A. Smith, Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action
, 27 N.Z.U.L. Rev.
1033 (2017), available at SSRN
It is a familiar quip that a right without a remedy is no right at all. A recent article by Stephen A. Smith shows, however, that there is such a thing as a remedy with no right—something I might call a “rightless remedy.” In Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action, Smith explicates a category of judicial orders (i.e., remedies) that are not tied to any underlying legal right or wrong. In doing so, Smith tells us something important about both rights and remedies.
To appreciate Smith’s insights, it is first important to understand his taxonomy. The phrase “cause of action” can mean many things, but to Smith and other scholars writing in this area, a “cause of action” is a set of facts that justify a judicially-administered remedy. Understood as such, a cause of action is not necessarily co-extensive with substantive law. The substantive law contains instructions for citizens (e.g., “do not hit others,”) but cause-of-action law (sometimes called “remedial law”) contains instructions for courts (e.g. “if a person proves to you that she has been hit, order the hitter to pay her damages”). Causes of action will usually track the substantive law closely, and for that reason we often take it for granted that, where a wrong has been committed, a court will issue a remedy. But there are certainly situations in which remedial law does not authorize judicial intervention, even when a wrong has been committed (such as, for example, when a court declines to issue an injunction because it will impose an undue hardship on the defendant). Far less common (or even ignored until Smith showed otherwise) are situations in which a remedy issues where no wrong has been committed—but that is an issue we will get to in a bit.
Smith’s project is to explain, as a categorical matter, the circumstances in which courts will issue a remedy. Two of these—rights-threats and wrongs—are easily recognizable to legal scholars and practitioners. When your neighbor threatens to cut down your tree (i.e., threatens to infringe one of your rights), a court will put down this threat by ordering your neighbor not to do so. Relatedly, if your neighbor cuts down your tree before you can make it to court (i.e., commits a legal wrong), a court will order the neighbor to pay you damages. Neither of these grounds for relief upsets our common understanding of remedial law. But Smith’s third ground—injustice—introduces a new variation of remedial law.
An injustice, in Smith’s telling, is a judicially administered remedy that is not based on a rights-threat or a wrong. Smith offers several examples, but a useful one for our purposes is restitution in the case of defectively transferred funds. If I mistakenly transfer money to your account, a court will order you to return the money—even though you have done nothing wrong. One might counter that retaining money mistakenly transferred to you is wrongful, but Smith convincingly shows why that is false. There is no underlying duty to return such money because people who receive such money often have no knowledge of it, or even if they do, have no way to determine with any certainty—short of judicial intervention—to whom to return the money. Thus, in the case of mistakenly transferred funds, the traditional role of the court is not to enforce an underlying duty through a remedy, but simply to correct the injustice by ordering the money be returned.
Having shown that a remedy in injustice cases is, to use my term, a “rightless remedy,” Smith turns to the question of why such a phenomenon should exist in private law. Part of the reason is contained in the point above: people frequently cannot be expected to have sufficient knowledge to comply with such a duty. Thus, if society wishes the money to be returned (to continue with the example from above), it can only accomplish this by a judicial order.
Perhaps. Or perhaps not. Instead of an order, we could accomplish the same result with a judicial declaration that a certain sum of money was mistakenly transferred. The declaration would thus trigger a substantive duty to return the funds—but only if we recognize a substantive duty to correct injustices. So the real nub of the issue is: why we don’t recognize an underlying duty to correct an injustice?
Smith’s answer, which I find the most interesting part of his paper, is as follows:
To say that someone has a duty to do X is to say, roughly, that regardless of how costly or inconvenient X is, X must be done. Duties are correlative to rights, and rights, to borrow Ronald Dworkin’s terminology, are trumps. Thus we say (and the law confirms) that we have rights to physical integrity—and correlative duties to respect physical integrity—because we believe that, with rare exceptions, non-consensual interferences with another’s physical integrity are never permissible.
“Correcting injustices” is different than “not injuring”: it is a valuable thing to do, but it is not, or at least should not be, a duty. Private law duties are basically duties not to interfere with others’ persons, property, or liberty, and duties to keep contractual promises. The actions that are required to correct injustices have a different orientation. A failure to compensate a loss or to reverse an enrichment is not an interference with the beneficiary’s personal property or liberty; nor is it breaking a promise. It is simply a failure to correct an injustice. Correcting an injustice is valuable but failing to do so is not a wrong in the sense that stealing or lying or breaking promises is wrong. As a society, we regularly trade off the value of correcting injustices against other values. The courts clearly play a crucial role in correcting injustices….Yet it is clear that criminals are often not brought to court (or not pursued at all) because courts and prosecutors are in short supply.…[I]f our goal was to ensure that every injustice was corrected, there would be almost no limit to the number of courts, judges, lawyers, police officers and so on that the State ought to provide.” (P. 29.)
Summing up his point, Smith puts it thus: “Private law duties correlate to individual rights, but no one has a right that justice be done, and certainly not a right that another private individual ensure that justice be done.” (P. 30) This is not to say that the state may not concern itself with injustices, or that it may not refer them to the courts for resolution when it finds them. The fact that restitution cases are resolved by courts is enough to prove this point. But such adjudication is not, in a fundamental sense, the adjudication of rights. Instead, it is something that Smith calls the provision of “justice services”—the correction of an unjust circumstance that has arisen without any wrong being committed.
Smith’s article is both enlightening and thought-provoking. In explaining the phenomenon of rightless remedies—i.e., court orders untethered to underlying substantive rights—Smith shows us something important about both rights and remedies. In particular, he shows us how substantive rights are correlated with wrongs but always correlated with remedies. In doing so, Smith deepens our understanding of the complex relationship between the common law itself and institutions that both create and maintain it (i.e., the courts).
Cite as: Jack Preis, Rightless Remedies
(May 6, 2019) (reviewing Stephen A. Smith, Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action
, 27 N.Z.U.L. Rev.
1033 (2017), available at SSRN), https://lex.jotwell.com/rightless-remedies/
Sarah Dadush, Identity Harm
, 89 U. Col. L. Rev.
__ (forthcoming, 2018), available at SSRN
You’re the kind of person who cares about protecting the environment, improving working conditions for the poor, and achieving sustainable growth. Indeed, your identity as a socially-conscious consumer is so important to you that you are often willing to pay more for a product if it is sold by a company who claims to share your values, to reflect the kind of person you want to be in this world. Attracted by this premium, more and more companies are making sustainability promises to target such consumers through commercials, print and electronic advertisements, and product labeling (often employing third-party certifications) to signal to the consumer that its products align with the consumer’s values and identity as a socially- and environmentally-conscious global citizen.
So what should happen when you find out that you were duped—that the “clean diesel” car you bought because it was advertised as being “low on emissions” actually pumped into the environment 10-40 times the nitrogen oxide pollution allowed by law (as in Volkswagen’s “Dieselgate” scandal), or where the clothes you purchased at a premium because they came affixed with a “Good Working Conditions” label were actually made in sweat shops, or where the expensive “Fair-trade” chocolate you bought for your daughter was made with the labor of beaten and enslaved children? What harm have you suffered, and what remedies, if any, should be available for your unintentional support of a system of production that polluted the environment, exploited workers, and enslaved children—practices that go against your very identity as a person?
The traditional answer is simple and straightforward: if the wrongdoer’s broken promise caused you economic harm, the wrongdoer should compensate you for that harm by putting you in the position you would have occupied but for the wrong. So, for example, if the $25,000 car you were driving yesterday is practically worthless today (which is what happened in the United States when Volkswagen’s fraudulent “Dieselgate” scheme was revealed), a court would require the wrongdoer to pay compensatory damages of $25,000. But is this the only type of harm you have suffered? Have you not also suffered from a sense that your identity as a socially-responsible consumer has been compromised when you were induced, through another party’s promises, lies, and misrepresentations, to buy or use a product that harms the environment or other human beings against your will?
According to Professor Sarah Dadush in her wonderful article Identity Harm, the answer is a resounding “yes.” (“Financial loss is not the only dimension along which harm is experienced, nor is it the only dimension along which harm should be measured.”) In this important and timely article, which is the first in a proposed series, Professor Dadush makes a significant contribution to remedies by introducing the concept of identity harm, along with a conceptual framework for recognizing such harm where it occurs. Indeed, I was fortunate to have been at a conference recently in which Professor Dadush argued persuasively that courts should be more willing to recognize identity harm, a type of non-economic harm that may be “generated when, as a result of a company’s unsubstantiated or broken sustainability promises, a disconnect materializes between a person’s idea of who they want—and try—to be in the world, and who they have unwittingly been made to be in the world.” These harms, which are felt most acutely by socially-conscious consumers (i.e., “those who care not just about the physical or price attributes of a given product, but also its environmental and social-humanitarian impact”), may “arise upon discovering one’s unwitting complicity in a scheme that hurts other beings” or harms the planet in a way that is contrary to one’s own values—contrary, in short, to the consumer’s identity, to the way in which the consumer sees itself situated in the world as a socially-conscious and responsible person.
Professor Dadush is no mere idealist, however. She recognizes that, unlike economic harm, which can easily be measured by the market (as in the Volkswagen example discussed above), identity harm is non-economic and subjective by nature, which makes it difficult to measure in practice. Further complicating the picture are two additional factors: first, that identity harm is “intimately connected to the injury experienced by a third party—a fellow human being or the planet, as a result of poor (or outright bad) corporate sustainability practices,” and second, that the amount of harm suffered is “not necessarily correlated to the dollar amount paid for the offending product.” Therefore, when it comes to measuring identity harm, the economic harm suffered by the consumer is but a poor proxy (at best) for estimating such damages. Indeed, it is conceivable (perhaps even likely) that a consumer may experience more identity harm upon learning that the $1.30 she spent on a chocolate bar helped support a system of child slave labor than she would have experienced upon learning that the $25,000 car she purchased polluted the environment.
The difficultly in measuring this type of harm, of course, makes it no less real, although it does pose some practical problems. How can we measure the victim’s harm if it is subjective by nature? What if the victim is faking his or her harm? These concerns, though real, are far from fatal. Courts have dealt with these types of problems before, and have developed a number of tools for measuring non-economic harm in a whole host of circumstances, ranging from pain and suffering to dignitary harms to emotional distress to harm to one’s reputation. The problem of measuring identity harm, though challenging, is no different. For instance, Professor Dadush cleverly proposes that the identity harm suffered by “Dieselgate” victims might best be captured not by the diminished resale value of their cars, but by “the lost greenness” of their purchases. This harm, in turn, could be measured by looking at how many miles each car owner drove, “calculating the above-what-was advertised and the above-what-was legally-permitted-in-their-state emissions,” and then attaching a price to these additional emissions, which “could then be used as the benchmark for damages that would eventually be placed into a climate mitigation fund.” (P. 57.)
Indeed, Professor Dadush makes a persuasive case that courts are already identifying and measuring such harm, albeit in a poorly-conceptualized, haphazard manner (my words, not hers). To show this, Professor Dadush engages in a thoughtful discussion of several recent cases in which courts have struggled with this concept. Although she concedes that some courts, for dubious reasons, have refused to allow actions for such harms to proceed (see her discussion of the Chocolate cases (pp. 31, 33)), other courts have been more receptive to such claims (see her discussions of Kaksy v. Nike and the “Dieselgate” victims, both of which resulted in settlements that recognized and remedied such harm, although only “collateral[ly] and incidental[ly]”), a trend that seems well-positioned to grow in the future (see her fascinating discussion of Nemet v. Volkswagen Grp. Of Am., Inc., a case currently pending in the Northern District of California filed by plaintiffs who sold their polluting VWs before the scandal broke, thereby suffering only indirect, non-economic losses.) As courts and litigants continue to struggle with this rather new but important concept, they will find Professor Dadush’s thoughtful conceptualization and analysis of identity harm to be indispensable. I know I have.
Constitutional tort remedies, like their common law counterparts, are presumed to deter future violations. But the inference of deterrence depends, of course, on a number of sub-inferences that may not hold. For example, deterrence may not obtain if the officer is indemnified and therefore does not feel the personal sting of a money judgment. In a recent article, Professor Joanna Schwartz showed that officer indemnity is, in fact, nearly universal. But maybe deterrence might still obtain because the police department, which has to foot the bill of the indemnification agreement, will push its officers to obey the law. In another article, however, Professor Schwartz showed that this might not happen because most departments carry liability insurance and the cost of indemnification will often simply disappear into a budget line item for insurance. If officers are indemnified, and departments are insured against any loss, how will constitutional tort actions have any deterrent force? Schwartz suggested at the end of her article that one avenue for deterrence might be found within the operation of the insurance agreements themselves and that further study was needed.
Professor John Rappaport’s fantastic new article, How Private Insurers Regulate Public Police, fills that need, and does so splendidly. To study an issue like this, one must dive deep into the insurance industry itself, and that is exactly what Rappaport did. His article is based on “interviews with over thirty insurance industry representatives, civil rights litigators, municipal attorneys, police chiefs, consultants and more.” There is so much to the article that any summary will fail to do it justice, but briefly, Rappaport charts a chain of incentives that works as follows: police departments have an incentive to obtain liability insurance because it reduces risk. Insurance companies, in turn, have an incentive to reduce claims, thus increasing their profits. To reduce claims, insurance companies often encourage (or even require) education, training, accreditation, and other conditions that tend to improve officer compliance with the law, thus reducing claims. Departments have an incentive to follow insurance companies’ guidance on these matters not just because they need and want liability insurance, but also because doing so may reduce the cost of premiums and deductibles.
Rappaport is careful not to claim that insurance certainly reduces police misconduct, for that claim would require much more than the qualitative research he presents. Moreover, Charles Epp has collected data that casts some doubt on the role of insurance in pushing police reform (though, as Rappaport notes, Epp’s data is now nearly two decades old and did not focus on misconduct itself, but rather best practices). Nonetheless, Rappaport’s study leaves little doubt that insurance plays a significant role in how departments handle officer training and personnel decisions. The inference of deterrence—to one degree or another—is thus reasonable in most cases.
What is especially attractive about deterrence-via-insurance is that, according to Rappaport’s research, insurance companies may actually be better situated than police departments at avoiding future violations. This is because insurance companies are able to aggregate data from across jurisdictions and are able to better balance the cost of a specific violation against the cost of preventive measures. Insurance companies’ capacities in this regard start to make them look like a government agency, which naturally brings up the question of why an insurance company, rather than the government itself, is regulating the police.
Government has its own problems, however. Agencies, Rappaport notes, are often led by political appointees (or at least the politically minded) and thus must contend with complicated political concerns, such as the interests of police unions, periodic elections, and legislators who control the agency’s funding. This is not to say, of course, that private insurance is always superior. Insurers are necessarily driven by a profit motive and will be far less concerned with constitutional violations that do not lead to high-dollar judgments. Racial bias, for example, is an enormous problem in policing (much as in life generally) but rarely plays a role in high value cases.
In sum, Rappaport’s article brings the potential deterrent force of constitutional tort actions into clearer focus: The availability of a civil rights action gives rise to a demand for liability insurance. Firms in the resulting insurance market naturally seek ways to increase profits, one of which is to lower claims. And one way to lower claims is to demand better education, training, and other reforms by the insured. The article does not prove that the deterrent force always applies, and Rappaport does not claim otherwise. But for those who might contend that civil rights actions do not deter misconduct, the article offers an insightful and eminently reasonable account how they might (and in many instances, likely do) deter misconduct.
Andrew F. Hessick, Remedial Chevron
, 96 N.C. L. Rev
__ (forthcoming 2018), available at SSRN
What’s not to love about a remedies approach to solving an Administrative Law problem? Professor Andrew Hessick’s forthcoming article, Remedial Chevron, aims to do just that. Critics of Chevron deference assert its foundation is shaky. Still, Chevron deference underlies countless judicial decisions. Originalists and textualists challenge Chevron’s legality under the Constitution, the Administrative Procedures Act (APA), and nondelegation doctrine. Two sitting Supreme Court justices call for its demise. Professor Hessick views these threats as dangerous and seeks to save Chevron through reinterpretation. He pragmatically alters tack to overcome formalist objections by reformulating our existing conception of Chevron to a “Remedial Chevron”—a constraint on the court’s remedial authority. The article’s goal is to save Chevron from peril and retain useful purposes. Courts would not be bound to agency interpretation but instead conduct de novo review of the law. This de novo power would be limited to the authority to vacate an agency determination only if it were unreasonable.
The reason the challenges pose threats to the continued vitality of Chevron, according to Professor Hessick, is that the logical conclusion to the legal challenges is that Chevron cannot stand. Professor Hessick seeks to avoid this conclusion and proposes a reconceptualization in order to save Chevron. Underlying his argument is a commitment to retaining the functional advantages of Chevron within the administrative system and to maintaining certainty and stability of agency regulation and adjudications.
According to Professor Hessick, the three primary legal obstacles to Chevron’s legality are: (i) judicial power under Article III of the Constitution, (ii) delegation of interpretive authority, and (iii) scope of judicial review under the APA. Under the first category of attack, Justices Gorsuch and Thomas contend that Article III’s judicial power centers on the federal judiciary’s independent interpretation of law. Professor Hessick outlines Founders’ support for this view but notes a contrary line of court opinions providing for deference to agency decisions. He does not resolve this split, but offers that if Article III requires independent judicial interpretation, Chevron deference conflicts with the Constitution. Under the second line of attack, Congress’s passing of statutes for agency administration amounts to an implicit delegation of power to interpret laws to agencies. Professor Hessick explains two flaws with this critique: it rests on a fiction and violates Article I’s nondelegation doctrine. Chevron flounders under this attack. The last legal obstacle to Chevron is tension with the APA’s requirement that courts interpret statutes. As Professor Hessick explains, any attempt to surmount this hurdle with an implied theory conflicts with the APA’s requirement of express modifications. Accordingly, Chevron remains vulnerable to legal attack.
Remedial Chevron as the answer. Professor Hessick doesn’t respond to policy critiques of Chevron but offers a theory of Chevron as remedy to eliminate the legal barriers. And it does so without overturning mountains of precedent and agency regulations. Viewing Chevron as a remedial doctrine, the judiciary would not show deference to agency interpretations of the law. Courts could vacate agency interpretations on erroneous grounds only if the agency unreasonably interpreted the statute. It is unclear, however, whether Professor Hessick’s conception of Chevron as remedial doctrine is a prudential suggestion for courts to reinterpret Chevron precedent to a limited remedy and behave accordingly in the future or is it a statutory or constitutional mandate that Congress must implement. Given Professor Hessick’s endorsement of Congress’s power over statutory remedies, his proposal may require congressional action.
Professor Hessick proposes a modified interpretation of Chevron to a remedies doctrine as the solution but offers limits on its application. To support this theory, he provides a concise argument for the practice of placing limits on remedies. For example, he notes the legal requirements a movant must meet before securing an injunction. While I appreciate his effort to show limitations, the first category and perhaps the third simply remind readers that remedies law is bounded by laws, precedent, and doctrines. These bounds exist even if the remedy is equitable such as the injunction. It aids his argument that the Supreme Court, in eBay and Winter, strengthened the requirements for injunctive relief: imposing a more pronounced judicial obligation to analyze four factors before issuing (or denying) an injunction, even where historically a judge might have automatically granted the relief. Professor Hessick also emphasizes that similar limitations exist for damages. This assertion is true: scores of doctrines of limitation confine damage remedies. For example, the law of remedies includes a variety of limits including avoidability, certainty, and foreseeability. In certain vectors, the remedy simply will not lie. This result is true for purely economic losses even though caused by a defendant’s negligence. As the last example of limitations on remedies, Professor Hessick reminds us that violations of constitutional rights do not guarantee relief. Regarding this claim, Professor Hessick is correct, though it is sometimes regrettable that for every wrong, the law does not afford a remedy. Accordingly, a limited conception of Chevron would fit within the remedies canon.
Reconceiving of Chevron to a limited remedies frame addresses the legal objections stemming from the Constitution, the APA, and the nondelegation doctrine. No doubt it is within the judicial power of Article III for Congress to tailor the ways the federal judiciary lends relief. Further, Congress has broad Article III power to constrain federal judicial power to issue and shape remedies. Would adoption of Professor Hessick’s reframe result if we simply think about Chevron differently and convince courts to do the same or would it require congressional action? Congress has that power as long as it steers clear of constitutional boundaries such as Klein and Plaut. Professor Hessick’s solution involves a narrowing of when the court can grant relief to instances of agency unreasonableness; he does not suggest altering the rules of decision or the results in a particular case. Thus, Remedial Chevron appears within judicial power; it does not rely upon a delegation fiction, and it better comports with the APA.
Might it garner critique due to its own formalism? The reinterpretation requires courts to be in good faith about when an interpretation is unreasonable versus erroneous on other grounds. Professor Hessick addresses other likely concerns. He offers that the reinterpretation applies narrowly: “courts would consider the reasonableness of an agency interpretation only in adjudicating challenges to that agency’s action” but “would not be bound by agency interpretations in suits that do not challenge agency actions.” Professor Hessick replies with a helpful example about vehicle regulations. The reframe also would eliminate Chevron step zero, which delimits the agency interpretations subject to Chevron deference. Instead, Remedial Chevron would apply to agency interpretations of any law underlying its action—even laws the agency is not charged with administering. The APA limits a reviewing court’s power to vacate an agency’s action as contrary to law. Professor Hessick maintains that Remedial Chevron does not rely on the theory of congressional delegation of interpretative authority to agencies. Accordingly, courts need not resolve whether the agency possessed authority to issue binding interpretations of the statute. Last, Professor Hessick acknowledges that his approach constitutes a sizeable departure from existing law in that an agency would not be permitted to adopt a contrary interpretation of an ambiguous statute already interpreted by a court. The court’s interpretation is the law as “Remedial Chevron does not depend on the theory that agencies have primary interpretive authority.”
Should we reconceive Chevron to embody a remedies doctrine? If you wish to retain administrative stability and diminish formalist objections to Chevron deference, Professor’s Hessick’s proposal warrants your serious consideration.
Cite as: Caprice Roberts, Chevron as Remedy
(May 23, 2018) (reviewing Andrew F. Hessick, Remedial Chevron
, 96 N.C. L. Rev
__ (forthcoming 2018), available at SSRN), https://lex.jotwell.com/chevron-as-remedy/
Yonathan A. Arbel, Contract Remedies in Action: Specific Performance
, 118 W. Va. L. Rev.
100 (2015), available at SSRN
Parties that have a right to the very thing promised in a contract may opt not to have it delivered by the breaching party through specific performance. Even when the promised item is unique, the plaintiff may choose not to enforce the remedy. Why? Is it too difficult to execute the remedy? Are motivations mixed? Do lawyers advise clients to pursue money damages over specific performance? Will the breaching party behave in good faith when complying with the order? Professor Yonathan Arbel, former managing editor of the New Private Law Blog, offers a fascinating qualitative study of this underexamined issue. He explores why a contractual party that has established a right to the remedy of specific performance might opt out of the preferred remedy. Despite having a proven right to this coveted remedy, he shows why plaintiffs may choose not to force the breaching party to perform as promised. This, he claims, is true notwithstanding the “notoriously” under-compensatory nature of expectancy damages in comparison to specific performance.
Remedies and substance are intertwined. Professor Ariel Porat, in a Remedies chapter in the forthcoming Handbook of Law and Economics, declares that “[a]nalyzing the substantive law without its remedial part is almost meaningless.” Understanding remedial options and goals is essential. Professor Arbel’s work thoughtfully analyzes contract law’s pinnacle remedy of specific performance and the goals it serves. He then critically examines contract’s law primary competing theories—economic and rights-based conceptions—in light of parties’ actual behavior regarding specific performance. His treatment describes what parties actually do when confronted with the option of specific performance in the real world. His qualitative approach explores their practices “‘from the inside,’ tracking the internal view of litigants and their lawyers.”
The heart of Professor Arbel’s article centers on his findings from interviews with lawyers and their clients who were engaged in specific performance litigation. For the qualitative analysis, he uses a comparable legal system, but one where specific performance is the default remedy: Israel. The interesting findings are inconsistent with the two main contract theories: A utilitarian may view specific performance as a bargaining chip to extract more money from the breaching party, while a rights-based advocate may view the remedy as the ultimate vindication of the value of promise-keeping. In part, Professor Arbel opines that the growing empirical data to prove these theories relies upon faulty assumptions. For example, the theorists omit plaintiff’s remedial choices, assume parities will negotiate execution of the order, and fail to appreciate real-world motivations and implementation challenges.
The interviews reveal the complexity that lies beneath. Though not all plaintiffs opt out of this powerful remedy, significant numbers do abstain at various stages: (i) prejudgment, (ii) post-judgment renegotiation, and (iii) ultimate execution. Pursuing a remedy via the court system takes time. Reaching the desired judicial remedy via litigation suspends the parties in an adversarial posture, which may linger post-trial when it is time to execute the special performance decree. Attaining the promised performance may entail further negotiations, and plaintiff’s preference may alter over time. Such orders require good faith in implementation, despite lack of standards or court supervisory means to ensure high quality compliance. In the face of bad faith or even simply delay, plaintiff must choose whether to spend energy and money to demand compliance. Most interviewees reported real challenges enforcing specific performance. Contempt may be ineffective if defendant lacks funds. Plaintiff may be left to leverage defendant’s reputation or rely on social norms—both valuable tools but not full proof in operation.
Professor Arbel also seeks to bridge the binary nature of the two theoretical dialogues. He suggests the economics-minded align assumptions with actual practice—for example, a decree does not equate to receipt of actual performance as promised. For the rights-based theorists, he recommends they consider the strategic and utilitarian motivations plaintiffs demonstrate in the process. Per Arbel’s findings, a plaintiff may choose specific performance prejudgment to signal the strength of the case, minimize costs and delays, and leverage renegotiation after judgment. Both would be well served to enhance their exploration with the possibilities that these real-world findings signify.
Importantly, Professor Arbel maintains that to best protect nonbreaching parties, both theoretical schools should give plaintiff the option between specific performance and expectation damages. Ethical rules must guide lawyers to avoid self-serving advice. But even assuming sage advice, Professor Arbel warns that judges shouldn’t trust plaintiffs to choose wisely, which may necessitate judges exercising broad discretion to craft the remedial award. This harkens back to equitable cleanup jurisdiction in the United States in which the judge would render complete justice, including damages in lieu, should specific performance become unavailable or impossible. What about other possible remedies beyond compensation if specific performance is unattainable: for certain breaches of contract, should plaintiffs also be able to disgorge defendant’s unjust gains? See here, here, and here. Both the United States and Israel permit a disgorgement gain-based remedy for breaches of contract when appropriate. That is a topic for another day, but more research along the lines Professor Arbel conducts would go far in servicing the very goals that the substantive law of contract aims to attain.
Overall, Professor Arbel seeks to contextualize contract theory, break the stalemate between instrumental and deontological stances, and stimulate the collection of more data with larger samples. His article successfully contextualizes the debate, but only time will tell on the other two aims. It is my hope that he and the scholarly community will succeed on all three goals. Fine-tuning data to context and linking theory to practice will sharpen the theoretical debate and aid plaintiffs in achieving optimal results in the face of breach.
May the third generation of specific performance discourse begin.