13/08/2024
𝐓𝐡𝐞 𝟐𝟎 𝐌𝐚𝐱𝐢𝐦𝐬 𝐨𝐟 𝐄𝐪𝐮𝐢𝐭𝐲
Equity is an ancient judicial system originating in England by which courts apply principles of general fairness in situations where application of the common law would bring about injustice. Article III of the U.S. Constitution extends the judicial power of courts to both cases in law and in equity. While the Federal Rules of Civil Procedure combined law and equity into a single type of suit—the civil action—in 1938, the distinction between law and equity is still very much alive. Claims in equity afford different remedies, do not permit a right to trial by jury under the Seventh Amendment (indeed, equitable claims must be decided by the judge even if a jury is deciding other claims at law), and equitable remedies are generally unavailable when there is an “adequate remedy at law.”
While they do not constitute binding precedent in US courts, equitable claims and the courts that preside over them are traditionally guided by the 20 Maxims of Equity, which are certainly persuasive precedent. The 11th Circuit was kind enough to recently gather 13 of these maxims in one place in Slater v. U.S. Steel Corp., 820 F.3d 1193, 1247 (2016), but of course we pride ourselves in creating a more comprehensive list:
1. 𝐎𝐧𝐞 𝐰𝐡𝐨 𝐬𝐞𝐞𝐤𝐬 𝐞𝐪𝐮𝐢𝐭𝐲 𝐦𝐮𝐬𝐭 𝐝𝐨 𝐞𝐪𝐮𝐢𝐭𝐲: this is “[p]erhaps one of the most basic maxims of equity.” Anstalt v. Ness Energy Int’l, Inc., Case No. 10-1218-D (W.D. Okla. Mar. 28, 2012). Simply put, a party petitioning the court for equitable relief must be willing to fulfill all of its own obligations.
2. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐰𝐢𝐥𝐥 𝐧𝐨𝐭 𝐬𝐮𝐟𝐟𝐞𝐫 𝐚 𝐰𝐫𝐨𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐚 𝐫𝐞𝐦𝐞𝐝𝐲: “The equitable power of a court is not bound by cast0iron rules but exists to do fairness and is flexible and adaptable to particular exigencies so that relief will be granted when, in view of all the circumstances, to deny it would permit one party to suffer a gross wrong at the hands of the other.” PCS Nitrogen, Inc. v. Ross Dev. Corp., 126 F. Supp. 3d 611, 642 (D.S.C. 2015) (quoting Hooper v. Ebenezer Sr. Servs. & Rehab. Ctr., 386 S.C. 108 (2009)).
3. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐫𝐞𝐠𝐚𝐫𝐝𝐬 𝐚𝐬 𝐝𝐨𝐧𝐞 𝐰𝐡𝐚𝐭 𝐨𝐮𝐠𝐡𝐭 𝐭𝐨 𝐛𝐞 𝐝𝐨𝐧𝐞: “It is a fiction of equity designed to effectuate the obvious intention of the parties and to promote justice.” Rodeck v. U.S., 697 F. Supp. 1508 (D. Minn. 1988).
4. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐢𝐬 𝐚 𝐬𝐨𝐫𝐭 𝐨𝐟 𝐞𝐪𝐮𝐚𝐥𝐢𝐭𝐲: “As the FMCRA is silent on the question of priority, and as ‘equity is equality,’ we find that the proper course here is to distribute the limited funds on a ratable basis, such that each claimant receives ‘a share of the fund proportionate to their share of the total judgment figure.’” Commercial Union Ins. Co. v. U.S., 999 F.2d 581 (D.C. Cir. 1993) (citing Dobbs, The Law of Remedies § 2.12 at 130).
5. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐚𝐢𝐝𝐬 𝐭𝐡𝐞 𝐯𝐢𝐠𝐢𝐥𝐚𝐧𝐭, 𝐚𝐧𝐝 𝐧𝐨𝐭 𝐭𝐡𝐨𝐬𝐞 𝐰𝐡𝐨 𝐬𝐥𝐮𝐦𝐛𝐞𝐫 𝐨𝐧 𝐭𝐡𝐞𝐢𝐫 𝐫𝐢𝐠𝐡𝐭𝐬: This is the basis for the equitable defense of laches. See Eason v. Whitmer, Case No. 20-12252 (E.D. Mich. Sep. 9, 2020) (quoting Hays v. Port of Seattle, 251 U.S. 233, 239 (1920)).
6. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐢𝐦𝐩𝐮𝐭𝐞𝐬 𝐚𝐧 𝐢𝐧𝐭𝐞𝐧𝐭 𝐭𝐨 𝐟𝐮𝐥𝐟𝐢𝐥𝐥 𝐚𝐧 𝐨𝐛𝐥𝐢𝐠𝐚𝐭𝐢𝐨𝐧: Near performance of a general obligation is sufficient unless the law requires perfect performance. See Union Trust Co. of Maryland v. Townsend, 101 F. 2d 903 (4th Cir. 1939).
7. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐚𝐜𝐭𝐬 𝐢𝐧 𝐩𝐞𝐫𝐬𝐨𝐧𝐚𝐦: Equity acts on the duties of people, not objects, or “[e]quity acts in personam, not in rem.” Diallo v. Redwood Invs., LLC, Case No. 18-cv-1793 (S.D. Cal. Aug. 6, 2019). Today, the term “people” includes legal entities like corporations.
8. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐚𝐛𝐡𝐨𝐫𝐬 𝐚 𝐟𝐨𝐫𝐟𝐞𝐢𝐭𝐮𝐫𝐞: Largely foreclosed (pun intended) today by statute, the original theory was that if one failed to make a payment for property received on time and had that property seized at law, they could pay the debt late and recover the property in equity. Today, it may be more important to understand the “exception to the general rule that ‘equity abhors a forfeiture’ . . . [which] states that ‘forfeiture is favored, when, instead of working a loss or injury contrary to equity, it promotes justice and equity and protects the owner against the indifference, laches, and injurious conduct of the lessee.” Bezilla v. Tug Hill Operating, LLC, Case No. 5:17-cv-123 (N.D.W. Va. Nov. 13, 2017) (internal citations omitted).
9. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐫𝐞𝐪𝐮𝐢𝐫𝐞 𝐚𝐧 𝐢𝐝𝐥𝐞 𝐠𝐞𝐬𝐭𝐮𝐫𝐞: “‘If the employee desires reinstatement for strategic purposes, that is a valid basis for denial’ . . . ‘Equity does not engage in idle gestures,’ and the Court will not order Plaintiff to work as a material handler at Volvo without it being unambiguously clear that she still wants this job.” Arroyo v. Volvo Grp. N. Am., LLC, Case No. 12-cv-6859 (N.D. Ill. Jul. 13, 2017) (internal citations omitted).
10. 𝐇𝐞 𝐰𝐡𝐨 𝐜𝐨𝐦𝐞𝐬 𝐢𝐧𝐭𝐨 𝐞𝐪𝐮𝐢𝐭𝐲 𝐦𝐮𝐬𝐭 𝐜𝐨𝐦𝐞 𝐰𝐢𝐭𝐡 𝐜𝐥𝐞𝐚𝐧 𝐡𝐚𝐧𝐝𝐬: “The equitable defense of unclean hands requires that ‘[h]e who comes into equity must come with clean hands.’” E.O.H.C. ex rel. M.S.H.S. v. Barr, Case No. 5:19-cv-06144-JDW (E.D. Pa. Jan. 22, 2020) (citing Keystone Driller Co. v. Genn. Excavator Co., 290 U.S. 240, 241 (1933).
11. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐝𝐞𝐥𝐢𝐠𝐡𝐭𝐬 𝐭𝐨 𝐝𝐨 𝐣𝐮𝐬𝐭𝐢𝐜𝐞, 𝐚𝐧𝐝 𝐧𝐨𝐭 𝐛𝐲 𝐡𝐚𝐥𝐯𝐞𝐬: “At the remedy stage – a violation having been established – it may be appropriate to resolve marginal doubts against the wrongdoers. Courts should not be gruding in remedying injustice. ‘Equity delights to do justice, and not by halves.’” Jeffers v. Clinton, 756 F. Supp. 1195 (E.D. Ark. 1990).
12. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐰𝐢𝐥𝐥 𝐭𝐚𝐤𝐞 𝐣𝐮𝐫𝐢𝐬𝐝𝐢𝐜𝐭𝐢𝐨𝐧 𝐭𝐨 𝐚𝐯𝐨𝐢𝐝 𝐚 𝐦𝐮𝐥𝐭𝐢𝐩𝐥𝐢𝐜𝐢𝐭𝐲 𝐨𝐟 𝐬𝐮𝐢𝐭𝐬: Good luck today with this one. While the spirit of this maxim may remain alive, it has largely been subsumed by rules concerning MDL, class actions, collective actions, and case law on the topic. “This case does not come within the principle that equity will take jurisdiction to avoid a multiplicity of suits.” Ohio Farmers’ Ins. v. Yoas, 65 F.2d 651 (9th Cir. 1933).
13. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐟𝐨𝐥𝐥𝐨𝐰𝐬 𝐭𝐡𝐞 𝐥𝐚𝐰: “As Justice Story explained, ‘[w]here a rule [of] . . . the statute law is direct and governs the case with all its circumstances, or the particular point, a court of equity is as much bound by it, as a court of law.’” Ibson v. United Healthcare Servs., Inc., 877 F.3d 384 (8th Cir. 2017) (quoting Joseph Story, Commentaries on Equity Jurisprudence § 64 (12th ed. 1877).
14. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐰𝐢𝐥𝐥 𝐧𝐨𝐭 𝐚𝐬𝐬𝐢𝐬𝐭 𝐚 𝐯𝐨𝐥𝐮𝐧𝐭𝐞𝐞𝐫: “An unjust enrichment claim will not lie, however, if the benefit is conferred ‘by a volunteer or intermeddler.’” Al-Sabah v. World Bus. Lenders, LLC, Case No. SAG-18-2958 (D. Md. Jul. 9, 2020). And conversely, in restitution claims, equity will not create a quasi-contract to a promisee if no consideration was provided (a “volunteer” in 18th Century English).
15. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐰𝐢𝐥𝐥 𝐧𝐨𝐭 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞 𝐚𝐧 𝐢𝐦𝐩𝐞𝐫𝐟𝐞𝐜𝐭 𝐠𝐢𝐟𝐭: “Equity will not make [a trust] where none has been clearly declared. A defective or imperfect gift will not be converted into a trust.” Weil v. Commissioner of Internal Revenue, 82 F.2d 561 (5th Cir. 1936).
16. 𝐖𝐡𝐞𝐫𝐞 𝐞𝐪𝐮𝐢𝐭𝐢𝐞𝐬 𝐚𝐫𝐞 𝐞𝐪𝐮𝐚𝐥, 𝐭𝐡𝐞 𝐥𝐚𝐰 𝐰𝐢𝐥𝐥 𝐩𝐫𝐞𝐯𝐚𝐢𝐥: “In any event the equity of the taxpayer is no greater than that of the United States and when equities are equal, the legal title will prevail.” Travel Industries of Kansas v. U.S., 425 F.2d 1297 (10th Cir. 1970).
17. 𝐁𝐞𝐭𝐰𝐞𝐞𝐧 𝐞𝐪𝐮𝐚𝐥 𝐞𝐪𝐮𝐢𝐭𝐢𝐞𝐬 𝐭𝐡𝐞 𝐟𝐢𝐫𝐬𝐭 𝐢𝐧 𝐨𝐫𝐝𝐞𝐫 𝐨𝐟 𝐭𝐢𝐦𝐞 𝐬𝐡𝐚𝐥𝐥 𝐩𝐫𝐞𝐯𝐚𝐢𝐥: The general principle with regard to real property is “first in time, first in right.” Bank of Am., N.A. v. Esplanade at Damonte Ranch Homeowners’ Ass’n, 3:16-CV-00116-RCJ-VPC (D. Nev. May 23, 2017). Comparing timing with legal and equitable claims, “[u]nder the common law, an earlier claim had priority over a later claim if both claims were legal claims . . . The same was true if both claims were equitable . . . [order in time] only mattered under the common law where [one party] had a legal claim and a competing earlier claim to the property was purely equitable.” Id.
18. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐰𝐢𝐥𝐥 𝐧𝐨𝐭 𝐚𝐥𝐥𝐨𝐰 𝐚 𝐬𝐭𝐚𝐭𝐮𝐭𝐞 𝐭𝐨 𝐛𝐞 𝐮𝐬𝐞𝐝 𝐚𝐬 𝐚 𝐜𝐥𝐨𝐚𝐤 𝐟𝐨𝐫 𝐟𝐫𝐚𝐮𝐝: “Courts of equity, independently of any statute, will relieve against fraud, if proceedings are seasonably brought after its discovery. Indeed, to use the language of Lord Cottenham, a court of equity will wrest property fraudulently acquired, not only from the perpetrator of the fraud, but ‘from his children and his children’s children,’ or, as was said in another English case, ‘from any person to whom he may have parcelled out the fruits of his fraud.’” Citizens Bank v. Leffler, 228 Md. 262, 269 (Md. 1962).
19. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐰𝐢𝐥𝐥 𝐧𝐨𝐭 𝐚𝐥𝐥𝐨𝐰 𝐚 𝐭𝐫𝐮𝐬𝐭 𝐭𝐨 𝐟𝐚𝐢𝐥 𝐟𝐨𝐫 𝐰𝐚𝐧𝐭 𝐨𝐟 𝐚 𝐭𝐫𝐮𝐬𝐭𝐞𝐞: Even if a trustee dies before the creation of a testamentary trust, for example, or if the trustee is incompetent at the time she accepts the position, these failures would not cause the creation of the trust to fail. See, e.g., Fulk & Needham, Inc. v. U.S., 288 F. Supp. 39, 44 (M.D.N.C. 1968).
20. 𝐄𝐪𝐮𝐢𝐭𝐲 𝐫𝐞𝐠𝐚𝐫𝐝𝐬 𝐭𝐡𝐞 𝐛𝐞𝐧𝐞𝐟𝐢𝐜𝐢𝐚𝐫𝐲 𝐚𝐬 𝐭𝐡𝐞 𝐭𝐫𝐮𝐞 𝐨𝐰𝐧𝐞𝐫: Another historical maxim that no longer applies—common law once provided no action by the beneficiary of a trust against the trustee, but that has since changed with the common law claim for breach of fiduciary duty.
