concurring in part and dissenting in part:
While I unhesitatingly agree with the majority that Snepp’s actions in breaking the contract were willful, deliberate and surreptitious, and that an injunction against future acts was appropriate, my disagreement lies in the rejection of the constructive trust established by the district court. I would affirm the district court in the entirety.
The majority apparently contends that there was no breach of Snepp’s fiduciary duties in publishing nonclassified material, even though the secrecy agreement provided that all material would first be submitted to the CIA for approval prior to publication. It is true that, in answer to an interrogatory requesting information as to classified material contained in Snepp’s book, the government did state that for the purposes of this litigation the government does not contend that any information was classified. The government did not affirmatively state that the book did not contain classified material. The majority states that, on remand for good cause shown, the government may amend its answer to the interrogatory and prove that classified material was published. Once this had been done, it is available to the public and the media and the purpose of any classification has been destroyed.1 If Snepp had followed the dictates of the Marchetti cases, the CIA would have been afforded the opportunity of segregating classified from unclassified material. Indeed, the majority states that if the classified material is disclosed on remand, then its conclusion as to the impropriety of imposing a constructive trust would be different. It seems to me that this is too great a penalty to exact where a constructive trust affords a ready solution to the problem and will act as a moderate deterrent, not only to Snepp but also to others similarly inclined.
Contrary to the view of the majority, the 1968 secrecy agreement does, in my judgment, establish a fiduciary relationship in that it requires all material to be submitted for review prior to publication. The majority agrees that a fiduciary relationship exists with regard to the duty not to disclose classified material, but expresses the view that this fiduciary relationship does not apply with respect to unclassified material. The 1968 secrecy agreement was no ordinary contract; it gave life to a fiduciary relationship and invested in Snepp the trust of the CIA. When Snepp accepted this trust, the disclosure of this same information from sources and methods available solely to the CIA did not release him from his fiduciary relationship to remain silent— at least until the CIA had an opportunity to *939review the material he intended to publish. Even without the secrecy agreement there existed a duty on Snepp not to reveal any confidential information obtained by reason of his employment by the CIA, even after he resigned. Restatement (Second) of Agency, §§ 395, 396, pp. 221 — 227.
The majority cites Restatement (Second) of Agency, § 400, comment c, as authority for the fact that not all contractual duties on the part of an employee are fiduciary in nature. I agree, but the very next sentence qualifies that comment by stating that “he [the employee] is not thereby liable for the profits made in such time if he does not use the facilities of the employer or confidential information, and does not act in competition with him.” Assuredly, Snepp made use of confidential information in this case, whether classified or unclassified.
A constructive trust is defined as a relationship with respect to property subjecting the person by whom the property is held to an equitable duty to convey it to another on the ground that his acquisition or retention of property is wrongful and that he would be unjustly enriched if he were permitted to retain the property. Restatement (Second) on Trusts, § le, p. 5. Where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it, a constructive trust arises. Restatement of Restitution, § 160, p. 640. And in some situations “a benefit has been received by the defendant but the plaintiff has not suffered a corresponding loss or, in some cases, any loss, but nevertheless the enrichment of the defendant would be unjust. In such cases, the defendant may be under a duty to give to the plaintiff the amount by which he has been enriched. Thus where a person with knowledge of the facts wrongfully disposes of the property of another and makes a profit thereby, he is accountable for the profit and not merely for the value of the property of the other with which he wrongfully dealt.” Restatement of Restitution, § le, p. 14.
Snepp’s case fits the foregoing statements like a glove. All of the elements are present and it strikes me as improper that a court should literally require a demand for punitive damages, never demanded by the government, in order to accede to Snepp’s demand for jury trial. Moreover, any judgment hereafter obtained against Snepp may indeed be worthless and the government’s efforts to effect collection would go down the drain. The remedy afforded by the majority will operate as little or no deterrent in future cases.
I am uncertain as to whether the majority has attempted to establish a rule of punitive damages in federal law, or whether the court relies upon Virginia law, the forum in which this case was tried. Footnote 12 suggests that Virginia law applies.2 *940Assuming that state law applies, it would subject the government, in similar cases, to the varying principles of state law applicable to punitive damages. Overlooked is the fact that different state courts limit, or even prevent altogether, any recovery of punitive damages even where a defendant is entirely culpable, as is Snepp in the instant case. As stated in Dobbs, Remedies, § 3.9, p. 208, the state rules have varying degrees of support, but all have some including (1) that the plaintiff may not recover punitive damages unless he can also recover compensatory damages; (2) that punitive damages must be commensurate with the amount of compensatory damages; (3) that equity will not entertain claims for punitive damages; (4) that mass disaster litigation against one or a small number of defendants should not yield punitive damages; and (5) that a principal is not vicariously liable for culpable torts of his servants.
During the pretrial proceedings in the present case, the government conceded that it could not prove any dollar damages and that it had no adequate remedy at law.3 In federal courts located within states which require some recovery of compensatory damages before punitive damages are recoverable, the government woilld be left with a claim for nominal damages — not exactly an item which will deter former CIA employees and publishers who are anxious to profit commercially on national and international secrets available to the CIA. In fact, I express grave doubts whether the threat of punitive damages, assuming that they are recoverable under state law, will deter former employees who may be secretly or openly protected by the publisher, thereby protecting the former employees from any loss by reason of an adverse judgment.4
The majority agrees that, with the exception of the issue of damages, Snepp’s case presented no issue of fact for the jury to resolve. See footnote 4 of majority opinion. The complaint alleged that Snepp failed to submit the manuscript for prepublication review pursuant to the 1968 secrecy agreement and sought a declaration that Snepp *941had breached his contractual and fiduciary duties, for which the government was entitled to (1) damages in an unspecified amount for breach of contract, (2) an injunction against further breaches, (3) an accounting of the past and future revenues from the sale of the book (Snepp had already received $60,000 from the publisher), and (4) the imposition of a constructive trust over all past and future revenues. No claim was made for exemplary or punitive damages. It is true that Snepp demanded a jury trial. Since the majority holds that only the request for damages required a jury trial, the issue is whether, in a purely equitable action where there is no dispute of fact, an isolated claim for damages in an unspecified amount requires a jury to make such finding where the plaintiff tacitly abandons its claim for damages. In the first place, it is not a certainty that punitive damages are prohibited in an equity action, although the traditional rule is otherwise. Dobbs, Remedies, § 3.9, p. 211 — 12. Similarly, a few authorities have held that, by electing to go into equity, plaintiff waives any claim to punitive damages. Karns v. Allen, 135 Wis. 48, 115 N.W. 357 (1908).
If the opinion is intended to create a new federal law on punitive damages, I submit that, in the absence of statute, this cannot be done. The “bounty approach” has been applied in securities fraud situations, environmental cases under 33 U.S.C. § 411, antitrust cases involving treble damages under 15 U.S.C. § 15, and perhaps other like actions, but it has not been applied under federal law without the authority of a statute. I cannot believe that the majority intended to create such a federal law on the subject.
Exemplary damages are not a favorite of the law, the power of giving them should be exercised with great caution, and they are properly confined within the narrowest limits. 22 Am.Jur.2d, Damages, § 238. In general, there is no cause of action for exemplary damages alone. Id. § 241. There appears to be a split of authority as to whether nominal damages will support a claim for punitive damages. Id. § 242. While I agree that exemplary damages require a jury, when demanded, it is settled that if all the facts warranting such damages are admitted or established without reasonable controversy, there is nothing to submit to the jury on that subject but the amount to be awarded. Id. § 341. However, in this case the reversal in part will require a retrial of the entire proceeding to determine the extent of willfulness on Snepp’s part in order to determine the amount of the punitive damage award.
We return to the fundamental question— was a jury required as demanded by Snepp in this purely equitable action upon which there is no controversy as to facts and liability in the eyes of the majority, bearing in mind that no punitive damages were requested?
If the allegations of the complaint disclose a cause of action which is simply equitable, a jury trial will not be directed merely because the prayer is for judgment for a sum of money. 47 Am.Jur.2d, Jury, § 42. While the constitutional right to trial by jury cannot be made to depend upon the choice of words used in the pleadings, Dairy Queen v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962), and courts are not bound by the pleadings or form of action, the determination of the essential character of the suit or remedy must be made by an examination of the entire pleadings and all issues. 47 Am.Jur.2d, § 38. It is the real, meritorious controversy between the parties as shown by the whole case which is controlling. Id. § 38. In the present case the district court conducted several pretrial conferences and fully explored the pleadings and all issues prior to excusing the prospective jury panel. This action was not taken until the court was advised that no factual dispute existed.
Since the majority has properly held that there are no legal claims available which justify a jury trial except as to damages, I do not believe that Dairy Queen v. Wood, supra, and Beacon Theatres, Inc. v. West-over, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959), are applicable. In the latter case, filed as a declaratory judgment action, *942a counterclaim alleging treble damages for violation of the antitrust laws was filed by the defendant with a demand for jury trial. The district court scheduled the trial of the equitable claim in advance of the law action. Since the equitable interests asserted by plaintiff and the legal issues alleged by defendant were interlocked, the Supreme Court held that a jury trial was mandated. Dairy Queen v. Wood deals more specifically with the problem where the district court granted plaintiff’s motion to strike the demand for jury trial where plaintiff and defendant had a contract with respect to the use of the trademark “Dairy Queen.” Payments were not made by defendant in accordance with the terms of the contract and plaintiff cancelled. Thereafter, defendant continued to use the trademark and plaintiff sued alleging, inter alia, a default with an indebtedness in excess of $60,000. The complaint asked for an injunction, an accounting to determine the amount of money owing and a judgment for that amount, and an injunction pending accounting to prevent defendant from collecting any money from “Dairy Queen” stores. Defendant denied any breach of contract because of a subsequent oral agreement, laches and estoppel, and denied any violations of antitrust laws. Defendant demanded a jury trial. There is language in Dairy Queen indicating that, where a money judgment is demanded, it presents a legal claim. However, in Snepp’s case, while a claim for damages in an unspecified amount was contained within the complaint, it was later conceded by the government that it could not prove dollar damages and, in substance and fact, the claim for damages was abandoned. Manifestly, the only remedy available to the government was the establishment of a constructive trust and an injunction. I cannot believe that the right to nominal damages constitutes an adequate remedy at law; nor do I believe that a court may force a plaintiff to seek punitive damages under the guise of saying that this is an adequate remedy at law.
Since this case, as finally presented after an exhaustive discussion of the various issues, was purely an equitable action, it seems proper to invoke the “clean-up” doctrine as discussed in Katchen v. Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966), which permitted, in a bankruptcy proceeding, a judgment for the surrender of a preference in the face of timely jury demand, as being within the traditional equity powers to afford complete relief even though there may exist legal remedies.
Finally, what bothers me appreciably is the effect upon the proper administration of justice. In future cases, if the majority opinion is accepted, district courts, wherever there is a demand for jury trial in an equitable action, will be required to empanel a jury because of the possibility that it may be appropriate to award punitive damages even though plaintiff makes no demand for same. Although the majority does not specifically so state, it apparently stands for the proposition that the government has an adequate remedy at law, either through nominal damages or punitive damages, or both. The remedy at law which will defeat equitable jurisdiction of federal courts must be a remedy at common law. 47 Am.Jur.2d, § 41. Clearly, in my opinion, there was no remedy at common law available to the government in Snepp’s case.
I join the majority in concluding that, in light of the two Marchetti cases, the First Amendment claim is patently frivolous.
With all due respect, I must dissent in part.
. In United States v. Marchetti (Marchetti I), 4 Cir., 466 F.2d 1309, 1314, Chief Judge Haynsworth, speaking for the court, said: “This case itself illustrates the point that the executive and judicial branches proceed on a case by case basis, the executive branch being dependent on the judiciary to restrict unwarranted disclosures.”
. The Virginia law on punitive damages in contract actions is set forth in Wright v. Everett, 197 Va. 608, 90 S.E.2d 855 (1956), in an action by the owners of real estate against a real estate agent to whom the responsibility of renting plaintiffs’ home had been imposed. The agent agreed to investigate the credit reference of any prospective tenant and further agreed to transfer all utility bills to the name of the tenant. He did neither. A jury returned a small verdict for compensatory damages and $3,000 punitive damages. The action was brought in tort even though it arose out of privity of contract between the parties. In reversing the award for punitive damages, the Supreme Court of Appeals (now the Supreme Court) said:
The general rule is that exemplary or punitive damages (with certain exceptions not here pertinent) are not allowed for breach of contract even though the action is ex delicto and not in assumpsit, (citations omitted) As a general rule, damages for breach of contracts are limited to the pecuniary loss sustained. According to the overwhelming weight of authority, exemplary damages are not recoverable in actions for breach of contract although there are dicta and intimations in some of the cases to the contrary. The rule does not obtain, however, in those exceptional cases where the breach amounts to an independent wilful tort, in which event exemplary damages may be recovered under proper allegations of malice, wantonness or oppression — as, for example, in actions for breach of marriage contracts. 15 Am.Jur., Damages, sec. 273, pp. 708 and 709.
Wright v. Everett, supra, has been applied and cited with approval in opinions by Judges Widener and Merhige, respectively, in National Homes Corporation v. Lester Industries, Inc., *940336 F.Supp. 644 (W.D.Va.1972), and Material Handling Industries, Inc. v. Eaton Corp., 391 F.Supp. 977 (E.D.Va.1975) — the first case pertaining to the issue as to whether a punitive damage judgment is dischargeable in bankruptcy; the second case involving a motion to strike a prayer for punitive damages as alleged in the complaint. Although National Homes Corporation reached the court of appeals on two different occasions, the propriety of an award for punitive damages was not pursued on appeal. National Homes Corporation was based upon a contract containing a covenant not to compete in which an injunction was awarded. Neither case considers the right to a jury trial.
While I assume that punitive damages grounded upon contract may be awarded in Virginia in exceptional cases, I do not believe that the government should be required or permitted to forum-shop for the state which applies the Virginia rule.
. Numerous pretrial hearings were conducted with briefs being submitted as to varying questions. The district judge had directed the call of a jury panel for the trial on June 20, 1978. Fifty-six pages of the transcript are devoted to the arguments of counsel as to whether any issues remained to be submitted to the jury. Appendix, Vol. II, pp. 4-60. The court made it clear that “if there is any issue of monetary damages other than an accounting, I will submit that to the jury.” Appendix, Vol. II, p. 23. Snepp’s counsel knew that monetary damages could not be established. His sole contention was that no injury flowed from the fact that Snepp’s book had been published. Appendix, Vol. II, pp. 25, 26, 31-33, 59, 60. The government responded that no showing of injury was required in this type of case. Appendix, Vol. II, p. 46, 51. Aside from the prayer for relief requesting that “defendant be required to pay to plaintiff such damages as plaintiff has sustained as a result of plaintiffs breach of contract,” Joint Appendix, Vol. I, p. 5, it is abundantly clear that the damages sought by plaintiff were for “unjust enrichment.” See Joint Appendix, Vol. I, p. 5, par. 21. It is also clear that this type of damage is merely another way of saying that equitable relief is sought on the ground of unjust enrichment. It was not until after hearing this lengthy argument that the court excused the jury. If, on remand, an amended complaint is filed, with the government electing to eliminate its claim for damages quoted above, it seems that, according to the majority opinion, a jury would not be required even on demand by defendant.
. It is argued that punitive damages have not been shown to have any effect as deterrents. See Morris, Rough Justice and Some Utopian Ideas, 24 Ill.L.Rev. 730, 736 (1930).