Chief Judge Loren A. Smith -- the only judge who has granted any meaningful damages award thus far in the over 120 breach of contract suits brought against the government for its disallowance of supervisory goodwill. His 1992 ruling in the Winstar cases, after first being reversed by a three-judge panel, was affirmed by the Court of Appeals and U.S. Supreme Court in 9-2 and 7-2 rulings. Highly critical of the way the government has conducted its defense of the goodwill suits since, Judge Smith was not reappointed by President Clinton when his 15-year term as Chief Judge expired in July. He is now a Senior Judge and continues to preside over the Meritor case.
"THE UNITED STATES HAS NOT ACTED AS THE GREAT, JUST NATION THAT IT IS"
"It is the obligation of the United States to do right. Every free government can be judged by the degree to which it respects the life, liberty and property of its citizens. The United States stands tall among the nations because it is a just nation. In the instant cases (however), the United States has not acted in a manner worthy of the great (and) just nation (that) it is. Because the dollars at stake appear to be so large, the government has raised legal and factual arguments that have little or no basis in law, fact or logic.
"While the court can appreciate the concerns of the government's attorneys to protect the public treasury, and they are honorable people, it must severely criticize the tactics and approach of the government . . . if the arguments put forth here are the strongest the United States can muster against liability then the government has a moral obligation to seek a fair and equitable settlement from the parties whose contracts were breached. If this cannot be achieved then the court is here to resolve these cases. However, the court is a tool of last resort. Where the government has violated rights it should first attempt to do justice without judicial prompting. (Emphasis added).
Hon. Loren A. Smith, Chief Judge, U.S. Court of Federal Claims
December 22, 1997
It has been nearly eight years since Judge Smith wrote the above words and yet the Winstar cases go on and on. In the meantime, the injured thrifts (some of which were put out of business nearly 15 years ago) and their shareholders have been forced to spend tens of millions of dollars in additional legal fees because the government persists in an all-or-none, scorched-earth defense. As if its overwhelming financial advantage and a seemingly endless supply of inventive excuses and creative defenses were not enough, the government is now getting help from Father Time. Indeed, many witnesses who were directly involved in the early 1980's goodwill deals are now in their 70's and 80's and some are dying before they can take the witness stand.
The full text of what Judge Smith had to say can be found by clicking on the link below.