OVERVIEW OF EQUITABLE RELIEF, CIVIL RICO, AND ITS LEGISLATIVE HISTORY

A. Origins and General Nature of Courts’ Equitable Authority

1. Origins of Courts’ Equitable Authority

Article III, Section 2 of the United States Constitution provides, in relevant part, that “[t]he judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties Made, or which shall be made, under their Authority.” “[E]quity is that portion of the law which was developed by the English and American courts of chancery to remedy defects in the common law.” Howard L. Oleck, Historical Nature of Equity Jurisprudence, 20 FORDHAM L. REV. 23, 24 (1951) (“Equity Jurisprudence”).

At the time the United States Constitution was adopted and continuing for a considerable period thereafter, various states had separate equity courts, and federal courts recognized separate causes of action for equity that were distinguished from suits at common law. See generally Parsons v. Bedford, 28 U.S. 433, 446 (1830); Equity Jurisprudence, 20 FORDHAM L. REV. at 23-26, 40-43; Leonard J. Emmerglick, J. Emmerglick, A Century of the New Equity, 23 Tex. L. Rev. 244 (1944-45) (“The New Equity”). However, commencing in 1845, states began to abandon their separate equity courts, and in 1938, federal courts adopted new Federal Rules of Civil Procedure for all civil matters, wherein a single form of civil action is provided for all civil suits. See Equity Jurisprudence, 20 FORDHAM L. REV. at 41-43; The New Equity, 23 Tex. L. Rev. at 244-250.

Classification of a cause of action as to whether it seeks a remedy “at law” or “in equity” remains important for several reasons of general significance: (1) “equitable remedies are generally enforceable by contempt while legal remedies are not”; (2) generally, litigants do not have a right to a jury trial to obtain equitable relief, whereas in many cases a right to a jury trial attaches to the suits “at law”; and (3) “equitable relief is discretionary.” DAN B. DOBBS, DOBBS LAW OF REMEDIES, Vol. One at 11-12, 56-57 (West Publ’g Co. 2d ed. 1993) (“DOBBS”).

However, determining whether a particular cause of action seeks remedies “at law” or “in equity” is not an easy task. As one commentator perceptively observed, “[t]he description of equity as that law which was administered by the old English Courts of Chancery, of course, is hardly a definition.” Equity Jurisprudence, 20 FORDHAM L. REV. at 24. To determine “whether [a cause of] action is more similar to suits tried in courts of law,” the Supreme Court examines “both the nature of the action and of the remedy sought.” Tull v. United States, 412 U.S. 412, 417 (1987). First, the Court compares the action at issue “to 18 Century actions brought in the courts of England prior to the the merger of the courts of equity,” and second, the Court examines “the remedy sought and determine[s] whether it is legal or equitable in nature.” Tull, 481 U.S. at 417-418. See also Section V (C) below, which addresses whether an action is equitable, and hence does not carry a right to a jury trial.

Under these principles, courts have ruled that a wide variety of causes of actions constitute actions for equitable relief, including injunctions, disgorgement of wrongdoers’ ill-gotten gains, restitution of illegally obtained profits, divestiture or dissolution, appointment of a receiver and others to assist the court in executing its duties, and constructive trusts. Moreover, “[g]enerally, an action for money damages” is a remedy “at law.” Teamsters Local No. 391 v. Terry, 494 U.S. 558, 570 (1990). However, an award of monetary relief is not necessarily legal relief. Id. at 570. The Supreme Court has “characterized damages as equitable where they are restitutionary, such as in ‘actions for disgorgement of improper profits.'” or when “a monetary award [is] ‘incidental to or intertwined with injunctive relief.'” Id. at 570-71 (citations omitted). Generally speaking, “a claim could be deemed equitable if it sought a coercive remedy like injunction,” or “if the plaintiff sought to enforce a right that was originally created in the equity courts, or a right that was traditionally decided according to equitable principles.” DOBBS, Vol. One at 155.

2. Courts Are Vested With Broad Equitable Powers To Remedy Unlawful Conduct, Including Ordering Intrusive, Structural Changes in Wrongdoers’ Entities and Practices

The Supreme Court has repeatedly emphasized that courts are vested with extensive equitable powers to fashion appropriate remedies to redress unlawful conduct. For example, in Swann v. Charlotte-Mecklenburg Bd. of Educ., 402 U.S. 1 (1971), the Supreme Court stated:

Once a right and a violation have been shown, the scope of a district court’s equitable powers to remedy past wrongs is broad, for breadth and flexibility are inherent in equitable remedies.

“The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it. The qualities of mercy and practicality have made equity the instrument for nice adjustment and reconciliation between the public interest and private needs as well as between competing private claims.” Hecht Co. v. Bowles, 321 U.S. 321, 329-330 (1944).

Moreover, the Supreme Court has pointedly ruled that where “the public interest is involved. . . those equitable powers assume an even broader and more flexible character than when only a private controversy is at stake.” Porter v. Warner Holding, Co., 328 U.S. 395, 398 (1946). Accord Virginian Ry. Co. v. Sys. Fed’n. No. 40, 300 U.S. 515, 552 (1937) (“Courts of equity may, and frequently do, go much farther both to give and withhold relief in furtherance of the public interest than they are accustomed to go when only private interests are involved.”) (collecting cases); Golden State Bottling Co. v. NLRB, 414 U.S. 168, 179-80 (1973) (same).

In accordance with these principles, courts have imposed a wide variety of highly intrusive equitable remedies in institutional reform litigation to remedy constitutional violations and to foster paramount public interests, including various structural reforms. Typically in such cases, the equitable relief afforded exceeds an injunction enjoining the proscribed conduct, and also encompasses compelled changes in practices, structural changes and prolonged court-supervision over implementation of the equitable relief. See generally, DOBBS, Vol. Two at 348-353.

For example, in Brown v. Bd. of Educ., 349 U.S. 294, 300-01 (1955), the Supreme Court ruled that courts had very broad equitable powers to order structural changes in school systems to desegregate schools, including “ordering the immediate admission of plaintiffs to schools previously attended only by white children.” Similarly, in Swann, 402 U.S. at 9-10, 18-32, the Supreme Court upheld a district court’s equitable authority to order a school district to implement a comprehensive plan to desegregate a school system, including various structural changes such as re-zoning, busing of students, and re-assignment of teachers to different schools. Moreover, in Milliken v. Bradley, 433 U.S. 267, 279-91 (1977), the Supreme Court upheld the equitable powers of a district court, as part of a desegregation decree, to “order compensatory or remedial educational programs for schoolchildren who have been subjected to past acts of de jure segregation.” Id. at 267.

Similarly, in Local 28 of the Sheet Metal Worker’s Int’l Assoc. v. EEOC, 478 U.S. 421 (1986), the district court found that Union Local 28 discriminated against nonwhite workers in recruitment, selection, training and admission to the union. The Supreme Court upheld the district court’s imposition of an affirmative action program requiring Local 28 to adopt various changes its practices and policies, including requiring Local 28 “to offer annual, nondiscriminatory journeyman and apprentice examinations, select members according to a white-non-white ratio to be negotiated by the parties, conduct extensive recruitment and publicity campaigns aimed at minorities, secure the [court-appointed] administrator’s consent before issuing temporary work permits, and maintain detailed membership records.” Id. at 432-33.14

The Supreme Court has, likewise, recognized courts’ expansive equitable authority to order structural changes and other intrusive remedies to redress unconstitutional prison conditions. See, e.g., Hutto v. Finney, 437 U.S. 678, 683 (1978) (describing district court’s orders to change various prisons practices and policies to remedy constitutional violations). Courts, likewise, have afforded similar equitable relief to compel changes in conditions and policies to remedy unconstitutional treatment of mental patients.