A Brief Unjust Enrichment Primer

The Department of Justice recently announced that it was pursuing an "unjust enrichment" claim against Lance Armstrong. This is part of a larger web of litigation involving allegations of breach of contract, False Claims Act violations, and fraud, to name some assertions. This comment only provides a brief unjust enrichment primer.

Unjust enrichment has an ancient history based upon broad principles of fairness. It is often combined in litigation with assertions of fraud or breach of an implied contract. Unjust enrichment is a 'know it when you see it' assertion of injustice and is difficult to reduce to an exact and easily applied remedy.

The following questions are frequently before a court when unjust enrichment is asserted. Did a contract exist that precisely defined the rights and responsibilities of all parties so that only it should be considered? Were there implied expectations that a court should enforce? Was fraud, separate from a contract, committed? Did a party violate a fiduciary duty to obtain the benefit? Does the one claiming unjust enrichment have clean hands? Did the claimant fulfill basic obligations to inquire and investigate prior to entering into the transaction? Does a statute or regulation define or limit the available remedies? Has technology created a new form of property and wealth that the law has not previously addressed? Has so much time passed that a statute of limitations prevents an otherwise meritorious suit?

Consider two recent statements in federal courts of appeal decisions. The Seventh Circuit stated in February, 2013, that remedial unjust enrichment asks for the profit that the defendant obtained by a wrongful act and substantive unjust enrichment addresses situations in which the defendant by mistake or theft obtained something that belonged to another or the plaintiff rendered a service for which he should have been paid. (Thomas v. UBS AG)

The Tenth Circuit, applying Utah law, wrote in January 2013, in a contract related case, that "the elements of an unjust enrichment claim are (1) "a benefit conferred by one person on another," (2) "the conferree must appreciate or have knowledge of the benefit," and (3) "acceptance or retention by the conferee of the benefit under such circumstances as to make it inequitable for the conferee to retain the benefit without payment of its value." (American Media Classics v. Rainbow Media Holdings)

In summary, in applying unjust enrichment a court considers the entire circumstances of a situation with an eye to fairness and the prevention of inappropriate conduct. Courts assume broad authority to do justice and applying the doctrine of "unjust enrichment" is one of many ways that this goal is accomplished.