0

The suit filed in Los Angeles over the 1968 Romeo and Juliet film is reported in the Guardian which says:

Damages are being sought “believed to be in excess of $500m”.

What is the significance of the figure provided by the party seeking damages? I'm not asking about the merit or non-merit of this case, but if it is successful, what are the chances of the awarded damages actually being or even approximating the figure that they had given? And how would it have been arrived at? Why not give something more like 17 quintillion instead?

Is there any advantage to specifying a figure that is being sought rather than seeking unspecified damages?

1

1 Answer 1

2

There is some significance to the amount claimed, but not much and mostly at the low end.

  • The existence of some damages caused by wrongful conduct is an element of some, but not all, claims for relief in lawsuits.

  • In some courts, the amount claimed in a complaint determines the filing fee for the complaint filed.

  • Limited jurisdiction courts usually cap the amount of relief that can be obtained in that forum, and a counterclaim in excess of that amount often results in the removal of a case to a forum with jurisdiction over the counterclaim.

  • Diversity jurisdiction in federal court requires an amount in controversy in excess of $75,000.

  • Class action cases seeking more than $5,000,000 (for the class as a whole) must be brought in federal court unless all plaintiffs and all defendants are from the same state.

  • Sometimes simplified rules of procedure are inapplicable to cases in excess of a specified amount in controversy. For example, in Colorado cases brought in its trial courts of general jurisdiction, simplified civil procedure rules apply if the amount in controversy is less than $100,000.

  • The federal rules of civil procedure and most state rules of civil procedure require "special damages" to be pleaded with specificity in the complaint to be recovered. There are several definitions of this term that are used. One of them is that: "In contract law, special damages (also called consequential damages) refer to irregular damages such as physical injuries during a breach of contract, but general damages would refer to the damages expected from the contract being breached."

  • In most cases, a default judgment which is entered because a defendant fails to respond to a complaint filed in court and duly served upon a defendant over which it has jurisdiction may not exceed the amount claimed in the complaint. The complaint can't be amended to claim more damages after it is filed and served. This requirement arguably has constitutional due process dimensions.

  • In arbitration under the American Arbitration Association's rules, certain cases to which other arbitration rules do not apply are presumptively subject to the AAA Commercial Rules if the amount in controversy is in excess of $500,000.

  • In cases where a defendant has both primary liability insurance and also "excess" or "umbrella" insurance, a claim in excess of the limits of insurance under the primary liability insurance policy immediately trigger the involvement of the excess or umbrella insurer.

  • The amount of damages claimed in a lawsuit is one important factor in determining whether a lawsuit has to be disclosed in the public disclosures of a publicly held company, or in the prospectus to an initial public offering of securities in a company, or in a private sale of the securities of a closely held company in a private placement memorandum.

  • The amount of damages claimed in a lawsuit is generally the initial value of the claim of the person bringing the lawsuit in a bankruptcy filed by the defendant unless and until the value of the claim is challenged in the bankruptcy court process.

  • The amount of damages claimed in a lawsuit is one factor to be considered in whether a transfer of property from a defendant to a third-party for less than substantially equivalent value is a fraudulent transfer.

  • A claim of damages in a lawsuit made without reasonable factual support can be a basis upon which an attorney filing the lawsuit may be sanctioned for misconduct by the court in which the case in pending.

Also, some states, including Colorado, prohibit filing a claim for a specified dollar amount in many circumstances.

Some states, including Colorado, allow certain kinds of damages (e.g., punitive damages) to be requested only in an amended complaint filed after some information has been exchanged by the parties after the lawsuit is filed.

6
  • The last bullet point seems to me the most interesting: if it is the case, why do we commonly see so many astronomical figures claimed like the $500,000,000, which is hard to imagine much definite factual support for? Feb 17, 2023 at 1:47
  • @Seekinganswers Your imagination may be weak. There are lots of scenarios in which huge damages are easy to image. I'm not interested in this particular case so I'm not going to look into it to see if the numbers are plausible or not. There have been cases where people bringing lawsuit have been sanctioned for making absurd claims not supported by a reasonable factual basis.
    – ohwilleke
    Feb 17, 2023 at 19:28
  • My imagination may be weak, but it just seems as though the higher the figures get, the more magnified the entropy begins to get, further exponented from each variable, such that there does begin to los a lot of accuracy, doesn't it? But do you have any good examples that you could point to in that the figures claimed are very high, and it's easy to explain how there is a clear deterministic factual basis for it? I mean, in most contexts, what is really the difference between $5mm and $6mm? Or $10mm and $30mm? I think this is actually a studied phenomenon known as something along the lines of Feb 17, 2023 at 23:09
  • the theory of asymptotic marginal utility of money or something like that. Feb 17, 2023 at 23:09
  • @SeekingAnswers Most really huge claims come up in commercial disputes. For example, if your client claims to have been denied a 1% ownership interest in Tesla that he was wrongfully denied, getting to $500M is easy. Or, if someone due to a tort was denied a role in a movie that made a huge profit, again, once you add compound interest at the statutory rate since 1968, it is easy to get to a huge number.
    – ohwilleke
    Feb 18, 2023 at 1:22

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .