What is a declaratory judgment?

1. What is a declaratory judgment? • A method by which a person fearing injury from another can clarify and conclusively determine rights prior to actual injury occurring. • Example: • Wallace plaintiff seeks a judicial declaration that Tennessee’s excise tax on gasoline purchased elsewhere but stored in Tenn. violates the commerce clause and 14thAmdt. prior to the tax actually being assessed and/or D’s refusal to pay. • Declaratory judgments are a purely statutory creation: • Uniform DJA – adopted in Missouri (Mo. Rev. Stat. 527.010-080) • Federal DJA – 8 USC '' 2201-02

2. In what types of situations does one most commonly use declaratory judgments? • Constitutional challenges to statutes or regulations • Does the law as applied to P (e.g., Wallace) or on its face violate state or federal constitutional provisions? • Intellectual Property litigation • Patent or trademark validity in the midst of an infringement dispute • Insurance Coverage litigation • Insured may seek determination of scope of insurance coverage while in dispute with insurer or third party • Will Contests • Beneficiary/potential beneficiary may seek declaration that is entitled to recover (or entitled to a certain amount) during a will contest • Contract disputes (or avoidance thereof) • Party to contract may seek declaration as to the parties’ rights to resolve uncertainty and avoid further dispute.

3. Declaratory Judgments & Threshold Requirements – based on Wallace • TN law requires P to pay a gasoline privilege tax (for storing w/in Tennessee gasoline that was purchased out-of-state). P claims tax violates commerce clause & 14A. To enjoin future enforcement of the TN statute in Wallace, P would have to show irreparable injury and a ripe threat of harm. • Does P have to show irreparable injury to get a declaratory judgment that the statute is unconstitutional? • 28 USC § 2201(a) & Mo. Rev. Stat. § 527.010 • Does P have to show a threatened injury is ripe in order to get a declaratory judgment that the statute is unconstitutional? Was the threat ripe in Wallace?

4. Ripeness & potentially unconstitutional laws: Can P simply challenge a law once its enacted (assuming P engages in activity w/in laws parameters) or must P show that the State has actually threatened to enforce the law against him? In other words, is there a ripe threat of harm merely because the statute exists and can be enforced against P? Courts answer this differently: • Some say the coercive effect of the law creates a ripe threat of injury and P can sue for a declaratory judgment • This tends to be more true if the cost of compliance is high or the risk of escalating penalties for non-compliance is significant (e.g., daily penalties for non-compliance) • Others say the state must make some movement toward enforcement before an injury is ripe. • But that movement toward enforcement can be as insignificant as a warning letter or statement to P

5. “Ripeness” in Cardinal Chemical • Facts: • Morton files lawsuit against CC for patent infringement; CC denies infringement & counterclaims that patent is invalid. • Fed. Cir. finds for CC on infringement issue. BUT dismisses the counterclaim re invalidity as “moot” because the infringement issue is no longer pending. • SCT reverses the Fed. Cir. on its mootness ruling – Why? • Is there any reason to hear CC on the validity issue now that the infringement dispute has gone away? Is there any “ripe” controversy?

6. A situation unripe for declaratory judgment: • Wycoff : Plaintiff (hauling business) seeks a declaration that it is engaged in interstate commerce. SCT says P’s request for a declaratory judgment is not ripe because P asked for a declaration of status rather than a declaration of rights. • What could P have done to make the Court view this as an actual ripe controversy?

7. Court discretion to deny a declaratory judgment Uniform DJA/Mo. Rev. Stat. 527.060 • The court may refuse to render or enter a declaratory judgment or decree where such judgment or decree, if rendered or entered, would not terminate the uncertainty or controversy giving rise to the proceeding. • In what circumstances will a declaratory judgment likely NOT terminate uncertainty? • P wants a declaration that Y’s will was invalid due to undue influence. • As a beneficiary, P would normally be able to do this in a will contest. But Y is still alive. And even if undue influence occurred, she could still change the will so a DJ re this will wouldn’t help. • Often in such cases, you can argue that the particular dispute simply isn’t ripe.

8. Differences between preventive injunctions & declaratory judgments (Wallace example):

9. Restitution • Basic Premise: • In cases where D has been unjustly enriched at P’s expense, D must return the amount of his/her unjust enrichment • Restitution Is a Hybrid: • It is one of 3 forms of substantive liability • It is also a possible remedy when the source of liability is contract, tort or statute

10. Blue Cross v. Sauer – substantive restitution • Why are the Sauer’s liable for the return of the mistaken payments from Blue Cross? • Did they do anything wrong? How easy would it be to prove? • Assume they had been on an extended vacation & payments were directly deposited – would the court have required them to return the payments? • So what is (would be) the easiest source of their liability forcing them to return the payments from Blue Cross in either situation?

11. Restitutionary Remedial Devices • Why was Sauer so concerned w/ the manner in which restitution occurred? Restitution encompasses many different devices, which effect return in different ways – some examples: • Constructive Trust – P can trace into specific, identifiable property in D’s hands and keep it even if it has increased in value (as long as traceable to wrongfully taken property from P) • Quasi-Contract(aka “Money Had & Received” in Sauer) – results in simple money judgment for value of unjust enrichment to D • For wrongdoers who have receivedmistakenpayments of money, P’s must rely on restitution as substantive cause of action & remedy: • P’s limited to restitutionary devices giving them a simple money judgment

12. Somerville v. Jacob – restitution and innocent improvers • Could Somervilles get restitution if they deliberately improved the Jacob’s land because the Somervilles thought the land really needed it and it would improve the Jacob’s property values? • What remedy if the Somerville’s negligently built a building over the shared property line onto the Jacob’s land? • What are the options when the Somervilles innocently improve the Jacob’s land thinking it is their land and mistake is discovered after improvement is finished? • Somervilles get nothing because they should have known of problem • Jacobs should pay Somervilles for actual cost of improvements • Jacobs should convey land to Somervilles in exchange for value of unimproved land • What does the majority say? Why does the dissent balk?

13. Restitution & Mistake • A truly innocent mistake by P/improver/payor is most likely to result in restitution. • As P’s culpability increases, courts are less likely to grant restitution • Also with a truly innocent victim (D/improvee/payee), courts may “balance the hardships” and refuse to grant restitution if returning the benefit will be hard on D • (But see Somerville) • Bottom line – whether restitution is granted depends on culpability of both parties and hardship on D. (See Restatement 3rd)

14. Measuring the unjust benefit to be returned – innocent wrongdoers • Often there are different ways to measure D’s unjust gain – this isn’t clearly self-defining or there are simply two available measures. • What measure do courts use when the D is innocent(ish)? • Theme throughout restitution with innocentwrongdoers: • When given a choice of measurement of unjust enrichment, courts will usually choose the lower amount (which it believes represents unjust enrichment to innocent D)

15. Grounds for restitution with innocent(ish) wrongdoers • Mistake– see previous slides • Emergency– one who reasonably provides essential goods/services during emergencies is excused from getting promise to pay beforehand • Measurement of U.E. for lives saved – FMV of treatment (NOT value of life saved) • Measurement of U.E. for property saved – lesser of value of services or property damage avoided • Performance of Duties to 3rd Parties – e.g., paying brother’s bills • Measurement of U.E. – reasonable value of services/bills paid for • Joint Ownership of Property – payment ofnecessaryexpenses • Measurement of U.E. – reasonable value of other’s proportionate expenses • Quantum Meruit or Unenforceable Contracts • Four Different Measures - Cost to Plaintiff, Market Value, Agreed Price, or Value in advancing D’s purposes