Opinion ID: 358214
Heading Depth: 2
Heading Rank: 2

Heading: Impairment of Contract Claim.

Text: 62
63 Appellants' theory of recovery against the United States under this count was that the actions of the United States in the construction of the Poplar Street Bridge impaired the contract between appellants and the City of East St. Louis in violation of article I, section 10, of the United States Constitution: 64 No State shall    pass any    law impairing the Obligation of Contracts   . 65 The district court dismissed the action as against the United States because article I, section 10, applies only to the states. Appellants contend that this was error because their theory of recovery was actually premised on an incorporation of article I, section 10, by the fifth amendment, which does apply to the federal government. 66 It is easy to understand why the district judge failed to discuss this theory in his memorandum decision accompanying the order of dismissal, for appellants' pleadings do not give any clue that this is the theory on which they rely. 67 Even assuming that theory of recovery was properly pleaded, however, we reject that theory as without merit. The federal government took no action that impaired the contract between appellants and the City in a constitutional sense. As the district court noted, the City may well have breached its contract with the appellants. Moreover, we take as true the statements in appellants' pleadings alleging that the federal government was a silent partner in that agreement and aided in the breach. Nevertheless, an individual breach of contract such as the present one does not reach constitutional dimensions and create a cause of action based on the contracts clause. As the Supreme Court stated in United States Trust Co. v. New Jersey, 431 U.S. 1, 21, 97 S.Ct. 1505, 1517, 52 L.Ed.2d 92 (1977): 68 Although the Contract Clause appears literally to proscribe any impairment, this Court observed in Blaisdell that the prohibition is not an absolute one and is not to be read with literal exactness like a mathematical formula. 69 In the United States Trust Co. case, the Supreme Court found an unconstitutional impairment of contract by the states of New Jersey and New York. The two states had passed similar statutes that repealed prior contractual obligations undertaken by the states. In the present case, in contrast, no attempt was made to use the law, federal or state, to repudiate a contractual obligation. Assuming the obligation did exist, all defendants were open to a suit for breach of contract. In short, appellants have confused impairment of performance of a contract with impairment of the obligation of the contract. The Constitution does not provide a federal action for simple breach of contract. 70
71 Appellants rely directly on article I, section 10, in their cause of action against the states and the City for impairment of contract. We find no greater merit to appellants' claim against the states and City than we did with respect to their claim against the United States. No state or local law or action impaired the obligation of their contract. Based on our discussion in part II(B)(1), we dismiss the cause of action against the states and the City as well. 72