Mesaros v. United States (1988) – Comprehensive Study Notes

Case Overview

• Federal Circuit decision: Mesaros v. United States, 845\,F.2d\,1576\,(Fed.\ Cir.\ 1988)
• Appeal from U.S. District Court for the Southern District of Georgia (Judge B. Avant Edenfield) which granted summary judgment for the Government
• Plaintiffs: disappointed purchasers of Statue of Liberty–Ellis Island commemorative coins alleging breach of contract and seeking mandamus relief
• Defendants: United States, Department of Treasury, Bureau of the Mint, Secretary James Baker, Mint Director Donna Pope
• Outcome on appeal: AFFIRMED – no contract was formed; no statutory duty to sell on first-come, first-served basis

Parties Involved

• Mary Mesaros & Anthony C. Mesaros (husband and wife), representing themselves and a proposed class of similarly situated purchasers (33 named)
• United States of America & Treasury-Mint officials
• Counsel:
  • Plaintiffs – Elizabeth F. Bunce (Middleton & Anderson, Savannah, GA)
  • Government – Torrence R. Thomas, Jr. (DOJ) with Richard K. Willard, David M. Cohen, Robert A. Reutershan, and Treasury counsel Randy Sim
• Mellon Bank (Pittsburgh, PA) – outsourced credit-card processor for the Mint

Legislative Background

• Statue of Liberty–Ellis Island Commemorative Coin Act, Pub. L. 99\text{–}61 (July 9, 1985)
  • Goal: raise private funds for restoration, renovation & endowment of Statue of Liberty & Ellis Island
  • Authorized mintage caps: 25{,}000{,}000 half-dollar clad coins, 10{,}000{,}000 one-dollar silver coins, 500{,}000 five-dollar gold coins
  • §105(c): Secretary "shall accept prepaid orders" and give a "reasonable" pre-issue discount
  • §105(d): permits bulk sales at discount
  • §102(a)(1): caps five-dollar gold pieces at 500{,}000

Advertising & Order Process

• November–December 1985: Mint mailed promotional packets to prior customers & advertised in newspapers
  • Promised “Pre-Issue Discount” (up to 16\%) for orders received by 31\,Dec\,1985
  • Payment options: check, money order, credit card (Visa/MasterCard) – credit cards new to Mint
  • Order form text:
  ▪ “YES, Please accept my order … I understand that all sales are final … Verification of my order will be made by the Department of the Treasury, U.S. Mint.”
  • Reverse side disclaimers: Mint may limit quantities; may stop accepting orders if bullion prices rise; delivery 6–8 weeks after 1\,Jan\,1986; credit cards billed upon receipt

Chronology of Key Events

• 26 Nov 1985 – Mary Mesaros mails order using Anthony’s credit-card information (1{,}675)
• 30 Dec 1985 – Anthony sends nine checks for 18 additional gold coins for family members
• ~31 Dec 1985 to 6 Jan 1986 – Last gold-coin orders accepted; supply of 500{,}000 exhausted (record mentions single 640-coin order accepted 8\,Jan\,1986)
• 18 Feb 1986 – Mint’s form letter to Mesaroses: “tried but was unable” to process credit card; invites re-order (gold coins no longer available)
• 7 Apr 1986 – Columbus Bank & Trust confirms authorization had been given to Mellon Bank on 27\,Dec\,1985
• May 1986 – Plaintiffs receive 18 coins that were paid for by checks; credit-card order still rejected
• 23 May 1986 – Class-action complaint filed (breach & mandamus)
• 13 Apr 1987 – District court grants Government’s motion to dismiss/summary judgment; class-certification motion moot
• Appeal initially to 11th Cir.; transferred to Federal Circuit (No. 88-1012); decision May 6 1988

Numerical Snapshot & Logistics

• Total orders received by 30 May 1986: 756{,}000
  • Credit-card orders: 186{,}000
  • Rejected credit-card orders: \approx13{,}000 (many for illegibility, missing data, over credit limit, etc.)
• Gold-coin aftermarket price rose \approx200\% within first months of 1986, intensifying purchaser frustration

Issues Before the Court

1. Did Mint advertising constitute a binding offer such that plaintiffs’ mailed order formed a contract?
2. Did the Coin Act impose a statutory duty on the Secretary/Mint to accept orders on a first-come, first-served basis, justifying mandamus relief?

Legal Reasoning – Breach of Contract Claim

• Governing jurisdiction: Tucker Act, 28\,U.S.C.\,§1346(a)(2) (district-court jurisdiction for <10{,}000 claims)
• General contract principle: Advertisements are ordinarily invitations to submit offers, not offers themselves
  • Restatement (2d) Contracts §26; Williston §27; Corbin §88
  • Authorities cited: Foremost Pro Color v. Kodak (9th Cir 1983); Arnold Pontiac-GMC (3d Cir 1986); Chicago Joint Board v. Chicago Tribune (N.D. Ill 1969); others
• Objective-reasonableness test: Whether recipient would reasonably believe advertiser intended to be bound
• Factors defeating offer status:
  • Limited supply (statutory cap 500{,}000 gold coins) vs. unknown demand → risk of oversubscription
  • Form language “Please accept my order” signals customer as offeror
  • Reservation-of-rights clause allowing Mint to limit quantities or discontinue
• Distinction from Lefkowitz v. Great Minneapolis Surplus Store (Minn. 1957): that ad offered one specific item on first-come basis – unique facts not applicable here
• Conclusion: Plaintiffs’ mailed form was an offer; Mint never accepted (credit-card order not verified & returned); no contract, hence no breach

Legal Reasoning – Mandamus Claim

• Statutory predicate needed for 28\,U.S.C.\,§1361 jurisdiction: a clear, ministerial duty owed specifically to plaintiffs
• Plaintiffs’ theory: §105(c) created duty to accept prepaid orders chronologically
• Court’s analysis:
  • Statute silent on order-processing sequence; affords Secretary “great discretion” (citing Design Pak, Inc. v. Secretary of the Treasury, 1st Cir 1985)
  • Practical limits: All 500{,}000 gold coins already sold; ordering Mint to "mint more" contravenes Art. I, §8, cl. 5 (Congress alone may coin money) and explicit statutory cap
  • Absent duty, district court lacked mandamus jurisdiction; dismissal proper

Holdings

• Advertisements were solicitations, not offers; no contract arose; summary judgment for Government upheld
• Coin Act imposes no first-come, first-served duty; mandamus relief unavailable; dismissal of Count II affirmed

Key Precedents Cited

• Foremost Pro Color, Inc. v. Eastman Kodak Co., 703\,F.2d\,534 (9th Cir 1983)
• Arnold Pontiac-GMC, Inc. v. GM Corp., 786\,F.2d\,564 (3d Cir 1986)
• Lefkowitz v. Great Minneapolis Surplus Store, 86\,N.W.2d\,689 (Minn. 1957) – distinguished
• Design Pak, Inc. v. Secretary of the Treasury, 801\,F.2d\,525 (1st Cir 1985)
• Lyng v. Payne, 476\,U.S.\,926 (1986) – agency cannot exceed delegated authority

Practical / Real-World Implications

• Mailers, catalogs, online listings ordinarily are not offers; merchants retain control over acceptance – critical for inventory-limited goods
• Outsourcing payment processing (Mellon Bank) created bottlenecks; illustrates operational risk in large-scale sales campaigns
• Collectibles market volatility (e.g., 200\% price spike) magnifies litigation incentives when allocation systems fail
• Reinforces necessity for explicit disclaimers & reservation-of-rights language in marketing materials

Ethical / Policy Discussion

• Public perception vs. legal reality: lay buyers felt deceived despite statutory caps & disclaimers
• Equity concerns for small collectors vs. bulk buyers; but courts prioritize statutory compliance & contract doctrine over distributive fairness
• Government’s dilemma: fundraising for public monuments while avoiding liability

Numerical & Statutory References (LaTeX)

• Gold-coin mintage cap: 500{,}000
• Silver one-dollar cap: 10{,}000{,}000
• Half-dollar cap: 25{,}000{,}000
• Total orders: 756{,}000; credit-card orders: 186{,}000; rejected: 13{,}000
• Value increase: \approx200\%
• Tucker Act monetary ceiling for district courts: <!10{,}000\,USD

Connections to Broader Doctrine

• Offer vs. invitation to treat – foundational in contract formation
• Government-contract principles align with private-law rules unless statute dictates otherwise
• Mandamus extraordinary remedy; requires clear, nondiscretionary duty
• Separation of powers: courts cannot order executive agencies to exceed statutory mandates, especially where Congress sets quantitative limits

Takeaway Points for Exam Preparation

• Always analyze advertisement fact patterns for objective intent and language reserving acceptance rights
• Limited-quantity scenarios (tickets, collectibles, promotions) nearly always treated as solicitations absent unequivocal commitment
• Statutory language “shall accept” may be tempered by context, discretion clauses, and practical constraints
• Mandamus ≠ tool to force agency contract formation without explicit statutory duty
• Compare/contrast with Lefkowitz for situations where ad wording is precise, definite, first-come, first-served, and quantity fixed at one item
• Remember constitutional limitation: only Congress may authorize additional coinage or currency; courts cannot compel beyond statutory ceilings