Campbell v. Tennessee Valley Authority

Raymond Campbell (plaintiff) entered into an agreement with Earl Daniel, the director of the technical library at the Tennessee Valley Authority (TVA) (defendant), to reproduce 13 sets of technical-trade journals on microfilm for $30,240. Daniel did not have the authority to make this purchase for TVA and entered the contract without the knowledge of his superiors. Campbell delivered the microfilm to TVA and destroyed the journals he had reproduced, pursuant to Daniel’s instructions. The microfilm was placed on the library shelves and available to patrons for two months. The microfilm was then returned to Campbell by registered mail with a letter from Daniel stating that he had no authority to enter the contract, that there was no contract, and that the price was excessive. Campbell refused to accept the microfilm. TVA continued to refuse to pay for the microfilm, stored the microfilm, and forbade the microfilm’s use. Campbell then filed suit, claiming an express contract. The district court granted TVA’s motion for summary judgment because Daniel had no authority to enter into an express contract for TVA. Campbell amended his complaint to set forth a claim of quantum meruit. At trial, the district court instructed the jury that the proper measure of damages was the fair market value of the microfilm. The jury awarded Campbell $30,240. TVA appealed, arguing that in quantum meruit, the proper measure of damages is the amount by which TVA actually benefited or was unjustly enriched.