Formosa Plastics v. Presidio Engineers – Breach of Contract & Punitive Damages

1. Formosa Plastics v. Presidio Engineers – Breach of Contract & Punitive Damages • Formosa invited Presidio to bid on a construction project for concrete foundations. Sent a bid package w/ specific representations re each parties’obligations. • Presidio’s bid, which was accepted, relied on these representations. But Presidio was substantially delayed and had far higher costs because Formosa intentionally lied in the bid package, induced contractors to make low bids and then continue their work even after Formosa breached its obligations. • Jury found fraud and awarded punitive damages. Texas SCT upheld despite Formosa’s argument that the case merely involved breach of K. Fraud was an independent tortupon which punitives could be based. • Almost all of Presidio’s damage essentially stem from Formosa’s breach of contract. What is it about fraudulent inducement that makes us so willing to award punitives in cases like this? • What if D intentionally began scheduling deliveries or multiple workmen after the project began? Is that fraud or just intentional breach? Why is timing so important to these sorts of claims for punitive damages?

2. What is an injunction? • Injunction = Court order requiring that a party do or refrain from doing something. • 3 basic kinds of injunctions in terms of timing & scope: • Preventive • Reparative • Structural • We will see another important distinction later re permanent v. preliminary – that distinction goes to substantive/procedural requirements re those types of injunctions

3. Preventive Injunctions • Preventive Injunction = An injunction seeking to prevent future violations of the law. • Critical Question: What are the circumstances in which future conduct can be enjoined?

4. Al Murbativ. Bush • What did the plaintiffs fear the government was going to do? • Why wouldn’t the court grant an order barring the gov’t from engaging in those actions? • What evidence did the P’s have that the government was likely to engage in those actions?

5. Preventive Injunctions & Ripeness • P must show a “substantial and realistic” threat of harm personal to P before a court will enjoin future conduct. • Another way of saying this: P must show D’s “propensity” to commit the harmful act. • The “ripeness” showing is heavily evidentiary in nature. • P needs to offer proof - must be something more than raw fear or simple theories • Ripeness requirement applies to all injunctions seeking to regulate future conduct – whether permanent or preliminary.

6. Preventive Injunctions, Ripeness, & Evidentiary Support • Would the harm in Al Murbatimore likely have been ripe if: • Ps had evidence that in some countries (including home countries) to which detainees were shipped the “diplomatic assurances” that no torture would occur were illusory and ineffective? • What if P presented strong evidence that U.S. officials lied about many aspects of its treatment of detainees BUT there was no evidence that it lied about this particular treatment of detainees? • Would that be more likely to make a court think the threatened harm was ripe? • What evidence would be necessary to show a ripe threat of harm that P’s would be transferred to a country where they would be tortured?

7. Preventive Injunctions, Ripeness & Tailoring • Even if Al-MurbatiP’s could prove they were likely to be shipped to a country that would torture them (i.e., the feared harm was ripe), would a court grant P’s requested injunction? • Requested injunction: Bars the government from transferring any P out of Guantanamo without 30 days notice to the court or P’s counsel. • What do Marshall (and what we’ve learned about the ripeness rule) suggest about whether the scope of the requested injunction in Al Murbati was appropriate?

8. The scope of preventive injunctions with multiple actors – possible options in Marshall v. Goodyear • Marshall v. Goodyear (p. 263) – Why is the nationwide injunction for a single act of age discrimination at Auburndale branch inappropriate? • Possible options for injunction – which is most appropriate? • Order barring “Auburndale branch of Goodyear from violating employment discrimination laws.” • Order barring the “Auburndale branch of Goodyear from engaging in acts that discriminate based on age in violation of the ADEA, including hiring, promotions and firing of employees.” • Order barring the “Manager of the Auburndale branch of Goodyear from engaging in acts that discriminate based on age in violation of the ADEA, including hiring, promotions and firing of employees.” • Order barring the “Manager of the Auburndale branch of Goodyear from discharging employees in violation of ADEA, including hiring, promotions and firing of employees.” • When is a company-wide injunction appropriate? At what point do actions of employees show the “company’s” propensity to act?”