The Market Value Rule of Damages and the Death of Irreparable Injury
16 Pages Posted: 8 Jun 2009 Last revised: 5 Feb 2012
Date Written: July 27, 2011
A fundamental principle of remedies is that the remedy should be sufficient to place the injured party in the position he would have occupied but for the wrong suffered. But law and equity come to very different conclusions about what remedy is sufficient to restore a plaintiff to his status quo ante when real property, rare property, and property with high sentimental but low market value are involved. Equity treats the loss of these items as irreparable injury, meaning that damages are not adequate to compensate the victim for their loss. But if the real property is seized in eminent domain proceedings, or rare or sentimental personal property is destroyed, the market value of these items is generally deemed at law to provide an adequate measure of the value of the loss, so that giving the plaintiff market value damages constitutes an adequate remedy at law. This demonstrates a fundamental tension between law and equity: law presumes that the market value is the measure of the damages suffered from the loss, but equity presumes that the damages from this same loss is immeasurable; were it otherwise, damages would be adequate, and equity jurisdiction would not be invoked. This article examines this tension and concludes that the market value rule of damages fails to provide an adequate remedy when real property is seized in eminent domain or when irreplaceable personal property is destroyed through some wrongful act.
Keywords: damages, equity, just compensation, eminent domain, irreparable injury
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