Franconia Associates v. United States, 536 U.S. 129, 19 (2002)

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Cite as: 536 U. S. 129 (2002)

Opinion of the Court

Every borrower of FmHA loans, for example, would be forced to sue the Government within six years of ELIHPA's enactment in order to preserve a claim stemming from that Act. Faced with the prospect of forever forgoing such a claim, even a borrower that had not previously wished to prepay might well conclude that early exit from the FmHA program is the only safe course. The Government would thus find itself defending against highly speculative damages claims in a profusion of lawsuits, most of which would never have been brought under a less novel interpretation of 2501. See Tr. of Oral Arg. 33-34.10

The Government also seeks to avoid the repudiation doctrine by attacking as "futile" petitioners' "search for an exact parallel in contracts solely between private parties." Brief for United States 13. The law of repudiation does not govern here, the Government ultimately contends, because the "statement of intent not to perform" on which petitioners base their claim is an Act of Congress. Id., at 24. According to the Government, a congressional enactment like ELIHPA that precludes the Government from honoring a contractual obligation anticipating future performance always constitutes a present breach. This is so, the Government maintains, because "the promisor"—the agency or official responsible for administering the contract—does not

10 The Government's reliance on McMahon v. United States, 342 U. S. 25 (1951), is misplaced. Brief for United States 29-30. The Court there rejected an interpretation of the Suits in Admiralty Act that would have given tort plaintiffs "an option as to when they will choose to start the period of limitation of an action against the United States." 342 U. S., at 27. The reasoning in that case does not apply to petitioners' claims, which arise out of contracts in which the Government allegedly granted borrowers an option to demand performance, and thereby precipitate breach, at any time. See supra, at 141. And unlike the position rejected in McMahon, our ruling today ensures that suit must be brought within a fixed period after the date of injury—in this case, no later than six years after the Government's refusal to accept prepayment in accord with the terms of the promissory notes.


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