New Valley Corp. v. United States

New Valley Corp. (plaintiff), formerly Western Union, contracted with NASA (defendant) to launch two communications satellites; NASA launched the first, but after the Challenger explosion suspended its satellite-launch program and later adopted policy restrictions preventing further commercial satellite launches, NASA informed New Valley it could not launch the second satellite within the contract term. Unable to find an alternative launcher and facing severe financial distress, New Valley sold off assets, including the unlaunched satellite, for a significant loss, and sued for breach of contract. Although an appellate court had already established NASA's liability for breach on remand, the parties' contract limited recovery to direct damages, and they disputed whether New Valley's loss on the satellite sale qualified as such, with NASA arguing New Valley's declining finances would have prevented performance regardless of the breach.