# Reply Brief — Martin v. United States (No. 05-1221) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0615%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief - **Published:** January 1, 2005 ## Text 8 needed not only because of harmful error on a fundamental issue, but also because of doctrinal conflict. B. The Second Question Should Be Reviewed 1. The Government begins its response on the second question presented, as on the first, by trying to avoid the issue. It says (without citation) that petitioners did not con- tend in the Federal Circuit that the Board resolutions created contract rights, but argued only for incorporation of the resolutions in the Assistance Agreement. Opp. 22. That is wrong. Petitioners argued at length that they had (express and implied) contract rights from multiple sources, i.e., the RCMA, the Board resolutions, and the Assistance Agreement (Doumani e7 a/. Ct. App. Br. 15-19, 22-30 (May 25, 2004)), and specifically denied that they were relying on incorpo- ration of the Board resolutions by the Assistance Agreement. Id. at 22 (Petitioners “do not sue for breach of the Assistance Agreement. Instead, they sue for breach of the Overall Con- tract, of which the Assistance Agreement was but one com- ponent.”). Petitioners thus preserved the issue. 2. Even on the merits, the Government tries to divert atten- tion from the actual issue. The question is not whether Government resolutions, regulations, or statutes generally give rise to contract rights. Opp. 24-25, discussing National Railroad Passenger Corp. v. Atchison, Topeka & Santa Fe Rv., 470 U.S. 451 (1985). It is whether certain types of reso- lutions —-which are common-—-do. The Government cites no authority whatever that denies such rights where, as here, the resolutions approve particular persons’ financial transac- tions with and for the benefit of the Government, address the persons who made the offer to the Government, and impose duties on those persons as part of the transaction. As the Government recognizes, the Winstar plurality treated the Board resolutions as sufficient to create contract rights. Opp. 25-26. And contract law makes clear that they 9 are. Contrary to the Government's citation-less statement, the absence of “agrees,” “contracts,” or “promises” language, let alone of language separately “requiring payment of dam- ages,” Opp. 23, in no way defeats contractual enforceability where “the realities of the transaction favor[ ] reading those documents as contractual commitments.” Winstar, 518 U.S. at 863 (plurality). Contract enforceability depends not on the form of words but on a common-sense understanding that the actions are justifiably viewed as commitments. Restatement § 2 & Comment b; id. $$ 3, 4, 202: see Pet. 28. The Gov- ernment does not identify a single one of the required elements for contrac: ‘ormation that is somehow missing in the Board resolutions. When petitioners assumed the various dutics imposed on them by the resolutions, they were justified in relying on the resolutions’ assurances about capital regulatory treatment as enforceable commitments, without which petitioners’ com- mitments would have been economically irrational. The presence of additional documents that serve various purposes partially overlapping with the resolutions is not uncommon ‘and does not change the contractual nature of the resolutions. And recognizing the resolutions as contracts does not un- dermine the separate treatment of the institutions and the individuals, who have different duties and benefits under the various resolutions and separate agreements. Contra Opp. 24. The Assistance Agreement, providing for a monetary infusion into the institutions, creates one set of duties and rights; the RCMA, addressing other issues, creates others (for petitioners and the institutions); and the resolutions create still others (including duties for petitioners beyond those imposed by the RCMA). See Pet. 6. 3. Other Federal Circuit decisions, notably Home Savings of America v. United States, 399 F.3d 1341 (Fed. Cir. 2005), and La Van, supra, have held that Board resolutions create contract rights, without additional privately signed agree- 10 ments. See Pet. 28-29. The Government cannot distinguish — those decisions, which it acknowledges held Board resolu- tions to create contract rights. Opp. 26-28. As to Home Savings, the Government focuses on the par- ticular private duties imposed by the resolutions (“full financial responsibility”)." Opp. 27 But the particulars of the duty are immaterial: here, too, the resolutions imposed duties on petitioners, which differ only in detail, not in their role as defining a bargain that makes the Board resolutions enforce- able. As to La Van, the Government notes aspects of the opinion (¢.g., about state law regarding veil piercing), Opp. 27-28, that have nothing to do with the legal issue here: whether Board resolutions just like the resolutions here create enforceable contract rights. La Van, like Home Savings, but contrary to the ruling in this case, squarely held that they do. The second question should thus be taken along with the first. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted, DAVID B. BERGMAN RICHARD G. TARANTO MELVIN C. GARBOW (Counsel of Record) HOWARD N. CAYNE H. BARTOW FARR III 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 June 1, 2006 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0615%3A3. Public record. Not legal advice.