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 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.