Samiksha Jaiswal (Editor)

United States v. Winstar Corp.

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Date decided
  
1996

Full case name
  
United States v. Winstar Corp., et al.

Citations
  
518 U.S. 839 (more) 116 S.Ct. 2432; 135 L.Ed.2d 964

Prior history
  
Certiorari to the United States Court of Appeals for the Federal Circuit

Plurality
  
Souter, joined by Stevens, Breyer, O'Connor

Concurrence
  
Scalia, joined by Kennedy, Thomas

Dissent
  
Rehnquist, joined by Ginsburg

United States v. Winstar Corp., 518 U.S. 839 (1996), was a decision by the United States Supreme Court which held that the United States Government had breached its contractual obligations. Winstar rejected the Government's “unmistakability defense”—that surrenders of sovereign authority, such as the promise to refrain from regulatory changes, must appear in unmistakable terms in a contract in order to be enforceable.

Winstar arose as a consequence of the savings and loan crisis. Federal regulators extended generous tax incentives to financial institutions that took over failing thrifts—Congress later substantially changed these advantages and one of the successor banks successfully sued. The United States Court of Appeals for the Federal Circuit found a breach of contract and awarded damages—the Supreme Court upheld the lower court decision. Winstar cases are still in litigation with multimillion-dollar payouts to the plaintiffs.

References

United States v. Winstar Corp. Wikipedia