NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________

TAYLOR & SONS, INC., CEDRIC THEEL, INC.,

WHITEY'S, INC., RFJS COMPANY, LLC, JIM 

MARSH AMERICAN CORPORATION, LIVONIA

CHRYSLER JEEP, INC., BARRY DODGE INC.,

Plaintiffs-Appellants

ALLEY'S OF KINGSPORT, INC., ET AL.,

Plaintiffs

v.

UNITED STATES,

Defendant-Appellee

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

MIKE FINNIN MOTORS, INC., GUETTERMAN 

MOTORS, INC.,

Plaintiffs-Appellants

ALLEY'S OF KINGSPORT, INC., ET AL.,

Plaintiffs

v.

UNITED STATES,

Defendant-Appellee

______________________

2020-1185, 2020-1205

Case: 20-1185 Document: 76 Page: 1 Filed: 12/29/2020
2 TAYLOR & SONS, INC. v. UNITED STATES

______________________

Appeals from the United States Court of Federal 

Claims in Nos. 1:10-cv-00647-NBF, 1:11-cv-00100-NBF, 

1:12-cv-00900-NBF, Senior Judge Nancy B. Firestone.

______________________

Decided: December 29, 2020

______________________

ROGER J. MARZULLA, Marzulla Law, LLC, Washington, 

DC, argued for plaintiffs-appellants Taylor & Sons, Inc., 

Cedric Theel, Inc., Whitey's, Inc., RFJS Company, LLC, 

Jim Marsh American Corporation, Livonia Chrysler Jeep, 

Inc., Barry Dodge Inc. 

 RICHARD D. FAULKNER, Faulkner ADR Law, Richardson, TX, for plaintiffs-appellants Guetterman Motors, Inc., 

Mike Finnin Motors, Inc. Also represented by HARRY 

ZANVILLE, La Mesa, CA.

 ELIZABETH MARIE HOSFORD, Commercial Litigation 

Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also 

represented by CHRISTOPHER JAMES CARNEY, JEFFREY B.

CLARK, KENNETH DINTZER, ROBERT EDWARD KIRSCHMAN,

JR., ALISON VICKS. 

 ______________________

Before DYK, TARANTO, and STOLL, Circuit Judges.

TARANTO, Circuit Judge.

Before mid-2009, the plaintiffs in these cases were automobile dealers operating as franchisees of Chrysler LLC. 

In that year, Chrysler filed a petition for reorganization in 

bankruptcy, and it rejected the franchise agreements in the 

bankruptcy proceeding under 11 U.S.C. § 365. Plaintiffs 

sued the United States in the Court of Federal Claims, 

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TAYLOR & SONS, INC. v. UNITED STATES 3

alleging that the government played a role in Chrysler’s rejection of the franchise agreements that constituted a taking of their property, requiring just compensation under 

the Takings Clause of the Fifth Amendment to the United 

States Constitution. In 2014, agreeing with the Claims 

Court, we allowed the case to proceed beyond the pleading 

stage. A & D Auto Sales, Inc. v. United States, 748 F.3d 

1142 (Fed. Cir. 2014). On remand, the Claims Court, after 

a full trial, rejected the claims on two grounds—first, that 

the government’s actions did not amount to coercion of 

Chrysler’s decision to reject the franchise agreements and, 

second, that plaintiffs did not prove that the franchise 

agreements would have had value but for those actions.

Colonial Chevrolet Co, Inc. v. United States, 145 Fed. Cl. 

243 (2019) (Trial Opinion). On plaintiffs’ appeal, we now 

affirm on the latter ground and do not address the former.

I

A

Taylor & Sons, Inc. (Taylor) and Mike Finnin Motors, 

Inc. (Finnin) are two of the nine plaintiffs-appellants, all of 

whom, like many other dealers, had their franchise agreements with Chrysler rejected in the 2009 Chrysler bankruptcy proceeding. Taylor and six other plaintiffsappellants have been called the “Alley’s dealers,” and Finnin and one other plaintiff-appellant have been called the 

“Colonial dealers,” reflecting the names of the first-named 

plaintiffs in the actions filed and consolidated in the Claims 

Court.

In late 2008, Chrysler, which had been experiencing

significant difficulties that were exacerbated by a general 

market crisis, sought financial assistance from the federal 

government. The Department of the Treasury entered into 

a Loan and Security Agreement (Agreement) with Chrysler. The Agreement provided for an immediate bridge loan 

(totaling $4 billion) to Chrysler and also provided for further, more wide-ranging negotiations—in which the 

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4 TAYLOR & SONS, INC. v. UNITED STATES

Treasury Department’s new Auto Team Task Force (Auto 

Team) was to play a central role—aimed at enabling the 

Chrysler business to continue operating over the long term. 

J.A. 10460 (§ 7.20(b)). The Auto Team and Chrysler ultimately agreed on a plan under which Chrysler would file 

for reorganization, the government would supply substantial funding during the bankruptcy process, and a newly 

formed entity (to be owned in part by Italian vehicle manufacturer Fiat) would take over the business. One issue

discussed during the negotiations was reducing the number of Chrysler’s dealer-franchisees, which Chrysler had 

been doing for many years through its “Project Genesis,”

though more gradually and with a greater role for franchisees’ choice than was now discussed. J.A. 10365–66, 

10378–82.

Chrysler filed for bankruptcy on April 30, 2009. In re 

Chrysler LLC, 405 B.R. 84, 87–88 (Bankr. S.D.N.Y. 2009). 

Two weeks later, on May 14, 2009, Chrysler, as debtor-inpossession, invoked its right under 11 U.S.C. § 365 to “assume or reject any executory contract” by filing a motion to 

approve rejection 789 franchise agreements, including 

those of the Alley’s and Colonial dealers. Id. at 88. The 

bankruptcy court approved the rejection on June 9, 2009, 

effective immediately, with the result that the now-former 

franchisees could no longer exercise franchise-agreement 

rights, such as holding themselves out as authorized 

Chrysler dealers and providing warranty-covered service 

for which Chrysler would pay. Order Rejecting Executory 

Contracts, In re Chrysler LLC, No. 09-50002, ECF No. 3802 

(Bankr. S.D.N.Y. 2009).

B

Following rejection of their franchise agreements, 

plaintiffs filed the present actions, alleging that the federal

government had committed a taking by its actions that assertedly coerced Chrysler’s rejection of the franchise agreements in bankruptcy. When the government moved to 

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dismiss the claims for failure to state a claim, the Claims 

Court denied the motion, Colonial Chevrolet Co., Inc. v. 

United States, 103 Fed. Cl. 570 (2012); Alley’s of Kingsport, 

Inc. v. United States, 103 Fed. Cl. 449 (2012), but granted 

the government’s motion for interlocutory appeal, Colonial 

Chevrolet Co., Inc. v. United States, 106 Fed. Cl. 619 (2012);

Alley’s of Kingsport, Inc. v. United States, 106 Fed. Cl. 762 

(2012).

On the interlocutory appeal, we affirmed the denial of 

dismissal and remanded the case. A & D Auto Sales, 748 

F.3d at 1147, 1159. We concluded that plaintiffs had alleged sufficient facts for the takings claim to pass muster 

at the motion-to-dismiss stage, save for their failure to allege a loss of economic value because the complaints “d[id] 

not sufficiently allege that the economic value of the plaintiffs’ franchises was reduced or eliminated as a result of the 

government’s actions.” Id. at 1147. And we remanded with 

instructions to grant plaintiffs leave to amend their complaints to allege economic loss of “but-for economic use or 

value” in the absence of government financing. Id. at 

1157–58.

On remand, the complaints were amended, then the

case proceeded through discovery and a trial, after which 

the Claims Court entered findings of fact and conclusions 

of law that rejected the dealers’ takings claims on two 

grounds, each sufficient for judgment against the dealers. 

The court ruled first that the challenged government actions that led to Chrysler’s franchise terminations—focused on conditions the government placed on its provision 

of funding—did not constitute a taking because those actions did not rise to the level of “coercion” as the trial court 

understood our holding in A & D Auto Sales. Trial Opinion, 145 Fed. Cl. at 249, 316–22. The Claims Court also 

ruled that, in any event, the taking claim failed on a separate ground: the dealers failed to prove that their franchise 

agreements would have had positive value in a “but for 

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6 TAYLOR & SONS, INC. v. UNITED STATES

world” without the government’s challenged actions. Id. at 

249, 322–24.

The Claims Court entered final judgment against the 

dealers on October 2, 2019. The dealers timely appealed.

We have jurisdiction under 28 U.S.C. § 1295(a)(3).

II

Whether government action constitutes a compensable 

taking is a question of law based on factual underpinnings. 

See Wyatt v. United States, 271 F.3d 1090, 1096 (Fed. Cir. 

2001). We review the Claims Court’s legal conclusions de 

novo and its factual findings for clear error. Reoforce, Inc. 

v. United States, 853 F.3d 1249, 1265 (Fed. Cir. 2017). 

Findings of fact are “clearly erroneous” when “the reviewing court on the entire evidence is left with the definite and 

firm conviction that a mistake has been committed.” Gadsden Indus. Park, LLC v. United States, 956 F.3d 1362, 1368 

(Fed. Cir. 2020) (internal quotation marks and citations 

omitted). “‘The fact-finder has broad discretion in determining credibility’” of witnesses. J.C. Equip. Corp. v. England, 360 F.3d 1311, 1315 (Fed. Cir. 2004) (quoting Bradley 

v. Sec’y of Health & Human Servs., 991 F.2d 1570, 1575 

(Fed. Cir. 1993)).

On appeal, plaintiffs challenge both of the Claims 

Court’s rulings. We conclude that the Claims Court committed no reversible error in determining that the dealers 

failed to prove a positive value that their franchise agreements would have had but for the challenged government 

actions. That conclusion suffices for affirmance. We do not 

reach the Claims Court’s no-coercion ruling.

The Fifth Amendment states: “nor shall private property be taken for public use, without just compensation.” 

U.S. Const. amend. V. There is no compensable taking 

when the alleged economic impact of the government action 

has not resulted in a diminution in value. See A & D Auto

Sales, 748 F.3d at 1157 (collecting cases); see also Love 

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Terminal Partners, L.P. v. United States, 889 F.3d 1331, 

1342 (Fed. Cir. 2018); Cienega Gardens v. United States, 

331 F.3d 1319, 1340 (Fed. Cir. 2003).1 “It is the property 

owner who bears the burden of proving an actual loss has 

occurred”; the property owner must “show actual damages 

‘with reasonable certain[t]y,’ which ‘requires more than a 

guess, but less than absolute exactness.’” Gadsden, 956 

F.3d at 1371 (quoting Otay Mesa Prop., L.P. v. United 

States, 779 F.3d 1315, 1323 (Fed. Cir. 2015)) (cleaned up).

The trial court did not clearly err in finding that the 

dealers failed to meet their burden. The dealers have conceded that Chrysler would have petitioned for bankruptcy, 

and proceeded to liquidate, in a hypothetical, but-for world 

without government financial assistance. Trial Opinion,

145 Fed. Cl. at 247; Alley’s Op. Br. 44; Colonial Op. Br. 36.

The dealers’ but-for-world valuations of the franchise 

agreements—presented by experts Diane Anderson Murphy and Edward Stockton—rested on premises about how 

Chrysler or a bankruptcy trustee would have treated the 

franchise agreements in such a liquidation. The Claims 

Court rejected those crucial premises about the but-forworld franchise treatment as unsupported and unpersuasive. Trial Opinion, 145 Fed. Cl. at 319, 322–24. We see 

no basis for reversing that determination, which leaves 

plaintiffs with no reliable proof of the but-for-world value 

they must establish.

1 In their opening brief, the Colonial dealers argue 

that the government actions at issue were “a per se direct 

taking, akin to a physical taking,” Colonial Op. Br. 38–39, 

but they present no argument that this characterization, 

even if correct, modifies their burden to prove the loss in 

value of the franchise agreements but for the challenged 

government actions. We therefore apply the loss-in-value 

requirement here without regard to other issues about the 

proper characterization of the claim for takings analysis.

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The Claims Court found that “a trustee in bankruptcy 

would have rejected all franchise agreements to protect the 

assets of the bankruptcy estate.” Trial Opinion, 145 Fed. 

Cl. at 323. The evidence supports that finding. Donald

MacKenzie, one of the government’s expert witnesses, testified that “Chrysler could not have paid its dealers for any 

warranty service performed after the [bankruptcy] petition 

date, nor could the company have provided assurance of future performance under the dealer franchise agreements,” 

due to the company’s high debt. Testimony of Donald MacKenzie, Tr. 4076:10–14 (May 3, 2019), No. 1:10-cv-00647, 

ECF No. 480; id. at 4045:15–19; see Trial Opinion, 145 Fed. 

Cl. at 319, 323. There was evidence that Chrysler, in an 

unassisted liquidation, would have ceased production and 

other activities. Trial Opinion, 145 Fed. Cl. at 294. With 

context-describing support from former Bankruptcy Judge 

Gerber, Mr. MacKenzie also testified that Chrysler’s obligation under the franchise agreements to purchase back 

unsold vehicles and parts in the event of termination (triggered by a discontinuance of production, J.A. 10113) was a 

liability that, consistent with fiduciary and trustee duties,

would have been avoided in a liquidation by a rejection of

the franchise agreements. See Trial Opinion, 145 Fed. Cl. 

at 307–09, 319, 323–324. The Claims Court reasonably 

found that, in a liquidation (in a but-for world), the franchise agreements of plaintiffs would have been rejected.

That finding amply supports the Claims Court’s refusal 

to credit the valuation opinions of the plaintiffs’ experts. 

The valuation opinion of Ms. Murphy, for the Alley’s dealers, rested on the contrary assumption—that the franchise 

agreements would not have been rejected in a liquidation, 

so that the dealerships would have continued to operate as 

Chrysler dealerships and sell Chrysler vehicles. See, e.g.,

id. at 254–255, 284; Testimony of Diane Anderson Murphy, 

Tr. 1749:4–7 (Apr. 15, 2019), No. 1:10-cv-00647, ECF No. 

462 (“Q. Your valuation certainly assumes that the dealers 

will last more than five years, correct? A. The dealership 

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TAYLOR & SONS, INC. v. UNITED STATES 9

would last more than five years, yes.”); id. at 1750:1–6

(“You write . . . ‘even in the absence of Government funding 

and Chrysler having entered bankruptcy, the franchise 

agreements of the Chrysler franchisees would remain in 

full force and effect.’ Correct? A. Yes.”). The same is true 

of the valuation testimony of the Colonial dealers’ valuation expert Mr. Stockton. See Trial Opinion, 145 Fed. Cl. 

at 323.

There also were other unpersuasive assumptions built 

into the opinions of the dealers’ valuation experts. For example, the Claims Court found a number of additional assumptions by Ms. Murphy unsupported by the evidentiary 

record, Trial Opinion, 145 Fed. Cl. at 323 n.46—a finding 

not challenged on appeal. The Claims Court, relying on 

testimony of Mr. MacKenzie and others, rejected, as well, 

the assumption embedded in Mr. Stockton’s valuation that 

the federal government would have chosen to continue to 

cover Chrysler warranties after Chrysler began to liquidate. Id. at 303 n.41, 319, 323. Further, based on the fact 

that the property at issue here consists of contract rights, 

see Taylor v. United States, 959 F.3d 1081, 1087 (Fed. Cir. 

2020) (noting Takings Clause precedents involving contract rights)—specifically, the plaintiffs’ rights under their 

franchise agreements—the Claims Court noted that Ms. 

Murphy testified that her calculations included tangible 

property beyond the rights in the franchise agreements, see 

J.A. 21797 (Tr. 1542:2–22), yet her opinion “did not separately analyze how these tangible assets contributed to the 

plaintiff’s income stream profits, separate from the franchise agreement allegedly taken,” Trial Opinion, 145 Fed. 

Cl. at 322. The same was true of Mr. Stockton’s valuation, 

which he testified included, beyond the terms of the franchise agreements, “other elements of value associated with 

franchise operations.” Trial Opinion, 145 Fed. Cl. at 286; 

see also J.A. 22611 (Tr. 2356:15–16). “[W]hat was important was for the focus to be on awarding just compensation for exactly what had been taken in the case.” Otay 

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10 TAYLOR & SONS, INC. v. UNITED STATES

Mesa Prop., L.P., 779 F.3d at 1320. The Claims Court reasonably found the testimony of the dealers’ experts not adequately so focused.

We conclude that the record supports the Claims 

Court’s rejection of crucial assumptions of the plaintiffs’ experts and finding that the plaintiffs did not provide a reliable proof that, in the but-for world, the franchise 

agreements would have had a positive value. The Claims 

Court’s finding is not clearly erroneous. And contrary to 

the Colonial dealers’ contention, Colonial Op. Br. 51–52, 

the finding of no proof of but-for-world value of the specific 

property at issue does not rest on any exclusion by the 

Claims Court of a legally legitimate method of proving 

value. The variations in methodology discussed by the Colonial dealers are immaterial given the Claims Court’s 

well-supported rejection of the plaintiffs’ experts’ assumption about the treatment of the franchise agreements in the 

liquidation that would concededly have occurred in the butfor world.

We have considered the dealers’ remaining arguments 

and find them unpersuasive.

III

For the foregoing reasons, we affirm the trial court’s 

judgment.

AFFIRMED

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