Forster v. Boss – Reparative Injunctions & Related Issues

1. Forster v. Boss – Reparative Injunctions & Related Issues • Facts: Forster (P) purchased lakefront property from Boss (D). • D represented that P would be able to obtain a boat dock permit (but failed to reveal D already had one which precluded P from getting it) • D promised to remove existing swim dock but did not. • P sued D for fraud re boat dock & breach of contract re swim dock. • Obtained injunction ordering D’s to remove the offending swim dock • During litigation UE agreed to give P’s boat dock permit if court found them entitled to it (which it did) – like being party to an injunction ordering UE to turn over permit since UE was a party D. • P’s awarded damages in the amount of: • $2,500 for breach of contract re swim dock • $12,250 for fraud re boat dock • $10,000 punitives for fraud

2. Forster – The reparative injunction • Contrast the injunction in Forster w/ Al Murbatior Nicholson – • Latter two injunctions were sought before harm occurred – transfer to country that tortures or use of property as half-way house • In Forster, the harm has already occurred – the fraud was perpetrated and the contract breached when the contract was signed and the property delivered to Forster. • No injunction can prevent Boss from having a conflicting boat permit of failing to remove the swim dock before the property passes into Forster’s hands. So any injunction Forster gets must UNDO the harm. • Reparative Injunction seeks to restore or repair a right previously violated.

3. Election of remedies & reparative injunctions • Why didn’t the court uphold the award of the reparative injunction and the breach of contract/damages award? • Could P have recovered damages consistent with the injunction? • Punitive Damages • Awarded when P was awarded fraud damages. Court notes P can keep punitives even if P elects to keep the reparative injunction rather than compensatory damages. • Is it consistent to award punitive damages w/ an equitable remedy like a reparative injunction?

4. Undoing the harm & practicality • Each kind of injunction faces its own hurdles • Preventive injunctions face ripeness issues & reparative often have practicality issues re undoing the harm • Forster was reasonably easy as far as reparative injunctions go: • Require UE to grant permit (but had to be added as party) • Require Boss to remove dock • Other injunctions are more complex • Bell v. Southwell– local JofP election declared invalid because tainted by racial discrimination • How does one undo this harm? • Rerun the election (even if two years later)? • What if local statutes only allow appointment of interim JofP if election invalid? • What to do about all official acts of JofP that was in office during period before election declared invalid?

5. The scope of reparative injunctions – Winston v. 3M • What injunction does Mincom seek? • What does Winston think is appropriate? • Court standard: Injunction should place Mincom in the position it would have occupied if the breach of confidence had not occurred before Mincom’s recorders were on the market. Possible implementation: • Length of time it took P to develop the recorders • Length of time it took D to develop the recorders • Length of time it would take a skilled competitor working with a finished product but no inside information to develop recorders

6. Winston – why doesn’t the court award profits too? • Future Profits • Past Profits

7. Bailey v. Proctor – The Investment Scheme

8. The Reparative Injunction in Bailey What position would the debenture holders have been absent fraud and insolvency at the Trust? What action comes closest to putting the debenture holders in that position? What action regarding the Trust did the 1st Circuit take in Bailey? What standard did the 1st Circuit use? Was the court wrong to issue such a broad order?

9. The Scope of Reparative Injunctions – A Continuum Bailey ----------------------------------------------------------------------------- Mincom freewheeling discretion narrow rightful position Trend in courts: Most courts are trending toward less equitable discretion than Bailey’s freewheeling concept. But don’t forget prophylactic injunctions. Does Bailey involve a prophylactic injunction?