Justice Scalia Reinvents Restitution
Tracy A. Thomas
University of Akron School of Law
36 Loyola L.A. Law Review 1063 (2003)
This Article criticizing the U.S. Supreme Court's most recent foray into equitable restitution appears as part of the 2002 Remedies Forum, a symposium and discussion group among international Remedies scholars on the topic of restitution. The Article asserts that the Court, led by Justice Scalia, has re-conceptualized equitable restitution with the effect of denying relief to claimants. It addresses the Court's most recent pronouncement on restitution in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002), where a divided Court in an opinion by Justice Scalia held that "equitable relief" authorized by the Employee Retirement Income Security Act of 1974 (ERISA) does not include claims for specific performance or restitution seeking money for breach of contract. Instead, the Court held that with respect to restitution, the term "equitable relief" includes only those restitutionary remedies which were historically available in courts of equity. Using this definition, Justice Scalia narrowly classified as equitable restitution only those claims for an accounting for profits, equitable lien, or constructive trust that seek the return of specific funds held by the defendant.
This Article levels two criticisms at the Court's holding in Great-West Life. The primary critique is that the Supreme Court distorted history and equity to reach its result on restitution. Historically, equitable restitution was not restricted to three types of formalistic claims seeking only the return of plaintiff's specific funds. To the contrary, equity was a flexible legal alternative that issued a variety of monetary remedies in order to address the failure of the hyper-formalist common law courts to redress wrongs. Moreover, despite Justice Scalia's claim that the Court can easily distinguish between law and equity, it is not a simple task to discern historical rules of equity. The historic development of restitution resulted in significant overlap between equitable and legal restitution, and the historical nuances have been long forgotten. Justice Scalia's return to the past in defining equitable relief resurrects the outdated distinctions between law and equity and makes them even more significant today. The Article suggests that the dearth of scholarship on historical equity creates a dangerous opportunity for courts, like the Supreme Court in Great-West Life, to issue decisions unguided by accurate knowledge, yet insulated from knowing challenge.
The Article's second criticism of Great-West Life is that the Court improperly interpreted modern remedial statutory language by historical reference. It suggests that statutory language distinguishing legal and equitable remedies should instead be interpreted by the purpose of the remedy sought. Remedies generally are classified according to their purpose to compensate, punish, disgorge an unjust benefit, or prevent future harm. A purpose test rather than a historical inquiry for defining "equitable relief" more easily delineates the available remedies and avoids the overly formalistic approach taken thus far by the Supreme Court.
Number of Pages in PDF File: 24
Keywords: equity, restitution, Supreme Court, remedies
JEL Classification: K4
Date posted: October 7, 2003 ; Last revised: November 7, 2013