Piszel v. United States
121 Fed. Cl. 793
Fed. Cl.2015Background
- Piszel is the former CFO of Freddie Mac; he had accrued $8.1 million in unpaid compensation prior to Freddie Mac.
- His employment agreement provided severance with a lump-sum payment and continued vesting of restricted stock units if terminated without cause.
- Freddie Mac is a government-sponsored enterprise regulated by OFHEO, later replaced by FHFA under HERA; FHFA conservatorship began Sept. 7, 2008.
- FHFA directed Freddie Mac, Sept. 28, 2008, to terminate Piszel without pay of severance; Freddie Mac complied and paid a portion of RSUs.
- Piszel filed Aug. 1, 2014, asserting illegal exaction and contract-based takings under the Fifth Amendment; the government moved to dismiss under RCFC 12(b)(1) and 12(b)(6).
- The court granted the government’s motion, dismissing both the illegal exaction and takings claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Illegal exaction claim viability | Piszel seeks return of severance funds allegedly expropriated. | No money paid directly or in-effect; exaction not plausible. | Claim dismissed |
| Cognizable property interest for takings | Employment contract creates property interest in severance. | Regulated environment precludes a cognizable property interest in severance rights. | Takings claim dismissed; no cognizable property interest |
| Contract remedies bar takings claim | Breach-of-contract remedies could not salvage takings claim after lapse. | Sherwood bars jurisdiction for contract claims against private parties. | Remedies against Freddie Mac do not bar takings claim; claim survives jurisdictionally |
| Regulatory/takings framework application | If regulation changes post-agreement, compensation could be due. | Regulatory regime precludes reasonable investment-backed expectations; no taking. | No viable takings theory under Penn Central; claim dismissed |
| FHFA authorization of actions | Actions unauthorized under governing statutes could support a taking. | Regulatory authority authorized the actions; disposal by amendment possible. | Court would permit amendment rather than dismissal if defect—otherwise dismissal |
Key Cases Cited
- Aerolineas Argentinas v. United States, 77 F.3d 1564 (Fed. Cir. 1996) (illegal exaction when government has money in its pocket)
- Eastport S.S. Corp. v. United States, 372 F.2d 1007 (Ct. Cl. 1967) (definition of illegal exaction)
- Bowman v. United States, 35 F.3d 397 (Fed. Cl. 1994) (in-effect exaction where government takes property later sold)
- Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (U.S. 1992) (categorical takings framework for regulatory takings)
- A&D Auto Sales, Inc. v. United States, 748 F.3d 1142 (Fed. Cir. 2014) (categorical/regulatory takings discussion; application to intangible property)
- Golden Pacific Bancorp v. United States, 15 F.3d 1066 (Fed. Cir. 1994) (investor lack of right to exclude government during conservatorship)
- California Housing Sec., Inc. v. United States, 959 F.2d 955 (Fed. Cir. 1992) (property interests in regulated entities under conservatorship)
- Wyatt v. United States, 271 F.3d 1090 (Fed. Cir. 2001) (existence of valid property interest is threshold for takings)
- Testan v. United States, 424 U.S. 392 (U.S. 1976) ( Tucker Act requires underlying substantive right)
- U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (U.S. 1977) (contract rights as property rights)