Document: 536 U.S. 129 FRANCONIA ASSOCIATES ET AL.v.UNITED STATES. No. 01-455. Supreme Court of the United States. Argued April 15, 2002. Decided June 10, 2002.* CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR FEDERAL CIRCUIT Under §§ 515 and 521 Housing Act 1949, Farmers Home Administration (FmHA) makes direct loans to private, nonprofit entities develop and/or construct rural housing for elderly low- or middle-income individuals families. Petitioners are property owners who entered into such before December 21, 1979. The promissory notes petitioners executed authorized "[p]repaymen[t] scheduled installments, any portion thereof, ... at time option Borrower." On February 5, 1988, concerned about dwindling supply in face increasing prepayments mortgages by § borrowers, Congress enacted Emergency Low Income Preservation 1987 (ELIHPA), which amended 1949 impose permanent restrictions upon prepayment May 30, 1997, Franconia filed suit under Tucker Act, 28 U. S. C. 1491, charging that ELIHPA abridged absolute right set forth their thereby effected, inter alia, a repudiation contracts. In dismissing petitioners' contract claims as untimely 2501 — provides claim "shall be barred unless petition thereon is within six years after first accrues" Federal Claims concluded accrued on regulations' effective date. affirming statute limitations grounds, Circuit ruled that, if Government's continuing duty allow prepay was breached, breach occurred immediately ELIHPA's enactment date, over nine suit. court rejected argument passage qualified repudiation, so would timely either date performance fell due (the they tendered prepayment) elected treat present breach. September 16, 1998, Grass Valley an action virtually identical dismissed reasons it had claims, affirmed without opinion. Held: Because parties' bargain, not loan agreements, occur, six-year period commence run, when borrower tenders Government then dishonors its obligation accept tender release control use securing loan. Pp. 141-149. (a) Resolution two threshold matters narrows scope controversy. First, requirement unequivocally waive sovereign immunity satisfied here because, once States waives does business with citizens, much party never cloaked immunity. Cf. Clearfield Trust Co. v. States, 318 363, 369. Second, Court, like Government, accepts purposes this decision contracts guaranteed allege. P. 141. (b) applicable general law principles, whether were "within [they] accrue[d]," 2501, depends breached undertaking stated notes. declaring contracts, reasoned but one those agreements: continue borrowers unfettered time. If maintained, immediately, totally, definitively, took away borrowers' prepay. ruling, incorrectly characterized allegedly from pledged properly comprehended prepayment. Once thus correctly characterized, decisions below lose force. A promisor's failure perform indicated establishes immediate But renunciation contractual fixed ripens prior only promisee elects such, see Roehm Horst, 178 1, 13. Viewed light, effected FmHA conveyed announcement represented when, some point future, attempted mortgages. Unless treated filing performance, occur prepay, responsive become due. 141-144. (c) arguments contrary unpersuasive. contends 2501's "first qualification meant ensure suits against earliest possible providing reasonably prompt notice fiscal implications past enactments. However, text unexceptional: number contemporaneous state statutes between private parties also tie commencement accrues." Equally telling, many applying interpreting has attributed words meaning now proposes. Instead, other settings, adopted doctrine traditional form evaluating timeliness governed 2501. Two practical considerations reinforce Court's conclusion. reading proposes seriously distort because aggrieved anticipating future compelled looming bar forgo usual awaiting putting prospective plaintiffs choice bringing soon forever relinquishing surely proliferate litigation, forcing defend highly speculative damages profusion suits, most have been brought less novel interpretation 144-147. (d) rejects premise, therefore conclusion, second application doctrine. congressional precludes honoring always constitutes agency official responsible administering free change mind render requisite violating binding federal law. just may announce intent dishonor through duly law, retract renouncement enabling contracting promised. Indeed, changed manner ELIHPA. 1979 amendments National repudiated issue conditioning all borrower's agreement maintain low-income specified period. One year later, removed conditions pre-1979 loans, retracting repudiation. Hence, fact case rested new no significant difference. Mobil Oil Exploration & Producing Southeast, Inc. 530 604, 619, 620. 147-148. 240 F. 3d 1358; 7 Fed. Appx. 928, reversed remanded. GINSBURG, J., delivered opinion unanimous Court. Jeff H. Eckland argued cause petitioners. With him briefs William L. Roberts Mark J. Blando. Matthew D. brief Acting Solicitor General Clement, Assistant Attorney McCallum, James A. Feldman, David M. Cohen, Josephs.â JUSTICE GINSBURG 1 This concerns 1491. participated program promote development affordable rental areas traditionally served conventional lenders. exchange low-interest mortgage issued (FmHA), agreed devote properties abide related during life loans. 2 allege governing gain places participating owner's property. yielded judgments us, charged (ELIHPA Act), 101 Stat. 1877, amended, 42 1472(c) (1994 ed. Supp. V). That placed restraints asserted complaints both taking violation Fifth Amendment. 3 held prescribes must accrue[d]." Circuit's view, constituted agreements triggered running of," after, enactment. account, untimely, dismissed. 4 Accepting allege, we reverse judgment. enactment, conclude, agreements. Accordingly, sixyear secured 5 * 6 76 671, 82 551, 1485, 1490a, designed serve families.1 Section require borrower, execute various documents, including agreement, note, real estate mortgage. Before 1979, each petitioner "to provide facilities eligible occupants areas." App. Pet. Cert. A165. certified unable obtain comparable commercial market. See id., A177. contained provisions projects people low incomes. Those included tenants, rents could charge, rate return realize, well requirements regarding maintenance financial operations project. A170-A174. Each length loan, ordinarily 40 50 years. 8 required payment principal plus interest. A176-A177. provision curtailed legislation involved litigation us. read: "Prepayments made Id., A176. No documents addressed 9 found participants prepaid mortgages, threatening continued availability housing. Concerned "these [remain] available moderate income families entire original term loan," R. Rep. 96-154, p. 43 (1979), stem loss low-cost prepayments, Community Development Amendments 93 1101. these amendments, prohibited accepting owner 15-year 20-year 1134-1135. avoided determined there longer need 1135. 10 applied past, present, future. 1980, however, further eliminate retroactive imposed legislation. 94 1614, provided apply amendment enacted. 514, 1671-1672. 1980 Secretary Agriculture inform repeal's adverse effects, any, 1672. 11 By 1987, again moderate-income 515.2 House Representatives Committee "prepay[ing] refinanc[ing] regard tenants projects." 100-122, 53. 12 Responsive concern, passed ELIHPA, legislation, can offer mortgage, 13 "the [FmHA] shall make reasonable efforts enter will commitment extend assisted than beginning executed." 1472(c)(4)(A) ed.). 14 include incentives increase investment, reduction interest additional borrower. 1472(c)(4)(B) 15 determines "reasonable period" cannot reached, sought sell "any organization public fair market value independent appraisers." 1472(c)(5)(A)(i) buy 180 days, 1472(c)(5)(A)(ii). offer-for-sale "materially affec[t]" opportunities minorities met: Prepayment displace affected housing, "an adequate safe, decent, area" "sufficient actions taken ensure" "will available" displaced tenants. 1472(c)(5)(G)(ii). 16 implementing regulations establish process addresses requests. procedures, "develo[ps] incentive offer," making effort takes consideration economic suffer foregoing [sic] prepayment." CFR 1965.210 (2002). Only attempt determinations effect minority opportunities, displacement 1472(c)(5)(G) accepted. 1965.215(a) (2002).3 B 17 1997. Plaintiffs whom subject others, unaffected Act. A3, n. 2.4 alleged which, asserted, gave them terminate participation exercising time." A112. Their complaint relief theories: Amendment's proscription compensation. A132-A133. 18 granted motion dismiss Cl. 702 (1999). states: "Every jurisdiction 23, 709. so, said, notes: keep promise right." 710. takings sua sponte; [government] conduct taking" "Congress's option," reasoned, based "accrued 1988 legislation." 711. 19 dismissal grounds. 1358 (2001). Appeals respective benefits burdens generated enjoyed time," 1363, while borrowers" option, ibid. "continuing breached," concluded, terms, Ibid. Thus, ruled, began run passage, 1364;5 given limitations-triggering held, post-ELIHPA, barred. 20 holding pressed Were regarded, "An anticipatory occurs," recognized, "when obligor communicates obligee he commit future." 1363 (internal quotation marks omitted). "The case," revoked unrestricted prepayment, owed 1364. 21 Petitioners' essentially same reason, held. "property" compensation "right 1365; arose "took conclusively abolished" 1366.6 22 petitioners, joined post-1979 action. 12, 2000, 46 629, 633-635 (2000). Judgt. order reported 928 (2001).7 23 We certiorari, 534 1073 (2002), us review. II 24 waiver "cannot implied expressed." King, 395 (1969). here. 369 (1943) ("The terms." omitted)). 25 Another matter confines For our disposition, agrees, assumed obtained precisely permits gaining Brief 18-19; Tr. Oral Arg. 29-30. sole cleanly presented: initiated prescribed 2501? 26 "When enters relations, rights duties therein generally individuals." 607 (2000) "principles law," Priebe Sons, 332 407, 411 (1947), Corman, Limitations Actions 7.2.1, 482 (1991) accrues, begins breach." (footnote omitted)); Williston, Law Contracts 2021A, 697 (3d W. Jaeger 1978) (same). 27 3d, 1363; Cl., 710 (Government's right"). definitively 1363. despite insistence government's prepayment" whenever long even decades 1362 (emphasis added); Circuit, persuaded, necessarily corresponding appropriate releases. 5-6. Absent lender allow" meaningless. incomplete design illusory. Murray, 2, (2d rev. 1974) (promise create "undertaking do refrain doing [some]thing future"). 29 error reasoning becomes apparent. Failure promisor Restatement (Second) 235(2) (1979) (hereinafter Restatement) ("When due[,] non-performance breach."); supra, 206, 417. "contractual performance" Corbin, 959, 855 (1951) 250 (repudiation entails statement "voluntary affirmative act" indicating breach" due). Such "elects such." (1900) "give[s] electing wait till [the promisor's] arrived, act renunciation] final assertion bound contract"). 30 250, Comment b ("[A] intention except go beyond repudiation." 208, 421. due.8 31 sum, understood sensibly To recapitulate, "[t]he accrual injured chooses Limitation 488 (1991). "[e]lects place repudiator accelerated [the] election." 488-489. instead opts await commences rather earlier 488. 32 draws distinction "between prepayments"; distinction," acknowledges, "would significance." 33. recognizes, "unfettered prepay," then, "of course," complemented "obligation tendered." defense judgment below, relies 33 bars "filed accrues," contends, key. 11. words, according convey Congress' guard might deemed parties. 28. As reads ensures date," 17, "reasonably enactments," 16. ("[S]trict construction [§ 2501] serves salutary purpose ensuring close [alleged caused contract] serving perhaps later address consequences."); 45-46. 34 agree creates special rule Contrary contention, Angell, 536-588 (6th 1876) (quoting limitations). Winstar-Related Cases 37 174, 183-184 (1997), aff'd sub nom. Ariadne Financial Services Pty. Ltd. 133 874 (CA 1998). line recognition principles should "in way that" parties, Irwin Department Veterans Affairs, 498 89, 95 (1990), reject proposed position, presents "unduly restrictiv[e]" immunity, Bowen City New York, 476 467, 479 (1986), "a realistic assessment legislative intent," Irwin, S., 95.9 35 Crown Coat Front 386 503, 517 (1967) interpreted "with ends limitation brought" Reading Assuming accrue" 144, convert shield sword invoke own wrongdoing defeat otherwise suits. Professor Corbin explained, plaintiff penalized leaving defendant opportunity his wrongful repudiation; statutory begin immediately." 989, 967; ("[I]t seems party, sue done, advantageous innocent party."). 36 There reason doubt inure benefit Putting litigation. Every example, forced preserve stemming Faced prospect forgoing claim, previously wished conclude early exit safe course. find itself defending lawsuits, 33-34.10 seeks avoid attacking "futile" "search exact parallel solely parties." govern here, ultimately "statement perform" base Congress. 24. According maintains, promisor" "remai[n] 27. concludes, essential unnecessary lawsuit allowing adhere inapplicable. 38 Just "change[d] mind" 1671-1672; 135. 39 comprehend why constitute party. renounce triggering withdraw so. "Hence, Government's] difference." Oil, 620; 619 ("[I]f signed President `statement obligor'" capable "it difficult imagine what statement." 250)). answer question presented i separately alternative theory recovery Takings Clause hinged entirely conclusion 1365-1366. incorrect, hold, erred grounds untimeliness. 41 Concluding petitioner's wrongly remand cases reviewed herein proceedings consistent It ordered. Notes: Together withGrass Terrace et al. (see Rule 12.4), certiorari court. â Briefs amici curiae urging reversal Bank America, FSB, Steven Rosenthal, Alan K. Palmer, Leo G. Rydzewski, John Millian, Melvin Garbow, Howard N. Cayne, B. Bergman, Michael Johnson, Daniel Goldberg, T. Reilly, Stephen Forte; Council Affordable Rural Carl Coan III; Association Builders Thomas Jon Ward. Perry, Paul Blankenstein Castle curiae. Since 1994, entrusted Service, known 1994 1996 Services. created authority Reorganization 108 3219, 110 1128, 1131. 2003.18 (2002) (functional Service). Our references successor agencies 1986, temporary moratorium precluded cases. originally expire extended another measure. note following 1472, 163 ed.) 1992, 106 3672, codified relevant part (1992 legislation). provision, petitioners,i. e., 1989. 3841. latter group ofFranconia remain pending Claims. 2. disagreed respect: former 1365, 3. disagreement irrelevant to, rendered academic by, resolution Like Claims, 702, 708-709 (1999), "alternative argument" commenced installing restrictions, 1992 operative provision. 4. contended emergency measure temporarily; definitive action, curtailment permanentId., 1365. although designated certain "interim measures," omitted), "no similar language indicate[s] [ELIHPA's] anything to" situation, theGrass separate decision. 51 436, 439 record indicates least A157-A158, contains information how others done attempts place, 707. Application light task lower courts observe, Reply 6, meaningful context tolling disabilities successive claimants. context, delayed disability claimant accrued; claimants laboring unprotected proviso. 488, reliance onMcMahon 342 (1951), misplaced. Suits Admiralty tort choose start States." arise out demand precipitate breach, And unlike position McMahon, ruling today injury case, refusal accord terms

Category: 8