Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-05100/USCOURTS-ca13-15-05100-0/pdf.json

Parties Involved:
Anthony Piszel
Appellant
United States
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

ANTHONY PISZEL,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2015-5100

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:14-cv-00691-LKG, Judge Lydia Kay 

Griggsby.

______________________ 

Decided: August 18, 2016

______________________ 

MICHAEL V. RELLA, Murphy & McGonigle, P.C., New 

York, NY, argued for plaintiff-appellant. Also represented 

by JAMES K. GOLDFARB; WILLIAM E. DONNELLY, Washington, DC.

DAVID A. HARRINGTON, Commercial Litigation Branch, 

Civil Division, United States Department of Justice, 

Washington, DC, argued for defendant-appellee. Also 

represented by BENJAMIN C. MIZER, ROBERT E.

KIRSCHMAN, JR., FRANKLIN E. WHITE, JR. 

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2 PISZEL v. UNITED STATES

GREGORY P.N. JOSEPH, Joseph Hage Aaronson LLC, 

New York, NY, for amici curiae Louise Rafter, Josephine 

Rattien, Stephen Rattien, Pershing Square Capital Management, L.P. Also represented by MARA LEVENTHAL,

SANDRA MYNDELLE LIPSMAN, CHRISTOPHER JAMES 

STANLEY. 

REBECCA LEGRAND, LeGrand Law PLLC, Washington, 

DC, for amicus curiae The National Black Chamber of 

Commerce. 

______________________ 

Before DYK, SCHALL, and HUGHES*, Circuit Judges.

DYK, Circuit Judge. 

Mr. Anthony Piszel appeals from a judgment of the 

United States Court of Federal Claims (“the Claims 

Court”) dismissing his complaint against the United 

States for failure to state a claim. That complaint alleged

a taking and illegal exaction resulting from a statute and 

regulations barring the payment of so-called “golden 

parachute” compensation upon his termination as an 

employee of the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Because we agree that Mr. Piszel’s 

complaint fails to state a claim on which relief can be 

granted, we affirm.

BACKGROUND

I 

The question here is whether a government prohibition on making golden parachute payments to terminated

 

* Judge Hughes concurs in the judgment and joins 

all but Part I.A. of the Discussion section. 

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PISZEL v. UNITED STATES 3

employees of Freddie Mac constitutes a taking or an 

illegal exaction.

Mr. Piszel is a former employee of Freddie Mac. According to his complaint, Mr. Piszel began working as the 

chief financial officer (“CFO”) of Freddie Mac in November 

of 2006. As part of his compensation package, Mr. Piszel 

was to receive a signing bonus of $5 million in Freddie 

Mac restricted stock units that would vest over four years, 

an annual salary of $650,000, and performance-based 

incentive compensation of roughly $3 million a year in 

restricted stock. In addition, Mr. Piszel’s employment 

agreement provided that in the event of his termination 

without cause, Mr. Piszel would receive a lump-sum cash 

payment of double his annual salary and that certain 

restricted stock units would continue to vest. These types 

of termination payments are often referred to as “golden 

parachute payments.” The payments at issue here are 

alleged to have a value in excess of $7 million.

Freddie Mac is a government sponsored enterprise, 

meaning that it is a privately owned but publicly chartered financial services corporation created by the United 

States. See 12 U.S.C. § 1452. Pursuant to its charter, 

Freddie Mac was created to “provide stability in the 

secondary market for residential mortgages” and “to 

promote access to mortgage credit throughout the Nation”

by “increasing the liquidity of mortgage investments and 

improving the distribution of investment capital available 

for residential mortgage financing.” See 12 U.S.C. § 1716. 

As such, Freddie Mac was authorized to purchase and sell 

residential mortgages from various banks, including “any 

. . . financial institution the deposits or accounts of which 

are insured by an agency of the United States.” Id. 

§ 305(b), 84 Stat. at 454 (codified as amended at 12 U.S.C. 

§ 1454(b)). 

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At the time that Mr. Piszel accepted his position, 

Freddie Mac was regulated by the Office of Federal Housing Enterprise Oversight (“OFHEO”) pursuant to the 

Federal Housing Enterprises Financial Safety and 

Soundness Act of 1992. See Pub. L. No. 102-550, § 1311, 

106 Stat. 3672, 3944 (1992). Mr. Piszel alleged in his 

complaint that his employment contract was reviewed 

and approved by OFHEO. Mr. Piszel alleged that he

performed his job as CFO as a “strong leader” with “excellent performance.” J.A. 30–31.

On July 30, 2008, facing great turmoil in the national 

housing market and the potential collapse of Freddie Mac, 

Congress passed the Housing and Economic Recovery Act 

of 2008 (“HERA”). Pub. L. No. 110-289, 122 Stat. 2654 

(2010) (codified at 12 U.S.C. § 4511 et seq.). At the time, 

Freddie Mac, along with its sister bank the Federal 

National Mortgage Association (“Fannie Mae”), owned or 

guaranteed about half of the nation’s $12 trillion mortgage market. The act significantly restructured the 

regulatory framework for Freddie Mac, establishing the 

Federal Housing Finance Agency (“FHFA”) to replace 

OFHEO as the primary regulator of Freddie Mac. See 12 

U.S.C. § 4511. In addition, the act significantly clarified 

and expanded the powers of the FHFA to act as a conservator or receiver for Freddie Mac should the mortgage 

giant get into serious financial trouble. See id. § 4617. As 

a conservator, the FHFA would “immediately succeed to 

all rights, titles, powers, and privileges of the regulated 

entity” and could “take over the assets of and operate the 

regulated entity with all the powers of the shareholders, 

the directors, and the officers of the regulated entity.” Id.

§ 4617(b)(2). The FHFA as conservator was given the 

explicit power to “disaffirm or repudiate any contract,” 

after which damages for the breach would be limited to 

“actual direct compensatory damages.” Id. § 4617(d)(1). 

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Additionally, and apart from the powers vested in the 

conservator to disaffirm contracts, the act contained a 

limit on “golden parachutes”: it authorized the Director of 

the FHFA to “prohibit or limit, by regulation or order, any 

golden parachute payment.” Id. § 4518(e)(1). The statute 

defined a “golden parachute payment” as “any payment . . . that is contingent on the termination of [a] 

party’s affiliation with [Freddie Mac]” and that is received 

on or after Freddie Mac is declared insolvent, placed in 

conservatorship or receivership, or is in financial trouble. 

Id. § 4518(e)(4)(A). The section also provided that “any 

payment made pursuant to a bona fide deferred compensation plan or arrangement which the Director determines, by regulation or order, to be permissible” is not a 

“golden parachute payment.” Id. § 4518(e)(4)(C)(ii). 

Congress did not outright prohibit all golden parachute payments,1 but rather left it to the Director of the 

FHFA to develop regulations determining which payments should, and should not, be made. Congress provided a number of “factors to be considered by the Director in 

taking any action” pursuant to his new authority. Id.

§ 4518(e)(2). Specifically, Congress stated that the Director should consider:

(A) whether there is a reasonable basis to believe 

that the affiliated party has committed any 

fraudulent act or omission, breach of trust or fiduciary duty, or insider abuse with regard to the 

regulated entity that has had a material effect on 

the financial condition of the regulated entity;

 

1 Congress did prohibit some severance payments, 

specifically the prepayment of salary if made “in contemplation of the insolvency of such regulated entity” or “with 

a view to, or having the result of preventing” the proper 

distribution of assets to creditors. 12 U.S.C. § 4518(e)(3).

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6 PISZEL v. UNITED STATES

(B) whether there is a reasonable basis to believe 

that the affiliated party is substantially responsible for the insolvency of the regulated entity, the 

appointment of a conservator or receiver for the 

regulated entity, or the troubled condition of the 

regulated entity (as defined in regulations prescribed by the Director);

(C) whether there is a reasonable basis to believe 

that the affiliated party has materially violated 

any applicable provision of Federal or State law or 

regulation that has had a material effect on the 

financial condition of the regulated entity;

(D) whether the affiliated party was in a position 

of managerial or fiduciary responsibility; and

(E) the length of time that the party was affiliated 

with the regulated entity, and the degree to 

which— 

(i) the payment reasonably reflects compensation earned over the period of employment; 

and

(ii) the compensation involved represents a 

reasonable payment for services rendered.

Id. 

The Director issued regulations implementing the 

statute on September 16, 2008. See 73 Fed. Reg. 53356-

01 (2008) (codified at 12 C.F.R. § 1231). These regulations 

generally prohibited all payments within the statutory 

definition of “golden parachute payments,” but listed 

several scenarios in which such a payment could be made, 

for example, when a regulated entity requests to make a 

payment and can demonstrate that the person involved 

did not commit any wrongdoing. See 12 C.F.R. § 1231.3(b) 

(2014). 

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The government placed Freddie Mac into conservatorship on September 7, 2008, because, according to 

FHFA’s website, there was “substantial deterioration in 

the housing markets that severely damaged Fannie Mae 

and Freddie Mac’s financial condition and left them 

unable to fulfill their mission without government intervention.” J.A. 34. Mr. Piszel alleges the following in his 

complaint: about two weeks later, on September 22, 2008, 

the Director of the FHFA, acting in his capacity and 

under his authority as Freddie Mac’s regulator, sent a 

letter to Freddie Mac’s CEO stating that he had “determined that [Mr. Piszel] should be terminated effective 

close of business today ‘without cause.’” Id. 35. The letter 

further provided that Freddie Mac should not pay Mr. 

Piszel a severance payment nor “any salary beyond the 

date of the cessation of Mr. Piszel’s employment, any 

annual bonus for 2008 [or] any further vesting of stock 

grants.” Id. As alleged, the letter stated that the basis 

for this decision was the newly-enacted golden parachute 

section of HERA and the implementing regulations. As a 

result of the letter, Freddie Mac terminated Mr. Piszel 

and, according to Mr. Piszel, “refused to provide him with 

any of the benefits to which he was contractually entitled 

under his employment agreement, including his $1.3 

million termination payment and the remainder of the 

restricted stock units that were granted to him as a 

signing bonus and were required to continue vesting after 

his termination.” Id. 36.2

II

Mr. Piszel filed suit against the United States on August 1, 2014, nearly six years after he was fired from his 

 

2 Mr. Piszel alleges that at the time of his termination, he had only received 19,735 of the 78,940 restricted 

stock units granted under his employment agreement.

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8 PISZEL v. UNITED STATES

job as CFO of Freddie Mac. At the time of the filing of his 

suit, Mr. Piszel had not filed suit against Freddie Mac for 

breach of contract nor, apparently, could he have, as the 

statute of limitations on such an action had already run.3

In his complaint, Mr. Piszel alleged a taking and an 

illegal exaction by the United States. Mr. Piszel asserted 

that: 

The FHFA’s actions . . . in directing Freddie Mac 

to terminate Mr. Piszel without cause without

paying him his contractually-required benefits (or 

any other just compensation), constitute[d] a taking in violation of the Fifth Amendment that completely deprived Mr. Piszel of his rights in his 

private property interests and rendered those interests worthless. Indeed, the Government’s actions permanently excluded Mr. Piszel from any 

interest in his contractual benefits and destroyed 

Mr. Piszel’s right to those interests . . . . 

Alternatively, the Government’s actions constitute 

an unlawful exaction in violation of HERA and 

the Due Process Clause of the Fifth Amendment, 

specifically because the government exceeded its 

authority under HERA in prohibiting payments 

that were not “golden parachute payments.” 

J.A. 39. 

 

3 Both parties agree that Freddie Mac, as a private 

institution, would be the appropriate counterparty in a 

breach of contract suit. See O’Melveny & Myers v. 

F.D.I.C., 512 U.S. 79, 85 (1994). According to both parties, the suit would have been brought in Virginia state 

court under Virginia law, which has a five-year statute of 

limitations for contract claims. See Va. Code Ann. § 8.01-

246(2) (1977).

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PISZEL v. UNITED STATES 9

The government moved to dismiss under Rule 12(b)(6) 

of the Rules of the United States Court of Federal Claims 

(“RCFC”).4 This rule is identical to its counterpart rule in 

the Federal Rules of Civil Procedure. The government 

argued that Mr. Piszel had failed to plead facts sufficient 

to support the various takings and illegal exaction claims. 

Mr. Piszel did not move to amend his complaint under 

RCFC 15 in response to the motion to dismiss, but rather 

defended the complaint as originally filed.

The Claims Court granted the government’s motion to 

dismiss the categorical and physical takings claims because it concluded that Mr. Piszel “fail[ed] to allege a 

plausible categorical or physical takings in his complaint.” 

Piszel v. United States, 121 Fed. Cl. 793, 805 (2015). The 

Claims Court also dismissed Mr. Piszel’s regulatory

takings claim because it concluded that Mr. Piszel did not 

have a cognizable Fifth Amendment property interest in 

his employment agreement and that Mr. Piszel did not 

have an investment-backed expectation in his employment agreement. Id. at 803, 805–06. Additionally, the 

Claims Court dismissed Mr. Piszel’s exaction claim because Mr. Piszel “concedes that he has not paid any 

money to the government” and therefore “there is no way 

to read the allegations in the complaint to state a plausible illegal exaction claim.” Id. at 807.

Mr. Piszel appealed. Following oral argument, we ordered supplemental briefing regarding the regulatory 

takings claim. Specifically, we asked the parties to address three questions:

 

4 The government also moved to dismiss under Rule 

12(b)(1) of the RCFC for identical reasons because the 

Claims Court would not have jurisdiction if Mr. Piszel 

could not plausibly state a claim against the United 

States. See 28 U.S.C. § 1491.

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(1) Does the fact that the golden parachute provision, 12 U.S.C. § 4518(e), did not eliminate breach 

of contract claims preclude a takings action 

against the government? 

(2) Would recovery for such a breach of contract 

claim be limited by the doctrine of impossibility or 

the sovereign acts doctrine and would the limitations on damages for breach of contract claims in 

HERA, 12 U.S.C. § 4617(d)(3)(A), preclude or limit 

recovery of breach of contract damages? Compare 

Office & Prof’l Employees Int’l Union, Local 2 v. 

FDIC, 27 F.3d 598 (D.C. Cir. 1994), with Howell v. 

FDIC, 986 F.2d 569 (1st Cir. 1993). 

(3) If these doctrines or statutory provisions would 

limit recovery, what impact would that have on 

the existence of a takings claim? 

Order for Supplemental Briefing, Piszel v. United States, 

No. 15-5100 (Fed. Cir. Apr. 7, 2016). Supplemental briefs 

were received from both parties. We have jurisdiction 

under 28 U.S.C. § 1295(a)(3) from a final decision of the 

Claims Court. We review the Claims Court’s grant of a 

motion to dismiss de novo, assuming the factual allegations of the complaint to be true. See Kam-Almaz v. 

United States, 682 F.3d 1364, 1367–68 (Fed. Cir. 2012). 

DISCUSSION

I 

We first consider Mr. Piszel’s regulatory takings 

claim. The Supreme Court has explained “that government regulation of private property may, in some instances, be so onerous that its effect is tantamount to a direct 

appropriation or ouster—and that such ‘regulatory takings’ may be compensable under the Fifth Amendment.” 

Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005). A 

regulatory takings analysis eschews any set formula, but 

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rather involves an “ad hoc, factual inquir[y]” which involves “several factors that have particular significance.” 

Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 124 

(1978). “Primary among [the] factors” for analyzing a 

regulatory taking is “[t]he economic impact of the regulation on the claimant and, particularly, the extent to which 

the regulation has interfered with distinct investmentbacked expectations.” Lingle, 544 U.S. at 538–39 (internal quotation marks and citations omitted). 

Here, Mr. Piszel alleges that the government effected 

a taking of his contractual right to payment of severance 

benefits when, pursuant to the statute and regulations 

prohibiting payment of golden parachutes, 12 U.S.C. 

§ 4518(e) and 12 C.F.R. § 1231.3, the Director of the 

FHFA instructed the CEO of Freddie Mac to terminate 

Mr. Piszel’s employment and not to pay him any severance. The government argues that the government’s 

actions did not amount to a taking for several distinct 

reasons.

A 

The government argues, and the Claims Court found, 

that Mr. Piszel lacked a cognizable Fifth Amendment 

property interest. We disagree.

In evaluating whether governmental action constitutes a taking for Fifth Amendment purposes, the court 

must determine “whether the claimant has identified a 

cognizable Fifth Amendment property interest that is 

asserted to be the subject of the taking.” Acceptance Ins.

Cos., Inc. v. United States, 583 F.3d 849, 854 (Fed. Cir. 

2009). When a claimant lacks such a property interest, 

nothing has been taken, and thus the claimant cannot 

maintain a takings claim. See Am. Pelagic Fishing Co., 

L.P. v. United States, 379 F.3d 1363, 1372 (Fed. Cir. 

2004). 

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In general, “[v]alid contracts are property, whether 

the obligor be a private individual, a municipality, a state, 

or the United States.” Lynch v. United States, 292 U.S. 

571, 579 (1934); see U.S. Tr. Co. of N.Y. v. New Jersey, 431 

U.S. 1, 19 n.16 (1977) (“Contract rights are a form of 

property and as such may be taken for a public purpose 

provided that just compensation is paid.”); A & D Auto 

Sales, Inc. v. United States, 748 F.3d 1142, 1152 (Fed. Cir. 

2014); see also United States v. Petty Motor Co., 327 U.S. 

372, 380–81 (1946) (holding that plaintiff was entitled to 

compensation for government’s taking of option to renew 

a lease). Mr. Piszel’s employment contract with Freddie 

Mac is no exception. 

Nonetheless, the government asserts that Mr. Piszel 

did not have a vested property interest in his contractual 

rights to severance because Freddie Mac operated in an 

environment of pervasive federal regulation. The government’s theory is that because Mr. Piszel voluntarily 

contracted with an entity that was subject to pervasive 

regulation, he assumed the risk of future regulation and 

thus cannot claim a vested interest in property that was 

likely to be subject to additional regulation. Because Mr. 

Piszel voluntarily entered into a highly regulated area, he 

lacked a right to exclude the government from his property. 

To be sure, if a regulation existed at the time of contract formation, the regulation would have inhered in the 

title. See A & D, 748 F.3d at 1152; Hearts Bluff Game 

Ranch, Inc. v. United States, 669 F.3d 1326, 1331 (Fed. 

Cir. 2012) (holding that the government’s precluding 

plaintiff from building a mitigation bank on his property 

was not a taking because the government’s authority 

predated plaintiff’s property right); Transohio Sav. Bank 

v. Dir., Office of Thrift Supervision, 967 F.2d 598, 618 

(D.C. Cir. 1992) (rejecting a takings claim because preexisting regulations allowed for agency discretion relating 

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PISZEL v. UNITED STATES 13

to the act alleged to be a taking). But here there was no 

specific regulation prohibiting golden parachute payments 

at the time of contract formation. The regulation, at the 

time, provided only for government review of Mr. Piszel’s 

compensation to determine whether it was “reasonable 

and comparable with compensation for employment in 

other similar businesses . . . involving similar duties and 

responsibilities.” 12 U.S.C. § 4518(a). There is no contention here that Mr. Piszel’s golden parachute was unreasonable under that standard. “If a challenged restriction 

was enacted after the plaintiff’s property interest was 

acquired, it cannot be said to ‘inhere’ in the plaintiff’s 

title.” A & D, 748 F.3d at 1152. This is the situation 

here. 

The government is nonetheless correct that the background regulatory environment is relevant to a takings 

analysis. When the government acts in a highly regulated environment to bolster restrictions or eliminate loopholes in an existing regulatory regime, the existence of 

government regulation does not defeat a property interest, but is relevant to whether there were investmentbacked expectations under the Penn Central test. See

Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers 

Pension Tr. for S. Cal., 508 U.S. 602, 645 (1993); Connolly 

v. Pension Benefit Guar. Corp., 475 U.S. 211, 226–27

(1986). Indeed, in Concrete Pipe and Connolly, relied 

upon by the government for the proposition that 

Mr. Piszel lacked a cognizable property interest, the 

Supreme Court did not conclude that no property interest 

existed. Rather, the Court concluded that because the 

property involved in those cases “had long been subject to 

federal regulation,” there was no interference with the 

plaintiff’s reasonable investment-backed expectations 

because there was no “reasonable basis to expect” that 

Congress would not alter the regulatory scheme. Concrete 

Pipe, 508 U.S. at 645; accord Connolly, 475 U.S. at 226–

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27. The same approach is also reflected in our decision in 

California Housing Securities, Inc. v. United States, 959 

F.2d 955, 958 (Fed. Cir. 1992), on which the government 

additionally relies. See also Golden Pac. Bancorp v. 

United States, 15 F.3d 1066, 1073–74 (Fed. Cir. 1994). 

In short, “there is [] ample precedent for acknowledging a property interest in contract rights under the Fifth 

Amendment.” Cienega Gardens v. United States, 331 F.3d 

1319, 1329 (Fed. Cir. 2003). In Cienega Gardens, we 

rejected the government’s position that “enforceable 

rights sufficient to support a taking claim against the 

United States cannot arise in an area voluntarily entered 

into and one which, from the start, is subject to pervasive 

Government control.” Id. at 1330 (quoting government 

brief) (internal quotation marks omitted); see also A & D, 

748 F.3d at 1152–53 (finding that a property interest in 

contract rights existed despite being subject to bankruptcy law). We therefore conclude that Mr. Piszel had a 

cognizable Fifth Amendment property interest in his 

contract rights.

B 

The government argues that Mr. Piszel should be 

barred from pursuing a takings claim because he failed to 

pursue a breach of contract claim against Freddie Mac. 

Mr. Piszel argues that there is no requirement to pursue a 

breach of contract claim against a private party before 

bringing a takings claim. We disagree with the government that Mr. Piszel’s failure to pursue a contract remedy 

is an absolute bar to his bringing a takings claim against 

the government.

The Supreme Court has held that a claimant must 

exhaust administrative or judicial remedies against the 

relevant government entity in order for his regulatory 

takings claim to be ripe. See, e.g., Williamson Cty. Reg’l 

Planning Comm’n v. Hamilton Bank of Johnson City, 473 

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U.S. 172, 186–87 (1985); see also, e.g., Palazzolo v. Rhode 

Island, 533 U.S. 606, 618–19 (2001); Suitum v. Tahoe 

Reg’l Planning Agency, 520 U.S. 725, 735 (1997); MacDonald, Sommer & Frates v. Yolo Cty., 477 U.S. 340, 348

(1986). The Court has explained that to demonstrate a 

regulatory taking, a party “must establish that the regulation has in substance ‘taken’ his property—that is, that 

the regulation ‘goes too far.’” MacDonald, 477 U.S. at 348

(citations omitted). But “[a] court cannot determine

whether a regulation has gone ‘too far’ unless it knows 

how far the regulation goes.” Id. This is because “resolution of [this] question depends, in significant part, upon 

an analysis of the effect [of the regulation] on the value of 

[the] property and investment-backed profit expectation. 

That effect cannot be measured until a final decision is 

made as to how the regulations will be applied.” Id. at 

349 (quoting Williamson, 473 U.S. at 200). As to the 

second prong of a takings claim, a failure to provide “just 

compensation,” “a court cannot determine whether a 

municipality has failed to provide ‘just compensation’ 

until it knows what, if any, compensation the responsible 

administrative body intends to provide.” MacDonald, 477 

U.S. at 350. 

We have applied a similar concept in cases where a 

party alleges a taking of a contract with the government. 

We have held that when the government itself breaches a 

contract, a party must seek compensation from the government in contract rather than under a takings claim. 

As we have explained, “[t]aking claims rarely arise under 

government contracts because the Government acts in its 

commercial or proprietary capacity in entering contracts, 

rather than its sovereign capacity” and therefore the 

“remedies arise from the contracts themselves, rather 

than from the constitutional protection of private property 

rights.” Hughes Commc’ns Galaxy, Inc. v. United States, 

271 F.3d 1060, 1070 (Fed. Cir. 2001); see also Sun Oil Co.

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16 PISZEL v. UNITED STATES

v. United States, 215 Ct. Cl. 716, 770 (Ct. Cl. 1978) (dismissing takings claim where the government was a 

party—the plaintiff’s remedies for the government’s 

violation of its contractual rights “must be directed [at the 

government] in its proprietary capacity and not in its 

sovereign capacity”). 

However, we are aware of no case that mandates that 

a claimant pursue a remedy against a private party before 

seeking compensation from the government. Indeed, our 

recent decision in A & D is to the contrary. In A & D, car 

dealerships brought takings claims against the government because the government instructed auto manufacturers to breach certain agreements with those 

dealerships. A & D, 748 F.3d at 1147. We addressed the 

takings claim against the government even though we 

noted that the claimants may have remaining claims 

against the auto manufacturers. Id. at 1149 (“To the 

extent the franchises were terminated by action of the 

bankruptcy estate, the affected dealers received unsecured claims against the estates.”). And the Supreme 

Court has consistently addressed takings claims even 

though claimants could have pursued breach of contract

claims against the private parties. See, e.g., Armstrong v. 

United States, 364 U.S. 40, 41–42 (1960); Norman v. Balt. 

& Ohio R.R. Co., 294 U.S. 240, 292–94 (1935); Omnia 

Commercial Co. v. United States, 261 U.S. 502, 510–11 

(1923). We therefore find no basis for the government’s 

argument that Mr. Piszel had to pursue a breach of contract claim against Freddie Mac before bringing a takings 

claim, even though, as described below, the existence of a 

remedy for breach of contract is highly relevant to the 

takings analysis in this case. 

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II

A 

We next consider whether the complaint sufficiently

alleges a taking. As noted, the complaint simply alleges 

that the government’s instruction to Freddie Mac 

amounted to a total taking of Mr. Piszel’s contractual 

right: 

The FHFA’s actions . . . in directing Freddie Mac 

to terminate Mr. Piszel without cause without 

paying him his contractually-required benefits (or 

any other just compensation), constitute a taking 

in violation of the Fifth Amendment that completely deprived Mr. Piszel of his rights in his private property interests and rendered those 

interests worthless. Indeed, the Government’s actions permanently excluded Mr. Piszel from any 

interest in his contractual benefits and destroyed 

Mr. Piszel’s right to those interests.

J.A. 39.

The government’s instruction to Freddie Mac did not 

take anything from Mr. Piszel because, even after the 

government’s action, Mr. Piszel was left with the right to 

enforce his contract against Freddie Mac in a breach of 

contract action. As the government correctly points out, 

“the only duty a contract imposes is to perform or pay 

damages.” F.T.C. v. Think Achievement Corp., 312 F.3d 

259, 261 (7th Cir. 2002) (citing Oliver Wendell Holmes, 

Jr., The Common Law 300–02 (1881)). Thus, to effect a 

taking of a contractual right when performance has been 

prevented, the government must substantially take away 

the right to damages in the event of a breach. See Castle 

v. United States, 301 F.3d 1328, 1342 (Fed. Cir. 2002)

(finding that because “the plaintiffs retained the full 

range of remedies associated with any contractual properCase: 15-5100 Document: 68-2 Page: 17 Filed: 08/18/2016
18 PISZEL v. UNITED STATES

ty right they possessed[,]” the government action “did not 

constitute a taking of the contract”). 

There can be no doubt that the golden parachute provision of HERA did not take away Mr. Piszel’s ability to 

seek compensation for breach of his employment contract 

in a traditional breach of contract suit under state contract law. Indeed, at oral argument, Mr. Piszel agreed 

“that the golden parachute provision didn’t eliminate [Mr. 

Piszel’s] breach of contract claim,” and the government 

agreed. Oral Argument at 2:40; see also id. at 17:29; Gov’t 

Supp. Br. at 3–4; Piszel Supp. Br. at 1. 

 Nothing in the statute or regulations removes Mr. 

Piszel’s ability to pursue a breach of contract remedy 

against his employer. Neither the golden parachute 

provision nor the regulations make any mention of a 

breach of contract claim. See 12 U.S.C. § 4518; 12 C.F.R. 

§ 1231.3. 

 Other similar provisions of HERA indicate that when 

a conservator prohibits performance of a contract, an 

action for breach of contract remains. Section 

1367(b)(2)(H) of HERA states a general policy that the 

conservator “shall, to the extent of proceeds realized from 

the performance of contracts or sale of the assets of a 

regulated entity, pay all valid obligations of the regulated

entity that are due and payable at the time of the appointment” of the conservator. 122 Stat. at 2738 (codified 

at 12 U.S.C. § 4617(b)(2)(H)). Section 1367(b)(19)(d), like 

the golden parachute provision, allows the conservator to 

“disaffirm or repudiate” contracts including “any contract 

for services between any person and any regulated entity” 

like employment contracts. 122 Stat. at 2747–48, 2750

(codified at 12 U.S.C. § 4617(b)(19)(d)). That section 

plainly preserves a breach of contract claim, providing

that the conservator will be liable for the disaffirmance or 

repudiation of the contract but limits the liability to 

Case: 15-5100 Document: 68-2 Page: 18 Filed: 08/18/2016
PISZEL v. UNITED STATES 19

“actual direct compensatory damages.” Id.; see also 

Howell v. F.D.I.C., 986 F.2d 569, 571 (1st Cir. 1993) (“By 

repudiating the contract the receiver is freed from having 

to comply with the contract . . . but the repudiation is 

treated as a breach of contract that gives rise to an ordinary contract claim for damages.”). The statute cannot 

reasonably be read to preserve a breach claim when the 

conservator disclaims a contract providing for a payment 

but to eliminate a breach claim when the identical action 

is taken pursuant to a regulatory directive. Thus, the 

surrounding provisions indicate that Congress intended to 

preserve breach of contract claims, as the parties agree.

B 

On appeal, Mr. Piszel argues that even if his breach 

claim is preserved, it is of little value because such a 

breach claim would be subject to an impossibility defense. 

The complaint makes no such allegation, and there is no 

basis for such an assumption. 

“The Supreme Court . . . has made clear that in the 

regulatory takings context the loss in value of the adversely affected property interest cannot be considered in 

isolation.” Cienega Gardens, 503 F.3d at 1280. Rather, 

the “test for regulatory taking requires [a court] to compare the value that has been taken from the property with 

the value that remains in the property.” Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 497 

(1987); see also Concrete Pipe, 508 U.S. at 644; Cienega 

Gardens, 503 F.3d at 1281. The Supreme Court recognized this in the very case that created the regulatory 

takings framework, explaining that “[i]n deciding whether 

a particular governmental action has effected a taking, 

this Court focuses . . . on the character of the action and 

on the nature and extent of the interference with rights in 

the parcel as a whole.” Penn Cent., 438 U.S. at 130–31

(emphasis added). This is, of course, because “a regulatoCase: 15-5100 Document: 68-2 Page: 19 Filed: 08/18/2016
20 PISZEL v. UNITED STATES

ry taking does not occur unless there are serious financial 

consequences” that stem from the government action. 

Cienega Gardens, 503 F.3d at 1282. 

Mr. Piszel asserts in his briefs, but not in his complaint, that pursuing his breach of contract claim against 

Freddie Mac would have been futile because “[t]he doctrine of impossibility would preclude Mr. Piszel’s recovery 

for a breach of contract claim against Freddie Mac.” 

Piszel Supp. Br. at 11.5 In other words, Mr. Piszel argues 

that because the government’s actions created an impossibility defense for the private party he may have sued, 

the government effected a taking of his property or, at 

least, caused severe adverse financial consequences. It is 

unclear whether a government action that creates a statelaw impossibility defense amounts to an act that would 

support a takings claim. See, e.g., Omnia, 261 U.S. at 511

(finding no takings claim even though the Supreme Court 

recognized that “[a]s a result of [the] governmental action 

the performance of the contract was rendered impossible”). But even assuming without deciding that the

indirect creation of an impossibility defense could support 

a takings claim, Mr. Piszel’s breach of contract claim may 

well have survived an impossibility defense, and his 

complaint does not allege otherwise.

First, an impossibility defense would have been unlikely to succeed if the statute and regulations did not bar 

the payments.6 Mr. Piszel could have sought to prove, 

 

5 Impossibility, or impracticability, is an affirmative 

defense against a breach of contract claim which excuses 

non-performance in certain situations. See, e.g., Restatement (Second) of Contracts § 261 (1981). 6 While we do not reach the issue here, we have also held that “[a] compensable taking arises only if the 

government action in question is authorized.” Del-Rio 

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PISZEL v. UNITED STATES 21

and does in fact allege in his complaint, that the termination of his payments was not authorized by the statute. 

J.A. 39–40 (“[T]he government exceeded and contravened 

its statutory and regulatory authority under HERA” in 

withholding payments which were “explicitly excluded 

from the definition of ‘golden parachute payment.’”). 

Under the statute, the only payments that are prohibited 

are “golden parachute payments,” meaning payments that 

are “contingent on the termination of [a] party’s affiliation 

with the regulated entity.” 12 U.S.C. § 4518(e)(4)(A)(i). 

Congress explicitly stated that payments “made pursuant 

to a bona fide deferred compensation plan” are not “golden 

parachute payments,” 12 U.S.C. § 4518(e)(4)(C)(ii), and 

the regulations include in that definition agreements 

where a party “voluntarily elects to defer all or a portion 

of the reasonable compensation, wages, or fees paid for 

services rendered,” 12 C.F.R. § 1231.2. 

Mr. Piszel alleges that the payments he was to receive 

“fit[] squarely into [the] exclusion,” Piszel Opening Br. at 

54, because “they were payments ‘made pursuant to a 

bona fide deferred compensation plan or arrangement[,]’ 

which are excluded from the definition of ‘golden parachute payment.’” J.A. 37. Plaintiffs have brought, and 

courts have considered, breach claims that particular

payments do not qualify as “golden parachute payments” 

in similar situations. See, e.g., Solsby v. Plaza Bank, No. 

G049272, 2015 WL 668711, at *6 (Cal. Ct. App. Feb. 17, 

2015) (addressing the question of “whether . . . severance 

compensation qualified as a[] . . . ‘golden parachute’”);

Cross-McKinley v. F.D.I.C., No. CV 211-172, 2013 WL 

870309, at *4 (S.D. Ga. Mar. 7, 2013) (same); Faigin v. 

Signature Grp. Holdings, Inc., 150 Cal. Rptr. 3d 123, 139

 

Drilling Programs, Inc. v. United States, 146 F.3d 1358, 

1362 (Fed. Cir. 1998). 

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22 PISZEL v. UNITED STATES

(Cal. Ct. App. 2012) (same); Hill v. Commerce Bancorp, 

Inc., No. 09-3685 RBK/JS, 2012 WL 694639, at *7 (D.N.J. 

Mar. 1, 2012) (same). Mr. Piszel offers no reason why the 

courts could not have addressed his breach claim, had he 

sought to prove it.

Second, an impossibility defense is not available if the 

breaching party could have secured permission to perform 

under the agreement. Under the regulations, a regulated 

entity may make a golden parachute payment if it requests to do so and “demonstrate[s] that it does not possess and is not aware of any information . . . that would 

indicate that there is a reasonable basis to believe” that 

the party to whom the payment is made has committed 

any wrongdoing that would be likely to have a “material 

adverse effect” on the regulated entity, is “substantially 

responsible for the . . . troubled condition of the regulated 

entity,” “has materially violated any applicable Federal or 

State law or regulation that has had or is likely to have a 

material effect on the regulated entity,” or has violated 

various sections of federal law relating to fraud and 

corruption. 12 C.F.R. § 1231.3(b)(1)(iv); see also, e.g.,

WMI Liquidating Tr. v. F.D.I.C., 110 F. Supp. 3d 44, 54 

(D.D.C. 2015) (reviewing and remanding a determination 

by the Federal Deposit Insurance Corporation (“FDIC”) as 

to a request to pay a golden parachute payment under 

identical regulations).

In his complaint, Mr. Piszel alleged that “no court, 

regulator, or government agency has found that 

Mr. Piszel committed any wrongdoing or violated any law 

while at Freddie Mac, or that Mr. Piszel was otherwise 

responsible for Freddie Mac’s financial condition or the 

conservatorship.” J.A. 37. The complaint also notes that 

“the FHFA publicly acknowledged that it investigated but 

uncovered no evidence sufficient to demonstrate that any 

of Freddie Mac’s current or former officers or directors 

engaged in” wrongdoing. Id. 38 (internal quotation marks 

Case: 15-5100 Document: 68-2 Page: 22 Filed: 08/18/2016
PISZEL v. UNITED STATES 23

omitted). Thus, Mr. Piszel’s complaint itself suggests that 

Freddie Mac could have received the required permission 

to make the payments. The complaint, however, makes 

no allegation that Freddie Mac sought, or that the FHFA 

denied, permission to make the necessary payments.

In Hill, under nearly identical FDIC regulations, the

district court denied a bank defendant summary judgment based on an impossibility defense when a former 

executive sued for breach of his employment contract 

after his former employer failed to pay his severance. See 

2012 WL 694639, at *10. The employer asserted an 

impossibility defense based on an analogous FDIC prohibition on golden-parachute payments. See id. However, 

the district court held that the employee could pursue a 

theory that the employer’s failure to request permission, 

as allowed under the regulations, constituted a breach of 

the agreement calling for severance payments. See id., at 

*9 (“[T]he question of whether Defendants are able to 

make the requisite certification for the [] exception is 

central to the question of whether or not Defendants can 

be said to have breached the Agreement by withholding 

Mr. Hill’s severance payment.”). Thus, because “there 

remain[ed] a genuine question of material fact as to 

whether or not Defendants are able to make the . . . 

certification[s] [necessary to apply for an exception], 

Defendants cannot be afforded summary judgment on 

their contractual impossibility defense.” Id. If the employer could but did not, it would be liable for breach 

notwithstanding the regulations prohibiting golden parachutes. Here also there remained the possibility that 

Freddie Mac could have secured permission to make the 

payments.7 

 

7 There is also the possibility that Mr. Piszel himself could have requested permission to receive the payCase: 15-5100 Document: 68-2 Page: 23 Filed: 08/18/2016
24 PISZEL v. UNITED STATES

Third, it is not clear as to whether the impossibility 

defense would apply at all even if the payments were 

prohibited. An impossibility defense could be defeated by 

showing that the contracting party assumed the risk of 

government regulation. The Restatement (Second) of 

Contracts § 264 states that “[i]f the performance of a duty 

is made impracticable by having to comply with a domestic or foreign governmental regulation or order, that 

regulation or order is an event the non-occurrence of 

which was a basic assumption on which the contract was 

made.” Restatement (Second) of Contracts § 264. However, the comments note that “[w]ith the trend toward 

greater governmental regulation, however, parties are 

 

ment. The FHFA notice proposing the golden parachute 

regulations provided little explanation on this point. See 

73 Fed. Reg. 53356-01 (Sept. 16, 2008); 12 C.F.R. § 1231. 

However, notably, in a notice announcing nearly identical 

regulations resulting from a nearly identical provision of 

title 12 governing the FDIC’s regulation of financial 

institutions, the FDIC stated that under the regulations 

an “employee who feels that he/she is being unfairly 

affected by the rule could apply for permission to receive a 

payment” as well. Regulation of Golden Parachutes and 

Other Benefits Which May Be Subject to Misuse, 60 Fed. 

Reg. 16069-01, 16074 (Mar. 29, 1995) (codified at 12 

C.F.R. § 359.4); see also Hill, 2012 WL 694639, at *7 

(noting that both the bank and the affected party are 

“equally eligible to apply for the exception to the golden 

parachute restrictions”). There is no indication in the 

complaint or the briefs that Mr. Piszel made a request to 

the FHFA to allow Freddie Mac to pay for any or all of his 

severance benefits. However, we need not decide this 

issue, which has not been identified by either party, 

because (as discussed), Mr. Piszel’s complaint fails for 

other, independent reasons.

Case: 15-5100 Document: 68-2 Page: 24 Filed: 08/18/2016
PISZEL v. UNITED STATES 25

increasingly aware of such risks, and a party may undertake a duty that is not discharged by such supervening 

governmental actions.” Id. cmt. a; see also United States 

v. Winstar Corp., 518 U.S. 839, 868–69 (1996) (reading a 

contract promise there “as the law of contracts has always 

treated promises to provide something beyond the promisor’s absolute control, that is, as a promise to insure the 

promisee against loss arising from the promised condition’s non-occurrence. . . . Contracts like this are especially appropriate in the world of regulated industries, where 

the risk that legal change will prevent the bargained-for 

performance is always lurking in the shadows.”). Certainly Freddie Mac operated in a regulated environment 

where a court may have concluded that Freddie Mac

accepted the risk of regulatory action. In a breach action, 

the courts might have concluded that Freddie Mac bore 

the risk of regulatory intervention, thus depriving it of an 

impossibility defense.8

C 

Under the circumstances, Mr. Piszel has failed to allege facts that would allow us to conclude that the government’s actions substantially affected his contractual 

property right. He agrees that his breach claim survived. 

 

8 As noted, we asked the parties to address whether 

recovery for a breach of contract claim would be limited by 

the sovereign acts doctrine. Both Mr. Piszel and the 

government take the position that the sovereign acts 

doctrine would not limit recovery in this case. Gov’t Supp. 

Br. at 6–7; Piszel Supp. Br. at 12 n.10. We agree. We 

also agree with the parties that HERA’s limitations on 

damages for breach of contract claims, 12 U.S.C. 

§ 4617(d)(3)(A), would not affect Mr. Piszel’s recovery 

in a breach of contract action against Freddie Mac. See

Gov’t Supp. Br. at 8–9; Piszel Supp. Br. at 12 n.10.

Case: 15-5100 Document: 68-2 Page: 25 Filed: 08/18/2016
26 PISZEL v. UNITED STATES

In his complaint, Mr. Piszel does not allege that the 

government action created an impossibility defense. 

Indeed, to some extent his complaint alleges to the contrary, stating the FHFA’s instruction to Freddie Mac was 

invalid because his payment was not a “golden parachute” 

payment but rather deferred compensation exempt from 

the golden parachute provision (removing an impossibility 

defense), and that he did not engage in wrongdoing 

(thereby permitting Freddie Mac to request permission to 

make his severance payments). In other respects as well 

it appears possible that the right to enforce the terms of 

the contract may have been left substantially intact after 

the government’s actions.9 We affirm the Claims Court’s 

dismissal of Mr. Piszel’s regulatory takings claim.

III 

We now address Mr. Piszel’s remaining claims, which 

we conclude are without merit. 

Mr. Piszel alleges that the government’s actions 

amount to a per se or a categorical taking. Supreme

Court precedent carves out two categories of regulatory 

action that constitute “per se” takings under the Fifth 

Amendment. “First, where government requires an 

owner to suffer a permanent physical invasion of her 

property—however minor—it must provide just compensation.” Lingle, 544 U.S. at 538 (citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) 

 

9 We note that in A & D, the plaintiff had a theoretical claim against the bankruptcy estate, but as the 

government conceded, “there [was] no question that [the 

plaintiffs] have alleged that their [franchises] have no 

value” after the government action. A & D Auto Sales, 

Inc. v. United States, Nos. 13-5019, 13-5020, Oral Argument at 3:50–4:00.

Case: 15-5100 Document: 68-2 Page: 26 Filed: 08/18/2016
PISZEL v. UNITED STATES 27

(state law requiring landlords to permit cable companies 

to install cable facilities in apartment buildings effected a 

taking)). Here, none of Mr. Piszel’s property suffered 

permanent physical invasion. “A second categorical rule 

applies to regulations that completely deprive an owner of 

‘all economically beneficial use’ of her property.” Id.

(quoting Lucas v. S.C. Coastal Council, 505 U.S. 1003, 

1019 (1992)). Even if the Lucas line of cases applies to 

intangible property like contract rights,10 as we have 

discussed above, the government’s actions did not amount 

to a total taking of Mr. Piszel’s property because the 

government’s actions left intact his potential breach of 

contract claim against Freddie Mac. 

Mr. Piszel also alleges that the government’s actions 

amounted to an illegal exaction. “[A]n illegal exaction 

claim may be maintained when the plaintiff has paid 

money over to the Government, directly or in effect, and 

seeks return of all or part of that sum that was improperly paid, exacted, or taken from [him] in contravention of 

the Constitution, a statute, or a regulation.” Aerolineas 

Argentinas v. United States, 77 F.3d 1564, 1572–73 (Fed. 

Cir. 1996) (internal quotation marks and citations omitted). Mr. Piszel does not allege that he paid any money to 

the government. Rather, his theory is that because the 

government (as conservator) caused Freddie Mac not to 

pay him his severance payments, his not receiving severance was in essence a payment sufficient to amount to an 

illegal exaction.11 Even assuming that an illegal exaction 

 

10 As we noted in A & D, “[w]e have not had occasion 

to address whether the categorical takings test applies to 

takings of intangible property such as contract rights,” 

748 F.3d at 1151–52, and we need not do so here. 

11 On appeal, Mr. Piszel also argues that HERA is 

money mandating. Mr. Piszel failed to plead such a 

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28 PISZEL v. UNITED STATES

claim can involve payments to non-governmental entities,

there was no exaction here because there was no payment. See Westfed Holdings, Inc. v. United States, 52 Fed. 

Cl. 135, 153 (2002) (no illegal exaction where money is 

“prevented from coming into [a] plaintiff’s account”). 

Illegal exaction concerns the “recovery of monies that the 

government has required to be paid contrary to law.” 

Aerolineas, 77 F.3d at 1572. No facts as alleged in the 

complaint concern the payment of money by Mr. Piszel; 

thus, Mr. Piszel’s illegal exaction claim must also fail.

We affirm the dismissal of Mr. Piszel’s claims.

AFFIRMED

COSTS

Costs to the government.

 

claim. See J.A. 38–40. In any case, there is no basis for 

such an assertion.

Case: 15-5100 Document: 68-2 Page: 28 Filed: 08/18/2016