Supreme Court of the United States

United States v. Winstar Corp.

July 1, 1996518 U.S. 839

Summary

The Court affirmed federal contractual liability and remanded for determination of damages. Justice Souter's plurality concluded that the thrift-acquisition agreements allocated to the Government the risk of regulatory changes affecting supervisory goodwill and capital credits, and that FIRREA's prevention of performance did not excuse breach. Stevens and Breyer joined throughout; O'Connor joined except Parts IV–A and IV–B, which addressed whether FIRREA was public and general. Breyer also concurred separately, emphasizing ordinary contract interpretation and rejecting a broadly applicable unmistakability requirement. Scalia, joined by Kennedy and Thomas, concurred in the judgment: he considered the unmistakability doctrine applicable but satisfied, and concluded that the Government had assumed the risk of legal change. Rehnquist dissented, arguing that respondents had not satisfied the unmistakability and sovereign acts doctrines and favoring reversal or reconsideration under those doctrines. Ginsburg joined Parts I, III, and IV of his dissent.

Holding

  • Contractual allocation of regulatory risk and breach. The agreements obligated the Government to recognize the specified supervisory goodwill and capital credits for regulatory capital purposes; implementation of FIRREA breached those obligations and exposed the Government to damages.
  • Unmistakability doctrine. The plurality concluded that the unmistakability doctrine did not bar these claims because enforcing the contractual risk allocation would not surrender sovereign power or effectively exempt the thrifts from FIRREA.
  • Reserved powers doctrine. The reserved powers doctrine did not invalidate the agreements.
  • Express delegation and agency authority. The Bank Board and FSLIC had sufficient statutory authority to make the agreements, and the special requirement of express authority to surrender sovereign power did not apply.
  • Sovereign acts and impossibility defenses. The sovereign acts doctrine did not excuse the Government's breach. The plurality found FIRREA insufficiently public and general in its effect on the Government's contracts; independently, ordinary impossibility principles did not discharge obligations allocating the risk of regulatory change to the Government.

Docket 95-865

Cited authorities

  • Rule 14.1(a)
  • 12 U.S.C. §§ 1464
  • 12 U.S.C. §§ 1421-1449
  • 12 U.S.C. §§ 1461-1468
  • CA11
  • CA10
  • CA11
  • 47 Stat. 725

Cited by

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