Professional Documents
Culture Documents
21-_____
In the
Supreme Court of the United States
v.
UNITED STATES,
__________________________
On Petition for a Writ of Certiorari to the
United States Court of Appeals for the Federal Circuit
QUESTIONS PRESENTED
During the liquidity crisis of 2008-09, the United
States determined the public interest required
Chrysler and General Motors because they were
too important to fail. Believing each would be more
profitable with fewer dealers, the Government
restructuring plans required the confiscation of large
numbers of General Motors and Chrysler dealer fran-
chises. branded
vehicles, parts, and service in exclusive territories
were terminated and gifted to other dealers who the
Government assumed would operate more produc-
tively, thereby benefitting the public. Believing state
laws prohibited those dealership terminations without
compensation, the Government executed a bankruptcy
strategy to circumvent paying for the dealerships
being taken while concomitantly blocking dealers from
purchasing each other in the free market. The Court
of Federal compensated
property seizure on two grounds: that the Chrysler
less because
their franchise contracts would have been rejected in
bankruptcy if the Government had not intervened
during the liquidity crisis and that the Government
was not legally responsible for the actions of Chrysler.
The Federal Circuit affirmed the former and declined
to address the latter.
THE CENTRAL QUESTIONS PRESENTED ARE:
1. Whether the novel Federal
defense to takings liability conflicts with
, 568 U.S. 23 (2012)
(categorical defenses are barred in takings cases),
, 576 U.S. 351 (2015) (hypothetical anal-
ii
Respondent
United States
LIST OF PROCEEDINGS
_________________
_________________
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ........................................ i
PARTIES TO THE PROCEEDINGS ........................ iii
RULE 29.6 STATEMENT ......................................... iv
LIST OF PROCEEDINGS .......................................... v
TABLE OF AUTHORITIES ....................................... x
OPINIONS BELOW ................................................... 1
JURISDICTION .......................................................... 1
CONSTITUTIONAL AND
STATUTORY PROVISIONS INVOLVED .......... 2
STATEMENT OF THE CASE .................................... 3
REASONS FOR GRANTING THE PETITION ......... 9
I. THE FEDERAL CIRCUIT S UT FOR TEST
SHOULD BE REVIEWED UNDER SUPREME
COURT RULE 10(A) AND 10(C) BECAUSE IT IS
CONTRARY TO CONTROLLING DECISIONS OF
THIS COURT ....................................................... 9
A. Relevant Takings Clause Concepts in
Context ........................................................ 9
B. The Dismissal of the Takings
Claim for Failing to Satisfy an Element
of a Takings Case Is Contrary
to - and ............. 11
C. F
Dismiss the Direct and the Regulatory
Takings Claims Is Contrary to Controlling
Decisions of This Court............................. 13
vii
Precedents ................................................. 39
CONCLUSION.......................................................... 41
ix
REHEARING ORDER
Order of the United States Court of Appeals for
the Federal Circuit Denying Petitions for
Rehearing En Banc (March 17, 2021) ........... 250a
OTHER DOCUMENTS
Federal Circuit Disposition of CFC Trial Verdicts,
2001-20............................................................ 253a
Federal Circuit Takings Analysis: Awards of
Money to Property Owners Were Affirmed
Only in (RTT) and , the
Other 79 Being Reversed or Remanded ........ 255a
Select Document Excerpts .................................... 262a
Indicative Summary of Terms for Secured Term
Loan Facility (December 19, 2008) ................ 268a
x
TABLE OF AUTHORITIES
Page
TA BLE O F AUTHORITIES
CASES
,
748 F.3d 1142 (Fed. Cir. 2014) ................. passim
,
961 F.3d 1380 (Fed. Cir. 2020) ......................... 12
,
966 F.3d 1347 (Fed. Cir. 2020) ......................... 36
,
953 F.3d 1344 (Fed. Cir. 2020) ......................... 32
,
597 F.3d 1356 (Fed. Cir. 2010) ......................... 21
,
568 U.S. 23 (2012) .......................................... i, 15
,
364 U.S. 40 (1960) ............................................. 28
.,
511 U.S. 531 (1994) ................................ 21, 31, 32
,
101 U.S. 16 (1880) ............................................. 16
CONSTITUTIONAL PROVISIONS
U.S. Const. amend. V .................................................. 2
STATUTES
15 U.S.C. § 1863(c)(5) ................................................. 2
28 U.S.C.§ 1254(1) ...................................................... 1
The Consolidated Appropriation Act of 2010,
§ 747, PL 111-117, 123 Stat. 3220
(Dec. 16, 2009) ................................................... 23
JUDICIAL RULES
Sup. Ct. R. 10(a) ............................................... 9, 36, 41
Sup. Ct. R. 10(c)............................................................ 9
GOVERNMENT PUBLICATIONS
Congressional Research Service,
:
,
CRS Report R40005 (Dec. 17, 2008) ................... 4
DOJ Civil Resource Manual,
................. 29
xv
(2011) ................................................................... 3
OTHER AUTHORITIES
Alexander Hamilton,
FEDERALIST No. 78 (1788) ................................. 41
Basil H. Mattingly,
:
,
36 WILLAMETTE L. REV. 695 (2000) ................... 38
Benjamin H. Barton,
,
37 IND. L. REV. 417 (2004) ................................. 14
Daniel R. Mandelker,
: ,
55 REAL PROP., TRUST & ESTATE L.J. 69
(Spring 2020) ..................................................... 38
xvi
,
4 WASH. U. JUR. REV. 213 (2012) ...................... 35
F. Patrick Hubbard, Shawn Deery, Sally Peace,
John Fougerousse,
,
50 URBAN LAWYER 1 (2019) ................................. 16
Harry T. Edwards,
,
1991 WIS. L. REV. 837 (1991)............................. 36
Richard A. Posner,
- ,
59 IND. L.J. 1 (1983) .......................................... 35
Robert G. Miller,
: :
-
65 TEX. B.J. 916 (2002) .................................... 36
Robert Meltz,
: , Congressional
Research Service (July 20, 2015) ...................... 38
xvii
OPINIONS BELOW
The consolidated case opinion of the CFC is
, 145 Fed. Cl.
243 (2019). (App.12a). The Federal
consolidated case opinion is
, 841 Fed. Appx. 205 (Fed. Cir. 2020).
(Appx.1a). The interlocutory appeal decision is
, 748 F.3d 1142
(Fed. Cir. 2014). (App.218a).
JURISDICTION
The panel judgment was entered on December 29,
2020. Rehearing and rehearing were denied
on March 17, 2021. (App.250a). This Court has juris-
diction pursuant to 28 U.S.C.§ 1254(1).
2
CONSTITUTIONAL AND
STATUTORY PROVISIONS INVOLVED
U.S. Const., amend. V
. . . [N]or shall private property be taken for
public use, without just compensation.
15 U.S.C. §§ 1863(c)(5)
THE CHRYSLER CORPORATION LOAN GUARANTEE ACT
The aggregate amount of nonfederally guaranteed
assistance of at least $1,430,000,000 required to
be provided under subsection (a) of this section
shall include . . . (5) at least $180,000,000 shall
be from suppliers and dealers, of which at least
$50,000,000 shall be in the form of capital as
defined in subsection (b).
3
(2011).
2 Government testimony admitted it intervened to prevent the
collapse of systemically important firms as an integral part of
the plan to inject liquidity into the economy, not to benefit the
firms or their owners.
4
-
realm for
hts for nothing. In
the Government terminated dealers did not
share the sacrifice: they were the sacrifice.
Like GM, Chrysler responded to the Government
requirement by proposing to reduce the dealer network
reduction by 25% within 18 months at no cost to
the Government. This dealer reduction would have
been achieved by December 2010 by dealers buying
each other out and through attrition without cost to
the Government or Chrysler. The Government
expert, Boston Consulting Group, supported the cred-
-existing voluntary
dealer reduction program 95% of which was financed
by the dealers themselves.
Chrysler executives informed the Government
The Government
from being purchased by their competing dealers.
Only the Government insisted upon a plan whose
outcome was the involuntary termination of dealers
without compensation. The Government took the deal-
them
to other dealers for free based on conjecture that
replacement dealers would operate their new terri-
tories more profitably.
Petitioners sued for Takings Clause relief in the
CFC in 2010. The CFC held in favor of the Government
after trial in 2019. First, it held that Chrysler, not
the Government
that
compelled it to ignore the real-world value of the
property, it declined to hold the Government liable
because perty would have
been worthless in a hypothetical scenario since their
franchise contracts would have been rejected in a
bankruptcy that would have followed the Government
refusal to restructure Chrysler.
opinion ignored the crucial, uncontested fact the
Government analysis
disappearance need not completely destroy its dealers.
Most of the jobs and profits in a dealership come not
from sales of new cars but from service and used
cars. Both would be needed if Chrysler liquidated
(emphasis added). App.262a.
The Federal
latter reasoning and chose not to rule on the former
9
of the decision
141 S.Ct. 731 (dissent) (2021).
- at 323 (2002).
Removing any chance of confusion on this stricture,
this Court reiterated that w taking has
occurred, . . . has no
at 382.
Disregarding
sole basis for dismissing this direct takings claim
was that the dealers failed to prove their
takings claim constituted an exception to the
12
Government
. at 208, fn. 1. That unprece-
dented holding, buried in a footnote bereft of citation
of legal authority, found the dealers failed to prove
of
what might have occurred if the Government took no
action. That holding relied upon , the first appeal
of this case, where the Federal Circuit panel created
a new economic impact proof requirement in regulatory
takings15 cases.16
dealers to prove the hypothetical economic impact on
Government
intervention during a national liquidity crisis. The
Federal Circuit intends that defense to operate as
threshold barrier in a new territory it carved out
between takings liability and valuation issues.17
Grafting regulatory takings test into a
direct taking case was like trying to pound a square
peg into a round hole. The panel relied upon
C.
Direct and the Regulatory Takings Claims Is
Contrary to Controlling Decisions of This Court.
1.
of a Footnote in
, 538 U.S. 216 (2003).
is based on a misreading
of footnote 11 in , at 240. footnote
did not announce a new liability barrier: it merely
stated a method of calculation of compensation being
used in an unusual set of factual circumstances. .
14
predecessor
, 449 U.S. 155, 164 (1980), was express-
ly circumstance because the
challenged government program created income where
in
by this Court or an Federal Circuit.
2.
by carving out a categorical exception to
Takings Clause liability and conflicts with
by obviating the requirement
to balance the factors.
The panel affirmed the dismissal of the direct and
at 39.
Similarly, in the context of regulatory takings,
3. but
Prohibition on Hypothetical Takings
Analysis.
In , ,21 the Government denied liability
on the ground that plaintiffs failed to prove the
Government
property owner complains. Petitioners pinpointed that
particular Governmental action in the CFC:
Government took an action by which it compelled
Chrysler to terminate a subset of its dealers. It is the
Government The CFC
responded by saying: correct
But the Federal Circuit panels misstated the
Government
complained and substituted their own definitions for
that of the dealers. The panel contextual references
Government
Government intervention
Government requirement
is an unworkable standard given the wide variety of
potential actions. These ambiguous substituted terms
could have meant many of the following: Government
financial assistance only to Chrysler after the bridge
loan, or before the bridge loan, or reaching back to
22
raised during oral argument.
19
5.
Carefully Developed Mosaic of Cases
Instructing How to Value Property
Taken During Economic Emergencies
into a License to Seize Valuable Property
Without Paying for It.
First, economic emergencies do not suspend the
Constitutional requirement of just compensation for
taking private property.
, 290 U.S. 398 (1933). Strikingly similar to
this case, the precedent of the
, 419 U.S. 102 (1974) is highly instructive.
transportation crisis [was]
precipitated when eight major railroads . . . entered
[bankruptcy] reorganization proceeding at 108.
Those railroads would have failed without Government
intervention. Just as in 2008-09, the Government
intervened because the railroads were too important
to be allowed to fail. Just as in 2008-09, the Government
20
plaintiff
667 F.3d 1239, 1245 (Fed. Cir. 2011).
Finnin and Guetterman dutifully followed the
law at trial by properly subtracting the value of the
offsetting benefit of the Government
reduction requirements (the specific Government action
they complained about); the Government having made
no proffer of evidence of offsetting benefits.
funda-
mental element of the property right, falls within
this category of interests the Government cannot
take without compensation at
382.
in the competitive advantage over others that [its
owner] Monsanto enjoys by virtue of its exclusive
B. Interjection of a
Direct Takings Defense for the Government
Violated Four Core Tenets of the Administration
of Justice.
- at 1579.
intervention to rescue the Government
from liability on the direct takings claim was a
heavy-handed tipping of the scales of justice. Not
only does the judiciary need to be impartial: it needs
. at 890 (Roberts, C.J.,
dissent). By raising its novel defense for the Govern-
ment, , the panel abandoned its role as a
that a
fair trial in a fair tribunal is a basic requirement of due
., 556 U.S.
868, 876 (2009).
The party presentation rule prohibited the panel
from interposing a defense to benefit the Government,
much less creating one out of whole cloth.
to
The CFC required the dealers to prove their
property had economic value in an imaginary world
where the Government did not intervene.25 The CFC
found the dealerships would be worthless in the
hypothetical world because two assumed events would
both occur: (1) Chrysler would declare bankruptcy,
worthless.26
establish
rights of franchisees or leave them worthless.
at 1659. Like the CFC, it conflated
with , diametrically opposed concepts both
in substance and procedure controlling the survival
of franchisee rights in bankruptcy. at 1663.
con-
tract that leaves intact the rights of franchisees.
Rejection of an executory contract
rights that the contract previously . at
1666. In contrast, the substantive effect of an
order is elimination of franchisee rights.
Government briefs and oral argument in
along with its legal manuals, painstakingly distinguish
FMV
methodologies was contrary to and which
held that, where there is no market price due to
exigent circumstances and because fairness requires
avoidance of extreme outcomes and inflexible tests,
C.
Historical and Subsidiary Fact Findings
Concerning the Profitability of the Exercise
of Franchisee Rights After Rejection is Contrary
to .,
333 U.S. 364 (1948) and
., 138
S.Ct. 960 (2018).
In disregarding , the
CFC failed to discharge its duty to make proper
historical and subsidiary fact findings concerning the
uncontroverted evidence establishing that the dealers
28 App.263a.
29 -
the labor or parts for the repair.
34
32 Douglas Lind, ,4
WASH. U. JUR. REV. 213, 217-18 (2012); Richard A. Posner,
- , 59 IND. L.J. 1, 8 (1983).
36
,
1991 WIS. L. REV. 837, 840.33
result-oriented reasoning, clear-
ly -justifies-the-means
Robert G. Miller, : :
-
TEX. B.J. 916, 917 (2002), is unconstitu-
tional because it is beyond debate that Constitu-
tion . . . is concerned with means as well
at 383.
The exercise Rule 10(a) supervisory
power is the only obstacle to the Federal
determined dismantling of the guarantees of the
Takings Clause. - is the most
recent but not the only case where this Court invoked
that power. : , 558 U.S.
183, 196 (2010); , 482 U.S. 641, 645
(1987); , 539
U.S. 69, 74 (2003); ,
, 574 U.S. 1104 (2015) (Alito, J.,
dissenting).
B. -
but -Stepping of
Controlling Precedents Will Have a Significant
Impact Beyond the Decision.
1.
Will Unduly Expand the Immunization of
the Government from Takings Liability.
in
analyzed the abysmal state of Takings Clause juris-
prudence. Noting that only 1.6% of 1,700 34
claims were successful from 1992-2017, he cited legal
35 , Daniel R. Mandelker,
: , 55 REAL
PROP., TRUST & ESTATE L.J. 69, 96-97 (Spring 2020); F. Patrick
Hubbard, Shawn Deery, Sally Peace, John Fougerousse,
Controlling Precedents.
There are no aspects of this case which would
distract from the ability of this Court to direct the
Federal Circuit to enforce the Fifth Amendment by
following its precedents and to avoid even the
40
CONCLUSION
Constitutional guarantees are only as effective
as the ability to vindicate them, Alexander Hamilton,
FEDERALIST No. 78 and 80 (1788) super-
vision under Rule 10(a) is necessary to ensure enforce-
ment of the Fifth Amendment s Takings Clause.
The petition should be granted for the reasons
stated above.
Respectfully submitted,
HARRY W. ZANVILLE
RICHARD FAULKNER
12770 COIT RD., SUITE 720
DALLAS, TX 75251
(972) 427-1500
JAMES H. ARENSON
ARENSON LAW GROUP, P.C.
425 2ND ST., SE #900
CEDAR RAPIDS, IA 52401
(319) 220-5850