The Restitution Revival and the Ghosts of Equity

Table of ContentsI. Restitution, the Elusive Merger of Law and Equity & Irreparable Injury 1029II. The Irreparable Injury Rule Is Dead. Long Live the Irreparable Injury Rule 1032III. Restitution Revival and the Shackles of Equity 1038A. Restitution in a Global Context 1038B. The Restatement (Third) of Restitution & Unjust Enrichment 1041C. Equity's Ghosts Haunting Restitution 1043IV. Inadequacy's Inadequacy for Restitution's Contractual Disgorgement Remedy 1055A. Inadequacy by Any Other Name Does Not Smell So Sweet 1055B. A Normative Approach for Restitutionary Disgorgement for Opportunistic Breach 1058V. Keep on Merging and Embrace Disgorgement Remedy for Opportunistic Breach 10601. Restitution, the Elusive Merger of Law and Equity & Irreparable InjuryA restitution revival is underway in the United States.1 Scholarly interest and cases involving the law of restitution and unjust enrichment are increasing in the United States. International scholars, long intrigued by restitution doctrine, are watching American developments with renewed interest. The primary catalyst for the revival is the ALI's restitution project, The Restatement (Third) of Restitution & Unjust Enrichment.2 The Restatement's Reporter, Professor Andrew KuIl, the ALI Restitution Advisers, and the ALI Members Consultative Group have dedicated fifteen years to the project.3 In May 2010, the ALI voted to approve the Restatement, which was recently published in July 201 1 .This Article addresses the extent to which equity's ghosts will haunt the revival. The focus will be on two particular threats: (i) Will fear of all things equity cause total abandonment of unjust enrichment's roots in justice and fairness, and (ii) will equity's nettlesome procedures undermine the launch of an exciting new rule that provides for restitutionary disgorgement for opportunistic breach of contract? I answer yes to both questions,4 but offer normative approaches for retaining restitution's historical justice roots, while exorcizing the restitutionary disgorgement remedy from burdensome equitable prerequisites, including the irreparable injury rule and other alternative formulations.5Why does the law-equity divide remain relevant? The complete merger of law and equity remains elusive. Court systems are no longer separated. The Federal Rules of Civil Procedure merged in 1938.6 Almost all states have merged law and equity courts.7 Students often fail to understand the contemporary relevance of studying equity. Good-faith efforts to teach it are inherently anachronistic. Many of the core law school courses that traditionally covered equity have faded from the curriculum.Value remains in appreciating America's law and equity origins for historical reasons alone. The import of the law-equity distinction, however, extends beyond its historical context. Comprehension is imperative because both federal and state constitutions hinge the right to a jury trial on the distinction. The Seventh Amendment of the United States Constitution guarantees the right to trial by jury in certain civil cases: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law."8 The Court has not incorporated the Seventh Amendment jury trial right to the states by means of the Fourteenth Amendment. …