  United States Court of Appeals
      for the Federal Circuit
                 ______________________

                  ANTHONY PISZEL,
                   Plaintiff-Appellant

                            v.

                   UNITED STATES,
                   Defendant-Appellee
                 ______________________

                       2015-5100
                 ______________________

    Appeal from the United States Court of Federal
Claims in No. 1:14-cv-00691-LKG, Judge Lydia Kay
Griggsby.
               ______________________

                Decided: August 18, 2016
                 ______________________

    MICHAEL V. RELLA, Murphy & McGonigle, P.C., New
York, NY, argued for plaintiff-appellant. Also represented
by JAMES K. GOLDFARB; WILLIAM E. DONNELLY, Washing-
ton, DC.

    DAVID A. HARRINGTON, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, argued for defendant-appellee. Also
represented by BENJAMIN C. MIZER, ROBERT E.
KIRSCHMAN, JR., FRANKLIN E. WHITE, JR.
2                                   PISZEL v. UNITED STATES




   GREGORY P.N. JOSEPH, Joseph Hage Aaronson LLC,
New York, NY, for amici curiae Louise Rafter, Josephine
Rattien, Stephen Rattien, Pershing Square Capital Man-
agement, L.P. Also represented by MARA LEVENTHAL,
SANDRA MYNDELLE LIPSMAN, CHRISTOPHER JAMES
STANLEY.

   REBECCA LEGRAND, LeGrand Law PLLC, Washington,
DC, for amicus curiae The National Black Chamber of
Commerce.
               ______________________

        Before DYK, SCHALL, and HUGHES *, Circuit Judges.
DYK, Circuit Judge.
    Mr. Anthony Piszel appeals from a judgment of the
United States Court of Federal Claims (“the Claims
Court”) dismissing his complaint against the United
States for failure to state a claim. That complaint alleged
a taking and illegal exaction resulting from a statute and
regulations barring the payment of so-called “golden
parachute” compensation upon his termination as an
employee of the Federal Home Loan Mortgage Corpora-
tion (“Freddie Mac”). Because we agree that Mr. Piszel’s
complaint fails to state a claim on which relief can be
granted, we affirm.
                        BACKGROUND
                              I
    The question here is whether a government prohibi-
tion on making golden parachute payments to terminated



    *   Judge Hughes concurs in the judgment and joins
all but Part I.A. of the Discussion section.
PISZEL v. UNITED STATES                                    3




employees of Freddie Mac constitutes a taking or an
illegal exaction.
    Mr. Piszel is a former employee of Freddie Mac. Ac-
cording to his complaint, Mr. Piszel began working as the
chief financial officer (“CFO”) of Freddie Mac in November
of 2006. As part of his compensation package, Mr. Piszel
was to receive a signing bonus of $5 million in Freddie
Mac restricted stock units that would vest over four years,
an annual salary of $650,000, and performance-based
incentive compensation of roughly $3 million a year in
restricted stock. In addition, Mr. Piszel’s employment
agreement provided that in the event of his termination
without cause, Mr. Piszel would receive a lump-sum cash
payment of double his annual salary and that certain
restricted stock units would continue to vest. These types
of termination payments are often referred to as “golden
parachute payments.” The payments at issue here are
alleged to have a value in excess of $7 million.
      Freddie Mac is a government sponsored enterprise,
meaning that it is a privately owned but publicly char-
tered financial services corporation created by the United
States. See 12 U.S.C. § 1452. Pursuant to its charter,
Freddie Mac was created to “provide stability in the
secondary market for residential mortgages” and “to
promote access to mortgage credit throughout the Nation”
by “increasing the liquidity of mortgage investments and
improving the distribution of investment capital available
for residential mortgage financing.” See 12 U.S.C. § 1716.
As such, Freddie Mac was authorized to purchase and sell
residential mortgages from various banks, including “any
. . . financial institution the deposits or accounts of which
are insured by an agency of the United States.” Id.
§ 305(b), 84 Stat. at 454 (codified as amended at 12 U.S.C.
§ 1454(b)).
4                                   PISZEL v. UNITED STATES




    At the time that Mr. Piszel accepted his position,
Freddie Mac was regulated by the Office of Federal Hous-
ing Enterprise Oversight (“OFHEO”) pursuant to the
Federal Housing Enterprises Financial Safety and
Soundness Act of 1992. See Pub. L. No. 102-550, § 1311,
106 Stat. 3672, 3944 (1992). Mr. Piszel alleged in his
complaint that his employment contract was reviewed
and approved by OFHEO. Mr. Piszel alleged that he
performed his job as CFO as a “strong leader” with “excel-
lent performance.” J.A. 30–31.
    On July 30, 2008, facing great turmoil in the national
housing market and the potential collapse of Freddie Mac,
Congress passed the Housing and Economic Recovery Act
of 2008 (“HERA”). Pub. L. No. 110-289, 122 Stat. 2654
(2010) (codified at 12 U.S.C. § 4511 et seq.). At the time,
Freddie Mac, along with its sister bank the Federal
National Mortgage Association (“Fannie Mae”), owned or
guaranteed about half of the nation’s $12 trillion mort-
gage market. The act significantly restructured the
regulatory framework for Freddie Mac, establishing the
Federal Housing Finance Agency (“FHFA”) to replace
OFHEO as the primary regulator of Freddie Mac. See 12
U.S.C. § 4511. In addition, the act significantly clarified
and expanded the powers of the FHFA to act as a conser-
vator or receiver for Freddie Mac should the mortgage
giant get into serious financial trouble. See id. § 4617. As
a conservator, the FHFA would “immediately succeed to
all rights, titles, powers, and privileges of the regulated
entity” and could “take over the assets of and operate the
regulated entity with all the powers of the shareholders,
the directors, and the officers of the regulated entity.” Id.
§ 4617(b)(2). The FHFA as conservator was given the
explicit power to “disaffirm or repudiate any contract,”
after which damages for the breach would be limited to
“actual direct compensatory damages.” Id. § 4617(d)(1).
PISZEL v. UNITED STATES                                   5




    Additionally, and apart from the powers vested in the
conservator to disaffirm contracts, the act contained a
limit on “golden parachutes”: it authorized the Director of
the FHFA to “prohibit or limit, by regulation or order, any
golden parachute payment.” Id. § 4518(e)(1). The statute
defined a “golden parachute payment” as “any pay-
ment . . . that is contingent on the termination of [a]
party’s affiliation with [Freddie Mac]” and that is received
on or after Freddie Mac is declared insolvent, placed in
conservatorship or receivership, or is in financial trouble.
Id. § 4518(e)(4)(A). The section also provided that “any
payment made pursuant to a bona fide deferred compen-
sation plan or arrangement which the Director deter-
mines, by regulation or order, to be permissible” is not a
“golden parachute payment.” Id. § 4518(e)(4)(C)(ii).
    Congress did not outright prohibit all golden para-
chute payments, 1 but rather left it to the Director of the
FHFA to develop regulations determining which pay-
ments should, and should not, be made. Congress provid-
ed a number of “factors to be considered by the Director in
taking any action” pursuant to his new authority. Id.
§ 4518(e)(2). Specifically, Congress stated that the Direc-
tor should consider:
   (A) whether there is a reasonable basis to believe
   that the affiliated party has committed any
   fraudulent act or omission, breach of trust or fidu-
   ciary duty, or insider abuse with regard to the
   regulated entity that has had a material effect on
   the financial condition of the regulated entity;


   1    Congress did prohibit some severance payments,
specifically the prepayment of salary if made “in contem-
plation of the insolvency of such regulated entity” or “with
a view to, or having the result of preventing” the proper
distribution of assets to creditors. 12 U.S.C. § 4518(e)(3).
6                                     PISZEL v. UNITED STATES




      (B) whether there is a reasonable basis to believe
      that the affiliated party is substantially responsi-
      ble for the insolvency of the regulated entity, the
      appointment of a conservator or receiver for the
      regulated entity, or the troubled condition of the
      regulated entity (as defined in regulations pre-
      scribed by the Director);
      (C) whether there is a reasonable basis to believe
      that the affiliated party has materially violated
      any applicable provision of Federal or State law or
      regulation that has had a material effect on the
      financial condition of the regulated entity;
      (D) whether the affiliated party was in a position
      of managerial or fiduciary responsibility; and
      (E) the length of time that the party was affiliated
      with the regulated entity, and the degree to
      which—
         (i) the payment reasonably reflects compensa-
         tion earned over the period of employment;
         and
         (ii) the compensation involved represents a
         reasonable payment for services rendered.
Id.
    The Director issued regulations implementing the
statute on September 16, 2008. See 73 Fed. Reg. 53356-
01 (2008) (codified at 12 C.F.R. § 1231). These regulations
generally prohibited all payments within the statutory
definition of “golden parachute payments,” but listed
several scenarios in which such a payment could be made,
for example, when a regulated entity requests to make a
payment and can demonstrate that the person involved
did not commit any wrongdoing. See 12 C.F.R. § 1231.3(b)
(2014).
PISZEL v. UNITED STATES                                   7




    The government placed Freddie Mac into conserva-
torship on September 7, 2008, because, according to
FHFA’s website, there was “substantial deterioration in
the housing markets that severely damaged Fannie Mae
and Freddie Mac’s financial condition and left them
unable to fulfill their mission without government inter-
vention.” J.A. 34. Mr. Piszel alleges the following in his
complaint: about two weeks later, on September 22, 2008,
the Director of the FHFA, acting in his capacity and
under his authority as Freddie Mac’s regulator, sent a
letter to Freddie Mac’s CEO stating that he had “deter-
mined that [Mr. Piszel] should be terminated effective
close of business today ‘without cause.’” Id. 35. The letter
further provided that Freddie Mac should not pay Mr.
Piszel a severance payment nor “any salary beyond the
date of the cessation of Mr. Piszel’s employment, any
annual bonus for 2008 [or] any further vesting of stock
grants.” Id. As alleged, the letter stated that the basis
for this decision was the newly-enacted golden parachute
section of HERA and the implementing regulations. As a
result of the letter, Freddie Mac terminated Mr. Piszel
and, according to Mr. Piszel, “refused to provide him with
any of the benefits to which he was contractually entitled
under his employment agreement, including his $1.3
million termination payment and the remainder of the
restricted stock units that were granted to him as a
signing bonus and were required to continue vesting after
his termination.” Id. 36. 2
                             II
   Mr. Piszel filed suit against the United States on Au-
gust 1, 2014, nearly six years after he was fired from his


   2    Mr. Piszel alleges that at the time of his termina-
tion, he had only received 19,735 of the 78,940 restricted
stock units granted under his employment agreement.
8                                  PISZEL v. UNITED STATES




job as CFO of Freddie Mac. At the time of the filing of his
suit, Mr. Piszel had not filed suit against Freddie Mac for
breach of contract nor, apparently, could he have, as the
statute of limitations on such an action had already run. 3
     In his complaint, Mr. Piszel alleged a taking and an
illegal exaction by the United States. Mr. Piszel asserted
that:
    The FHFA’s actions . . . in directing Freddie Mac
    to terminate Mr. Piszel without cause without
    paying him his contractually-required benefits (or
    any other just compensation), constitute[d] a tak-
    ing in violation of the Fifth Amendment that com-
    pletely deprived Mr. Piszel of his rights in his
    private property interests and rendered those in-
    terests worthless. Indeed, the Government’s ac-
    tions permanently excluded Mr. Piszel from any
    interest in his contractual benefits and destroyed
    Mr. Piszel’s right to those interests . . . .
    Alternatively, the Government’s actions constitute
    an unlawful exaction in violation of HERA and
    the Due Process Clause of the Fifth Amendment,
    specifically because the government exceeded its
    authority under HERA in prohibiting payments
    that were not “golden parachute payments.”
J.A. 39.


    3   Both parties agree that Freddie Mac, as a private
institution, would be the appropriate counterparty in a
breach of contract suit. See O’Melveny & Myers v.
F.D.I.C., 512 U.S. 79, 85 (1994). According to both par-
ties, the suit would have been brought in Virginia state
court under Virginia law, which has a five-year statute of
limitations for contract claims. See Va. Code Ann. § 8.01-
246(2) (1977).
PISZEL v. UNITED STATES                                    9




    The government moved to dismiss under Rule 12(b)(6)
of the Rules of the United States Court of Federal Claims
(“RCFC”). 4 This rule is identical to its counterpart rule in
the Federal Rules of Civil Procedure. The government
argued that Mr. Piszel had failed to plead facts sufficient
to support the various takings and illegal exaction claims.
Mr. Piszel did not move to amend his complaint under
RCFC 15 in response to the motion to dismiss, but rather
defended the complaint as originally filed.
    The Claims Court granted the government’s motion to
dismiss the categorical and physical takings claims be-
cause it concluded that Mr. Piszel “fail[ed] to allege a
plausible categorical or physical takings in his complaint.”
Piszel v. United States, 121 Fed. Cl. 793, 805 (2015). The
Claims Court also dismissed Mr. Piszel’s regulatory
takings claim because it concluded that Mr. Piszel did not
have a cognizable Fifth Amendment property interest in
his employment agreement and that Mr. Piszel did not
have an investment-backed expectation in his employ-
ment agreement. Id. at 803, 805–06. Additionally, the
Claims Court dismissed Mr. Piszel’s exaction claim be-
cause Mr. Piszel “concedes that he has not paid any
money to the government” and therefore “there is no way
to read the allegations in the complaint to state a plausi-
ble illegal exaction claim.” Id. at 807.
    Mr. Piszel appealed. Following oral argument, we or-
dered supplemental briefing regarding the regulatory
takings claim. Specifically, we asked the parties to ad-
dress three questions:


    4   The government also moved to dismiss under Rule
12(b)(1) of the RCFC for identical reasons because the
Claims Court would not have jurisdiction if Mr. Piszel
could not plausibly state a claim against the United
States. See 28 U.S.C. § 1491.
10                                   PISZEL v. UNITED STATES




     (1) Does the fact that the golden parachute provi-
     sion, 12 U.S.C. § 4518(e), did not eliminate breach
     of contract claims preclude a takings action
     against the government?
     (2) Would recovery for such a breach of contract
     claim be limited by the doctrine of impossibility or
     the sovereign acts doctrine and would the limita-
     tions on damages for breach of contract claims in
     HERA, 12 U.S.C. § 4617(d)(3)(A), preclude or limit
     recovery of breach of contract damages? Compare
     Office & Prof’l Employees Int’l Union, Local 2 v.
     FDIC, 27 F.3d 598 (D.C. Cir. 1994), with Howell v.
     FDIC, 986 F.2d 569 (1st Cir. 1993).
     (3) If these doctrines or statutory provisions would
     limit recovery, what impact would that have on
     the existence of a takings claim?
Order for Supplemental Briefing, Piszel v. United States,
No. 15-5100 (Fed. Cir. Apr. 7, 2016). Supplemental briefs
were received from both parties. We have jurisdiction
under 28 U.S.C. § 1295(a)(3) from a final decision of the
Claims Court. We review the Claims Court’s grant of a
motion to dismiss de novo, assuming the factual allega-
tions of the complaint to be true. See Kam-Almaz v.
United States, 682 F.3d 1364, 1367–68 (Fed. Cir. 2012).
                        DISCUSSION
                              I
    We first consider Mr. Piszel’s regulatory takings
claim. The Supreme Court has explained “that govern-
ment regulation of private property may, in some instanc-
es, be so onerous that its effect is tantamount to a direct
appropriation or ouster—and that such ‘regulatory tak-
ings’ may be compensable under the Fifth Amendment.”
Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005). A
regulatory takings analysis eschews any set formula, but
PISZEL v. UNITED STATES                                 11




rather involves an “ad hoc, factual inquir[y]” which in-
volves “several factors that have particular significance.”
Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 124
(1978). “Primary among [the] factors” for analyzing a
regulatory taking is “[t]he economic impact of the regula-
tion on the claimant and, particularly, the extent to which
the regulation has interfered with distinct investment-
backed expectations.” Lingle, 544 U.S. at 538–39 (inter-
nal quotation marks and citations omitted).
    Here, Mr. Piszel alleges that the government effected
a taking of his contractual right to payment of severance
benefits when, pursuant to the statute and regulations
prohibiting payment of golden parachutes, 12 U.S.C.
§ 4518(e) and 12 C.F.R. § 1231.3, the Director of the
FHFA instructed the CEO of Freddie Mac to terminate
Mr. Piszel’s employment and not to pay him any sever-
ance. The government argues that the government’s
actions did not amount to a taking for several distinct
reasons.
                            A
    The government argues, and the Claims Court found,
that Mr. Piszel lacked a cognizable Fifth Amendment
property interest. We disagree.
    In evaluating whether governmental action consti-
tutes a taking for Fifth Amendment purposes, the court
must determine “whether the claimant has identified a
cognizable Fifth Amendment property interest that is
asserted to be the subject of the taking.” Acceptance Ins.
Cos., Inc. v. United States, 583 F.3d 849, 854 (Fed. Cir.
2009). When a claimant lacks such a property interest,
nothing has been taken, and thus the claimant cannot
maintain a takings claim. See Am. Pelagic Fishing Co.,
L.P. v. United States, 379 F.3d 1363, 1372 (Fed. Cir.
2004).
12                                  PISZEL v. UNITED STATES




    In general, “[v]alid contracts are property, whether
the obligor be a private individual, a municipality, a state,
or the United States.” Lynch v. United States, 292 U.S.
571, 579 (1934); see U.S. Tr. Co. of N.Y. v. New Jersey, 431
U.S. 1, 19 n.16 (1977) (“Contract rights are a form of
property and as such may be taken for a public purpose
provided that just compensation is paid.”); A & D Auto
Sales, Inc. v. United States, 748 F.3d 1142, 1152 (Fed. Cir.
2014); see also United States v. Petty Motor Co., 327 U.S.
372, 380–81 (1946) (holding that plaintiff was entitled to
compensation for government’s taking of option to renew
a lease). Mr. Piszel’s employment contract with Freddie
Mac is no exception.
    Nonetheless, the government asserts that Mr. Piszel
did not have a vested property interest in his contractual
rights to severance because Freddie Mac operated in an
environment of pervasive federal regulation. The gov-
ernment’s theory is that because Mr. Piszel voluntarily
contracted with an entity that was subject to pervasive
regulation, he assumed the risk of future regulation and
thus cannot claim a vested interest in property that was
likely to be subject to additional regulation. Because Mr.
Piszel voluntarily entered into a highly regulated area, he
lacked a right to exclude the government from his proper-
ty.
     To be sure, if a regulation existed at the time of con-
tract formation, the regulation would have inhered in the
title. See A & D, 748 F.3d at 1152; Hearts Bluff Game
Ranch, Inc. v. United States, 669 F.3d 1326, 1331 (Fed.
Cir. 2012) (holding that the government’s precluding
plaintiff from building a mitigation bank on his property
was not a taking because the government’s authority
predated plaintiff’s property right); Transohio Sav. Bank
v. Dir., Office of Thrift Supervision, 967 F.2d 598, 618
(D.C. Cir. 1992) (rejecting a takings claim because pre-
existing regulations allowed for agency discretion relating
PISZEL v. UNITED STATES                                 13




to the act alleged to be a taking). But here there was no
specific regulation prohibiting golden parachute payments
at the time of contract formation. The regulation, at the
time, provided only for government review of Mr. Piszel’s
compensation to determine whether it was “reasonable
and comparable with compensation for employment in
other similar businesses . . . involving similar duties and
responsibilities.” 12 U.S.C. § 4518(a). There is no conten-
tion here that Mr. Piszel’s golden parachute was unrea-
sonable under that standard. “If a challenged restriction
was enacted after the plaintiff’s property interest was
acquired, it cannot be said to ‘inhere’ in the plaintiff’s
title.” A & D, 748 F.3d at 1152. This is the situation
here.
    The government is nonetheless correct that the back-
ground regulatory environment is relevant to a takings
analysis. When the government acts in a highly regulat-
ed environment to bolster restrictions or eliminate loop-
holes in an existing regulatory regime, the existence of
government regulation does not defeat a property inter-
est, but is relevant to whether there were investment-
backed expectations under the Penn Central test. See
Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers
Pension Tr. for S. Cal., 508 U.S. 602, 645 (1993); Connolly
v. Pension Benefit Guar. Corp., 475 U.S. 211, 226–27
(1986). Indeed, in Concrete Pipe and Connolly, relied
upon by the government for the proposition that
Mr. Piszel lacked a cognizable property interest, the
Supreme Court did not conclude that no property interest
existed. Rather, the Court concluded that because the
property involved in those cases “had long been subject to
federal regulation,” there was no interference with the
plaintiff’s reasonable investment-backed expectations
because there was no “reasonable basis to expect” that
Congress would not alter the regulatory scheme. Concrete
Pipe, 508 U.S. at 645; accord Connolly, 475 U.S. at 226–
14                                 PISZEL v. UNITED STATES




27. The same approach is also reflected in our decision in
California Housing Securities, Inc. v. United States, 959
F.2d 955, 958 (Fed. Cir. 1992), on which the government
additionally relies. See also Golden Pac. Bancorp v.
United States, 15 F.3d 1066, 1073–74 (Fed. Cir. 1994).
    In short, “there is [] ample precedent for acknowledg-
ing a property interest in contract rights under the Fifth
Amendment.” Cienega Gardens v. United States, 331 F.3d
1319, 1329 (Fed. Cir. 2003). In Cienega Gardens, we
rejected the government’s position that “enforceable
rights sufficient to support a taking claim against the
United States cannot arise in an area voluntarily entered
into and one which, from the start, is subject to pervasive
Government control.” Id. at 1330 (quoting government
brief) (internal quotation marks omitted); see also A & D,
748 F.3d at 1152–53 (finding that a property interest in
contract rights existed despite being subject to bankrupt-
cy law). We therefore conclude that Mr. Piszel had a
cognizable Fifth Amendment property interest in his
contract rights.
                            B
    The government argues that Mr. Piszel should be
barred from pursuing a takings claim because he failed to
pursue a breach of contract claim against Freddie Mac.
Mr. Piszel argues that there is no requirement to pursue a
breach of contract claim against a private party before
bringing a takings claim. We disagree with the govern-
ment that Mr. Piszel’s failure to pursue a contract remedy
is an absolute bar to his bringing a takings claim against
the government.
    The Supreme Court has held that a claimant must
exhaust administrative or judicial remedies against the
relevant government entity in order for his regulatory
takings claim to be ripe. See, e.g., Williamson Cty. Reg’l
Planning Comm’n v. Hamilton Bank of Johnson City, 473
PISZEL v. UNITED STATES                                   15




U.S. 172, 186–87 (1985); see also, e.g., Palazzolo v. Rhode
Island, 533 U.S. 606, 618–19 (2001); Suitum v. Tahoe
Reg’l Planning Agency, 520 U.S. 725, 735 (1997); Mac-
Donald, Sommer & Frates v. Yolo Cty., 477 U.S. 340, 348
(1986). The Court has explained that to demonstrate a
regulatory taking, a party “must establish that the regu-
lation has in substance ‘taken’ his property—that is, that
the regulation ‘goes too far.’” MacDonald, 477 U.S. at 348
(citations omitted). But “[a] court cannot determine
whether a regulation has gone ‘too far’ unless it knows
how far the regulation goes.” Id. This is because “resolu-
tion of [this] question depends, in significant part, upon
an analysis of the effect [of the regulation] on the value of
[the] property and investment-backed profit expectation.
That effect cannot be measured until a final decision is
made as to how the regulations will be applied.” Id. at
349 (quoting Williamson, 473 U.S. at 200). As to the
second prong of a takings claim, a failure to provide “just
compensation,” “a court cannot determine whether a
municipality has failed to provide ‘just compensation’
until it knows what, if any, compensation the responsible
administrative body intends to provide.” MacDonald, 477
U.S. at 350.
    We have applied a similar concept in cases where a
party alleges a taking of a contract with the government.
We have held that when the government itself breaches a
contract, a party must seek compensation from the gov-
ernment in contract rather than under a takings claim.
As we have explained, “[t]aking claims rarely arise under
government contracts because the Government acts in its
commercial or proprietary capacity in entering contracts,
rather than its sovereign capacity” and therefore the
“remedies arise from the contracts themselves, rather
than from the constitutional protection of private property
rights.” Hughes Commc’ns Galaxy, Inc. v. United States,
271 F.3d 1060, 1070 (Fed. Cir. 2001); see also Sun Oil Co.
16                                  PISZEL v. UNITED STATES




v. United States, 215 Ct. Cl. 716, 770 (Ct. Cl. 1978) (dis-
missing takings claim where the government was a
party—the plaintiff’s remedies for the government’s
violation of its contractual rights “must be directed [at the
government] in its proprietary capacity and not in its
sovereign capacity”).
    However, we are aware of no case that mandates that
a claimant pursue a remedy against a private party before
seeking compensation from the government. Indeed, our
recent decision in A & D is to the contrary. In A & D, car
dealerships brought takings claims against the govern-
ment because the government instructed auto manufac-
turers to breach certain agreements with those
dealerships. A & D, 748 F.3d at 1147. We addressed the
takings claim against the government even though we
noted that the claimants may have remaining claims
against the auto manufacturers. Id. at 1149 (“To the
extent the franchises were terminated by action of the
bankruptcy estate, the affected dealers received unse-
cured claims against the estates.”). And the Supreme
Court has consistently addressed takings claims even
though claimants could have pursued breach of contract
claims against the private parties. See, e.g., Armstrong v.
United States, 364 U.S. 40, 41–42 (1960); Norman v. Balt.
& Ohio R.R. Co., 294 U.S. 240, 292–94 (1935); Omnia
Commercial Co. v. United States, 261 U.S. 502, 510–11
(1923). We therefore find no basis for the government’s
argument that Mr. Piszel had to pursue a breach of con-
tract claim against Freddie Mac before bringing a takings
claim, even though, as described below, the existence of a
remedy for breach of contract is highly relevant to the
takings analysis in this case.
PISZEL v. UNITED STATES                                     17




                             II
                             A
    We next consider whether the complaint sufficiently
alleges a taking. As noted, the complaint simply alleges
that the government’s instruction to Freddie Mac
amounted to a total taking of Mr. Piszel’s contractual
right:
    The FHFA’s actions . . . in directing Freddie Mac
    to terminate Mr. Piszel without cause without
    paying him his contractually-required benefits (or
    any other just compensation), constitute a taking
    in violation of the Fifth Amendment that com-
    pletely deprived Mr. Piszel of his rights in his pri-
    vate property interests and rendered those
    interests worthless. Indeed, the Government’s ac-
    tions permanently excluded Mr. Piszel from any
    interest in his contractual benefits and destroyed
    Mr. Piszel’s right to those interests.
J.A. 39.
     The government’s instruction to Freddie Mac did not
take anything from Mr. Piszel because, even after the
government’s action, Mr. Piszel was left with the right to
enforce his contract against Freddie Mac in a breach of
contract action. As the government correctly points out,
“the only duty a contract imposes is to perform or pay
damages.” F.T.C. v. Think Achievement Corp., 312 F.3d
259, 261 (7th Cir. 2002) (citing Oliver Wendell Holmes,
Jr., The Common Law 300–02 (1881)). Thus, to effect a
taking of a contractual right when performance has been
prevented, the government must substantially take away
the right to damages in the event of a breach. See Castle
v. United States, 301 F.3d 1328, 1342 (Fed. Cir. 2002)
(finding that because “the plaintiffs retained the full
range of remedies associated with any contractual proper-
18                                  PISZEL v. UNITED STATES




ty right they possessed[,]” the government action “did not
constitute a taking of the contract”).
    There can be no doubt that the golden parachute pro-
vision of HERA did not take away Mr. Piszel’s ability to
seek compensation for breach of his employment contract
in a traditional breach of contract suit under state con-
tract law. Indeed, at oral argument, Mr. Piszel agreed
“that the golden parachute provision didn’t eliminate [Mr.
Piszel’s] breach of contract claim,” and the government
agreed. Oral Argument at 2:40; see also id. at 17:29; Gov’t
Supp. Br. at 3–4; Piszel Supp. Br. at 1.
    Nothing in the statute or regulations removes Mr.
Piszel’s ability to pursue a breach of contract remedy
against his employer. Neither the golden parachute
provision nor the regulations make any mention of a
breach of contract claim. See 12 U.S.C. § 4518; 12 C.F.R.
§ 1231.3.
    Other similar provisions of HERA indicate that when
a conservator prohibits performance of a contract, an
action for breach of contract remains.               Section
1367(b)(2)(H) of HERA states a general policy that the
conservator “shall, to the extent of proceeds realized from
the performance of contracts or sale of the assets of a
regulated entity, pay all valid obligations of the regulated
entity that are due and payable at the time of the ap-
pointment” of the conservator. 122 Stat. at 2738 (codified
at 12 U.S.C. § 4617(b)(2)(H)). Section 1367(b)(19)(d), like
the golden parachute provision, allows the conservator to
“disaffirm or repudiate” contracts including “any contract
for services between any person and any regulated entity”
like employment contracts. 122 Stat. at 2747–48, 2750
(codified at 12 U.S.C. § 4617(b)(19)(d)). That section
plainly preserves a breach of contract claim, providing
that the conservator will be liable for the disaffirmance or
repudiation of the contract but limits the liability to
PISZEL v. UNITED STATES                                 19




“actual direct compensatory damages.” Id.; see also
Howell v. F.D.I.C., 986 F.2d 569, 571 (1st Cir. 1993) (“By
repudiating the contract the receiver is freed from having
to comply with the contract . . . but the repudiation is
treated as a breach of contract that gives rise to an ordi-
nary contract claim for damages.”). The statute cannot
reasonably be read to preserve a breach claim when the
conservator disclaims a contract providing for a payment
but to eliminate a breach claim when the identical action
is taken pursuant to a regulatory directive. Thus, the
surrounding provisions indicate that Congress intended to
preserve breach of contract claims, as the parties agree.
                            B
    On appeal, Mr. Piszel argues that even if his breach
claim is preserved, it is of little value because such a
breach claim would be subject to an impossibility defense.
The complaint makes no such allegation, and there is no
basis for such an assumption.
    “The Supreme Court . . . has made clear that in the
regulatory takings context the loss in value of the ad-
versely affected property interest cannot be considered in
isolation.” Cienega Gardens, 503 F.3d at 1280. Rather,
the “test for regulatory taking requires [a court] to com-
pare the value that has been taken from the property with
the value that remains in the property.” Keystone Bitu-
minous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 497
(1987); see also Concrete Pipe, 508 U.S. at 644; Cienega
Gardens, 503 F.3d at 1281. The Supreme Court recog-
nized this in the very case that created the regulatory
takings framework, explaining that “[i]n deciding whether
a particular governmental action has effected a taking,
this Court focuses . . . on the character of the action and
on the nature and extent of the interference with rights in
the parcel as a whole.” Penn Cent., 438 U.S. at 130–31
(emphasis added). This is, of course, because “a regulato-
20                                  PISZEL v. UNITED STATES




ry taking does not occur unless there are serious financial
consequences” that stem from the government action.
Cienega Gardens, 503 F.3d at 1282.
    Mr. Piszel asserts in his briefs, but not in his com-
plaint, that pursuing his breach of contract claim against
Freddie Mac would have been futile because “[t]he doc-
trine of impossibility would preclude Mr. Piszel’s recovery
for a breach of contract claim against Freddie Mac.”
Piszel Supp. Br. at 11. 5 In other words, Mr. Piszel argues
that because the government’s actions created an impos-
sibility defense for the private party he may have sued,
the government effected a taking of his property or, at
least, caused severe adverse financial consequences. It is
unclear whether a government action that creates a state-
law impossibility defense amounts to an act that would
support a takings claim. See, e.g., Omnia, 261 U.S. at 511
(finding no takings claim even though the Supreme Court
recognized that “[a]s a result of [the] governmental action
the performance of the contract was rendered impossi-
ble”). But even assuming without deciding that the
indirect creation of an impossibility defense could support
a takings claim, Mr. Piszel’s breach of contract claim may
well have survived an impossibility defense, and his
complaint does not allege otherwise.
    First, an impossibility defense would have been un-
likely to succeed if the statute and regulations did not bar
the payments. 6 Mr. Piszel could have sought to prove,


     5 Impossibility, or impracticability, is an affirmative
defense against a breach of contract claim which excuses
non-performance in certain situations. See, e.g., Restate-
ment (Second) of Contracts § 261 (1981).
    6  While we do not reach the issue here, we have al-
so held that “[a] compensable taking arises only if the
government action in question is authorized.” Del-Rio
PISZEL v. UNITED STATES                                   21




and does in fact allege in his complaint, that the termina-
tion of his payments was not authorized by the statute.
J.A. 39–40 (“[T]he government exceeded and contravened
its statutory and regulatory authority under HERA” in
withholding payments which were “explicitly excluded
from the definition of ‘golden parachute payment.’”).
Under the statute, the only payments that are prohibited
are “golden parachute payments,” meaning payments that
are “contingent on the termination of [a] party’s affiliation
with the regulated entity.” 12 U.S.C. § 4518(e)(4)(A)(i).
Congress explicitly stated that payments “made pursuant
to a bona fide deferred compensation plan” are not “golden
parachute payments,” 12 U.S.C. § 4518(e)(4)(C)(ii), and
the regulations include in that definition agreements
where a party “voluntarily elects to defer all or a portion
of the reasonable compensation, wages, or fees paid for
services rendered,” 12 C.F.R. § 1231.2.
     Mr. Piszel alleges that the payments he was to receive
“fit[] squarely into [the] exclusion,” Piszel Opening Br. at
54, because “they were payments ‘made pursuant to a
bona fide deferred compensation plan or arrangement[,]’
which are excluded from the definition of ‘golden para-
chute payment.’” J.A. 37. Plaintiffs have brought, and
courts have considered, breach claims that particular
payments do not qualify as “golden parachute payments”
in similar situations. See, e.g., Solsby v. Plaza Bank, No.
G049272, 2015 WL 668711, at *6 (Cal. Ct. App. Feb. 17,
2015) (addressing the question of “whether . . . severance
compensation qualified as a[] . . . ‘golden parachute’”);
Cross-McKinley v. F.D.I.C., No. CV 211-172, 2013 WL
870309, at *4 (S.D. Ga. Mar. 7, 2013) (same); Faigin v.
Signature Grp. Holdings, Inc., 150 Cal. Rptr. 3d 123, 139



Drilling Programs, Inc. v. United States, 146 F.3d 1358,
1362 (Fed. Cir. 1998).
22                                  PISZEL v. UNITED STATES




(Cal. Ct. App. 2012) (same); Hill v. Commerce Bancorp,
Inc., No. 09-3685 RBK/JS, 2012 WL 694639, at *7 (D.N.J.
Mar. 1, 2012) (same). Mr. Piszel offers no reason why the
courts could not have addressed his breach claim, had he
sought to prove it.
    Second, an impossibility defense is not available if the
breaching party could have secured permission to perform
under the agreement. Under the regulations, a regulated
entity may make a golden parachute payment if it re-
quests to do so and “demonstrate[s] that it does not pos-
sess and is not aware of any information . . . that would
indicate that there is a reasonable basis to believe” that
the party to whom the payment is made has committed
any wrongdoing that would be likely to have a “material
adverse effect” on the regulated entity, is “substantially
responsible for the . . . troubled condition of the regulated
entity,” “has materially violated any applicable Federal or
State law or regulation that has had or is likely to have a
material effect on the regulated entity,” or has violated
various sections of federal law relating to fraud and
corruption. 12 C.F.R. § 1231.3(b)(1)(iv); see also, e.g.,
WMI Liquidating Tr. v. F.D.I.C., 110 F. Supp. 3d 44, 54
(D.D.C. 2015) (reviewing and remanding a determination
by the Federal Deposit Insurance Corporation (“FDIC”) as
to a request to pay a golden parachute payment under
identical regulations).
    In his complaint, Mr. Piszel alleged that “no court,
regulator, or government agency has found that
Mr. Piszel committed any wrongdoing or violated any law
while at Freddie Mac, or that Mr. Piszel was otherwise
responsible for Freddie Mac’s financial condition or the
conservatorship.” J.A. 37. The complaint also notes that
“the FHFA publicly acknowledged that it investigated but
uncovered no evidence sufficient to demonstrate that any
of Freddie Mac’s current or former officers or directors
engaged in” wrongdoing. Id. 38 (internal quotation marks
PISZEL v. UNITED STATES                                 23




omitted). Thus, Mr. Piszel’s complaint itself suggests that
Freddie Mac could have received the required permission
to make the payments. The complaint, however, makes
no allegation that Freddie Mac sought, or that the FHFA
denied, permission to make the necessary payments.
    In Hill, under nearly identical FDIC regulations, the
district court denied a bank defendant summary judg-
ment based on an impossibility defense when a former
executive sued for breach of his employment contract
after his former employer failed to pay his severance. See
2012 WL 694639, at *10. The employer asserted an
impossibility defense based on an analogous FDIC prohi-
bition on golden-parachute payments. See id. However,
the district court held that the employee could pursue a
theory that the employer’s failure to request permission,
as allowed under the regulations, constituted a breach of
the agreement calling for severance payments. See id., at
*9 (“[T]he question of whether Defendants are able to
make the requisite certification for the [] exception is
central to the question of whether or not Defendants can
be said to have breached the Agreement by withholding
Mr. Hill’s severance payment.”). Thus, because “there
remain[ed] a genuine question of material fact as to
whether or not Defendants are able to make the . . .
certification[s] [necessary to apply for an exception],
Defendants cannot be afforded summary judgment on
their contractual impossibility defense.” Id. If the em-
ployer could but did not, it would be liable for breach
notwithstanding the regulations prohibiting golden para-
chutes. Here also there remained the possibility that
Freddie Mac could have secured permission to make the
payments. 7



   7    There is also the possibility that Mr. Piszel him-
self could have requested permission to receive the pay-
24                                  PISZEL v. UNITED STATES




    Third, it is not clear as to whether the impossibility
defense would apply at all even if the payments were
prohibited. An impossibility defense could be defeated by
showing that the contracting party assumed the risk of
government regulation. The Restatement (Second) of
Contracts § 264 states that “[i]f the performance of a duty
is made impracticable by having to comply with a domes-
tic or foreign governmental regulation or order, that
regulation or order is an event the non-occurrence of
which was a basic assumption on which the contract was
made.” Restatement (Second) of Contracts § 264. Howev-
er, the comments note that “[w]ith the trend toward
greater governmental regulation, however, parties are


ment. The FHFA notice proposing the golden parachute
regulations provided little explanation on this point. See
73 Fed. Reg. 53356-01 (Sept. 16, 2008); 12 C.F.R. § 1231.
However, notably, in a notice announcing nearly identical
regulations resulting from a nearly identical provision of
title 12 governing the FDIC’s regulation of financial
institutions, the FDIC stated that under the regulations
an “employee who feels that he/she is being unfairly
affected by the rule could apply for permission to receive a
payment” as well. Regulation of Golden Parachutes and
Other Benefits Which May Be Subject to Misuse, 60 Fed.
Reg. 16069-01, 16074 (Mar. 29, 1995) (codified at 12
C.F.R. § 359.4); see also Hill, 2012 WL 694639, at *7
(noting that both the bank and the affected party are
“equally eligible to apply for the exception to the golden
parachute restrictions”). There is no indication in the
complaint or the briefs that Mr. Piszel made a request to
the FHFA to allow Freddie Mac to pay for any or all of his
severance benefits. However, we need not decide this
issue, which has not been identified by either party,
because (as discussed), Mr. Piszel’s complaint fails for
other, independent reasons.
PISZEL v. UNITED STATES                                    25




increasingly aware of such risks, and a party may under-
take a duty that is not discharged by such supervening
governmental actions.” Id. cmt. a; see also United States
v. Winstar Corp., 518 U.S. 839, 868–69 (1996) (reading a
contract promise there “as the law of contracts has always
treated promises to provide something beyond the promi-
sor’s absolute control, that is, as a promise to insure the
promisee against loss arising from the promised condi-
tion’s non-occurrence. . . . Contracts like this are especial-
ly appropriate in the world of regulated industries, where
the risk that legal change will prevent the bargained-for
performance is always lurking in the shadows.”). Certain-
ly Freddie Mac operated in a regulated environment
where a court may have concluded that Freddie Mac
accepted the risk of regulatory action. In a breach action,
the courts might have concluded that Freddie Mac bore
the risk of regulatory intervention, thus depriving it of an
impossibility defense. 8
                              C
    Under the circumstances, Mr. Piszel has failed to al-
lege facts that would allow us to conclude that the gov-
ernment’s actions substantially affected his contractual
property right. He agrees that his breach claim survived.


    8   As noted, we asked the parties to address whether
recovery for a breach of contract claim would be limited by
the sovereign acts doctrine. Both Mr. Piszel and the
government take the position that the sovereign acts
doctrine would not limit recovery in this case. Gov’t Supp.
Br. at 6–7; Piszel Supp. Br. at 12 n.10. We agree. We
also agree with the parties that HERA’s limitations on
damages for breach of contract claims, 12 U.S.C.
§ 4617(d)(3)(A), would not affect Mr. Piszel’s recovery
in a breach of contract action against Freddie Mac. See
Gov’t Supp. Br. at 8–9; Piszel Supp. Br. at 12 n.10.
26                                  PISZEL v. UNITED STATES




In his complaint, Mr. Piszel does not allege that the
government action created an impossibility defense.
Indeed, to some extent his complaint alleges to the con-
trary, stating the FHFA’s instruction to Freddie Mac was
invalid because his payment was not a “golden parachute”
payment but rather deferred compensation exempt from
the golden parachute provision (removing an impossibility
defense), and that he did not engage in wrongdoing
(thereby permitting Freddie Mac to request permission to
make his severance payments). In other respects as well
it appears possible that the right to enforce the terms of
the contract may have been left substantially intact after
the government’s actions. 9 We affirm the Claims Court’s
dismissal of Mr. Piszel’s regulatory takings claim.
                            III
    We now address Mr. Piszel’s remaining claims, which
we conclude are without merit.
    Mr. Piszel alleges that the government’s actions
amount to a per se or a categorical taking. Supreme
Court precedent carves out two categories of regulatory
action that constitute “per se” takings under the Fifth
Amendment.      “First, where government requires an
owner to suffer a permanent physical invasion of her
property—however minor—it must provide just compen-
sation.” Lingle, 544 U.S. at 538 (citing Loretto v. Tele-
prompter Manhattan CATV Corp., 458 U.S. 419 (1982)



     9   We note that in A & D, the plaintiff had a theoret-
ical claim against the bankruptcy estate, but as the
government conceded, “there [was] no question that [the
plaintiffs] have alleged that their [franchises] have no
value” after the government action. A & D Auto Sales,
Inc. v. United States, Nos. 13-5019, 13-5020, Oral Argu-
ment at 3:50–4:00.
PISZEL v. UNITED STATES                                   27




(state law requiring landlords to permit cable companies
to install cable facilities in apartment buildings effected a
taking)). Here, none of Mr. Piszel’s property suffered
permanent physical invasion. “A second categorical rule
applies to regulations that completely deprive an owner of
‘all economically beneficial use’ of her property.” Id.
(quoting Lucas v. S.C. Coastal Council, 505 U.S. 1003,
1019 (1992)). Even if the Lucas line of cases applies to
intangible property like contract rights, 10 as we have
discussed above, the government’s actions did not amount
to a total taking of Mr. Piszel’s property because the
government’s actions left intact his potential breach of
contract claim against Freddie Mac.
     Mr. Piszel also alleges that the government’s actions
amounted to an illegal exaction. “[A]n illegal exaction
claim may be maintained when the plaintiff has paid
money over to the Government, directly or in effect, and
seeks return of all or part of that sum that was improper-
ly paid, exacted, or taken from [him] in contravention of
the Constitution, a statute, or a regulation.” Aerolineas
Argentinas v. United States, 77 F.3d 1564, 1572–73 (Fed.
Cir. 1996) (internal quotation marks and citations omit-
ted). Mr. Piszel does not allege that he paid any money to
the government. Rather, his theory is that because the
government (as conservator) caused Freddie Mac not to
pay him his severance payments, his not receiving sever-
ance was in essence a payment sufficient to amount to an
illegal exaction. 11 Even assuming that an illegal exaction



    10 As we noted in A & D, “[w]e have not had occasion
to address whether the categorical takings test applies to
takings of intangible property such as contract rights,”
748 F.3d at 1151–52, and we need not do so here.
    11 On appeal, Mr. Piszel also argues that HERA is
money mandating. Mr. Piszel failed to plead such a
28                                  PISZEL v. UNITED STATES




claim can involve payments to non-governmental entities,
there was no exaction here because there was no pay-
ment. See Westfed Holdings, Inc. v. United States, 52 Fed.
Cl. 135, 153 (2002) (no illegal exaction where money is
“prevented from coming into [a] plaintiff’s account”).
Illegal exaction concerns the “recovery of monies that the
government has required to be paid contrary to law.”
Aerolineas, 77 F.3d at 1572. No facts as alleged in the
complaint concern the payment of money by Mr. Piszel;
thus, Mr. Piszel’s illegal exaction claim must also fail.
     We affirm the dismissal of Mr. Piszel’s claims.
                        AFFIRMED
                           COSTS
     Costs to the government.




claim. See J.A. 38–40. In any case, there is no basis for
such an assertion.
