[00:00:00] Speaker 03: The first is number 24, 2042, Kelly versus the United States. [00:00:04] Speaker 03: Mr. Lueck. [00:00:06] Speaker 02: Good morning, Your Honor. [00:00:08] Speaker 02: We have sort of three distinct issues on this appeal. [00:00:11] Speaker 02: One is the statute of limitations. [00:00:12] Speaker 02: Another is the merits of the taking claim. [00:00:14] Speaker 02: And the third is the implied contract claim that we made in the district court. [00:00:20] Speaker 02: So I'll try to split my time on those three issues as much as I can. [00:00:23] Speaker 02: But the statute of limitations issue is also going to be argued in the case that follows us. [00:00:27] Speaker 02: And we have much the same arguments in the briefs. [00:00:30] Speaker 02: And that argument is that the Bright case issued by this court in 2010 is the law, still is the law, and has not been implicitly overturned by the CalPERS case, the securities case that the Supreme Court decided in 2017. [00:00:47] Speaker 02: The Bright case clearly was on all fours with what we have here. [00:00:52] Speaker 02: It was on all fours with the law at the time. [00:00:54] Speaker 01: Can I just be clear? [00:00:55] Speaker 01: I remember from your brief that you have an argument about why CalPERS really didn't implicitly overrule a bright and fairly extended argument. [00:01:06] Speaker 01: But I don't think you made any kind of argument that said, as a technical or, and I don't mean to diminish it by that word, matter. [00:01:19] Speaker 01: It was reasonable to rely on right until we declare that right was implicitly overruled. [00:01:31] Speaker 01: I don't think you made an argument along those lines. [00:01:34] Speaker 02: I've grown into some difficulties, but I just want to... You mean our reliance, the reliance argument, you mean that we made your argument? [00:01:41] Speaker 01: Uh, not quite. [00:01:43] Speaker 01: Okay. [00:01:43] Speaker 01: So, um, we have not yet said that bright is, um, no longer good law in light of cash. [00:01:50] Speaker 01: I don't think you've made an argument that says the simple fact that we have not yet said that should mean that, um, that bright should govern this case. [00:02:04] Speaker 02: Well, I think, if we did not say that explicitly, we certainly intended that by saying that CalPERS cobbled together with these other cases does not. [00:02:12] Speaker 03: And the court of... If I understand Jeff Toronto's question, I think he's asking you whether this panel is bound by Bright until the in-bank court overrules it based on the Supreme Court authority, or whether we directly have an obligation to consider what the Supreme Court did in CalPERS. [00:02:33] Speaker 02: I think that you do have an obligation to consider it, obviously. [00:02:37] Speaker 02: But I think it is still the law of this court, and I do not think anything in CalPERS changes that with regard to this court. [00:02:45] Speaker 02: I think that I really do believe that if Bryce is going to be overruled, this court has to do it. [00:02:50] Speaker 02: Because implication and innuendo is not going to bring us there. [00:02:54] Speaker 01: But we have cases, I think, that say that, for example, a panel decision, which ordinarily would bind a later panel, doesn't bind the later panel if it's really quite clear that the Supreme Court in the meantime has made a pronouncement that is inconsistent with the earlier. [00:03:17] Speaker 02: No, I agree with that, Your Honor. [00:03:19] Speaker 02: I think that's true. [00:03:21] Speaker 02: But our position is that the Supreme Court did not take a position that's inconsistent with Bright. [00:03:27] Speaker 02: Bright was an extremely well-reasoned decision that was on all fours. [00:03:31] Speaker 02: It covered the Tucker Act, class actions, the Sand Case. [00:03:35] Speaker 02: It covered equitable versus other semantics of what is a class action tolling with transaction and administrativeness. [00:03:42] Speaker 02: It dealt with all that and said, very specifically, the last sentence in Bright says, [00:03:47] Speaker 02: You have tolling in a class action under the Tucker Act for taking claim. [00:03:52] Speaker 03: Yeah, but it says that that's based on the fact that it's statutory tolling rather than equitable tolling. [00:03:57] Speaker 02: It does, Your Honor. [00:03:58] Speaker 02: And I don't think that CalPERS eliminated that issue. [00:04:02] Speaker 02: I think you've got to grapple with that with this court if you're going to adopt that. [00:04:06] Speaker 02: I think in the CalPERS case, it was a statute of repose. [00:04:11] Speaker 02: And in the end, it was a 5-4 decision, highly criticized by the dissent, [00:04:16] Speaker 02: because of that issue. [00:04:18] Speaker 02: But clearly, under that standard, it rested on statute of repose, which is not what we have here. [00:04:24] Speaker 02: It's not a statute of repose. [00:04:27] Speaker 02: And all the courts have agreed with that. [00:04:29] Speaker 02: And that's why Sand is distinguishable. [00:04:31] Speaker 02: I think the Bright Court had the absolute right answer and considered all the things, including the reasons why Congress set up class actions in the first place for the efficiency of the court system. [00:04:41] Speaker 01: Why is 2501 not a statute of repose? [00:04:46] Speaker 02: because it doesn't have the characteristics of status reposed. [00:04:48] Speaker 02: There's nothing in that statute that says, this is the end. [00:04:51] Speaker 02: This is it. [00:04:52] Speaker 02: Statutes reposed normally say, as soon as you discover that, at that period of time, that's it. [00:05:00] Speaker 02: This is the statute of limitations. [00:05:01] Speaker 02: It says, when the events occurred, you have the statute of limitations for that period of time. [00:05:06] Speaker 02: I think this leads us into the biggest problem that this court has to face, and that's this. [00:05:13] Speaker 02: It's a case of fundamental fairness. [00:05:16] Speaker 02: If you look at this, and this is different from what we have in Blue Cross Blue Shield. [00:05:21] Speaker 02: The operative facts here were 2008. [00:05:24] Speaker 02: Statute of limitations is 2014. [00:05:27] Speaker 02: Bright comes out in 2010. [00:05:30] Speaker 02: Bright is good law, the law of the land, 10, 11, 12, 13, 14. [00:05:35] Speaker 02: When I have to advise my client, what do you do? [00:05:40] Speaker 02: Do you follow protective action, or do you just rely on the fact that Bright has said that you're part of the class? [00:05:45] Speaker 01: I'm trying to talk. [00:05:48] Speaker 01: I don't remember your brief making this point, though it is one that popped into my mind as I was reading, which is, unlike the other case, by the time CalPERS came around, your six years were up. [00:06:04] Speaker 02: Yeah, by the time, and it really didn't pop up until 2024 as saying that Wright was overruled. [00:06:10] Speaker 01: Well, let's just assume 2017. [00:06:12] Speaker 01: OK. [00:06:12] Speaker 01: OK. [00:06:14] Speaker 01: But I don't remember you making an argument to that effect. [00:06:16] Speaker 01: We did make the reliance argument. [00:06:18] Speaker 01: Yes, reliance originally, but not that. [00:06:21] Speaker 01: It mattered that the, I'm now just by assumption in this question, the overruling of Wright occurred after your six years had run. [00:06:32] Speaker 02: Well, which is not true in the next case. [00:06:36] Speaker 02: No, the overruling of Bright was done in 2024 in our case by a court of claims judge. [00:06:44] Speaker 02: That's the first time that Bright was overruled that we can find anywhere. [00:06:47] Speaker 02: Matter of fact, in 2022, we have a case, a Bridgebright case, I think it was, where the court of claims applied Bright five years after CalPERS. [00:06:58] Speaker 02: I think that our reliance issue is that [00:07:02] Speaker 03: There's no authority under 2501 that you can toll the statute if you've relied on some judicial decision that gave you a window of opportunity. [00:07:15] Speaker 03: But Your Honor, we didn't have any opportunity. [00:07:17] Speaker 03: No, no, no. [00:07:18] Speaker 03: But there's no cases that say reliance can toll the statute under 2501, right? [00:07:25] Speaker 02: Well, I don't think we're talking about that. [00:07:27] Speaker 02: What we're talking about is that this court, who has the sole responsibility for appeals over this issue, the Tucker Act, made it very clear under Bright that there was a tolling of the statute. [00:07:40] Speaker 02: And it made it in 2010, during the period of time when we had to make that decision on what do we do. [00:07:46] Speaker 02: A company had lost all of its assets. [00:07:49] Speaker 02: You have to go forward and bring a case, a protective case, thinking that sometime in the future, [00:07:55] Speaker 02: Some case would change that. [00:07:58] Speaker 02: We don't think it did. [00:08:00] Speaker 02: We do not think that CalPERS changed it. [00:08:02] Speaker 02: We think that BRITE is still the right law. [00:08:05] Speaker 02: And we think if, remember too that the government appealed BRITE on the very issues we're talking about here to the Supreme Court and CERT was denied. [00:08:14] Speaker 02: That's important in this case because of the series of cases the Supreme Court had looked at. [00:08:18] Speaker 02: They denied CERT and BRITE. [00:08:22] Speaker 02: And so now we have the law. [00:08:24] Speaker 02: This is it. [00:08:25] Speaker 02: And I think that in that case, given the fact that the prior cases we're talking about, whether you look at, you know, go back to American Pipe, you look at Sands, you look at all these, the Wu, you know, is it, the Wong, I'm sorry, the Wong case, just a few years ago, the Supreme Court said that on a tort claim under the Tucker Act, it's not jurisdictional. [00:08:47] Speaker 00: So your argument is that Calper's decision did not abrogate the right because it involved a statute of repose? [00:08:57] Speaker 00: Is that your argument? [00:08:58] Speaker 02: I think when you read the Calper's decision, Justice Kennedy was talking about the difference between a normal statute of limitations and where Congress has specifically, on the legislative history and everything, said that this is a statute of repose. [00:09:13] Speaker 02: In the securities case, we have to have a finality. [00:09:17] Speaker 02: And it was only a three-year statute of limitations. [00:09:19] Speaker 02: But in the course of a legislative-created claim like the Securities Act, it can disrupt the market. [00:09:27] Speaker 02: So we're going to have an end. [00:09:29] Speaker 02: And it was all there. [00:09:30] Speaker 02: And that's what he talked about. [00:09:32] Speaker 02: He didn't talk about the statute of limitations like we have in the Tucker Act, which is quite different. [00:09:37] Speaker 02: And I think that that's something maybe the Supreme Court eventually will have to address. [00:09:41] Speaker 02: But I don't think CalPERS did it. [00:09:43] Speaker 02: And even the Court of Claims judge said, [00:09:46] Speaker 02: I'm doing it by implication. [00:09:48] Speaker 02: It's got to be expressed in the situation. [00:09:50] Speaker 01: Can I ask a question on, I guess, a slightly different topic? [00:09:56] Speaker 01: On the assumption that American Pipe is still available, don't most, if not all, of your claims fail under American Pipe anyway? [00:10:08] Speaker 01: I know the claims court didn't say so, like your contract claim. [00:10:13] Speaker 01: There were no contract claims in Washington Federal, right? [00:10:16] Speaker 02: There were no contracts. [00:10:17] Speaker 01: And American Pipe and whatever the later case was that said it really has to be the same claim. [00:10:27] Speaker 01: And so the contract claims might be unavailable regardless, even if American Pipe were available. [00:10:35] Speaker 01: That might be true as well. [00:10:37] Speaker 01: about one or two of your taking claims. [00:10:40] Speaker 01: For example, if you say your tier one capital taking claim is really quite different from the claim that was litigated in Washington Federal, it would maybe follow that your tier one capital claim was not present in Washington Federal, in which case, American Pipe wouldn't apply to that either. [00:11:01] Speaker 01: What do you think [00:11:02] Speaker 01: would survive here for you if American pipe were still available? [00:11:10] Speaker 02: I think the full taking claim survives because under the Washington federal case, the putative class, remember class action was never determined. [00:11:19] Speaker 02: The putative class include everyone who had stock in the GSEs, everyone. [00:11:26] Speaker 02: Clearly the banks had stock in the GSEs. [00:11:29] Speaker 02: But the Washington federal case only limited to that property taken. [00:11:35] Speaker 02: They didn't get to the point of what was the result of that for any plaintiff, not just our plaintiffs. [00:11:43] Speaker 02: So in the event of it had a case gone on for and there was a class certification, the class would have been defined. [00:11:49] Speaker 02: We may have been a subclass because we had greater property loss than some others. [00:11:53] Speaker 02: But in class actions, you can have some class members can have greater property loss than others. [00:11:59] Speaker 02: It's not a different theory. [00:12:00] Speaker 02: It's a taking by the government for a public purpose without compensation. [00:12:05] Speaker 00: But those disparate losses have to be based on the same theory, the same underlying theory, correct? [00:12:12] Speaker 02: Yes, Your Honor, and they are the same theory. [00:12:14] Speaker 02: The theory is that the government took, nationalized the GSEs. [00:12:19] Speaker 02: What happens as a result of that, nationalization, is the taking. [00:12:24] Speaker 02: For people who only had stock, it was the value of their stock, which Washington Federal said. [00:12:30] Speaker 02: For our banks, it was not. [00:12:32] Speaker 02: Because of the specific arrangements the government had in the regulators, they encouraged these banks to invest the same as bonds and stocks, with government backing, in their tier one capital. [00:12:45] Speaker 02: When this happened with nationalization, there was an additional taking. [00:12:50] Speaker 02: And that taking was all of the assets of these banks. [00:12:52] Speaker 00: After you made the investment, the transition into the enterprises, you left that money parked there for several months. [00:13:04] Speaker 02: No, Your Honor. [00:13:04] Speaker 02: What happened was the government was looking for ways to finance the GSEs. [00:13:10] Speaker 02: Tier 1 capital is limited to U.S. [00:13:12] Speaker 02: bonds at the time, U.S. [00:13:13] Speaker 02: bonds and cash only. [00:13:15] Speaker 02: because those are backed by the federal government. [00:13:17] Speaker 02: And so solvency of a bank could only be that. [00:13:21] Speaker 02: The US government would not allow anything else. [00:13:22] Speaker 02: They came to the banks and said, look, I'm going to make an exception. [00:13:25] Speaker 02: We want you to invest in these GSEs. [00:13:27] Speaker 02: We want you to put your cash into these GSEs. [00:13:30] Speaker 02: In return, we will treat it the same as bonds and cash. [00:13:34] Speaker 02: That was the deal and all the incentives that went with that. [00:13:38] Speaker 02: And so if you look at this from that perspective, it was the government and the banks together that made this deal. [00:13:46] Speaker 02: And in making that deal, look, a good example is if the government just devalued US savings bonds and said they weren't going to honor them, we wouldn't have this appeal. [00:13:55] Speaker 02: That would be a taking absolutely. [00:13:57] Speaker 02: That would be an absolute taking. [00:14:00] Speaker 03: There's no difference. [00:14:01] Speaker 03: You're into your rebuttal time. [00:14:02] Speaker 03: Do you want to save it? [00:14:04] Speaker 03: Yes, sir. [00:14:05] Speaker 03: I'll give you two minutes. [00:14:08] Speaker 03: Mr. Jerome. [00:14:19] Speaker 04: Good morning, Your Honors, and may it please the Court, Simon Jerome, for the federal government. [00:14:24] Speaker 04: American pipe tolling does not apply to Section 2501. [00:14:27] Speaker 04: That conclusion follows from three principles expressed in the Supreme Court's case law. [00:14:32] Speaker 04: The first is that jurisdictional statutes of limitations are not subject to equitable tolling. [00:14:37] Speaker 04: We see that principle in the Wong case. [00:14:38] Speaker 04: We see it in Beckler. [00:14:39] Speaker 04: We see it in numerous Supreme Court cases and decisions of this court. [00:14:44] Speaker 04: Secondly, Section 2501 is a jurisdictional statute of limitation. [00:14:49] Speaker 04: We have that from the John R. Sand case from the Supreme Court. [00:14:52] Speaker 04: And finally, American pipe tolling is equitable in nature. [00:14:56] Speaker 04: The Supreme Court explained that. [00:14:58] Speaker 00: Is it your view that sand is dispositive in this case? [00:15:02] Speaker 00: in your position? [00:15:04] Speaker 04: Partially dispositive, Your Honor. [00:15:05] Speaker 04: I think, Sand, certainly the holding that Section 2501 is a jurisdictional statute of limitation is an important part of the logic. [00:15:12] Speaker 04: But similarly, you need the logic that American pipe tolling is equitable in nature. [00:15:17] Speaker 04: We acknowledge that this court reached a contrary conclusion in its bright case in 2010, but CalPERS, from the Supreme Court, which is an intervening decision, unambiguously abrogated that logic. [00:15:27] Speaker 04: And to get to the procedural question that Judge Toronto asked my colleague earlier, it's, I think, [00:15:31] Speaker 04: Indisputable under this court's case law, we cite the Troy case at page 23 of our brief that so long as the intervening decision of this report undermines the logic of the case, that a panel of this court can depart from it. [00:15:45] Speaker 04: That is what we have here. [00:15:46] Speaker 04: I understood, my friend, to attempt to distinguish CalPERS on the basis that it involved a statute of repose with respect that distinction is meaningless in this case. [00:15:56] Speaker 04: This court, indeed, in its Hall case, which we cite, has analogized jurisdictional statutes of limitation to statutes of repose. [00:16:02] Speaker 04: There's no question that we're not arguing Section 2501 is not a statute of repose, but it is a jurisdictional statute of limitation. [00:16:09] Speaker 04: And that has consequences. [00:16:11] Speaker 04: I heard a lot in the conversation in my friend's presentation about fundamental fairness. [00:16:15] Speaker 04: I heard questions of, you know, reliance interests. [00:16:18] Speaker 04: Those are equitable considerations. [00:16:21] Speaker 04: And just to put a finer point on it, the key part, I think, of this Court's analysis in Bright was that it looked to the type of tolling, the source of the rule, and it said it was a statutory rule. [00:16:32] Speaker 04: There can be no question after CalPERS that how we determine what is a statutory tolling rule and what is an equitable tolling rule [00:16:39] Speaker 04: Justice Kennedy explained you need to look to the text of the statute. [00:16:43] Speaker 04: If the tolling rule comes from the text of the statute, it's a statutory rule that, in contrast to American pipe tolling, and this court's, you know, the Court of Federal Claims equivalent local rule 23, they rest, there's no textual indication that tolling is to be the rule. [00:16:59] Speaker 04: And so for those reasons, the right decision has been abrogated. [00:17:03] Speaker 04: CalPERS controls here. [00:17:05] Speaker 04: And all of the taking claims are untimely. [00:17:09] Speaker 04: As Judge Tronto indicated, or the premise of your question, Your Honor, was that the contract claims, there were no contract claims in Washington Federal, which is the asserted basis of the tolling. [00:17:18] Speaker 04: in this case. [00:17:19] Speaker 04: And so all of the claims are untimely, whether because they're untold or because they were not present in the action that my friend invokes to support claims. [00:17:30] Speaker 01: Have you made the argument to us, not on the contract claims, but that any of the takings claims here were also missing from Washington Federal? [00:17:41] Speaker 01: We have not, Your Honor, because we've accepted. [00:17:43] Speaker 04: I mean, I think in her decision below, Judge Silfin acknowledged that it's a very difficult line. [00:17:48] Speaker 04: My friend has to walk. [00:17:49] Speaker 04: His claims have to be so close as to be told, but not so close as to be barred by binding precedent of this court. [00:17:56] Speaker 01: You were happy to make that on the merit side. [00:17:58] Speaker 04: We've accepted the framing. [00:18:02] Speaker 04: To explain further, of course, I understand, my friend, to say that his client's interests are different because they are downstream of the taking. [00:18:10] Speaker 04: But respectfully, the relevant time of analysis is the imposition of the conservatorship. [00:18:15] Speaker 04: This court unambiguously said the imposition of the conservatorships on their enterprises did not constitute a taking. [00:18:21] Speaker 04: And so any harm that flows from that. [00:18:23] Speaker 01: One other, I think, minor question. [00:18:25] Speaker 01: Yes, Your Honor. [00:18:26] Speaker 01: One thing happened on September 6th, which is the Conservatives ships. [00:18:31] Speaker 01: The second thing happened on September 7th, as I recall, which is the deal with Treasury to infuse money in exchange for super preferential stock. [00:18:42] Speaker 01: Does anybody make here a distinction between those two dates? [00:18:47] Speaker 04: No, Your Honor, and Judge Silfin, at least the decision below, said the parties did not dispute for purposes of this motion the accrual date. [00:18:54] Speaker 04: I believe it was September 6. [00:18:55] Speaker 04: I can double-check. [00:18:56] Speaker 04: But with one of those dates in September, those dates for purposes of the motion were undisputed. [00:19:01] Speaker 04: That was my understanding. [00:19:03] Speaker 04: If there are no further questions. [00:19:05] Speaker 00: You do say in your brief that Sand is directly on point here. [00:19:10] Speaker 00: Yes, Your Honor. [00:19:11] Speaker 00: Well, do you concede that Sand has conflict or at least tension with the other Supreme Court cases? [00:19:17] Speaker 04: know your honor and in fact the Supreme Court has reaffirmed sand in the Wong case in particular you know I understand in the briefing there's a lot about how this clear statement rule that the Supreme Court now imposes requires a different result the Supreme Court acknowledged in Wong but its outcome that the out holding in sand [00:19:34] Speaker 04: was a product of stare decisis. [00:19:36] Speaker 04: And so the Supreme Court is well aware that it has sort of charted a new path with respect to interpreting novel statutes. [00:19:42] Speaker 04: But it said, as a matter of stare decisis, we've interpreted this very old statute the same way a number of times, and we declined to depart from that. [00:19:48] Speaker 04: That holding is binding on this court. [00:19:53] Speaker 04: Thank you, Your Honors. [00:19:56] Speaker 04: Mr. Reilack? [00:20:00] Speaker 02: I think that the government lawyer said that our claims are downstream. [00:20:04] Speaker 02: They're not downstream. [00:20:06] Speaker 02: I think that one of the problems we have with the opinion below, and we briefed this, is that the court below did not live with the normal procedures that she had to undertake. [00:20:16] Speaker 02: And that is treating the complaint and the allegations as true and light and as faithful to us. [00:20:23] Speaker 02: She didn't even address those. [00:20:24] Speaker 02: And if you look at paragraphs 142 through 152, you see [00:20:29] Speaker 02: directly what was claimed here. [00:20:32] Speaker 02: This is not about the GSEs losing stock value. [00:20:36] Speaker 02: The entire arrangement here was one for this tier one capital, which was something between the federal government and the banks. [00:20:44] Speaker 02: They asked the banks to put up their banks in effect to help the GSEs. [00:20:50] Speaker 02: And in part of that, they said, we will treat the GSE stock like bonds and stock. [00:20:57] Speaker 02: And you know what bonds are guaranteed by the federal government. [00:21:01] Speaker 02: And so what happened was things changed. [00:21:04] Speaker 02: Harrow was passed afterwards. [00:21:06] Speaker 02: You got to go back to the time this transaction was made to see what the real investment backed expectations were. [00:21:15] Speaker 02: The expectations were that we're going to give you this money for the GSEs, but you've got to protect us like you protect the bonds. [00:21:22] Speaker 02: That's what was going on here. [00:21:23] Speaker 02: And when the nationalization occurred, did the stock drop? [00:21:26] Speaker 02: Yes. [00:21:27] Speaker 02: But the direct result was that sovereignty went away because of that. [00:21:33] Speaker 02: Just as though the government refused to honor savings bonds. [00:21:37] Speaker 02: Would they do that? [00:21:38] Speaker 02: They could. [00:21:39] Speaker 02: But wouldn't that be a taking? [00:21:40] Speaker 02: Absolutely. [00:21:41] Speaker 02: There was no difference here. [00:21:43] Speaker 02: But the importance here is that, and why this falls under the Washington federal class, [00:21:51] Speaker 02: is because, yes, they were all shareholders. [00:21:54] Speaker 02: Yes, they suffered the value. [00:21:55] Speaker 02: But that doesn't mean that every class member suffers the same damages. [00:22:00] Speaker 02: In this case, there were more, in addition. [00:22:04] Speaker 02: The court held in Washington Federal that we're not entitled to the value of our stock. [00:22:09] Speaker 02: But that's just a part of that. [00:22:10] Speaker 03: I think we're out of time. [00:22:11] Speaker 03: Thank you. [00:22:11] Speaker 03: Thank both counsel. [00:22:12] Speaker 03: The case is submitted.