Kizas v. Webster
532 F. Supp. 1331 (1982)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
When the value of a promised benefit (expectancy interest) is too speculative to calculate, the appropriate measure of damages is the injured party's reliance interest, which aims to restore them to the position they would have occupied had the promise never been made. The burden is on the party who breached the promise to prove that the injured party would have suffered a loss even if the promise had been performed.
Facts:
- The Federal Bureau of Investigation (FBI) maintained a program that provided clerical employees with a preferential path to becoming special agents.
- Plaintiffs accepted lower-paying clerical positions at the FBI, forgoing other employment opportunities in reliance on the existence of this clerk-to-agent program.
- The FBI unilaterally terminated the clerk-to-agent program.
- The termination deprived the plaintiffs of the opportunity for preferential consideration they had relied upon when accepting their jobs.
- The value of this lost opportunity was difficult to quantify, as the percentage of clerks who would have successfully become special agents under the program was unknown and speculative.
Procedural Posture:
- Kizas and other clerical employees sued the Director of the FBI in the U.S. District Court for the District of Columbia.
- The plaintiffs alleged the termination of the clerk-to-agent program constituted a taking of property without just compensation in violation of the Fifth Amendment.
- The District Court previously granted the plaintiffs' motion for summary judgment on the issue of liability, finding a Fifth Amendment violation had occurred.
- The plaintiffs then filed the current Motion for Summary Judgment on the issue of damages.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Is the appropriate measure of damages for the wrongful termination of a speculative employment opportunity the plaintiff's reliance interest, which aims to restore them to the position they would have been in had the promise never been made?
Opinions:
Majority - Oberdorfer, District Judge.
Yes. When the value of an expected benefit is speculative, the appropriate measure of damages is the reliance interest. By analogy to contract law, the court distinguishes between expectancy damages (the benefit of the bargain) and reliance damages (costs incurred in reliance on the promise). Here, the value of the expectancy—the chance to become a special agent—is too speculative to calculate precisely. Therefore, reliance damages are the appropriate remedy to provide 'rough justice.' The court rejects the defendant's argument that the opportunity had zero value because employment was terminable at will; the wrong was the termination of the opportunity for preferential consideration, which itself had value. Citing precedent like L. Albert & Son v. Armstrong Rubber Co., the court places the burden on the defendant to prove the plaintiffs entered a 'losing contract,' which the defendant failed to do. Thus, plaintiffs are entitled to recover losses incurred in reliance on the program.
Analysis:
This case clarifies how courts should calculate damages when a government entity terminates a beneficial program on which individuals have relied. It solidifies the use of reliance damages as a viable alternative to speculative expectancy damages in the context of a Fifth Amendment taking claim structured like a breach of contract. By shifting the burden to the defendant to prove the plaintiff would have lost money regardless, the decision makes it easier for plaintiffs to recover for the loss of uncertain future opportunities. This approach provides a practical framework for achieving 'rough justice' where precise compensation is impossible to determine.
Unlock the full brief for Kizas v. Webster