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UNJUST ENRICHMENT IN THE USA

Lloyd's Maritime and Commercial Law Quarterly

UNJUST ENRICHMENT IN THE USA

Mark Gergen *

ANNUAL SURVEY

The most noteworthy case of the year is Liu v Securities Exchange Commission §131, for the long discussion by the US Supreme Court of the history of disgorgement as an equitable remedy. Perhaps the most consequential case as a practical matter is In re Facebook Inc Internet Tracking Litigation §125, which holds that individuals who cannot establish that they were harmed by a company’s misuse of their personal data may allege a “concrete injury” and so have standing to bring an action seeking disgorgement of the defendant’s profit from misusing the data. The disgorgement remedy was also important in litigation between competitors in cases involving theft of information. In Digital Drilling Data Systems v Petrolink §122 and Epic v Tata §124 businesses recovered substantial verdicts on a theory of disgorgement though they could not establish they were harmed by a competitor stealing trade secrets or hacking into their data.
A trio of interesting cases comes from Virginia. James G Davis Construction v FTJ §128 is an interesting variation on a familiar claim: a contractor defaults and an unpaid subcontractor sues the party who hired the contractor to recover for work performed. All nine judges agree that the starting point for resolving the claim is the rule that the defendant cannot be made to pay twice for the work. They split 5:4 on the application of the rule. In T Musgrove Construction v Young §139, the Virginia Supreme Court uses a straightforward claim for restitution by a plaintiff who acted after an accident to protect the defendant’s property and perform the defendant’s duty to try to clarify and distinguish a claim for quantum meruit and a claim for unjust enrichment. In Fessler v International Business Machines §126, a federal court, applying Virginia law, finds wriggle room in the rules laid down in T Musgrove to allow a restitution claim in the face of a clear contractual disclaimer of obligation.
Virginia is not the only state that continues to use the old forms of action. The old claim for money had and received looms large in two cases from Texas involving litigation between victims of financial crimes over who should be left holding the bag: Midwestern Cattle Marketing v Legend Bank §133 and In re Okedokun §136. Also notable is Wilmington v Collart §143, where a bank brought a claim to recover money fraudulently obtained by a father from his daughter, who inherited her father’s estate. The issue in the case is framed as whether the bank had a right to an equitable lien on the daughter’s property rather than the substantive question whether the bank had a right to restitution.
Unjust enrichment in the USA

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