Counter-Restitution for Monetary Remedies in Equity

Equitable remedies are growing in importance as the remedies of choice for intellectual property and federal agency claims. The measure of monetary remedies in equity is founded in trust law, which provides that even a disloyal trustee is entitled to indemnity for expenses that benefit the trust. Based on this principle and case law on measuring intellectual property remedies, a defendant to a claim for a monetary remedy in equity has the opportunity to prove that the unjust enrichment established by the plaintiff should be reduced for unrelated revenues or beneficial expenses. Opponents of this right justify revenue disgorgement by the prejudicial nature of the defendant’s actions; an inexplicable distinction between "restitution" and "disgorgement"; and the disputed authority of a court in equity to exact punitive remedies.

The right to prove counter-restitution represents the traditional law in equity and when federal agencies seek gross disgorgement, they exceed the limited jurisdiction that the United States Supreme Court allows for their ancillary claims to injunctive relief.