Nominal Damages as Vindication

Category: Print Issues

Sadie Blanchard

Volume 30

, Issue 1

30 GEO. MASON L. REV. 227 (2022)

Introduction

Oliver Wendell Holmes famously conceived of the law as a prediction of when courts will coerce a party to pay compensation or suffer a penalty for certain behavior.¹ Law for the Holmesian bad man is that body of rules the violation of which will result in his being forced to forfeit money or sent to jail.² Or as the leading American remedies casebook observes, “Clients are more interested in the bottom line than in the principle of the thing.”³

Yet the law permits plaintiffs to start or continue a suit even if they will receive nothing more from the court by succeeding than a verdict in their favor and a nominal sum. Pop star Taylor Swift did just that recently, countersuing a radio personality who groped her for assault and battery and requesting just one dollar in damages, which the court awarded her.⁴ Swift explained that she did not sue for substantial damages because her purpose was to hold the defendant accountable and to strengthen the social norm against sexual assault.⁵ Taylor Swift’s lawsuit is a specific instance of a larger phenomenon. While Swift chose not to pursue substantial damages, in other cases a plaintiff is unable to recover damages because she cannot establish that an alleged legal violation caused her harm or cannot prove the quantum of damages with reasonable certainty. Common law courts usually do not grant substantial damages absent evidence of harm causing an ascertainable loss.⁶

But even when a plaintiff cannot establish harm or quantify her loss, the common law often entitles her to maintain an action for violation of her legal right. The centuries-old black-letter law is encapsulated by Blackstone’s statement, “where there is a legal right there is also a legal remedy, by suit or action of law, whenever that right is invaded.”⁷ When a case sits between the divergent standards for maintaining a cause of action and receiving monetary compensation, courts typically award nominal damages.⁸ Early American courts adopted this doctrine from the courts of England, and though it has since been somewhat circumscribed,⁹ actions can still be pursued—and are pursued—that entitle the victorious plaintiff only to nominal damages.¹⁰

This Article argues that some plaintiffs pursue suits for nominal damages to employ courts as producers of presumptively reliable information that is used in reputation-based private governance. That information might include credible factual findings, assessments of behavior relative to legal rules, articulation of legal rules, or some combination of those information types. Plaintiffs sometimes pursue lawsuits in which they expect to receive only nominal damages because the credible-information-producing function of courts is effective at deterring wrongful behavior or remedying its harmful effects.¹¹ In addition to shining new light on nominal damages, this insight has implications for the concept of vindication in the law, the expressive value of the law, the perceived legitimacy of courts, federal standing doctrine, and remedies.

To be sure, plaintiffs sometimes proceed through litigation with the hope of receiving substantial damages or an equitable remedy only to find that hope dashed. However, other times it is apparent well before a verdict that no more than nominal damages are likely to be awarded. For example, courts sometimes rule on summary judgment or dismissal motions that a plaintiff cannot show compensable harm under the applicable standards but is nonetheless entitled to proceed with the suit for nominal damages.¹² Alternatively, some plaintiffs pursue lawsuits in which they seek no compensatory damages.¹³ And sometimes plaintiffs request only nominal damages because there is no alleged loss for which they can recover.¹⁴

The longstanding rule allowing suits for nominal damages has been disputed in recent federal constitutional tort cases, giving rise to a circuit split that culminated in the 2021 Supreme Court case Uzuegbunam v. Preczewski.¹⁵ The legal doctrine permitting nominal damages suits developed predominantly in the context of private law matters such as contractual and private law tort claims. Following this history, the Court’s decision in the case rests heavily on common law tradition and precedent in what are predominantly private law suits.¹⁶ Drawing from that long practice, the Court held that a claim for nominal damages is sufficient to prevent a lawsuit from becoming moot in federal court.¹⁷ The legal challenge to permitting nominal damages suits to continue—once other claims for relief were moot—relied on the arguments that nominal damages cannot provide an effective remedy and that nominal damages suits violate the separation of powers and undermine judicial administrability.¹⁸ The Supreme Court correctly held that courts have long recognized deciding nominal damages suits as a legitimate judicial function within the bounds of federal standing and mootness doctrines.¹⁹ But the Court’s analysis of the history of nominal damages suits is formalistic and somewhat cursory. Similarly, other courts, and even legal scholars, have failed to appreciate the full range of functions that nominal damages suits historically have served and can continue to serve.²⁰ This Article uncovers the overlooked reputational governance function of nominal damages litigation.

Part I explains the legal doctrines that make nominal damages suits possible and presents the three existing explanations of nominal damages: that they serve as a peg for costs, a vehicle for declaratory judgments, or a means of vindication.

Part II illustrates the inadequacy of existing explanations of nominal damages by discussing cases that those theories fail to explain.

First, the peg-for-costs account fails to explain the nominal damages suits in which attorney’s fees are not available to the prevailing plaintiff.²¹ That category includes most causes of action by default under the American rule that litigants bear their own attorney’s fees unless a cost-shifting statute or contract provides otherwise.²² The peg-for-costs explanation also assumes that the decision to award nominal damages arises only at the end of a suit when it turns out that the plaintiff failed to establish substantial damages. This explanation therefore ignores the role of nominal damages in preventing suits from being dismissed at a preliminary stage of litigation or concluded on summary judgment. The rule allowing plaintiffs to proceed with certain claims even if they only request nominal damages has prevented courts from dismissing cases when courts concluded that no other relief is available based on the pleadings or after discovery.²³

The second explanation—that nominal damages serve as a vehicle for a declaratory judgment—accurately describes a subset of nominal damages suits. The classic example is an action for trespass to property that serves to establish a property boundary or to protect the plaintiff’s property right from future legal claims by the defendant grounded in the defendant’s pattern of uncontested possession or use.²⁴ But there is a second category of nominal damages suits that does not fit this description. These category-two suits challenge completed past behavior that does not threaten legal rights subject to remedies in a future legal action.²⁵ The category-two nominal damages suit does not derive its force in governing behavior from the threat of future legal remedies. Rather, it drives behavior because of actual or potential reputational repercussions from judicial fact-finding and legal determinations.²⁶

Third, nominal damages suits are often said to vindicate legal rights, but the concept of vindication is underarticulated by courts and legal scholars.²⁷ Courts invoke the maxim that the law should “not authorize the least violation of” a legal right, but they fail to elaborate just how awarding nominal damages achieves the end of vindicating a legal right.²⁸ Indeed, serious observers contend that awarding nominal damages trivializes rather than vindicates a right and, in some circumstances, awarding substantial damages is thought necessary to achieve vindication.²⁹ Whether and how nominal damages can vindicate, then, remains to be fully understood.

Part III introduces the informational theory of vindication through nominal damages, the core contribution of this Article. It argues that the common law has developed to allow plaintiffs to bring informational nominal damages suits because these suits serve core purposes of the common law pertaining to social ordering. This Part explains the role of the three key sets of players in informational nominal damages suits and the factors that determine the effectiveness of courts as reputation adjudicators. First is the plaintiff as initiator, seeking reputational reckoning, reputational rehabilitation, or rule reinforcement. The plaintiff’s motivation is of course intertwined with the expected effect of its actions on the defendant. Second is the court as producer of reputation-relevant information in the form of factual revelations and legal determinations. To perform this function, the court must be trusted as reliable. Three core characteristics of judicial process—participation, formal adjudicative procedure, and publicity—allow courts to engage in costly signaling to increase public confidence in their reliability. The third set of actors is the audience. For reputational adjudication to be effective, there must be an audience that can access the information produced by the lawsuit and that has the will and power to impose or withdraw sanctions in the direction desired by the plaintiff. Confidence in factual and legal determinations will vary with the audience. For instance, a commercial audience to a commercial dispute between sophisticated parties might have to believe that the adjudicator understands the relevant commercial realities before accepting judicial conclusions as inputs into reputational governance.

Part IV considers remaining puzzles in nominal damages and offers preliminary analyses of how the information theory of nominal damages applies to those puzzles. It first looks at the internal perspective and asks whether courts are self-consciously performing the reputational governance function elaborated here. Next, it considers whether constitutional torts are a special case that courts should treat differently from the predominantly private law actions that were the context in which the law of nominal damages developed. Part IV also discusses whether features of today’s social, media, and litigation environment might raise concerns about reputational lawsuits that justify modifying the law of nominal damages. It examines to what extent the law should subsidize reputational nominal damages suits and considers possible implications of the reputational account for damages more broadly.

Part V concludes by considering the implications of reputational nominal damages suits for the relationship between legal institutions and private ordering.

I. What Are Nominal Damages For?

Existing explanations of nominal damages point to their role in shifting the costs of litigation, serving as a vehicle for a declaratory judgment, and vindicating a plaintiff’s legal rights.

The common law has long entitled a plaintiff to maintain an action for violation of a legal right even without demonstrating harm in fact. The centuries-old black-letter law is encapsulated by Blackstone’s statement, “every right when with-held must have a remedy, and every injury it’s [sic] proper redress.”³⁰ Common law courts, however, usually would not grant substantial damages absent evidence of factual injury causing an ascertainable compensable loss.³¹ Courts typically award nominal damages when a case sits between the divergent standards for maintaining a cause of action and receiving monetary compensation.³² The general rule in English law was that “every infringement of a right involves a claim to nominal damages, though all actual damage is disproved.”³³ American courts adopted this view, as explained in an opinion by Justice Story in 1838:

I am not able to understand, how it can correctly be said, in a legal sense, that an action will not lie, even in case of a wrong or violation of a right, unless it is followed by some perceptible damage, which can be established, as a matter of fact; in other words, that injuria sine damno is not actionable. On the contrary, from my earliest reading, I have considered it laid up among the very elements of the common law, that, wherever there is a wrong, there is a remedy to redress it; and that every injury imports damage in the nature of it; and, if no other damage is established, the party injured is entitled to a verdict for nominal damages. . . . Actual, perceptible damage is not indispensable as the foundation of an action. The law tolerates no farther inquiry than whether there has been the violation of a right. If so, the party injured is entitled to maintain his action for nominal damages, in vindication of his right, if no other damages are fit and proper to remunerate him.³⁴

Though the availability of actions for nominal damages is now considered less universal than Justice Story’s statement suggests,³⁵ plaintiffs can, and do, still maintain actions that entitle them only to nominal damages.³⁶ The existing explanations for allowing suits for nominal damages fall into three categories: nominal damages serve as a peg for costs, they permit courts to declare rights, and they vindicate the plaintiff. The remainder of this Part sets out those theories of nominal damages, and the next Part explains why they are incomplete.

A. A Peg for Costs

Nominal damages are often viewed as “a mere peg to hang costs on.”³⁷ A leading remedies treatise describes the award of nominal damages as a “rescue operation” that courts undertake to protect the plaintiff who has established a cause of action, but failed to prove damages, from having to bear the costs of the suit.³⁸ There is some truth in this explanation, but it is incomplete and, for some of the cases it describes, only an intermediate explanation.³⁹

Today, most attention paid by courts and scholars to the question of nominal damages and costs focuses on suits against government defendants alleging violations of constitutional or other civil rights.⁴⁰ Fee-shifting statutes apply to those causes of action and therefore make the availability of costs relevant to which party prevails.⁴¹ A plaintiff who receives nominal damages is a prevailing party and therefore eligible to recover statutory attorney’s fees, although “ordinarily” he will not under current Supreme Court precedent.⁴² There are other reasons that the question of nominal damages is especially salient in those cases. Civil rights plaintiffs sometimes seek an injunction or declaratory relief against a government action that is either ongoing or threatens the plaintiff with repetition in the future.⁴³ After the plaintiff files suit, and sometimes after a court has “strongly intimated” that the policy or action is unlawful, the government defendant changes the challenged policy or stops engaging in the challenged conduct.⁴⁴ This change in behavior renders the requested prospective relief moot and leaves a request for nominal damages as the only requested relief for the past harm.⁴⁵ If the court dismissed the suit as moot, the plaintiff would bear the costs of the lawsuit. Congress and state legislatures have provided for victorious plaintiffs in such suits to recover costs.⁴⁶ It would be perverse for the law to enable government actors to throw the costs of suits that cause the cessation of rights violations onto plaintiffs in this way. It would undermine the legislative purpose in providing for cost recovery if a government defendant could unilaterally elect to render a lawsuit moot and wriggle out of paying costs by changing its policy. There is, therefore, truth in the peg-for-costs explanation of nominal damages. However, as explained below, it fails to account for some of the functions that nominal damages serve in the law.⁴⁷

B. A Declaration of Rights

Some suits for nominal damages serve a purpose similar to that of a declaratory judgment.⁴⁸ Declaratory judgments are a form of prospective, “preventive adjudication” that resolves uncertainty about legal rights and duties rather than serving to redress past harm.⁴⁹ They offer a notification of the likely result in court if a party later sues for damages or equitable relief.⁵⁰ Declaratory judgments and nominal damages suits that function analogously might sit squarely within Holmes’s view of the law because they govern behavior by allowing the courts to let the Holmesian bad man know in advance whether he should expect to be sanctioned if he pursues a course of action.⁵¹ Such actions are accounted for by theories of private ordering in the shadow of the law, where the force of potential future legal remedies on behavior is presumably doing the work of encouraging compliance once legal rights are clarified.⁵² The classic example is an action for trespass to property. The trespass action has been used to establish a boundary or to declare that a defendant’s entry onto the property is unlawful, which in turn protects the plaintiff’s property right from future claims of entitlement to use the property, such as through adverse possession or prescriptive easement.⁵³ Plaintiffs have used lawsuits in a similar manner to establish ownership of intellectual property rights.⁵⁴ Applying a related legal technique, before the abolition of slavery in the United States, Black persons sometimes won nominal damages in suits sounding in causes of action such as assumpsit and assault and battery through which they sought to establish their right to freedom under laws prohibiting slavery in a state or territory.⁵⁵ U.S. state and territorial courts sometimes awarded prevailing plaintiffs only nominal damages in these suits on the basis that the suits were brought “for the purpose of trying” the plaintiffs’ “right to . . . freedom.”⁵⁶ The limits of the explanation of nominal damages suits as vehicles for declaratory judgment are discussed in the next Part.⁵⁷

C. Vindication of the Plaintiff’s Right

Nominal damages are sometimes said to vindicate the plaintiff or its legal rights. But the concept of vindication is underarticulated in judicial opinions and legal scholarship. The word “vindication” appears not infrequently in judicial opinions but is rarely elaborated upon. The Supreme Court’s statement on the relationship between nominal damages and vindication is illustrative:

Common-law courts traditionally have vindicated deprivations of certain “absolute” rights that are not shown to have caused actual injury through the award of a nominal sum of money. By making the deprivation of such rights actionable for nominal damages without proof of actual injury, the law recognizes the importance to organized society that those rights be scrupulously observed; but at the same time, it remains true to the principle that substantial damages should be awarded only to compensate actual injury or, in the case of exemplary or punitive damages, to deter or punish malicious deprivations of rights.⁵⁸

When courts explain the availability of nominal damages by reference to vindication, they often invoke some variant of the maxim that when a right is absolute, the law should not authorize any violations of it.⁵⁹ The federal courts have stated that nominal damages are a form of “recognition of a violation of rights,” a way of “vigorously defend[ing]” rights, or “symbolic vindication.”⁶⁰ Historically, when English and U.S. courts recognized a right to bring an action without a showing of harm, they also cited vindication as if it were self-evident how prevailing and receiving nominal damages would achieve this end.⁶¹ They often relied on the following passage from the eighteenth-century case Ashby v. White⁶²Ashby v. White (1703) 92 Eng. Rep. 126, 136–37; 2 Ld. Raym. 938, 953–55.:

If the plaintiff has a right, he must of necessity have a means to vindicate and maintain it, and a remedy if he is injured in the exercise or enjoyment of it; and indeed it is a vain thing to imagine a right without a remedy; for want of right and want of remedy are reciprocal . . . surely every injury imports a damage, though it does not cost the party one farthing, and it is impossible to prove the contrary; for a damage is not merely pecuniary, but an injury imports a damage, when a man is thereby hindered of his right. . . . [I]n an action for slanderous words, though a man does not lose a penny by reason of the speaking them, yet he shall have an action. So if a man gives another a cuff on the ear, though it cost him nothing, no not so much as a little diachylon, yet he shall have his action, for it is a personal injury. So a man shall have an action against another for riding over his ground, though it do him no damage; for it is an invasion of his property, and the other has no right to come there.⁶³

Despite repeated judicial invocations of vindication, it is far from obvious that a judgment for nominal damages vindicates a plaintiff. To the contrary, awards of nominal damages have sometimes been characterized as insignificant “technical victor[ies]”⁶⁴ or even expressions of judicial contempt for frivolous claims.⁶⁵ The notion that a nominal damages judgment vindicates is examined below.⁶⁶

II. The Incompleteness of Existing Explanations

The justifications for nominal damages discussed above do not account for all the functions nominal damages serve in the law. Part A explains that the law of nominal damages serves the previously overlooked function of keeping alive lawsuits that would otherwise be terminated at a preliminary stage. Part B shows that in many cases in which courts are asked to rule on nominal damages, the core matter at stake is more substantive than the costs of the suit. Part C observes that plaintiffs sometimes seek only nominal damages, even when a declaration of rights by the court does not have a practical legal effect. Finally, Part D argues that the notion that a plaintiff might be vindicated through a suit for nominal damages rings true but is undertheorized.

A. Nominal Damages Can Keep a Suit Alive

The peg-for-costs explanation views a court’s decision to allow nominal damages as one that is presented only at the tail end of a lawsuit after a plaintiff has proven a violation of her legal right but has failed to prove damages to the applicable standard. This explanation ignores the fact that permitting suits for nominal damages prevents suits from being dismissed or summarily adjudged before fact-finding or full adjudication. When damages are an element of a cause of action, as in actions for negligence, a court might dismiss or summarily adjudicate a suit before evidence is produced, factual findings are made, or the merits of the claim are determined. Claims are dismissed or summarily adjudicated on the pleadings, after discovery, or otherwise before extensive public hearing or adjudication on the merits because the loss alleged or supported by evidence could not satisfy the legal standards for showing harm or establishing damages.⁶⁷

For example, in actions that plaintiffs may not maintain for nominal damages, courts dismiss suits on the pleadings when plaintiffs fail to allege pecuniary loss, when the damages claimed are too speculative or remote, or when the damages claimed are not of the kind allowed for the cause of action.⁶⁸ Courts dismiss other suits after discovery on the basis that while the plaintiff raised material issues of fact regarding the conduct elements of the claim, it has “failed to produce competent evidence sufficient to create a genuine issue of material fact as to injury.”⁶⁹ In still other suits, courts issue or direct verdicts for defendants after the presentation of some evidence on the basis that the plaintiff failed to show that it suffered any damage.⁷⁰ Such early termination of suits allows defendants to prevent courts from revealing or deciding facts or legal issues regarding the merits of the dispute that have reputational consequences.⁷¹ In contrast, the availability of nominal damages for some causes of action prevents lawsuits from being similarly terminated before a full presentation of evidence and adjudication of disputed legal and factual issues.⁷²

The rule that nominal damages preclude dismissal interacts with the harmless error doctrine to create judicial flexibility. This flexibility allows courts to take into account considerations of conserving judicial resources and preventing frivolous suits by dismissing nominal damages suits deemed insignificant. Courts have held that while a plaintiff should have been entitled to proceed for nominal damages, the error was harmless because no substantial right or question of reputation was at stake.⁷³ Appreciating the different manifestations of the reputational function of nominal damages suits suggests that when considering whether such a suit should be permitted to proceed and when applying the harmless error doctrine, courts should consider the reputation interests at stake broadly. These interests include not only reputational rehabilitation of the plaintiff but also the possibility of revealing valuable information about the defendant’s wrongful behavior that might allow the plaintiff to obtain redress through a negotiated settlement or that might deter wrongful behavior.⁷⁴

Even when courts decide to award nominal damages after a full trial rather than at a preliminary stage of litigation, the legal doctrine that a plaintiff can maintain a suit for nominal damages potentially transforms the court’s task and the information produced by its decision. If plaintiffs were required to establish damages to prevail, a court could dispense with a case simply on the basis that the plaintiff did not establish damages; it could forego factual and legal analysis of the merits of the claim. For causes of action that a plaintiff may maintain for nominal damages, a court may bifurcate the trial between liability in the first proceeding and injury in the second.⁷⁵ In contrast, when nominal damages are not available, the decision-making may proceed in the opposite order.

B. Sometimes Costs Are Not the Core Interest at Stake

The “peg for costs” explanation is also incomplete for two reasons. First, it does not explain the historic availability of nominal damages in the United States for most lawsuits. Second, it does not explain the purpose of plaintiffs who pursue claims even when they know they will receive insignificant compensation.

Under the American Rule on costs, which governs lawsuits in the United States unless a statute or contract provides for fee shifting, each party bears its own costs.⁷⁶ Plaintiffs in colonial and early U.S. courts bore most of their own legal fees, and by the mid-nineteenth century, the “American Rule” was formalized.⁷⁷ When plaintiffs bear most of their own litigation expenses, it is all the more striking when they pursue litigation knowing that their prospect of recovering substantial damages is limited by applicable burdens of proof and other constraints on the availability of damages.

Costs are not the matter under consideration in the cases discussed in the previous Section regarding whether a suit should be allowed to proceed at a preliminary stage.⁷⁸ Additionally, even under cost-shifting statutes, a plaintiff who recovers only nominal damages is sometimes unable to recover attorney’s fees. A plaintiff who wins nominal damages under a federal fee-shifting statute, for instance, will “ordinarily” not recover attorney’s fees under current Supreme Court precedent.⁷⁹ Most states permit awarding attorney’s fees to the prevailing party under a relevant fee-shifting statute or contract when that party received only nominal damages,⁸⁰ but the outcome sometimes varies depending on the applicable statute or contract.⁸¹

Finally, even in cases covered by fee-shifting statutes or contract terms, the entitlement to attorney’s fees does not explain the decision of the plaintiff to pursue a low- or nominal-value lawsuit. Permitting plaintiffs to prevail and collect litigation costs even without a showing of loss reflects the reality that, even apart from their role in awarding compensation for the effects of legal wrongs, courts perform a legitimate judicial function when they publicly ascertain facts and categorize behavior as wrongful in the context of a legal dispute. The availability of attorney’s fees permits plaintiffs with low-monetary-value suits to procure legal representation to pursue those suits, including on a contingency-fee basis.⁸² That the lawyer can expect compensation if the suit succeeds does not explain the plaintiff’s objective in pursuing the suit.⁸³ To the extent, then, that nominal damages serve as a peg for costs, they do so because nominal damages awards are recognized as serving a legitimate judicial purpose. This feature of the law suggests that private law adjudication is at least as concerned with adjudicating legal wrongs as it is with remediating harms.⁸⁴

C. A Declaration of Rights Sometimes Has No Practical Legal Effect

This Article uncovers and focuses on nominal damages actions not accounted for by the declaratory judgment or costs theories. It explains suits that differ from nominal-damages-as-declaratory-judgments suits in two ways. First, these nominal damages suits ask courts to adjudicate the lawfulness of behavior that has already happened, is unlikely to recur, and does not—if left unchallenged—threaten the plaintiff’s legal rights, such as property rights under doctrines like adverse possession.⁸⁵ Second, unlike in declaratory judgment suits, the incentive to comply with the law in these non-declaratory nominal damages suits does not come from the threat of future legal sanctions. Instead, it comes from private ordering in response to the revelation of facts and legal determinations by the court.⁸⁶

Prior to the Supreme Court’s decision in Uzuegbunam, some federal courts distinguished nominal damages suits that have no practical legal effect from those that do, with only that latter cases satisfying standing requirements.⁸⁷ In a concurrence to an opinion permitting a suit for only nominal damages to survive a mootness challenge, Judge Michael McConnell elaborated the view that nominal damages claims ought to be actionable only when they have a practical legal effect. Judge McConnell argued that the Tenth Circuit’s precedent permitting suits for only nominal damages to proceed should be overruled.⁸⁸He reasoned that a claim for nominal damages alone is beyond federal court jurisdiction because “[f]ederal courts exist to resolve live controversies, to remedy wrongs, and to provide prospective relief.”⁸⁹ Since the defendant’s conduct at issue in the case had stopped and was not expected to recur, and because the plaintiffs alleged no compensatory harm, Judge McConnell reasoned that the court could do nothing to make the plaintiffs whole for the alleged constitutional violation.⁹⁰ Chief Justice Roberts’s dissent in Uzuegbunam makes the same argument, contending that “an award of nominal damages does not change [a plaintiff’s] status or condition at all.”⁹¹

Judge McConnell’s concurrence tries to distinguish the case before the court from common law cases in which nominal damages suits are permitted to proceed. The latter, he argues, are limited to situations in which the judgment for nominal damages will have a practical prospective effect on the disputing parties.⁹² To illustrate the kind of case in which an adjudication of the lawfulness of past conduct not expected to recur constitutes a practical effect, Judge McConnell discusses the most prominent examples of nominal damages suits at common law: libel and trespass.⁹³ Nominal damages are legally important, he reasons, only when they affect rights that matter prospectively between the parties, such as when used to “obtain a legal determination of a disputed boundary” through an action for trespass or to prove a libelous statement false.⁹⁴

But this reasoning contradicts Supreme Court precedent at the time, now reaffirmed and expanded in Uzuegbunam, that a plaintiff whose constitutional rights have been violated, but who cannot show compensable harm, can still receive redress through adjudication in the form of nominal damages.⁹⁵ A second problem is that the argument ignores the other causes of action that plaintiffs have long been able to pursue for nominal damages, such as breach of contract.⁹⁶ The Supreme Court explicitly rejected the distinction in Uzuegbunam, holding that nominal damages alone can today, as they could traditionally, provide retrospective and not only prospective relief.⁹⁷ This category of nominal damages suits involving no practical legal effect, however, remains undertheorized.

D. How Nominal Damages Vindicate Is Undertheorized

The judicial opinions discussing vindication as a function of a judgment for nominal damages rarely elaborate the concept of vindication or explain how an award of nominal damages achieves the end of vindication. It is easy to understand how such a judgment can provide vindication in the case of defamation⁹⁸ by establishing that statements made about the plaintiff are false.⁹⁹ But when a dispute involves a matter other than clearing the plaintiff’s good name, it is more mysterious how the entitlement to seek an award of nominal damages vindicates the plaintiff or the right.

Indeed, both scholarly and judicial observers have interpreted awards of nominal damages as trivializing rather than vindicating. Judge Richard Posner has described the suggestion that nominal damages vindicate the plaintiff as risible: “If the plaintiff goes around bragging that he won his suit, and is asked what exactly he won, and replies ‘$1 dollar,’ he’ll be laughed at.”¹⁰⁰ The Ninth Circuit has called nominal damages “trifling and purely symbolic.”¹⁰¹ While the Supreme Court held in Uzuegbunam that nominal damages can provide the redress for past harm required to establish standing, its reasoning does little to erase the impression that the redress supposedly provided is form without substance. The Court relied on the long line of common law precedent assuming that nominal damages provide redress¹⁰² and on the judgment’s effect of ordering the defendant to do something—hand over a single dollar—vis-à-vis the plaintiff “‘to effectuate a partial remedy.’”¹⁰³ Even when the Court held in Farrar v. Hobby¹⁰⁴ that a plaintiff who wins nominal damages in a civil rights suit is a “prevailing party” under a federal fee shifting statute, the Court concluded that “the only reasonable attorney fee” in many such cases “is usually no fee at all.“^¹⁰⁵Id. at 115^.This reasoning implies that such a victory might typically be merely “technical,” which is difficult not to read as “trivial.”

Neither have legal scholars explained how nominal damages might vindicate outside the context of defamation. The English legal philosopher John Gardner described contemptuous damages as a “conspicuously trifling sum” awarded to express contempt for the plaintiff for pursuing a petty lawsuit.¹⁰⁶ Professor Robert Post, in an article on defamation law and reputation, explained that he would “use the term ‘vindication’ to refer to the process by which honor is restored. Vindication should be understood as the mirror image of the ‘denunciation of wrong doing’ which occurs in the criminal law.”¹⁰⁷

But courts use the term more variously. They sometimes use it in the denunciatory sense that Post excludes from his definition.¹⁰⁸ Most often, they use it to refer to the recognition of the importance or even inviolability of rights, treating it as self-evident that litigation can achieve such recognition apart from an exercise of the judicial power to order a right violator to pay damages or change its behavior.¹⁰⁹ The skepticism about nominal damages outlined above demonstrates that this presumption is mistaken. Professor Nathan B. Oman might capture something of this broader sense of vindication by conceiving of private law adjudication as offering vindication by providing a means by which a plaintiff can act against a wrongdoer to reestablish her entitlement to respect and equal standing.¹¹⁰ But Oman’s honor-centered theory of vindication by private law adjudication presumes the availability of damages to the wronged plaintiff.¹¹¹ More generally, vindication is a recognized purpose of tort law, but accomplishing it is usually thought to require more than nominal damages. According to the Restatement (Second) of Torts,

[F]or certain types of dignitary torts, the law serves the purpose of vindicating the injured party. Thus, in suits for defamation, invasion of privacy or interference with civil rights, the major purpose of the suit may be to obtain a public declaration that the plaintiff is right and was improperly treated. This is more than a simple determination of legal rights for which nominal damages may be sufficient, and will normally require compensatory or punitive damages.¹¹²

Whether and how awarding nominal damages can provide vindication, then, remains to be understood. Understanding nominal damages suits from an information-producing perspective illuminates unappreciated aspects of vindication and how litigation, including for nominal damages, might achieve it.

III. Adding a Credible-Information Theory of Vindication

The central claim of this Article is that the law allows suits for nominal damages to vindicate rights and that the vindication provided for completed past harms is essentially the public provision—through an adjudicative process—of credible factual information or legal determinations that can be used in reputation-based private ordering. Nominal damages suits empower the judiciary to provide reliable information about the plaintiff’s or the defendant’s behavior to assess that behavior against legal norms. The availability of a forum in which to produce that information might deter violations of legal rights or aid the plaintiff in receiving redress through a negotiated settlement. The work of deterrence and redress is done by the interaction of the information produced with social forces rather than by the threat of future legal remedies.

The common knowledge of the possibility—and therefore the threat—of the plaintiff bringing an action is critical to the power of informational nominal damages lawsuits. The threat of information being revealed by a suit might improve the likelihood of the plaintiff reaching an acceptable resolution of a dispute through negotiations.¹¹³ Relatedly, that same threat will deter some violations of legal rights.¹¹⁴ Alternatively, a plaintiff can use such a suit to clear her own name when another person’s behavior has threatened her reputation. In addition to reasons of strictly rational self-interest, plaintiffs might sometimes pursue such suits to contribute to the collective good of producing information about bad actors.¹¹⁵ Such altruistic suits might be aided by the emotional satisfaction obtained from imposing reputational costs on a norm violator or from providing information to the community about a violator. The reputational capital earned by revealing valued information to others might also incentivize these suits.¹¹⁶

Informational nominal damages suits operate by the actions of plaintiffs as initiators, courts as adjudicators, and the parties and the public (or a part of it) as a responsive audience. Core features of courts position them to fulfill the function of adjudicating norm adherence effectively by lending judicial conclusions presumptive reliability. Those features are participation, publicity, and process.

A. The Plaintiff’s Purposes

Nominal damages suits have long been a feature of private law, including in tort, contract, and property.¹¹⁷ A plaintiff might seek one of the following types of vindication in a suit for nominal damages: reputational rehabilitation, reputational reckoning, or norm reinforcement and publication.

1. Reputational Rehabilitation

A well-understood purpose of defamation suits is to permit a plaintiff to protect or rehabilitate his reputation against falsehoods. This vindication of the plaintiff’s reputation is achieved not by the awarding of damages but by either a judicial finding of fact that the defendant made false statements about the plaintiff or by the defendant’s admission—procured by the threat or initiation of the suit—that the statements were false.¹¹⁸

A historical example illustrates how a suit for nominal damages can vindicate a person’s reputation.¹¹⁹ In 1913, former President Theodore Roosevelt sued the publisher of a small Michigan newspaper for libel for publishing the statement that Roosevelt got “drunk and that not infrequently.”¹²⁰ This allegation had apparently been made before, and Roosevelt brought the suit to prove it false.¹²¹ The publisher initially defended himself by arguing that the statement was true.¹²² After Roosevelt presented at trial “many distinguished men,” who gave “unqualified testimony” that Roosevelt was abstemious, the publisher retracted the statement in court, saying, “I am forced to the conclusion that I was mistaken.”¹²³ Roosevelt then withdrew his request for damages and asked the court to award only nominal damages, making the following statement in court:

In view of the statement of the defendant, I ask the court to instruct the jury that I desire only nominal damages. I did not go into this suit for money. I did not come into it for any vindictive purpose.

As this court has said, I made my reputation an issue, because I wished once and for all during my lifetime thoroughly and comprehensively to deal with these slanders.

Never again will it be possible for any man in good faith to repeat them. I have accomplished my purpose and I am content.¹²⁴

Other legal actions function analogously to defamation suits. For instance, plaintiffs have recovered nominal damages against banks that wrongfully refused payment on checks.¹²⁵ These verdicts have served to rehabilitate the plaintiff’s reputation with prospective counterparties after a bank falsely indicated to the plaintiff’s trading partners that the plaintiff’s checks were bad.¹²⁶ Similarly, in an action for wrongful foreclosure on a deed of trust, the intervening plaintiff alleged that he suffered “loss and embarrassment” because the bank foreclosed on a commercial property that he had pledged to the bank as security, but which he had redeemed with substitute collateral before selling to another party.¹²⁷ After the sale, the bank wrongfully foreclosed on the property and evicted the purchaser, threatening to damage the seller’s reputation by suggesting that he had fraudulently sold an encumbered property.¹²⁸ In a similar manner, other legal actions—such as those for false arrest and malicious prosecution—can vindicate a plaintiff’s reputation by revealing and making a matter of public record that another party’s conduct rather than his was wrongful, making a suit for only nominal damages valuable to him. For example, a verdict for a plaintiff awarding nominal damages in an action for malicious prosecution can help to clear the residue of suspicion left on the plaintiff’s credit history by an action for collection of a debt recklessly brought even though the plaintiff already paid the debt.¹²⁹ Even though the credit report showed that the court dismissed the debt collection suit, that record leaves the besmirching impression that the debtor paid the debt only after being sued.¹³⁰

2. Reputational Reckoning

In Bond v. Hilton,¹³¹ ship owners sued a co-owner of the ship, who was to serve as its master on a long voyage, for breaching the parties’ contract by delaying the voyage and abandoning the ship to another captain.¹³² The court held that the plaintiffs were entitled to maintain their action for breach of contract and recover nominal damages.¹³³ It reasoned that

it is no answer, except as to the quantum of damages, that the plaintiffs had sustained no actual injury by the substitution of Moss as Captain. The defendant had violated his duty and broken his contract: the plaintiffs had a right to bring their action on the contract, or in tort, and to allege the gravamen to consist in a breach of duty.¹³⁴

Why should the ship owners not be indifferent between two verdicts: (1) the defendant breached the contract but caused no loss; therefore, nominal damages; and (2) no loss, therefore verdict for the defendant? The direct pecuniary result of the two outcomes are equal. The conventional assumption, discussed above,¹³⁵ is that the ship owners would prefer the first outcome only because it might entitle them to recover their litigation costs. On this view, the decision to pursue the lawsuit is like making a speculative investment. The ship owners sue in an effort to show that they suffered loss and to recover damages. They might win or lose, but permitting recovery of litigation costs for establishing a legal violation but no harm lowers the expected cost of trying.

This depiction obscures core features of common law adjudication and ignores important drivers of behavior. It does not explain the location of the line between who may and who may not collect costs. Why should a plaintiff who has failed to show the defendant caused him any loss shift the cost of his lawsuit to that defendant? Why is it the violation of a legal right that determines where to draw that line?¹³⁶

The ship owners likely knew that they had little chance of recovering substantial damages given the evidence available to them, the applicable standards of proof, and the legal limits on recovering damages, including the doctrines of remoteness and foreseeability. Therefore, to fully understand the function of common law adjudication requires serious consideration of the other ends the plaintiffs might have sought by pursuing this suit. The verdict that the defendant breached the contract and neglected his duty—and, importantly, the common knowledge that the law provided for such an outcome—might be valuable to the plaintiffs for several reasons. The prospect of being publicly outed for neglect of duty increases the expected cost of breach and therefore makes petty or risky shirking less likely to occur in the first place. The threat of being publicly exposed in this way could also improve the plaintiffs’ position in negotiating with the defendant to make amends for the breach.

The eighteenth-century English case Leach v. Money¹³⁷(1765) 97 Eng. Rep. 1075; 3 Burr. 1741. illustrates vividly how a plaintiff might achieve reputational reckoning—together perhaps with reputational rehabilitation (discussed above) and rule reinforcement (discussed further below)—through a trial and verdict entirely apart from any recovery of damages. Leach was a printer who was wrongfully arrested for seditious libel as part of a larger operation by the Crown against members of the press.¹³⁸ The state relied on a general warrant—a warrant that failed to specify the persons against whom it authorized search, seizure, and detention.¹³⁹ Officials erroneously arrested Leach in an egregious manner, as they also did to other printers and publishers.¹⁴⁰ They broke into his house, “pulled [him] from his bed, seized papers and took him and his servants to be held under guard. They detained him for four days.”¹⁴¹ The legality of general warrants was disputed, but the court proceedings allowed Leach to clearly establish his own innocence and to expose the state’s egregious conduct.¹⁴² Leach’s attorneys opted to bring the case for false imprisonment and trespass in the Court of Common Pleas rather than the King’s Bench to maximize publicity.¹⁴³ They also strategically put facts in issue to ensure a jury trial, witness testimony, and fact finding to use the court as a platform on which to display how the Crown’s use of general warrants invaded subjects’ privacy and threatened their liberty.¹⁴⁴ Leach’s suit was one of a series of lawsuits brought through coordination by members of the press who had been targeted; the legal proceedings attracted extraordinarily large crowds.¹⁴⁵ Having set up the litigation for maximum visibility and public exposure of the Crown’s conduct—which was embarrassing but not clearly illegal¹⁴⁶—Leach prevailed on his claims and, dramatically, in open court, offered to accept nominal damages.¹⁴⁷ As reported, his lawyers stated, “[t]hat as they had the happiness of feeling vindicated, asserted, and maintained, all the great and constitutional points of liberty, which had been so solemnly debated and determined, they were willing to accept nominal damages.”¹⁴⁸ This declaration earned praise from the court and applause from the audience, further boosting the plaintiff’s public standing even beyond the elevation occasioned by the favorable verdict.¹⁴⁹

A less dramatic case in the United States was reported in a 1907 Sunday edition of the New York Times: “Woman Sued for Principle: Asked and Got Nominal Damages from Men Who Cut Her Trees.”¹⁵⁰ The plaintiff sued a government agency for cutting back her trees to clear a parade route and sought only six cents in nominal damages, stating that she sued “for a matter of principle and to establish her rights.”¹⁵¹ One view of this case is that it is an example of using nominal damages to establish a boundary, as in trespass suits. The plaintiff had an ongoing relationship with the government entity that infringed her right. The agency posed no immediate threat of cutting her trees again, but government officials might possibly seek to do so in the future. With the court’s pronouncement of her right, she could perhaps more readily get or threaten to get an injunction in the event of a future threat. But another explanation of the suit’s purposes and effects is that the plaintiff sued to inflict a reputational penalty on the government actors for cutting her trees unlawfully. The New York Times published the names and official titles of the men who cut her trees.¹⁵² Indeed, even if the prospective effect of winning a suit against the government motivated her, it is as plausible that the reputational consequences for the government of knowingly violating her rights would protect her entitlement as well as any potential coercive legal remedies a court might impose in the future.

3. Rule Reinforcement

Given the costliness of suing, it has likely been historically rare for a plaintiff to pursue a nominal damages suit solely to reinforce or develop norms. It is likely less rare in the age of well-funded impact litigation organizations, discussed further in Part IV below. A repeat player, either with a particular defendant or in a kind of interaction, might pursue norm reinforcement and development for her benefit in future dealings, together with the additional deterrence benefit gained from signaling that she will vigorously pursue violators. In addition to reasons of strictly rational self-interest, plaintiffs might sometimes pursue such suits to contribute to the collective good of producing information about bad actors.¹⁵³ Such altruistic suits might be aided by the emotional satisfaction of imposing reputational costs on a norm violator or of providing information to the community about a violator, as well as by possible reputational capital earned by having revealed that valued information to others.¹⁵⁴

However, a plaintiff might be more likely to seek norm reinforcement, clarification, or development together with fact production. As the Taylor Swift case illustrates, rule reinforcement can be an effect, even an intended effect, of a case in which adjudication of disputed facts is central, even when the norm at issue is itself widely accepted. The norm against unwanted sexual contact was sufficiently widely accepted in 2013, when the defendant violated it, that he was immediately fired and ostracized for the battery.¹⁵⁵ And yet, while the behavior at issue, which the defendant denied, uncontroversially constituted the tort of battery, there remained, for some, refusal to accept the seriousness of “minor” groping.¹⁵⁶ The knowledge that groping is transgressive, that it is the kind of transgressive act that often goes uncontested, and that it can be plausibly denied as accidental or minimized as a joke, are part of the act’s allure. Swift’s suit, filed before the beginning of the Me Too movement but tried during its height, conveyed the message that even “minor” acts of unwanted sexual contact are not funny but disgraceful and unlawful. Even though few people have the power and resources that enabled Swift to pursue the suit and to attract the level of attention that it received, the suit also contributed to an emerging norm of contesting unwanted sexual contact rather than tolerating it.¹⁵⁷

The case of Bond v. Hilton, introduced above, illustrates how a plaintiff might seek to reinforce social norms through litigation in the context of commercial transactions. By successfully pursuing the suit against the shirking business partner, the plaintiffs enlisted the court in public affirmation of the legal and social norm that requires the diligent performance of duties. At the same time, they signaled to third parties that they would vigorously pursue violators.¹⁵⁸

In Leach v. Money, introduced above, we see again how a suit that seeks reputational rehabilitation and reputational reckoning can also achieve norm reinforcement and extension. The innocent printer’s suit against the Crown attracted—indeed, cultivated—public attention to a longstanding law enforcement practice, the use of general warrants, that had long been considered lawful but that violated the public’s sense of respect for privacy and individual rights. The courts did not determine general warrants to be unlawful, but the Crown no longer used them because of the negative attention they attracted and consequent condemnation by the courts.¹⁵⁹

B. The Court’s Role: Courts as Producers of Reputation-Relevant Information

Courts produce three types of reputation-relevant information. For this information to be effective for private ordering, the relevant audience has to consider it reliable. Essential features of judicial system—participation, publicity, and process—allow courts to engage in costly signaling about their reliability as reputational information producers.

1. Types of Reputation-Relevant Information Produced Through Litigation

Courts can contribute to reputational governance both by producing credible factual information and by assessing behavior against legal norms.

Uncovering and processing facts constitutes most of adjudication.¹⁶⁰ As Blackstone remarked, “experience will abundantly show, that above a hundred of our lawsuits arise from disputed facts, for one where the law is doubted of.”¹⁶¹ Raw facts revealed through pleading, discovery, and witness testimony are valuable inputs into reputational governance. This category includes documents, admissions by parties, and witness statements. The perceived reliability of these raw facts will vary. However, the authority of the court increases the reliability of raw facts submitted in judicial process as compared to the same facts provided in other fora or media. When the relevant audience perceives the courts as fair and trustworthy, it views them as filtering for truthfulness, even at the stage of the submission of factual allegations.¹⁶² Courts filter for truthfulness by taking testimony under oath, by having the capability to assess the truthfulness of statements through the litigation process, and by their power to penalize litigants and lawyers for submitting false evidence.

An example of this dynamic was the yawning chasm between the claims of election fraud made by President Donald Trump and his surrogates in public in the months immediately after the 2020 presidential election and the allegations they made in court, where they expected to have to prove them. Of course, the existence of this gap failed to convince many Trump supporters that the election fraud claims were false, for several reasons: public ignorance about what was happening in the litigation, a decline in the quality of the media environment and trust in the media, and mistrust of courts and elite institutions more generally.¹⁶³ Nonetheless, the gap between the claims made outside of court and those made in court was widely reported, including by center-right media outlets whose audiences were likely more inclined than the median American to be receptive to the election fraud allegations.¹⁶⁴ The difference between the allegations made in the legal complaints and those made outside of legal fora convinced some people that the claim that the election was stolen was false.¹⁶⁵

Compared to raw factual inputs, factual conclusions reached through judicial process are more important when the facts in question are not readily ascertainable from raw evidentiary inputs but require sifting and synthesis. As noted above, the prospect of such fact finding by a competent and trusted adjudicative body will sometimes force explicit admissions or imply facts through omission in pleadings. Further backward induction implies that the prospect of fact-finding will also deter some wrongful conduct and press some wrongdoers to offer compensation voluntarily to avoid litigation.

The effect of legal conclusions in reputational governance is more nuanced. Blackstone’s observation that most lawsuits arise from disputed facts rather than disputed law is relevant here.¹⁶⁶ To the extent that legal obligations are sufficiently unclear that they require a judicial determination of what the law says, the party adjudged to have committed a legal wrong might suffer little reputational harm. If the conduct at issue appears to consist of bad-faith attempts to get as near as possible to violating another’s rights without crossing a legal line, then it would seem that the factual revelations about the wrongdoer’s conduct would do more work than the determination that the wrongdoer miscalculated and did indeed cross the line into unlawful behavior.

However, legal determinations matter for reputational governance because they address the problems of uncertainty about the content of norms and plausible deniability. The ex ante effect of the availability of adjudication is important to adjudication’s performance of these functions. That each party knows that the other has access to an authority empowered to publicly draw lines between conforming and breaching behavior incentivizes the parties to be attentive to the location of those lines. Reputationally conscious actors will have reason to be careful about their own behavior that might plausibly be found to violate the law or to be vigilant about resisting behavior by others that appears to opportunistically push boundaries. They might be more likely to explain their own conduct, or challenge others’ behavior that they believe to be plausibly law-violating. The availability of a forum for adjudication therefore creates incentives to engage in negotiations when behavior might plausibly violate rights.

Moreover, some good-faith disagreements about the content of legal norms or how they apply to a particular case might most effectively be resolved through adjudication. Nominal damages adjudication that functions solely to clarify legal norms in this way fits with the theory of nominal damages suits as declaratory, described above.¹⁶⁷ This type of suit is analogous to an action for trespass that serves to clarify the location of a property line. However, appreciating the role of adjudication in reputational governance reveals that, once the line is clarified, it is not necessarily the threat of future legal sanctions that does all of the work of producing compliance. Rather, reputation might also be a significant driver of adherence to legal norms.

In addition to or instead of determining that a party has violated the law, courts might condemn behavior revealed in litigation or exhort a party to conduct itself differently in the future.¹⁶⁸ Analogously, Professor Edward B. Rock has shown how the Delaware Court of Chancery contributes to reputational and internal normative control of elite corporate managers and lawyers. These professionals are insulated from the effects of damages awards by liability insurance and wide discretion granted by the applicable doctrines of fiduciary law, such as the business judgment rule.¹⁶⁹ The court employs narrative, interweaving detailed factual accounts of their behavior with normative assessments of that behavior and exhortation in something like a sermon, giving content to the vague standard of “good faith.”¹⁷⁰

2. Determinants of Judicial Credibility as Information Producers

The facts produced and conclusions reached through litigation must be trusted as reliable for reputational litigation to be effective. The most basic requirements for confidence in courts are perceived judicial independence, impartiality, and competence.¹⁷¹The trust and confidence that courts must sustain to be presumptively reliable adjudicators depends to some extent on factors that vary depending on the relevant audience and the kind of dispute. For example, in a commercial dispute between sophisticated parties, it might be necessary for the court to be, and to be perceived as being, knowledgeable or educable about the relevant commercial realities. In disputes with political implications, perceptions of politically biased decision-making undermine trust in judicial conclusions.¹⁷² Three characteristics of judicial process—participation, formal adjudicative procedures, and publicity—allow courts to engage in costly signaling about their independence, impartiality, and competence. These characteristics therefore improve confidence in the information produced by courts.

Adjudicative procedures are the rules for participating in adjudication. In civil adjudication, this process begins with the right of petition, which makes the court a responsive forum in which persons may hold to account others whom they believe have violated their rights.¹⁷³ The right of petition contributes to trust in courts because holding agenda-setting power protects against judicial dependence and partiality.¹⁷⁴ In addition to the right of petition, the rights of participation and the procedures governing participation offer further protections against partiality, dependence, and incompetence.¹⁷⁵ Those include the rights to present one’s case and defend one’s case, and the right of each party to present evidence and arguments—with formal procedures governing the exercise of these rights. These protections are buttressed by the publicity of proceedings and by involving other members of the public in decision-making as jury members.¹⁷⁶ Publicity works in concert with participation and formal procedure to contribute to adjudicative legitimacy by making judicial partiality, dependence, and incompetence easier to detect.

C. Audiences

The availability of a suit for nominal damages allows a person whose legal right has been violated to notify a relevant audience, even where the violation, by chance or calculation, does not result in harm compensable by law. The value to a plaintiff of these suits will vary according to whether there is an audience that has the capacity and will to respond to information produced through litigation in a way that achieves the desired reputational consequences. It is not necessary that the parties be famous or that the issue be one of great public importance; the audience need not be large for a plaintiff to benefit from a reputational suit. The remedy sought might be nothing more than a judgment that a plaintiff can bring to the attention of particular persons with whom she deals or will deal in the future.¹⁷⁷

A significant determinant of whether such an audience will exist is judicial credibility, either generally or within the particular social fields of the parties’ concern, as discussed in the preceding Section. Another factor that might impact credibility is the relationship between the legal norms at stake and the social norms of the relevant audience. Incongruence between legal and social norms will undermine a court’s effectiveness as a contributor to reputational governance most directly when the legal wrong at issue is not considered a moral wrong by the relevant audience. If legal norms do not track moral ones, then a person announced as a legal norm violator might not suffer or expect to suffer social sanctions for violating the law. In that case, judicially enforced remedies are necessary to deter or make whole. The reputation penalty that accompanies a successful suit for violation of a legal norm that is also a social norm is analogous to either a fine on the norm-violating behavior—if the plaintiff does not enjoy a reputational boost from prevailing in the suit—or additional damages, if the plaintiff receives reputational benefit. Conversely, when the legal norm conflicts with a social norm, the plaintiff might suffer a reputational penalty from bringing the suit, and the defendant might enjoy a reputational boost. To enforce the legal norm in this situation requires additional damages to offset these reputational effects for both parties. Informational nominal damages, for instance, would not effectivelyenforce anti-discrimination laws in a society that rewards invidious discrimination. Laws intended to change social norms are more likely to require damages for effective enforcement—damages large enough to offset the perverse reputational effects that might result from publicizing the discriminatory conduct.

Must the law have any particular relationship to conventional norms for a court to provide valuable information by ascertaining facts? As long as the divergence of governing legal norms from social norms does not render the court entirely untrustworthy in the eyes of the relevant audience, the court can still be an effective fact adjudicator for reputational governance. For example, as long as a court is trusted as a disinterested, neutral adjudicator, a court can restore a defamed person’s reputation by its finding of fact that statements made about her were false. For courts to serve this function, the relevant audience must trust the courts as fact-finding bodies even if not as upholders of theaudience’s norms. However, the relationship between the legal norms upheld by the court and the norms of the relevant audience is not entirely irrelevant to trust in courts as fact finders. If the relevant audience perceives the court as committed to norms that are antagonistic to those of the relevant audience, then the court’s presumptive trustworthiness as a factual adjudicator might be jeopardized.¹⁷⁸

One might also wonder why a court would not merely chastise the defendant for its wrongful behavior instead of deciding in favor of a plaintiff who has been legally wronged and awarding nominal damages. When the relevant audience for reputational information was primarily geographically local and litigation was a community spectacle, which would have been true of many lawsuits historically, exhortation from the bench might have been effective even without entering judgment against a defendant.¹⁷⁹ Recall the role that permitting plaintiffs to prevail and receive nominal damages plays at earlier stages of litigation in enabling plaintiffs to get to fact revelation and adjudication.¹⁸⁰ If not for the rule that a plaintiff is entitled to receive nominal damages if she succeeds on the merits of her claim, some suits would never get far enough to establish that wrongful behavior occurred. Further, the normative content and the communicative clarity of a judgment for a plaintiff might in some social environments make it a more effective input into reputational governance than a judgment for a defendant on the basis that the plaintiff did not establish harm. The message received, particularly by non-lawyers, from a judgment for a plaintiff together with nominal damages is that the defendant committed a legal wrong against the plaintiff. Judgment for a defendant on the basis that the plaintiff did not establish harm will sometimes convey—both to the parties and to the audience—that either no wrong occurred or, if one did occur, it was trivial. In communicating the outcome, the different judgments mean the difference to the plaintiff between: (1) saying a court found in her favor and against the defendant; or (2) explaining that, although she lost her lawsuit, it was only on a technicality or that the court admonished the defendant. A defendant could diminish the perceived wrongfulness of her conduct by pointing out that she won the lawsuit.

Communicative clarity might be more important when the audience for the reputational information devotes less time and attention to judicial pronouncements, when judicial decisions are not reported in detail or reliably, or whensuch reports are not readily accessible to the relevant audience. For instance, historically, when legal reporters took notes by hand on opinions read from the bench, there was a high risk that the reporter would miss or intentionally omit exhortations because they focused on recording the legal conclusions.¹⁸¹ Therefore, the court’s judgment—the pronouncement that a plaintiff prevailed in the suit even if only for nominal damages—might have been necessary for reliably conveying that a defendant committed a legal wrong. Other factors that affect the importance of communicative clarity and the means of achieving it in a judgment include the quality of media reporting and the heterogeneity of norms among the relevant audience.¹⁸² As noted above, courts might have sometimes used nominal damages to express judicial contempt for a plaintiff deemed to have pursued a frivolous suit.¹⁸³ However, in other reasoned decisions, courts do not ascribe pettiness to a plaintiff who is entitled to nominal damages; rather, they treat the plaintiff as pursuing a valid entitlement.¹⁸⁴

IV. Puzzles and Implications

A. Are Courts Self-Consciously Performing This Function?

The account given above might be seen as largely functionalist because it focuses on the plaintiff’s and defendant’s purposes and incentives that depend on social factors that are to some extent external to the law. Those who take seriously the internal point of view of the law might wonder whether judges, in addition to some plaintiffs and defendants, have historically understood themselves to be engaging in reputational governance. Is the reputational governance function of nominal damages litigation a purpose of the legal rule permitting such suits or only a fruitful side effect? This Section offers preliminary remarks on this question.

In defamation law, it is uncontroversial that courts are knowingly engaged in reputational governance.¹⁸⁵ Beyond defamation law, judicial opinions seldom elaborate on how nominal damages achieve vindication. As discussed above, some decisions refer to nominal damages as technical in a manner that implies that they are trivial.¹⁸⁶ In contrast, other decisions treat nominal damages as the plaintiff’s legitimate entitlement without suggesting that they are trivial or expressing any contempt for the plaintiff who seeks them. This appears to be the more common posture toward nominal damages. Among those cases, some explicitly connect the availability of nominal damages to the plaintiff’s interest in reputational rehabilitation.¹⁸⁷ However, the modal approach appears to be simply to assert, without elaborating, that nominal damages vindicate.¹⁸⁸

Nevertheless, by invoking vindication, courts intimate that they are engaging in a practice that entails, and that is at a minimum difficult to disentangle from, reputational governance. That is because vindication means to show to be blameless, right, reasonable, or justified, which implies an audience for the showing.¹⁸⁹

Constitutional tort cases more explicitly connect the vindication provided by nominal damages to reputational governance, specifically the two purposes of reputational reckoning for wrongs and rule reinforcement. When judges suggest that vindication is about “making the deprivation of . . . rights actionable” to “recognize[] the importance to organized society that those rights be scrupulously observed,”¹⁹⁰ they are invoking the judicial practice of authoritatively reinforcing the law by publicly adjudicating violations. When they refer to “alert[ing] the municipality and its citizenry”¹⁹¹ to violations of legal rights, they acknowledge the judicial function of community notification. These statements implicitly recognize the power of declaring wrongs even apart from awarding compensation. When courts declare behavior wrongful and issue judgment even absent the establishment of compensable harm, that action communicates that the rules and the court’s application of them have normative force that transcends the imposition of coercive remedies. In declaring the wrong and declining to impose a sanction or remedy, the court makes a claim about its legitimate authority to assess behavior relative to legal norms.

Judicial opinions granting nominal damages sometimes do so explicitly to spare the plaintiff who proved a violation of rights but failed to establish compensable harm from paying court costs.¹⁹² This observed practice does not contradict the account given here. These discussions occur primarily in cases in which there is a statutory provision for the plaintiff to recover attorney’s fees.¹⁹³ It bears explaining why judges believe that the plaintiff who failed to establish compensable harm ought not be held responsible for the costs of litigation. That judges conceive of it as self-evident that such a plaintiff ought not bear the costs of the suit implies that there is value in the suit itself apart from the availability of standard compensatory or injunctive remedies.

B. Constitutional Torts Today: A Special Case?

What does the theory of nominal damages presented here imply for the Supreme Court’s recent decision in Uzuegbunam v. Preczewski and constitutional tort suits more generally? The Court correctly recognized that suits for nominal damages have long been held permissible under the common law. However, recognizing that the effects of nominal damages suits for reputational vindication vary depending on the social and litigation environment might make some observers sympathetic to the concern expressed by Chief Justice Roberts in his dissent about nominal damages suits being used in a way that unduly expands the power of the federal courts.¹⁹⁴

The prevalence of nominal damages suits in constitutional tort cases in recent U.S. history has historical analogs. A significant branch of the nominal damages cases consists of suits against government officials for violations of privaterights that result in harms that cannot be proven to the applicable standards or are hard to measure monetarily.¹⁹⁵ In other cases against government actors, the plaintiffs demand only nominal damages because the reputational consequences of prevailing accomplish their goals.¹⁹⁶

It is not surprising that a long-running body of nominal damages cases involves suits against government officials. Reputational lawsuits have special force in the public sphere. To a greater extent than in other social fields, the force of legal rules against government officials relies on reputational enforcement in the form of elections and funding decisions by other branches of government.¹⁹⁷ As professors Jack Goldsmith, Daryl Levinson, Oona Hathaway, and Scott Shapiro have argued, domestic public law is largely unenforceable by conventional coercive means because there is “no sovereign above the sovereign.”¹⁹⁸ Hathaway and Shapiro persuasively theorize domestic public law as being law that—like medieval Icelandic law, classic canon law, and international law—is enforced through a reputation-based mechanism they call “outcasting.”¹⁹⁹ Judicial recourse—including through suits for nominal damages for the deprivations of private rights that cause harm that is difficult to value in monetary terms—makes it possible for a person subjected to a violation of her rights by a government actor to establish and publicize the violation and to possibly attract the attention of voters, activists, or other government entities with authority or influence over the violator’s power.

As discussed above, the effectiveness of nominal damages suits in providing vindication depends on the actual or expected reactions of the public, or a subset of it, to the information produced by the courts. These suits can be ineffective if (1) the relevant audience is not paying attention to what the courts are doing; (2) the relevant audience does not trust the courts’ factual or legal conclusions; (3) the relevant audience does not care about wrongs committed against certain persons; or (4) norms are so heterogeneous as to undermine the effects of any social repercussions that might result among relevant subgroups.

Conversely, it might be possible to use nominal damages suits in a way that is so out of proportion to their historical role that they aggrandize judicial power relative to the authority of other government actors, and in the context of our federal system, perhaps especially state and local government actors.²⁰⁰ There were historically natural limits to a plaintiff’s ability to bring nominal damages suits, such as the costliness of litigating and of transmitting information about litigation. Those constraints have been loosened by the existence of deep pocketed impact litigation organizations and the effectiveness of social media at disseminating information to activate public reactions.²⁰¹ It was suggested above that nominal damages suits for norm reinforcement and publication have historically been rare because they would not ordinarily provoke the kind of organic public reaction that normally gives nominal damages suits their force. It might be that the existence of well-funded impact litigation firms has fundamentally changed this dynamic and made a substantial proportion of nominal damages suits, at least those against public officials, largely about inflicting litigation costs on government actors.²⁰² One possible response that courts might employ, drawing from the harmless error doctrine, is to formulate a set of factors for deciding when nominal damages ought to be available for past harms and when dismissals of such suits should be affirmed.²⁰³

C. Reputation Effects and Remedies

1. Should Reputational Nominal Damages Suits Be Subsidized?

If the information provided by nominal damages suits is valuable for social ordering, should the law incentivize the filing of more suits by awarding prevailing plaintiffs substantial damages even if they do not show harm? If plaintiffs could win sizeable damages without showing compensable harm, it would incentivize the pursuit of more lawsuits with low informational value and would likely increase the incidence of frivolous or abusive lawsuits. To be sure, permitting nominal damages suits makes more frivolous lawsuits possible.²⁰⁴ However, balanced against creating an opportunity for frivolous suits is the value of permitting persons to bring claims to vindicate their legal rights and legally protected interests and the associated community interests described above. Allowing such suits to proceed while capping recovery to nominal damages filters in plaintiffs that place a high value on the information produced through litigation and cases in which the information produced has high social value. These two aspects of the value of information produced are correlated.

To see the tendency of nominal damages suits to filter in suits that produce information with high social value, consider that when the plaintiff’s payoff from litigation comes predominantly or exclusively from the information revealed by the suit, the likelihood that a plaintiff will pursue the suit increases with the social value of the information revealed.²⁰⁵ This is not a mere tautology: the plaintiff will value the information more when it is more important to third parties. In other words, the magnitude of the informational value of the suit for the plaintiff is a function of its value to third parties. Other than the occasional crank, it would not much benefit a plaintiff to have a court ascertain a fact or make a legal judgment the response to which is a shrug.

Permitting suits to proceed for nominal damages for alleged violations of legal rights therefore reflects a judgment that the courts exist to give citizens the opportunity to assert their legal rights, to hold violators to account, to prompt the state to reinforce selected legal norms, and to alert the community to violations of legal and social norms. The absence of public subsidy for informational suits in the form of supracompensatory damages or more liberal standards of proof of loss is consistent with a judgment that the informational value of suits should be determined organically by individual demand for information and current community norms.

That is not to say that this somewhat crude filter will not also permit suits producing information with low social value to proceed. The filters of the common law are not susceptible of perfect refinement. The choice is between overinclusiveness and underinclusiveness. Permitting suits to proceed for nominal damages is consistent with an institutional judgment that, given the core purposes of common law courts, it is preferable to permit suits that might produce information that is valuable to the individual seeking vindication, to the state, and to the community or society even given the increased risk of abusive or frivolous litigation.

2. Nominal Damages as an Anchor for Punitive Damages

Some courts permit a plaintiff to receive punitive damages when the only other damages awarded are nominal if a defendant behaved egregiously.²⁰⁶ They sometimes allow punitive damages even where the facts leave little question that no harm in fact occurred.²⁰⁷ Awarding punitive damages in such cases is consistent with the informational theory of nominal damages presented here. Punitive damages are appropriate when a defendant’s actions suggest invulnerability to the reputational effects of an adverse judgment for nominal damages.²⁰⁸ Punitives are for the shameless. Judicial decisions awarding punitives on the basis of nominal damages suggest that a defendant’s open defiance of social norms requires an award of punitive damages to reinforce those norms.²⁰⁹

In the famous case Jacque v. Steenberg Homes,²¹⁰ the Wisconsin Supreme Court awarded punitive damages for a one-shot trespass when the defendant hauled a trailer over private property after being repeatedly admonished by the property owner not to do so.²¹¹ The trespass caused no harm to the property.²¹² The court explained its decision to follow the minority view by permitting an award of nominal plus punitive damages to stand by reasoning from a nineteenth-century English case:²¹³

In Merest, a landowner was shooting birds in his field when he was approached by the local magistrate who wanted to hunt with him. Although the landowner refused, the magistrate proceeded to hunt. When the landowner continued to object, the magistrate threatened to have him jailed and dared him to file suit. Although little actual harm had been caused, the English court upheld damages of 500 pounds, explaining “in a case where a man disregards every principle which actuates the conduct of gentlemen, what is to restrain him except large damages?”²¹⁴

The Jacque court goes on to assess the social interest in “punishing and deterring intentional trespassers beyond that of protecting the interests of the individual landowner.”²¹⁵ Those interests include “preserving the integrity of the legal system” to give citizens faith in its ability to protect their rights to prevent them from engaging in violent self-help.²¹⁶ The court also invokes the commonplace desire to see wrongdoers punished even when the wrongs do not inflict costly harm, as well as the state’s interest in deterring the tortfeasor from intentionally violating the legal rights of others in the future.²¹⁷ The trespasser’s behavior in Jacque is like the magistrate’s behavior in Merest in that it similarly expresses open defiance of the legal and social norms at issue when confronted with those norms by a community member before engaging in the wrongful conduct.²¹⁸

Perhaps the Wisconsin Supreme Court in 1997 recognized a decline in the force of community-enforced reputational sanctions. The lesson of Jacque is that reputation-based community enforcement has a limited domain.²¹⁹ Its effectiveness is attenuated by shamelessness, concentrated power, and community inattention or indifference. Reputational enforcement often fails to protect persona non grata within a group and, as the long history of invidious discrimination demonstrates, incentivizes harms against oppressed minorities.²²⁰ It will tend to be less effective as norms among relevant audience members become more heterogeneous. The next Section examines some implications of the limits of reputation-based enforcement for damages more generally.

3. Implications for Damages

Looking beyond nominal damages, the analysis above suggests that judges and policymakers should sometimes consider the reputation effects of adjudication when selecting remedies. The law provides for remedies disproportionate to the wrong—such as punitive or other supracompensatory damages—when the probability of detecting the wrongful conduct is low.²²¹ Disproportionate damages offset the reduction in deterrence that results from the wrongdoer’s discounting of damages by the likelihood of being caught. Similarly, disproportionate damages can also counteract reductions in deterrence caused by reputational effects. Reputation effects might undermine deterrence when they impose social costs on the plaintiff for pursuing a claim or create benefits for the defendant for having engaged in the conduct at issue in the litigation. Such effects might occur, for instance, in litigation to enforce antidiscrimination laws in a society that overtly favors oppression of members of particular groups.²²²

There are related implications for optimal remedies more generally. In many suits in which the alleged loss consists of lost profits, plaintiffs know that it will be difficult to establish the loss to the applicable standard of reasonable certainty.²²³ And even after a plaintiff adjusts their expected compensation based on the reasonable certainty standard, they must further discount this expectation to account for the contingencies and uncompensated expenses inherent in pursuing litigation. For example, it is black-letter law that the default remedy for breach of contract is expectation damages—the amount of money necessary to put the nonbreaching party in the position she would have been in had the other party performed the contract as promised.²²⁴ An important line of criticism of expectation damages is that they might systematically undercompensate, leading to inefficiently high levels of breach of contract.²²⁵ But inefficient breach of contract might be less common, at least over some range of transactions, than is suggested by conventional economic theories that consider only direct pecuniary incentives.²²⁶ Undercompensation sometimes results from the legal limits on recovering damages, including that they be proven to a reasonable certainty and that they be foreseeable.²²⁷ Additionally, a breached-against party might not be willing to reveal information necessary to prove its expectation damages, which will often include lost profit.²²⁸ Proving lost profit often requires revealing sensitive information about the business that might damage the plaintiff’s bargaining position in future negotiations or weaken its competitive advantage in the market.²²⁹ Recognizing that a plaintiff may pursue nominal damages in a breach of contract suit introduces the possibility of a plaintiff declining to provide evidence of damages or of some aspects of its losses and pursuing a suit exclusively or substantially for its reputational reckoning value. When the reputational value is sufficiently large to deter the breach, the availability of litigation expands the scope and effectiveness of reputational governance and therefore reduces the incidence of breach. Of course, a great many breaches of contract will not involve behavior that other potential counter-parties will view as wrongful, limiting the range of possible breaches that could be deterred by the prospect of reputational nominal damages litigation.

Conclusion

The judicial information-providing function is powerful. Even apart from courts’ coercive enforcement power—even in a situation in which that power is effectively nonexistent—they have the power to uncover information and to label it as wrongful, which prove to be effective drivers of behavior under certain conditions. Separating the information-uncovering and behavior-labeling functions of courts from the enforcement (that is, asset- and body-seizing) functions illuminates how adjudication by courts contributes to social ordering, how it interacts with private ordering, and, consequently, its nature.

Adjudication by courts expands the range over which social forces can sanction behavior that a relevant audience deems norm violating. That is because courts can feed presumptively reliable information that would not otherwise be available into the relevant social fields. If calculative self-interest is an important driver of compliance with social norms, then this function of courts is important because it increases the likelihood that the norm violator will be caught by thwarting his efforts to hide his misdeeds or to maintain plausible deniability under complexity that tends to obscure cause and effect relationships.

Over a more limited range of social environments—those in which an audience accepts judicial norm-setting authority in addition to viewing courts as reliable factual adjudicators—nominal damages suits can reinforce norms by bringing the authority of the courts to bear in publicly restating and reminding the audience of those norms. In these cases, adjudication might govern behavior through several mechanisms. It might affect the relevant audience’s assessment of whether behavior is wrongful, thereby activating social sanctions against those adjudicated to have committed wrongs. Apart from its effect on social sanctions, adjudication—and the prospect of adjudication—in such cases might affect the behavior of those persons who abide by norms because of moral commitments or because of extra- or quasi-rational mental states such as emotions.²³⁰

Recognizing that courts can govern behavior in these ways complicates the Holmesian characterization of the law and the Posnerian characterization of adjudication as resting essentially on the power to sanction or to coerce compensation.²³¹ Even viewing the law’s governing power through a rational-choice lens, an accurate understanding of the incentives facing decision-makers requires taking into account how the law and courts affect the social repercussions of actions. Legal scholars have conventionally viewed reputation-based governance as an alternative to courts and legal ordering—as an “opting out” of the legal system.²³² Recently, leading scholars have encouraged looking beyond the conventional paradigm of “small, geographically concentrated, close-knit groups” understood to rely heavily on reputation-based governance and “explore the wide variety” of institutional structures that support private ordering.²³³ The common law’s provision for reputational nominal damages suits is one such institutional structure. Its presence highlights that modes of private ordering often presumptively characterized as “extralegal” are not necessarily entirely so. In addition to revealing the private-ordering power of state ordering by adjudication, the account given here highlights—in opposition to Hobbesian, sanction-centered conceptions of law—how the effectiveness of legal ordering depends on social factors, particularly audience perceptions of judicial reliability as factual and normative adjudicators.

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Nominal Damages as Vindication

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