Opposition Brief — Martin v. United States (No. 05-1221)

8

The complaint alleged that Congress had breached that

contract through the enactment of FIRREA. /d. at

127a. In response, the government acknowledged that

the Assistance Agreement was an express contract be-

tween FSLIC and SoCal and SCH permitting SoCal to

include the $217.5 million capital credit in its regulatory

capital. The government denied, however, that petition-

ers had standing to enforce that promise, because they

were not parties to the Assistance Agreement. See id.

at Sa,

The Court of Federal Claims granted the plaintiffs’

motions for summary judgment on liability. With re-

spect to petitioners, the court concluded that the Assis-

tance Agreement’s Entire Agreement clause incorpo-

rated the RCMA and the FHLBB resolutions authoriz-

ing the transmittal of the Forbearance Letter which, in

turn, authorized the inclusion of goodwill (including the

capital credit) in the calculation of SoCal’s regulatory

capital. Pet. App. 146a. The trial court further held

that the Entire Agreement clause rendered “unenforce-

able” the Assistance Agreement’s Sole Benefit clause, to

the extent the latter clause would exclude petitioners as

parties. /d. at 145a. The court concluded that, although

petitioners had not signed and were not parties to the

Assistance Agreement itself, they were parties to what

the court characterized as an “overall” agreement that

encompassed the terms of the Assistance Agreement,

the RCMA, and the FHLBB resolutions/Forbearance

Letter adopted in connection with the transaction. /d.

at 146a, 149a.

After a trial on damages, the trial court awarded

over $90 million to petitioners based upon a “dilution

theory.” The court accepted that, in the absence of the

breach, the 1992 and 1995 recapitalizations would not

9

have occurred, and petitioners would have continued to

possess their shares. The court therefore held that peti-

tioners are entitled to the value of the shares they would

have possessed in 1998. Pet. App. 106a-L1lla, 123a. The

court also awarded $65.4 million in damages to SCH and

SoCal. /d. at 123a.

5. On appeal, the Federal Circuit affirmed in part

and reversed in part the trial court’s award of damages

to SCH and SoCal. Pet. App. 22a-27a. No party has

sought further review of that decision. In the ruling at

issue here, the court of appeals reversed the award of

damages to petitioners. /d. at 27a.

The court held that the trial court had erred in con-

cluding that the government had entered into an “over-

all” contract to which petitioners were parties, with the

government’s promises regarding the treatment of capi-

tal credits and supervisory goodwill running to all of the

parties, thereby according standing to petitioners to

recover damages for a breach. Pet. App. 10a-19a. The

court of appeals found that conclusion to be contrary to

the plain terms of the Assistance Agreement, to which

SCH and SoCal were parties, but petitioners, as share-

holders of SCH, were not. /d. at lla-14a. The court

noted in particular that the Sole Benefit clause of the

Assistance Agreement excludes non-parties, such as

petitioners, from the benefits of the Assistance Agree-

ment,-and that the trial court’s conclusion to the con-

trary concededly made the Sole Benefit clause “unen-

foreceable.” /d. at 12a; see id. at 146a.

The court of appeals further held that the trial court

had erred in concluding that the Entire Agreement

clause required that petitioners be accorded the benefits

of the Assistance Agreement notwithstanding their ex-

press exclusion under the terms of the Sole Benefit

10

clause. The court noted that the Entire Agreement

clause of the Assistance Agreement by its terms incor-

porated the FHLBB resolutions, the Forbearance Let-

ter, and other “interpretations or understandings

agreed to in writing by the parties.” Pet. App. 13a. The

court held, however, that the RCMA was not one of the

types of documents incorporated into the Assistance

Agreement, because it was neither an FHLBB resolu-

tion nor an “interpretation[] or understanding| | agreed

to in writing by the parties” to the Assistance Agree-

ment. /bid. Rather, the court explained, the RCMA “is

a separate contract that involves additional parties and

distinct promises, including its own Entire Agreement

clause.” bid. Thus, the court concluded, “the plain lan-

guage of the Sole Benefit clause and the Entire Agree-

ment clause evidences the parties’ intent to limit the

scope of the Assistance Agreement to its specified

terms.” /bid.

The court of appeals noted that the trial court had

relied upon petitioners’ participation, as shareholders,

in the conversion and acquisition process to hold that the

petitioners were parties to an “overall” contract based

on the Assistance Agreement. Pet. App. 15a. The court

explained, however, that petitioners’ participation in the

process does not show that they became parties to the

Assistance Agreement or a broader, “overall” agree-

ment, because of the well-settled principle “that a corpo-

ration is generally considered to be a separate legal en-

tity from its shareholders.” /bid. Under the Assistance

Agreement, the law of California was to govern its con-

struction, and the court explained that California law

would plainly treat the corporations as separate entities

from their shareholders in the circumstances of this

case. /d. at 15a-16a. In short, “| h]aving chosen to limit

11

their personal liability by adopting a corporate form”

with all of its advantages of limited liability, petitioners

could not “rely on their involvement in the negotiation

process or their role in funding a transaction to alter

their chosen legal status” and be treated as the real con-

tracting parties when it suited their interests. /d. at

17a.

The Federal Circuit then considered whether the

much more limited RCMA, to which petitioners were

parties, entitled petitioners to recover damages. Pet.

App. 19a-22a. The court noted that the trial court itself

did not find that petitioners’ status as signatories to the

RCMA was sufficient to allow them to recover damages.

Id. at 15a n.4. In analyzing the RCMA, the court of ap-

peals noted that the RCMA contained references to the

capital credit (but not to goodwill). /d. at 19a-20a. As-

suming, but not deciding, that the government had

breached the RCMA, id. at 20a, the court determined

that petitioners were not entitled to damages for dilu-

tion of their ownership interest in SCH and SoCal, be-

cause petitioners’ relinquishment of their equity was

neither caused by, nor a foreseeable result of, any al-

leged breach of the RCMA. /d. at 20a-21a.

Judge Mayer dissented in part. Pet. App. 28a-30a. -

He would have affirmed the trial court’s conclusion that

“(t]he combined content of the [RCMA], the Assistance

Agreement, and the |FHLBB]| implementing resolutions

* * * proves that [petitioners] entered into an overall

contract with the government.” /d. at 28a. In his view,

that “overall contract” gave petitioners “standing to

enforce both the capital credit and the supervisory good-

will promises of the government.” /d. at 30a. Judge

Mayer did not disagree with the court’s conclusion that

12

petitioners had no right to damages based upon a breach

of the narrower RCMA itself.

ARGUMENT

The decision of the court of appeals is correct and

does not conflict with any decision of this Court or of any

other court of appeals. The narrow issues decided by

the court of appeals concerning the construction of the

particular documents in this case and the causation and

foreseeability of petitioners’ alleged damages by the

alleged breach do not warrant further review.

1. Petitioners do not challenge the court of appeals’

conclusion that the trial court erred in finding a broad,

overall agreement based on the Assistance Agreement,

incorporating the FHLBB Resolutions and Forbearance

Letter, and including the RCMA as well. Nor do peti-

tioners challenge the court of appeals’ articulation, see

Pet. App. 20a-21la, of the general rules governing con-

tract damages under an expectation, reliance, or restitu-

tion theory, including the court’s recitation of the ordi-

nary causation and foreseeability requirements for ex-

pectation damages. See Pet. 20. Petitioners’ sole chal-

lenge is to the application of those general standards to

the particular contract and the particular transaction in

this case. Further review of that fact-based claim is not

warranted. In any event, the court of appeals correctly

held that petitioners are not entitled to damages for

breach of the RCMA.

a. The plain terms of the RCMA make clear that it

did not include a promise by the government to permit

SoCal to include the $217.5 million capital credit in its

regulatory capital for federal regulatory purposes.

Without such a promise, petitioners’ claim for damages

must be rejected.

13

As discussed above, Section 1 of the RCMA by its

terms embodied a promise by SCH and SoCal that they

would “cause” SoCal to satisfy what Secton 1 termed the

“Required Regulatory Capital” level, /.e., the level re-

quired by federal regulations. Pet. App. 18la-182a.

Section 1 then stated two qualifications on that promise

by SCH and SoCal, each introduced with a “provided

that” clause. /d. at 182a. Under the second “provided

that” clause, SCH and SoCal would cause SoCal to sat-

isfy the Required Regulatory Capital level, “provided

further that * * * the $217.5 million of assistance from

the CORPORATION |[2.e., the so-called “capital credit” |

shall be ineludable in capital for purposes of determining

whether [SoCal] has maintained its regulatory capital at

the Required Regulatory Capital level.” /bid.; see note

2, supra. Accordingly, SCH and SoCal would have an

obligation under the RCMA to ensure compliance with

the Required Regulatory Capital level provided that the

$217.5 million cash infusion was includable in capital for

purposes of the calculation. Because the government’s

commitment regarding the capital credit was introduced

in a “provided that” clause, it was merely a condition on

the performance of SCH and SoCal. The language of

Section 1—which was written as a condition on the

perofrmance by SCH and SoCal, not as an affirmative

undertaking by FSLIC—thus makes clear that the gov-

ernment was not making a more general, affirmative

commitment in the RCMA about how SoCal’s capital

would be calculated or regulated for other purposes.

While such a more general commitment was made to

SCH and SoCal (but of to petitioners) in the Assistance

Agreement, see pp. 14-15, /fra, it was not included in

the RCMA.

14

Section 2 reinforced that conclusion. Under Section

2, “[fJor purposes of this Agreement, any computation of

{SoCal’s] Required Regulatory Capital shall be as deter-

mined by,” inter alia, “the second proviso of § 1,” 7.e.,

the $217.5 million “ineludable in capital” proviso. Pet.

App. 182a-183a. Section 2 thus made clear that the

$217.5 million “includable in capital” proviso was to be

controlling solely “|fjor purposes of this Agreement,”

i.e., for purposes of determining whether SCH and

SoCal would have to perform their contractual commit-

ment in the RCMA to maintain SoCal’s capital at a cer-

tain level. The proviso was to have no further force in,

for example, calculating SoCal’s compliance with regula-

tory or statutory capital standards for thrifts more gen-

erally, or the liability of the government for breach of

any promises FSLIC may have made to SCH or SoCal

in some other agreement.

The above promises made by SCH and SoCal in Sec-

tion 1 of the RCMA are relevant to petitioners solely by

virtue of Section 4 of the RCMA. Section 4 states that,

“so long as [SCH] shall be obligated pursuant to § 1,”

petitioners “guarantee the performance of [SCH] and

[SoCal] under § 1,” subject to petitioners’ maximum ob-

ligation in the aggregate of $5 million. Pet. App. 183a.

Because SCH and SoCal have contractual obligations

under Section 1 to maintain capital levels only if the

$217.5 million “ineludable in capital” proviso in that sec-

tion is satisfied, Section 4 similarly limits petitioners’

obligations as guarantors of SCH and SoCal to cireum-

stances in which the $217.5 million “ineludable in capi-

tal” proviso is satisfied. Neither Section 4 nor any other

portion of the RCMA, however, includes or suggests a

government promise to SCH or SoCal, much less to peti-

tioners, to permit SoCal to treat the capital credit in any

15

particular way for purposes other than determining the

obligations of SCH and SoCal—and the derivative obli-

gations of petitioners as guarantors of the performance

of SCH and SoCal—under Section 1 of the RCMA.

To be sure, a more general promise committing the

government to calculate SoCal’s capital in a particular

way for federal regulatory purposes was made in the

Assistance Agreement, to which petitioners were not

parties. The terms of that promise may usefully be con-

trasted with the RCMA. Under the Assistance Agree-

ment, the government agreed that “[fJor purposes of

reports to the Bank Board, the [capital credit] shall be

credited to [SoCal’s] regulatory capital account and shall

constitute regulatory capital.” C.A. App. A400755; see

note 1, supra. Had the parties desired in the RCMA to

include an affirmative promise by the government to

permit the capital credit to constitute regulatory capital

generally under the applicable federal regulations, the

parties thus had a readily available model to achieve

that end. The RCMA, however, was directed to a differ-

ent and more limited purpose—.e., establishing the obli-

gation of SCH and SoCal, as corporations, to maintain

the regulatory capital of SoCal, subject to certain condi-

tions. And the purpose of Section 4 of the RCMA was

also different and far more limited still—to obtain the

personal guarantee of petitioners, as individual share-

holders of SCH, for the performance by SCH and SoCal

of their conditional obligations under Section 1. Fur-

thermore, even that guarantee was capped at $5 million.

Accordingly, petitioners did not obtain—and the govern-

ment did not agree to—a general contractual commit-

ment to petitioners that the capital credit would consti-

tute regulatory capital of SoCal for purposes of deter-

16

mining compliance with federal banking regulations.'

Indeed, it is exceedingly unlikely that the government

would have exposed itself to the sort of broad liability

petitioners assert in this case in exchange for a condi-

tional guarantee capped at $5 million.

b. With the terms of the RCMA in mind, petitioners’

damages claim can be analyzed. The court of appeals

correctly rejected petitioners’ claim “that the incorpora-

tion of the capital credit promise into the terms of the

RCMaA is sufficient to uphold the Court of Federal

Claims’ award of damages.” Pet. App. 20a. Because the

treatment of the capital credit was only a condition on

petitioners’ performance of their obligation, there was

no breach of the RCMA by the government when the

condition that excused Sch and SoCal from performing

occurred.

Put another way, as the court of appeals explained,

“the damages for which [petitioners] seek to recover,

namely the dilution and the extinguishment of their

ownership interest in SCH, were not caused by the obli-

* In the court of appeals, petitioners and the government focused

almost all of their attention on whether there was an overall agree-

ment to which petitioners were parties and which included not only

the RCMA, but also the Assistance Agreement, the Bank Board

Resolutions, and the Forbearance Letter. Only three pages in one

of the two 59-page appellate briefs submitted by the two separate

groups of petitioners mentioned the possibility of an asserted

breach of the RCMA as a separate basis for liability. See C.A. Br.

for Roy Doumani et al. 19-22. The parties’ focus on the Assistance

Agreement and Forbearance Letter is entirely explicable when the

terms of the RCMA are examined, since those terms make clear

that the RCMA did not include a general promise, as in the Assis-

tance Agreement, that the capital credit “shall be credited to

[SoCal’s] regulatory capital account and shall constitute regulatory

capital” for federal regulatory purposes. C.A. App. A400755.

17

gations they incurred in the RCMA.” Pet. App. 20a.

Indeed, as the court of appeals further noted, “[t|he

RCMaA did not require that the Individual Plaintiffs in-

vest in SCH,” but “[aJt the most, the RCMA obligated

the Individual Plaintiffs to collectively contribute to

SCH and SoCal an additional $5 million in the event that

SCH and SoCal did not maintain SoCal’s regulatory cap-

ital at the required level.” /bid. And petitioners in fact

never even made that contribution. /bid. Thus, because

the government’s only undertaking to petitioners in the

RCMA was a “provided that” condition on petitioners’

performance of their up-to-$5 million guarantee (which

was in turn conditional on a failure by SCH and SoCal to

fulfill their conditional undertakings as primary obligors

under Section 1 of the RCMA)—and because petitioners

never rendered that performance—the nonoccurrence

of the condition that excused SCH and-SoCal from their

obligations under the RCMA could not have caused peti-

tioners any damages under the RCMA, much less the

damages they claimed for dilution of their ownership

interest in SCH.

That holding was independently sufficient to dispose

of petitioners’ claims. Nonetheless, the court of appeals

additionally went on to address the issue in terms of

foreseeability and damages, concluding that, “even if

[the court] assume|s] that the passage of FIRREA con-

stituted a breach of the RCMA, [petitioners] are not

entitled to recover the damages they seek.” Pet. App.

20a. The damages petitioners seek are for dilution of

their ownership interest in SCH and SoCal. From the

beginning, however, petitioners (like all other share-

holders of thrifts and holding companies) faced a risk

that if the thrift needed more capital, SCH might issue

more stock (and even cancel the old stock) to raise

18

money to infuse into the thrift. That risk would have

existed even if the shareholders never entered into the

RCMA. Thus, assuming there was a breach here, peti-

tioners could prevail only if the RCMA shifted that par-

ticular risk—the risk that SCH would dilute petitioners’

ownership interest in order to raise capital—from the

shareholders to the government.

As noted above, the RCMA was directed to petition-

ers’ obligation to invest additional funds in SCH, and

the assurances petitioners sought regarding the condi-

tions that would have to exist in order for that obligation

to be triggered. Nothing in the RCMA addressed the

more general risk that petitioners’ pre-existing stock in

SCH and SoCal would be diluted. As the court of ap-

peals explained,“there are no terms in the RCMA that

require | petitioners] to raise capital for SCH and SoCal

by diluting their ownership interest in order to issue

equity to new investors,” but, “[a]t the most, the RCMA

obligates [petitioners] to contribute an additional $5

million to the operation of SCH and SoCal.” Pet. App.

21a. Accordingly, from the standpoint of the RCMA, a

claim that petitioners lost a $5 million contribution re-

quired by the RCMA might have stated a claim for fore-

seeable damages up to that amount in certain circum-

stances, had petitioners ever made such a contribution.

But a claim that petitioners’ pre-existing stock was di-

luted was not within the scope of risks addressed by the

RCMA, and any dilution of petitioners’ stock was ac-

cordingly not foreseeable with respect to the RCMA.

Accordingly, even if it is assumed, arguendo, that the

change in regulatory capital requirements after

FIRREA could be regarded as a breach of the RCMA,

“{b]ased on the unambiguous terms of the RCMA, | peti-

tioners’] loss of their ownership interests was neither

19

the foreseeable result of nor caused by the government’s

breach of the RCMA and therefore dilution damages

cannot be awarded as a form of expectation damages.”

Ibid.

ce. Petitioners argue that further review is war-

ranted on the ground that the court of appeals minted a

new, and unduly limited, rule of contract damages in this

case. They contend that, “[a]lthough [the court of ap-

peals] recited the usual foreseeability standard, the

court rejected expectation damages as a matter of law

by adding a novel limitation to that standard: that the

‘ contract itself must require the equity loss upon breach

or the acquisition of the destroyed property in the first

place.” Pet. 16; see Pet. 19-20.

Petitioners are correct that the court of appeals re-

cited the ordinary standards of causation and fore-

seeability for contract damages. But they err in assert-

ing that the court otherwise added any “novel limita-

tion” to those standards. Contrary to petitioners’ con-

tentions, the court of appeals never stated any general

principle that expectation damages are awardable only

if the contract “require|s] the equity loss upon breach”

or if the contract requires “the acquisition of the de-

stroyed property in the first place.” Pet. 16. Rather,

the court applied the general principles of causation and

foreseeability to this particular contract, where the only

possible deficiency was the alleged failure of a condition

precedent to petitioners’ own obligations. In those cir-

cumstances, any claim for damages by petitioners would

have to flow from their performance of their own obliga-

tions; having negotiated a contract in which the govern-

ment’s obligation was merely a condition precedent to

theirs, they cannot now obtain consequential damages

20

based on the proposition that the government made a

general and unqualified promise.

Petitioners also argue (Pet. 21) that “the Federal

Circuit nowhere questioned as a factual matter the trial-

court finding that the loss of the 1987 equity was a fore-

seeable consequence of the Government’s breach of its

regulatory-capital contract.” The trial court considered

the RCMA, however, only as part of a broad, “overall”

contract, a contract whose existence the court of appeals

correctly rejected. See Pet. App. 10a-19a. Thus, the

trial court never considered whether the petitioners’

relinquishment of their equity was foreseeable as a re-

sult of an asserted breach of the RCMA standing alone.

See zd. at 15a n.4 (“It is noteworthy that the Court of

Federal Claims did not find that the status of [petition-

ers| as signatories to the RCMA was sufficient to allow

them to recover damages.”). In any event, in light of the

terms of the RCMA, no such finding would have been

possible.

d. Finally, petitioners argue (Pet. 22-24) that the

court of appeals’ decision conflicts-with its prior deci-

sions in Bluebonnet Savings Bank, FSB v. United

States, 266 F.3d 1348 (Fed. Cir. 2001), and La Van v.

United States, 382 F.3d 1340 (Fed. Cir. 2004). Further

review is not warranted to address a claim of an intra-

circuit conflict. Wisniewski v. United States, 353 U.S.

901, 902 (1957) (per curiam). In any event, there is no

such conflict.

In Bluebonnet, the shareholder obligated himself to

infuse money into the thrift at specified intervals. Based

upon the facts of that case, the trial court held, and the

Federal Circuit affirmed, that it was foreseeable that a

breach of the promises in a forbearance letter sent to

the shareholder would interfere with the shareholder’s

21

ability to raise capital. 266 F.3d at 1354. The damages

sought in Bluebonnet arose from the alleged increased

costs to the shareholder of making the required infu-

sions after the breach. The alleged breach of the RCMA

in this case arose in a completely different factual envi-

ronment. Unlike in Bluebonnet, the contract in this case

contained only a cendition precedent to petitioners’ per-

formance, not an unqualified promise by the govern-

ment. Moreover, unlike in Bluebonnet, the shareholders

here did not actually infuse money inte the thrift pursu-

ant to the contract.

In the “fact-specific dispute” before the Federal Cir-

cuit in La Van, 382 F.3d at 1342, the trial court held that

“the Government contracted with the Acquirors for * * *

the amortization of the goodwill resulting from the

|Winstar-type] transaction over thirty-five years.” Jd.

at 1345. The court of appeals affirmed that conclusion.

By contrast, the government entered into no such agree-

ment with petitioners in the RCMA.” And just as in La

Van the court of appeals held that “the standard for

damages was the usual make-whole principle based on

foreseeability,” Pet. 24 (citing La Van, 382 F.3d at 1350-

1351), the court of appeals in this case correctly held

that “|e|xpectation damages are recoverable provided

* Moreover, contrary to petitioners’ assertion (Pet. 24), the court

of appeals did not hold that the plaintiffs in LaVan were entitled to

“expectation damages * * * for loss in value of their stock.” Rather,

the court noted the trial court’s unappealed award of restitution for

“the amount of the | plaintiffs’| initial investment,” 382 F.3d at 1349,

and held that “the trial court erred in denying | plaintiffs} the oppor-

tunity to present a case for expectancy damages,” id. at 1350 (em-

phasis added). The court declined to decide whether the plaintiffs

were entitled to expectation damages, instead “remand[ing] for the

trial court to determine whether expectancy damages would be

appropriate in the present case.” /bid.

2?

they are actually foreseen or reasonably foreseeable, are

caused by the breach of the promisor, and are proved

with reasonable certainty.” Pet. App. 20a-21a (quoting

Bluebonnet, 266 F.3d at 1355).

2. Petitioners also argue (Pet. i, 27) that review

should be granted to determine whether the Bank Board

resolutions themselves “created contract rights for peti-

tioners.”

a. Initially, petitioners never argued to the court of

appeals that the Bank Board resolutions themselves

created contract rights, and the court of appeals never

addressed that issue. Instead, prior to the petition for

certiorari, petitioners contended that the FHLBB reso-

lutions had been incorporated into the Assistance Agree-

ment and that those resolutions—and, in particular, the

Forbearance Letter to which they referred—created

contractual rights on that basis. The court of appeals

agreed that “[t]he Entire Agreement clause [in the As-

sistance Agreement] specifically incorporates * * * reso-

lutions or letters from the FHLBB or the FSLIC.” Pet.

App. 18a. But the court held that the petitioners were

not parties to the Assistance Agreement into which the

resolutions had been incorporated—a holding that peti-

tioners do not challenge. /bid. The contention pre-

sented in the petition, that the resolutions alone created

a contract with petitioners, is thus a new contention that

this Court should not consider.

b. In any event, further review would not be war-

ranted to address petitioner’s highly case-specific con-

tention that the Bank Board resolutions in this case cre-

ated contractual rights in petitioners. By statute and

regulation, petitioners needed various approvals by the

Bank Board before they could consummate the transac-

tion in which they acquired SoCal. Three Bank Board

23

resolutions granted those approvals. Resolution No. &7-

514 approved the acquisition of SoCal’s common stock

by SCH, subject to any conditions that were imposed in

a concurrent resolution. Pet. App. 223a. Resolution No.

87-511 noted the statutory and regulatory requirements

for FHLBB approval of the conversion of SoCal to a

stock organization, the acquisition of SoCal’s stock by

SCH, and the occupation of certain corporate offices by

petitioners. /d. at 200a-201la. The resolution granted

the requisite approvals subject to certain conditions,

including (1) the execution of the Assistance Agreement

by SoCal and SCH; (2) the execution of the RCMA by

SoCal, SCH, and petitioners; (3) the execution of a Divi-

dend Stipulation by SoCal and SCH; and (4) other stipu-

lations and documents. /d. at 201a. The resolution also

authorized the transmittal of the Forbearance Letter.

Id. at 217a. The third resolution, No. 87-513, authorized

FSLIC to execute and implement the Assistance Agree-

ment, the RCMA, and other documents. /d. at 220a.

As petitioners acknowledge, “the requirements for a

contract with the Government” include “mutual intent to

contract.” Pet. 29 (quoting Massie v. United States, 166

F.3d 1184, 1188 (Fed. Cir. 1999)). The Bank Board reso-

lutions evidence no such mutual intent; they do not state

that the Bank Board “agrees,” “contracts,” or “prom-

ises” to do anything. The resolutions are framed as ex-

ercises of federal regulatory authority, not contracts

binding the government (and petitioners) and requiring

payment of damages by the government (or petitioners)

upon “breach” of the resolutions. Although the resolu-

tions refer in various places to documents that are un-

doubtedly contractual (7.e., the Assistance Agreement

and the Regulatory Capital Maintenance Agreement),

the resolutions do not incorporate those agreements; to

24

the contrary, the Resolutions distinguish between those

contracts, which are referred to as “agreements,” and

other documents, which are termed “stipulations.” See,

e.g., Pet. App. 207a. Moreover, the documents in this

case were carefully structured so that one agreement

(the Assistance Agreement) imposed obligations upon

SCH and SoCal but not on petitioners, while another

agreement (the RCMA) included petitioners. Having

structured the transaction to take advantage of the sep-

arate identities of SoCal and SCH and the limited liabil-

itv advantage offered by those separate identities, peti-

tioners cannot now frustrate that structure by claiming

that, by virtue of the Bank Board resolutions, the par-

ties’ efforts to distinguish between the corporations

(SCH and SoCal) and petitioners as individuals who

were shareholders of SCH, and to limit petitioners’ obli-

gations and rights, were entirely illusory.

To adopt petitioners’ view that a request for and

grant of regulatory approval forms a contract between

the regulatory agency and regulated entity would con-

flict with long-settled principles of administrative law.

As this Court explained in addressing an analogous sit-

uation in National Railroad Passenger Corp. v.

Atchison, Topeka & Santa Fe Railway, 470 U.S. 451

(1985), “absent ‘an adequate expression of an actual in-

tent’ of the State to bind itself, this Court simply will not

lightly construe that which is undoubtedly a scheme of

public regulation to be, in addition, a private contract to

which the State is a party.” /d. at 466-467 (citation omit-

ted). National Railroad Passenger Corp. involved a

claim that a statute, rather than a regulatory action,

constituted a contract between the government and pri-

vate entities. But the underlying rule in both instances

is that “the principal function of a legislature |or regula-

25

tory agency] is not to make contracts, but to make laws

that establish the policy of the state.” /d. at 466. “Poli-

cies, unlike contracts, are inherently subject to revision

and repeal, and to construe laws |or regulatory actions |

as contracts when the obligation is not clearly and un-

equivocally expressed would be to limit drastically the

essential powers of a legislative [or administrative]

body.” bid. To imply a contractual undertaking from

a regulatory approval is impermissible, because in this

case, as in National Railroad Passenger Corp., “(t]he

continued existence of a government would be of no

great value, if, by implications and presumptions, it was

disarmed of the powers necessary to accomplish the

ends of its creation.” Keefe v. Clark, 322 U.S. 393, 397

(1944) (quoting Charles River Bridge v. Warren Bridge,

36 U.S. (11 Pet.) 420, 548 (1837)).

ce. Contrary to petitioners’ contention (Pet. 28), the

decision below does not conflict with this Court’s deci-

sion in Winstar. In Winstar, the plurality first con-

cluded that an FHLBB resolution had been incorporated

into the Supervisory Action Agreement (whose status as

a contractual document was undisputed) by means of an

integration clause. 518 U.S. at 862-863 (opinion of

Souter, J). That conclusion was sufficient to establish

that the terms of the contract were supplemented by the

FHLBB resolution; the court of appeals in this case re-

jected the analogous conclusion with respect to the

RCMA, and petitioners do not challenge that holding.

Petitioners rely, however, on the plurality’s added state-

ment that “[t]lo the extent that the integration clause

leaves any ambiguity, the other courts that construed

the documents found that the realities of the transaction

favored reading those documents as contractual commit-

26

ments, not mere statements of policy, and we see no rea-

son to disagree.” /d. at 863 (citation omitted).

That alternative reasoning by the plurality, which

was not addressed by the concurring Justices, was not

necessary to the decision in Winstar. By its own terms,

moreover, that reasoning is inapplicable here, because

“the other courts” that construed the documents here

did not find that they were contractual commitments; to

the contrary, neither lower court expressly addressed

whether the Bank Board resolutions alone were suffi-

cient to form a contract. In any event, the facts of this

case are fundamentally different from those in Winstar.

Here, the parties plainly did provide in a contract (the

Assistance Agreement) for the regulatory treatment of

goodwill, and they also made quite clear that that agree-

ment incorporated certain Bank Board resolutions. But,

unlike in Winstar, the parties also decided not to include

petitioners in that agreement. What petitioners seek in

this case, unlike in Winstar, is to use the Bank Board

resolutions to create additional contract rights for them-

selves, notwithstanding the fact that, at the time of con-

tracting, the parties decided to grant those rights only

to others.

d. Petitioners also argue (Pet. 28-29) that the deci-

sion of the court of appeals conflicts with other decisions

of the Federal Circuit. Further review would not be

warranted to address a claim of an intra-circuit conflict.

Wisniewski, 353 U.S. at 902. Moreover, the court of ap-

peals’ decision could not conflict on this point with any

of its prior decisions, because the court of appeals in this

ease did not address (because petitioners did not raise)

the argument that the Bank Board resolutions alone

constituted contracts between the government and peti-

tioners.

27

In any event, even had the court of appeals held that

the Bank Board resolutions were not contractual docu-

ments giving rights to petitioners, there would have

been no intra-circuit conflict. Petitioners cite Home

Savings of America, FSB v. United States, 399 F.3d

1341 (Fed. Cir. 2005). In Home Savings, the court of ap-

peals held that although a parent company, Ahmanson,

was not a party to the Assistance Agreements in that

case, it was a party to overall contracts with the govern-

ment pursuant to which its subsidiary, Home Savings,

acquired several thrifts. /d. at 1349. Unlike in this case,

the Bank Board resolutions in Home Savings condi-

tioned approval of the transaction on a direct undertak-

ing by Ahmanson to assume full financial responsibility

for the thrift. See, e.g., Home Sav. of Am. FSB v.

United States, 51 Fed. Cl. 487, 498 (2002); See also 399

F.3d at 1349 (Bank Board resolutions memorialized “re-

ciprocal promises that were part of the overall bargains

between the plaintiffs and the government”). In this

case, by contrast, the Bank Board resolution approving

SCH’s acquisition of SoCal mentions petitioners, see

Pet. App. 197a-199a, but it does not impose direct obli-

gations on them or condition approval of the acquisition

upon reciprocal promises by them.

Petitioners also cite La Van. See Pet. 29. The court

of appeals in this case specifically distinguished La Van,

noting that “the shareholders [in La Van] were so criti-

cal to the conversion transaction that they, rather than

the corporation, were essentially the direct purchasers

of the converted federally-insured institution.” Pet.

App. 17a. The court also noted that the contractual doc-

uments in La Van had not identified the state law in-

tended to govern the contracts in that case, and the

court in La Van aecordingly had no occasion to consider

28

the legal requirements under a particular state’s law

“mandating a distinction between a corporation and its

shareholders.” /d. at 18a; ef. Domino’s Pizza, Tne. v.

McDonald, 126 S. Ct. 1246 (2006) (emphasizing impor-

tance of distinction between corporation and its share-

holders). In this case, by contrast, the parties provided

in the Assistance Agreement that California law would

govern the contract, and the court of appeals’ analysis

emphasized that under California law “there is no justifi-

cation” to “disregard * * * the corporate structure in-

voked by [petitioners] facilitating the acquisition and

conversion of [SoCal].” Pet. App. 17a. Finally, the court

of appeals in La Van relied on specific evidence that the

government intended to contract with the shareholders

separately from the corporation in which they owned

shares, such as internal deliberations, 382 F.3d at 1348,

and an internal memorandum stating that “arm’s

length” negotiations were being conducted with the

shareholder plaintiffs, 7d. at 1348. Here, in contrast, the

facts show that any intent to reach an agreement with

petitioners was confined to the terms contained in the

RCMA.

In any event, the extent to which particular Bank

Board resolutions constituted contracts between the

thrift regulators, the banks, and their shareholders in

the course of the 1980s is confined to the Winstar con-

text. Only 30, out of the original total of approximately

122, Winstar-related cases are still pending. The ques-

tion presented concerning the precise circumstances

under which Bank Board regulations during the 1980s

did—or did not—attain contractual status is one of lim-

ited future importance.

29

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

PAUL D, CLEMENT

Solicitor General

STUART E. SCHIFFER

Acting Assistant Attorney

General

DAVID M. COHEN

JEANNE E. DAVIDSON

KENNETH M. DINTZER

Attorneys

MAY 2006

@) FILED ~

No. 05-1221 UN 1- 2006

OFFICE OF THE CLERK

SUPREME COURT, U.S.

IN THE

Supreme Court of the United States

PRESTON MARTIN, ROY DOUMANI, BEVERLY W. THRALL

(Successor to the Claims of Larry B. Thrall), ARBUR, INC.,

WILLIAM E. SIMON, JR., J. PETER SIMON, AND GEORGE J.

GILLESPIE, III (Executors of the Estate of William E.

Simon, Sr.),

Petitioners,

v.

UNITED STATES, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

REPLY BRIEF FOR PETITIONERS

DAVID B. BERGMAN RICHARD G. TARANTO

MELVIN C. GARBOW (Counsel of Record)

HOWARD N. CAYNE H. BARTOW FARR II

MICHAEL A. JOHNSON FARR & TARANTO

ARNOLD & PORTER, LLP 1220 19th Street, NW, Suite 800

555 Twelfth Street, NW Washington, DC 20036

Washington, DC 20004-1202 (202) 775-0184

(202) 942-5000

DAVID S. COHEN

MILBANK, TWEED, HADLEY,

& MCCLOY

1850 K Street, NW, Suite 1100

Washington, DC 20006

(202) 835-7517

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 - WASHINGTON, D.C. 20001

RULE 29.6 STATEMENT

There has been no change since the petition. See Pet. ii.

TABLE OF CONTENTS

RULE 29.6 STATEMENT

REA ee Se PAF REE cic iscintcthesiniingenigesnasiiacacinss iV

A. The First Question Warrants Review ................ 2

B. The Second Question Warrants Review ............ 8

EE Ba NE sini Sinh chs Saeed einchannnieebiaatannerarentlas 10

(111)

iV

TABLE OF AUTHORITIES

CASES Page

Bluebonnet Sav. Bk. v. United States, 266 F.3d

ESE Ae RAR, SIE? as koccrteamniinasareeaouae 7

Cardinal Chem. Co. v. Morton Intern., Inc., 508

SF a REE ER OR owns talsisndaaneasiiackagndoulibamenidsc cnn eaeed 7

East River S.S. Corp. v. Transamerica Delaval,

PG APG US: Be CI IOOD aidviciicen canted 8,

Home Savings of America v. United States, 399

Pe 1 SE AG ACE, ZOMG i vaceseesicdesics hicaacnstas 9,10

La Van vy. United States, 382 F.3d 1340 (Fed. Cir.

Pi ortckicesrtarcimitbiccdicstinnteniivas tuceekaiimuesenupalaen 7,9, 10

National Railroad Passenger Corp. v. Atchison,

Topeka & Santa Fe Ry., 470 U.S. 451 (1985)... 8

United States v. Winstar Corp., 518 U.S. 839

Loe SCRUM ER ig Re NR B ayr citi arse ies Ses ey MNS 3,9

OTHER AUTHORITIES

BE. Farnswortht, Contracts (1962). ...cc.cccsscavsscsceeseases 5

R. Lord, Williston on Contracts (4th ed.).............. 5

Restatement (Second) of Contracts (1979)

Pk ican chcecuda cesta sncuesnuneteupaacnasaoe eta sbcia ceaiaereniee 3,9

OP peiecknb ccna hiis oar anctavantieaisd nara mpd aan 9

PO sis Gas vucacn ha sateanbecen west eusidea psc tairc bbeieannceoeaies 3,9

ee hia es bask k au edoy alias earuak a casebloas Vecabonia beeen 3,9

RE ee AS cas diedicgs econ ne rasndpntasinkddciananatavneuacak 6

E> SRNR Spee rete peer Saacte MNT aN tan eEN RSMo R a 4

BE REN GRR age RAN MUR OU KEN are we NORE TA LAN STE 5

BL) ga ARR Nn teat Ate aie paRigra a SeER RORY ST creesio Wear Beant ane 5

Petition for Certiorari, in United States v. IBM

Corp., S517 U.S. 843 (1996), 1995 WL

PUNE NE fen hivicekavinat che dca es eae 7

REPLY BRIEF FOR PETITIONERS

The principal question presented is whether, when a party

to a Government contract suffers a breach that causes factu-

ally foreseeable expectation damages (as the Federal Circuit

accepted here). federal contract law nevertheless bars such

damages unless the contract specifically provides for them.

The Federal Circuit held that it does, engrafting a radical

limitation, unsupported in any authority, on the entitlement

to expectation damages. Because of the Federal Circuit's

unique role in government contract law, its deviation from

well-established standards and its own prior decisions on so

fundamental an issue will cause serious harm until corrected.

The Government cannot defend the court’s holding. It pri-

marily seeks to avoid the issue by disputing the Federal Cir-

cuit’s own (correct) premise that the Government breached its

contract with petitioners. When the Government does discuss

the actual ruling, it makes a simple and decisive error. It

treats contract provisions that limit promisees’ express obli-

gations, and thus protect against their downside risk, as if

they legally implied curtailment of their entitlement to the

benefit of their bargain (their expected upside potential).

That confusion of contract obligations with contract oppor-

tunities, aside from being, illogical and unaccompanied by a

single citation of authority, flouts the defining feature of

contract damagyes—the guarantee of the “benefit of the bar-

gain.” The Federal Circuit’s damages ruling is plainly wrong

and should be reviewed and reversed.

The question whether the Board resolutions themselves

created contract rights also warrants review. The Government

is wrong in saying that petitioners failed to preserve this issuc.

On the merits, the Government has neither authority nor analy-

sis to deny that financial-transaction-approving resolutions

like the ones here create contract rights. Other Federal

Circuit decisions plainly recognize such resolutions’ enforce-

ability as contracts, creating a conflict that warrants review.

2

A. The First Question Warrants Review

The Government incorrectly asserts that the petition’s first

question, about contract damages law, merely contests the

application of settled law. Opp. 12. The Federal Circuit did

not hold that, on the facts, petitioners failed to meet the

accepted standard of factually foreseeable expectation dam-

ages; it did not even conduct a clear-error review of the trial

court’s factual finding of foreseeability (and could not have

reversed that finding as a factual matter, as Pet. 21-22

explains). Rather, the court held that expectation damages

could not, as a matter of law, include the breach-caused

destruction of petitioners’ property (their 1987 equity) simply

because petitioners’ obligations in the breached contract (the

RCMA) did not include surrender (or initial acquisition) of

that property. That is a legal ruling, and it is insupportabie;

indeed, its novelty is shown by the fact that the Govern-

ment’s entire argument on the merits (Opp. 12-20) is devoid

of any citation to legal authority, whether precedent or the

Restatement’s governing principles. '

1. The Government’s main argument relies on what it

recognizes was not the ground of the Federal Circuit’s deci-

sion: a contention that the RCMA did not include a capital-

credit promise by the Government. Opp. 12-16. The Federal

Circuit, however, at least accepted (as the Government

agrees), and is better read as having affirmatively concluded,

that the Government breached the RCMA when it altered

the regulatory treatment of capital credits. Pet. App.- 19a

(“Recital G and § | [of the RCMA] include the government’s

promise that SCH and SoCal will be able to account for

$217.5 million in capital credits as part of its regulatory

capital.”); id. at 20a (“the incorporation of the capital credit

' The Government misstates the amount at stake: it says that “the trial

court awarded over $90 million to petitioners” (Opp. 8), when the award

to peutioners was just over $28 million (App. 123a: see Pet. 11).

3

promise into the terms of the RCMA”). The Federal Circuit

thus adopted a legal rule that limits damages for a breach, and

it is that rule, which the Government struggles to explain and

support (see pages 4-7, infra), that contract parties and courts

now must follow.

The Federal Circuit was correct in declining to adopt the

Government's argument that the RCMA contains no capital-

credit promise. RCMA § | in terms says: “regardless of any

changes in the method of calculating regulatory capital or the

items includable in such calculation, the $217.5 million of

assistance from the CORPORATION [Government] shall be

includable in capital for purposes of determining whether the

NEW ASSOCIATION [SoCal] has maintained its regulatory

capital” at the 3% level § 1 requires. Pet. App. 182a. RCMA

§ 4 requires petitioners (the “ACQUIRING GROUP”) to

guarantee that level and also to maintain their equity owner-

ship, and RCMA §§ 5 and 7 require petitioners to forfeit their

stock in certain circumstances if their equity or the capital

level falls too much. Pet. App. 183a. The recitals preceding

those provisions, moreover, not only state that the Govern-

ment “has agreed” to the capital-credit regulatory treatment

(Recital G), but refer to “the mutual promises contained

herein” (Recital F) and place the RCMA at the very core

of the overall transaction by stating that the Government’s

provision of financial assistance was contingent on receiving

the promises in the RCMA, from petitioners as well as others

(Recital E). Pet. App. 181a (emphasis added).

The Government’s eapital-credit assurance can only ration-

ally be viewed as an enforceable promise under the RCMA—

a “manifestation of intention” that “justif[ies] a promisee in

understanding that a commitment has been made.” Restate-

ment § 2 & Comment b; id. §§ 3, 4, 202. As a common-sense

matter, petitioners’ RCMA commitments of their money,

time, and reputations made no sense whatever without the

Government’s capital commitment. United States v. Winstar

4

Corp., 518 U.S. 839, 863 (1996) (plurality). Textually, more-

over, under the RCMA’s express characterization of the

“mutual promises contained herein” (Recital F), the Govern-

ment’s capital-credit guarantee had to be an enforceable

promise, because there is nu other Government promise in the

document. That fact alone disproves the Government’s effort

(unsupported by citation) to limit the RCMA § | “provided”

commitment to the thrift and holding company (Opp. 13)—

which is also wrong, legally and factually, on additional

grounds as well. Thus, even if the Government’s capital-

credit commitment were viewed simply as benefiting the

thrift and its holding company, black-letter law entitles peti-

tioners to enforce it. Restatement § 305 Comment a (“[t]he

promisee of a promise for the benefit of a beneficiary has the

same right to performance as any other promisee”). And, in

any event, the § | commitment runs to petitioners themselves,

because RCMA §§ 4 and 7 put them on the line for the

institutions’ capital maintenance required by § 1, making clear

that the Government’s commitment was in exchange for

petitioners’ as well as the institutions’ undertakings.”

2. On the merits, the Government strains to construct a

justification for the Federal Circuit’s damages ruling. Opp.

16-20. The various attempts ultimately rest on the same

notion: that, because petitioners’ obligations were limited

under the RCMA, their damages must be limited to those

obligations and cannot compensate them for their oppor-

tunities under the contract had it been performed. The

Government offers this as another way of saying what the

>The Government. while acknowledging that petitioners separately

argued for breach of the RCMA capital-cred:t promise in the Federal

Circuit. suggests that the brevity of the argument casts doubt on it. Opp.

16 n.4. To the contrary, the brevity reflects the simplicity of the point--

which the Federal Circuit accepted, at least arguendo as well as the need

for space to address other more complex issues, including whether peti-

tioners” contract went beyond the RCMA.

5

Federal Circuit said: that the breach-caused destruction of

petitioners’ property was not recoverable because the ©

breached contract (the RCMA) did not require forfeiture (or

initial acquisition) of that property. Like the Federal Circuit,

however, the Government has cited not one authority for this

limitation on contract damages—tacitly proving the novelty

of the limitation on which the judgment below rests.

This limitation is not just unsupported but insupportable.

By restricting protection of promisees’ contract opportunities

to their contract obligations, the Federal Cuircuit’s and

Government’s new theory violates the core principle that

distinguishes contract damages from tort and other damages.

The essence of the well-established primary measure of

contract damages, i.e., expectation damages, is precisely to

“give a plaintiff the full benefit of its bargain by com-

pensating for forgone business opportunities.” East River

S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 873

(1986); see Restatement §§ 344, 347 & Comments a; R. Lord,

Williston on Contracts § 64:2 (4th ed.) (promisee entitled to

expected value of the contract if performed); E. Farnsworth,

Contracts §§ 12.1, 12.9 (1982) (same, noting also UCC § I-

106(1)).. The Federal Circuit’s denial of damages, and the

Government’s defense of it, thus attack the very heart of

contract-damages law, and the harmful consequences of the

ruling are correspondingly large.

The RCMA bargain is plain. Petitioners made a continu-

ing commitment—of their money (up to specified amounts),

their time as directors and officers, and their reputations in

the industry——-to saving the thrift, a very risky proposition,

benefiting the Government (which had no other bidders) by

relieving it of an immediate liquidation lability. In ex-

change, petitioners received the Government’s capital-credit

commitment-— without which it made no sense for petitioners

to promise effectively to keep re-upping their investment cach

day after the April 30, 1987, RCMA—plus ownership of

6

what they might transform into a successful enterprise. The

RCMA commitments, according to the RCMA itself, were

central, not peripheral, to the whole transaction, for Recital

E declares the Government’s critical provision of financial

assistance and indemnification to be conditional on those

commitments. Pet. App. 18la. The basic rule of expectation

damages guarantees petitioners the benefit of their bargain,

and under standard contract law, those damages include the

factually foreseeable destruction of their equity stake that

was, in fact, caused by the Government's breach.

Two examples illustrate how far from settled law the

Government has to reach. First: It suggests denial of relief

because petitioners always faced a risk that they would have

to forfeit their equity for the thrift to succeed. Opp. 18. This

misses the critical point. Although contract parties always

face risks that their enterprise will not succeed and they will

suffer losses, contract law specifically protects against the

causing of such business reversals and losses by the actions of

the other party breaching their promises in the contract.

Here, the Government’s withdrawal of the capital-credit

commitment, as the trial court found, is what caused peti-

tioners’ loss and thus renders the Government responsible.

Second: The Government invokes the label “condition prece-

dent” to describe its capital-credit commitment, Opp. 19, 21,

as if that label defeated its liability for damages. This is sheer

confusion. A “condition” in the Government’s control, if not

satisfied, might have relieved petitioners of their, contract

duties, but that is hardly the issue. The law of conditions

has literally nothing to do with excusing non-performance

by the party in control of the condition (let alone non-

,erformance after the counterparty has performed, as peti-

tioners had by committing their money, time, and reputa-

tions). See Restatement $8 224-230.

The harmful consequences of the Federal Circuit’s novel

limitation on damages are evident. See Pet. 25-26. The rul-

4

ing will raise transaction costs in contracting, as parties must

struggle to anticipate possible losses, write them into the

contract, and perhaps even coordinate particular losses with

particular obligations. It also will raise the contract price to

the Government, as the increased transaction costs. plus the

increased litigation costs and risk of limited recovery, must be

compensated by higher payments in the contract. Not only

private parties, but the Government itself will suffer. The

Government does not dispute these evident harms—which

will occur long before and outside the glare of further

appellate rulings. Review is therefore needed now.

3. The ruling below also creates a deep intra-circuit

conflict on a fundamental matter within the Federal Circuit’s

unique jurisdiction, an accepted basis for review. See

Cardinal Chem. Co. v. Morton Intern., Inc., 508 U.S. 83, 89

(1993).* Numerous Federal Circuit decisions articulate and

apply, and award damages under, the ordinary expectation

damages principle, without the novel restriction of damages

to the plaintiff's contract obligations that was created and

applied here. See Pet. 22-24. In the Winstar setting, both

Bluebonnet Sav. Bk. v. United States, 266 F.3d 1348 (Fed.

Cir. 2001), and La Van v. United States, 382 F.3d 1340 (Fed.

Cir. 2004), do so. The Government tries to distinguish those

decisions only by once again disputing that it made a promise

to petitioners in the RCMA, a position the Federal Circuit

here, for good reason, did not accept. Review is therefore

* The United States has explained that, because of the Federal Circuit's

special jurisdiction, “this Court has recognized the need for plenary

review of Federal Circuit decisions that present issues of substantial

importance. See. ¢.g., United States v. Hill, 113 S. Ct. 941, 945 (1993).

United States v. Goodyear Tire & Rubber C 'o.. 493 U.S. 132, 138 (1989).

United States v. American Bar Endowment, 477 U.S. 105. 109 (1986).”

Petition for Certiorari at 14, in United States v. IBM Corp., 517 U.S. 843

(1996). at 1995 WL. 17013668.