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"In this way, both the President and the
Senate are held accountable for those who wield
significant authority of the United States. United
States v. Arthrex, Inc., 141 S. Ct. 1970, 1979 (2021)."
"Yet the Senate must
confirm these officers, “serv[ing] both to curb
Executive abuses of the appointment power, and to
promote a judicious choice of persons for filling the
offices of the union.” Edmond, 520 U.S. at 659
(cleaned up). In this way, both the President and the
Senate are held accountable for those who wield
significant authority of the United States. United
States v. Arthrex, Inc., 141 S. Ct. 1970, 1979 (2021)."
"Yet in its decision, a divided panel of
the Sixth Circuit refused to recognize any temporal
limitations on “acting” officers. "
"As Judge
Thapar explained in dissent, this decision allows the
President and Congress to “scrap” the Appointments
Clause altogether. Pet. App. 32."
"The Sixth Circuit’s holding that there are
effectively no constitutional limits on the tenure of an
acting official is an outlier. In fact, it diverges from
courts that have considered this issue, including the
D.C., First, Fourth, and Federal Circuits. "
If a temporary appointment
were not really temporary, “the structural protections
of the Appointments Clause” would be “avoided based
on . . . trivial distinctions.” N.L.R.B. v. Sw. Gen., Inc.,
580 U.S. 288, 314 n.1 (2017) (Thomas, J., concurring).
Constitutional text, history, and precedent all indicate that, if an “acting” official exercises the duties
of a principal officer, that official may only serve
without Senate confirmation for up to six months or
at most two years. Pet. App. 40–44 (Thapar, J.,
concurring in part and dissenting in part). Thus, the
over four years that the “Acting” FHFA Director
wielded power far exceeds any constitutionally
permissible line or fair understanding of Eaton’s
“limited time” and “special or temporary conditions.”
And, at the time of the challenged actions in this case,
the “Acting” FHFA Director had been serving for over
three years, which certainly crosses that line as well.
Sw. Gen., Inc., 580 U.S. at 314 n.1 (Thomas, J.,
concurring) (explaining there is “nothing special or
temporary” about serving “more than three years in
an office limited by statute to a 4–year term, and . . .
exercis[ing] all of the statutory duties of that office”).
In fact, so far in this litigation, the Government has
failed to identify a single acting official during the
first two hundred years of the Constitution that
exercised the power of a principal officer without
Senate confirmation for as long as the “Acting” FHFA
Director did."
Now here comes the ROP Petition for a Writ of Certerrori filed the other day:
The question presented is whether the challenged
decisions of the “Acting” FHFA Director should be
vacated because the Constitution does not permit the
President to designate an “acting” official to exercise
the powers of a principal officer indefinitely without
the advice and consent of the Senate.
This is that MENTAL GIANT, EDWARD J. DEMARCO WHO GAVE AWAY ALL OF THE GSES PROFITS INTO PERPETUITY IN RETURN FOR NOTHING!
"He served for
over four years—longer than a Presidential term,
longer than the average tenure of a Cabinet secretary,
and longer than the service of exceptional ones, such
as Thomas Jefferson’s time as Secretary of State. He
was never nominated by the President. He was never
confirmed by the Senate. Yet the whole time this
“Acting” Director exercised significant authority of the
United States. The issue in this case is whether such
an end-run around the Appointments Clause is
constitutionally permissible. It is not.
The Sixth Circuit held that it is. In doing so, the
court determined that Congress could “authorize[]” an
acting official “to serve indefinitely via statute.” Pet.
App. 47 (Thapar, J., concurring in part and dissenting
in part). Such a holding renders the Appointments
Clause an empty formality, splits from other circuit
authority, disregards this Court’s precedents, and
establishes a dubious standard during an era when
the Executive’s reliance on “acting” officials has grown
precipitously.
"Finally, the principal practical effect of
Plaintiffs’ requested remedy would be to put Fannie and Freddie in a stronger
financial position, which if anything would expand the policy options of the current
Administration.
At the motion to dismiss stage, the district court was required to take
Plaintiffs’ plausible allegations as true. Instead, the district court disbelieved Plaintiffs’ plausible allegations, weighed the evidence in Defendants’ favor, and
chose to disbelieve a former President of the United States. The district court
ultimately discounted Plaintiffs’ factual allegations as “mere speculation.”
ROA.1521; see also ROA.1523 (“Plaintiffs’ Amended Complaint fails to plead that
any harm was more than speculative.”). But Plaintiffs have done precisely what the
Supreme Court called for. The Supreme Court instructed Plaintiffs, and in turn the
lower courts, to determine what would have happened absent the unconstitutional
removal restriction. That is—by definition—a counterfactual exercise. Plaintiffs’
duty under the Court’s framework was to allege facts to establish, by a
preponderance of evidence, what would have happened under different
circumstances. Plaintiffs did just that—and more. Indeed, President Trump’s letter
takes all speculation out of the matter. ROA.1225. In the end, the district court may
be entitled to disagree with the Supreme Court’s prescription of a counterfactual
inquiry. But it is not entitled to dismiss Plaintiffs’ plausible allegations on that basis."
"All the while, FHFA exercises sweeping powers
over the Companies and the American housing market. ROA.1177. This structure
renders FHFA “no longer dependent and, as a result, no longer accountable to
Congress and, ultimately, to the people.” CFSA, 51 F.4th at 639 (internal quotation
marks omitted).
As to remedy, “[s]o long as this constitutional infirmity in FHFA’s funding
structure persists, FHFA lacks constitutional authority to act.” ROA.1177. After all,
“[a]n executive agency that lacks constitutionally authorized funding to operate
lacks the authority necessary ‘to carry out the functions of the office.’” ROA.1213
(quoting Collins, 141 S. Ct. at 1788). “The FHFA adopted the Third Amendment at
a time when it lacked constitutionally authorized funding to operate,” ROA.1214,
and so “the Third Amendment must be vacated and set aside,” Id.; see also
ROA.1216–17 (Plaintiffs’ Appropriations Clause claims brought under the APA).
Because FHFA lacked constitutional authority to act due to the
Appropriations Clause violation, it follows that Section 4617(f) does not bar relief.
See Collins, 141 S. Ct. at 1776.
Plaintiffs have stated a claim that the FHFA’s self-funding structure violates the Appropriations Clause and that the appropriate remedy for this constitutional
violation is to vacate and set aside the Third Amendment. Here again, this
Court should Plaintiffs in the position they would have been in but for the violation
of the Constitution."
So lack of liquidity IS an issue for prospective Fulcrum Security buyers/sellers? Because they keep coming here and reminding us how superior their "Junior Preferred shareholder" status is amongst us common shareholders. HeeeeHeeee!
HeeeeHeeee! How's the White Surrender Flag going? !
Plenty of other reasons to sue Uncle Suggy against this coercive and abusive governmental overreach.
We'll NEVER KNOW if MC and SM could have completed the R,R, and R in 50 months (they could have started planning in November) versus 24 months.
And why? All because Senator Elizabeth Warren INSISTED on having an independent 4th Branch of Gubmint INSULATED FROM FROM THE POTUS AND THE US CONGRESS FOR APPROPRIATIONS!
Thanks Elizabeth for unleashing your little experiment on the American people! Did you see her give a standing ovation last night to JB when he said he was reigning in the 'evil credit card companies' from charging late fees?
Amerika, my kinda place !
If fnmas and fnmat are both $25 par why does one close today at almost $2.50 and the the other at closer to $2?
The S series sells at about a 20% price premium over the T series, has that always been the case?
The $100,000 par series sells at 6.25% of par and traded 200 shares today, and was up 11.1%. Fnmao traded 1600 shares today and was down 8.12%
That's the approximately 20% intraday price fluctuation I keep seeing whenever I check the JPS prices. I think the low trading share volume per series explains it, right?
So long as we remain on the pink sheets and the Nationalization continues, I think both common and jps will lack ready and willing institutional and retail buyers and sellers.
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1
Thanks Guido! I lost that link and appreciate you sharing the link.
Is the intraday price volatility between the dozen or so JPS issues still typically as much as 20%? Isn't that unusual given they all have somewhat similar characteristics?
Wouldn't it be fair to say that the yuge swings in daily price volatility between the JPS series is due to low volume, that on some days say fnmas will go up and fmcck will decrease?
Guido, do you still have that yahoo page comparing common and jps closing prices all on one page?
I suspect Lamberth sees the Gubmint shenanigans going on here and is okay with letting the Jurors decide this bizarre fact pattern.
The problem is this time there will likely be more than 8 needed to see the theft, plus it's a Gubmint town and everyone's on their payroll !
Great, thanks Navy! 07/24/23 @ 10am.
Timing issues aside, DJT was prohibited unconstitutionally by HERA's insulated FHFA Director provision that let MW not be fired on Day 1 and putting HIS plan in motion.
The delay lasted for over 1/2 his term and taking 2 bank like GSES whose capital had been depleted to close to ZERO to being adequately capitalized will take time.
MC and SM did finish the 4th Amendment which does increase capital retention at the GSES with a dollar for dollar increase in the LP.
MC, SM, and DJT may have been able to end the CONservatorships in his 1st term but never had the chance.
Developing this counterfactual world is what the USSCT mandated here to determine the shareholders remedy if any and you can see how confused the lower courts are about it.
You don't believe that we would be further along if not completed with the exit from the conservatorships because of the inability of DJT to replace MW on Day 1? DJT explained EXACTLY what he would have done BUT FOR the unconstitutional provision in HERA.
1. So ---- do you agree with the DJT WH that the EXECUTIVE - on its own - on such a major decision as the "status of FHFA and 5T" could act without legislation ? Seems the opposite of what you most often argue
HERA'S Exclusive mandate in acting as a conservator is to rehabilitate and release not to take actions that makes it impossible to release them, such as the NWS, which is statutorily permissible and legal under the Implied Powers of HERA but may have not passed Constitutional validity under the Seperation of Powers Doctrine.
2. Hell - I am glad the plaintiffs are arguing and arguing and hope they win - we win ---- but would like to see the actual information (I assume the at 1783 and 84 is such) that shows the Trump Administration sought to unwind these policies - during those two years of office - not before and for sure not after ..........
The 2019 Housing finance plan said that they would release the GSES from government control administratively if the US Congress fails to act and both MC and SM reiterated that view publicly on several occasions.
MC said he would do it administratively at his confirmation hearing but he would prefer Congress to decide the future of the GSES.
SLT (and MW) said that they were waiting for the Congress to do it.
Make sure you understand that an agency action may be statutorily legal BUT IF IT VIOLATES THE US CONSTITUTION IT CAN BE REVERSED.
Do you understand? That's why Collins is currently being litigated in the 5th federal circuit.
Do you see the Nondelegation Problem? The POTUS (the sole Executive Branch Head) is telling his Director of Education to find a way to deliver on my campaign promise to forgive student loans. It could be the previous POTUS telling DoD to find a way to deliver on my campaign promise to build a wall.
The power of the federal purse belongs to the US Congress NOT the POTUS.
Also, the US Congress is to decide National Economic and Political Questions not the federal agencies under control of the Executive Branch.
Here, FHFA Director DeMarco may have violated the Major Questions Doctrine by implementing the NWS and Nationalizing the 2 lynchpins of the US Secondary Mortgage Market and the NWS would then need to be invalidated as an Unconstitutional Agency Action.
Shifting the burden of proof to the federal government to show that the shareholders were not harmed by the Unconstitutionally insulated FHFA Director Mel Watt could be beneficial for shareholders.
Since the SCOTUS and the 5th Circuit Appealate Panel remanded to the trial court as to what damages if any are appropriate AND only the Defendants know the answer since they are sitting on the undiscoverable and protected information, it would follow that they have the burden of proving no harm.
If the courts or the federal government is concerned about Executive Privilege they could simply let the Judge view the evidence in camera only so it's not available for public consumption.
According to the federal district court Judge, he thinks that the POTUS was suppose to make a contemporaneous public statement that he thought he couldn't fire Mel Watt, but that's not what the SCOTUS said.
Whether or not the POTUS had internal discussions with his staff about that issue is only known by the federal government and they have consistently hid behind the Executive Privilege and National Security exemptions to Discovery during the years long litigation.
David Thompson is simply asking the court to get to the facts and they remain hidden and unattainable from our government.
The SCOTUS said that the shareholders may have compensable harm from the Unconstitutional Seperation of Powers Violation of the insulated FHFA Director Mel Watt.
Don't you think that the shareholders would be closer to R,R, and R BUT FOR the fact that Mel Watt UNCONSTITUTIONALLY lingered for over 1/2 of DJT's term?
"But the district court may not weigh evidence or
make credibility judgments on a motion to dismiss. The district court’s substantive
analysis of evidence has no place in the motion to dismiss stage and is alone
sufficient to justify reversal. Still, additional errors in the district court’s opinion
further require reversal."
"To the extent there may be reason to doubt the credibility of
President Trump’s letter, that credibility judgment cannot be made at the motion to dismiss stage. Ramirez v. Escajeda, 921 F.3d 497, 501 (5th Cir. 2019) (“Iqbal does
not allow us to question the credibility of the facts pleaded[.]” (quoting Iqbal, 556
U.S. at 679)).
Here,
President Trump is explaining what he would have done in a counterfactual situation
made relevant for the first time by a Supreme Court decision that issued after he left
office. Under the district court’s reasoning, a sitting President would have to make
a public, contemporaneous statement for every action he would like to take but
cannot take because of some limitation on his authority. And here, President Trump
would have had to do so with no prior notice of that requirement. This would be an
exercise in absurdity, not a basis for denying relief for constitutional harms.
"Second, the district court created and imposed on Plaintiffs new, heightened
evidentiary standards for stating a claim for a remedy under Collins."
"The Supreme Court—unlike the district
court—did not impose an additional, heightened requirement for a “concrete plan”
or “clear path” to execute the President’s intent. ROA.1518–19."
"Third, the district court improperly based its analysis on a policy judgment
that Plaintiffs’ relief would be too sweeping or invasive to the current
Administration. The district court held that Plaintiffs’ request for declaratory and
injunctive relief exceeded the scope of the court’s mandate because Plaintiffs’
request for injunctive and declaratory relief “would require the Court to exercise
sweeping administrative duties based on the unachieved policy preference of a prior
Administration, impeding the current Administration’s own ability to effectuate its
policy preferences through the appointment of a new FHFA director.” ROA.1521.
For one, this broad policy consideration is again wholly outside the bounds of the
district court’s limited inquiry at the motion to dismiss stage. For another, the district
court’s reasoning fails on its own terms. Separation of powers cases of course often
carry significant policy implications. And a presidential Administration may have to
take actions it might otherwise not take in order to remedy a constitutional violation
that occurred during a prior Administration. "
This is an interesting 2nd argument that could be decisive if the Appealate Court agrees:
"If the Court decides that former President Trump’s statement—the precise
hypothetical evidence Collins said would “clearly” show harm—is not dispositive,
the Court should hold that Defendants may avoid Plaintiffs’ requested remedy only
by making a clear showing that the removal restriction did not, in fact, harm
Plaintiffs. Several doctrines support this conclusion.
For one, “where the facts with regard to an issue lie peculiarly in the
knowledge of a party, that party has the burden of proving the issue.” 2 McCormick
on Evidence § 337 (8th ed. 2022);
Here, we already know what the former President thinks, and any non-public
facts relevant to this issue are in the exclusive possession of Defendants and their
other former officers and employees. Under these circumstances, Defendants should
bear the burden. Cf. Gomez v. Toledo, 446 U.S. 635, 641 (1980) (Defendant bears
burden of establishing entitlement to qualified immunity because it “depends on
facts peculiarly within the knowledge and control of the defendant” and “will
frequently turn on factors which a plaintiff cannot reasonably be expected to
know.”). Just as courts shift the burden of persuasion once a plaintiff makes a prima
facie case of employment discrimination, see McDonnell Douglas Corp. v. Green,
411 U.S. 792, 802 (1973), or a violation of the Equal Protection Clause, see
Alexander v. Louisiana, 405 U.S. 625 (1972), the Court should hold that Plaintiffs
have made (at the very least) a prima facie showing that the unconstitutional removal
restriction inflicted compensable harm. The burden should thus shift to Defendants
to disprove harm."
Only “clear evidence to the contrary” may overcome the presumption of
regularity and permit a court to reject the reasons given by a public official regarding
an official act. Chem. Found., 272 U.S. at 14–15; see also Nat’l Archives and
Records Admin v. Favish, 541 U.S. 157, 174 (2004) (“[W]here the presumption is
applicable, clear evidence is usually required to displace it.”). If the Court
determines the presidential statement is not dispositive, it should require Defendants
to come forward with—as the United States previously put it—“the clearest showing
to the contrary.” Br. for the United States, supra, at 78. Absent that showing, the
Court should not second-guess the statement of a former President of the United
States describing the President’s own thought process.
The only way for Defendants to prevail now is if this Court says the statement
from the former President of the United States—about the former President’s own
thinking—is false. But that ruling would call for judges to inquire into the supposed
“‘real’ reasons” the President did not attempt to terminate Director Watt. Reno v.
AAADC, 525 U.S. 471, 491 (1999). Even if Defendants conjured up some argument
about alleged “real” reasons, “a court would be ill equipped to determine their
authenticity and utterly unable to assess their adequacy.” Id.
Burden shifting also takes into account “substantive policy.” Mueller &
Kilpatrick, 1 Federal Evidence § 3.3 (4th ed. 2022); see Keyes v. Sch. Dist. No. 1,
413 U.S. 189, 209 (1973) (allocation of burden of proof is “a question of policy and
fairness based on experience”). The Constitution itself sets forth the policy interest
here—the separation of powers “protects individual liberty.” Bond v. United States,
564 U.S. 211, 223 (2011). To ensure that policy is not illusory, the Court should
place the burden on the government to show that an unconstitutional removal
restriction did not cause harm given the former President’s unequivocal statement.
For two years,
Democratic appointee Mel Watt stymied a Republican administration’s policy goals
in violation of the Constitution, harming Plaintiffs in the process. And now, a
Democratic administration is back in power and seeks to argue that Director Watt’s
tenure made no difference at all. In this way, holding the constitutional error
harmless would permit one political party to evade judicial review of its own
separation-of-powers violation that has injured Plaintiffs. The Court should reject
this all’s-fair-in-politics understanding of the separation of powers and require a
clear showing from Defendants before concluding that the removal restriction did
not harm Plaintiffs."
"In sum, although the Administration was
committed to selling Treasury’s stake in the Companies and ending the
conservatorships, Director Watt’s unconstitutionally protected tenure did nothing
but cost the Administration critical time—two full years—in pursuing those goals.”
"Taking these factual allegations together, Plaintiffs have clearly stated a claim
for relief. Plaintiffs plausibly allege—indeed, with ample support that goes beyond Plaintiffs’ burden at this motion to dismiss stage—that the Trump Administration:
(1) intended to take the Companies out of conservatorship and privatize the
Companies; (2) took several key steps to achieving those goals; and (3) was unable
to achieve those goals because of the two years lost to the unconstitutional removal
restriction."
"The Supreme Court instructed plaintiffs to present a counterfactual theory of what President Trump would have done absent the unconstitutional removal
restriction, particularly focusing on the former President’s intent. Plaintiffs have
presented direct, probative evidence about the former President’s intent from the
former President himself. That fact conclusively answers the question of what
President Trump would have done absent the unconstitutional removal restriction.
That fact alone precludes a motion to dismiss."
"Even putting aside Plaintiffs’ extraordinary direct facts proving President
Trump’s intent, plaintiffs also allege a body of probative circumstantial facts which
independently demonstrate that plaintiffs can make out their case for relief.
“Steven Mnuchin said in an interview shortly after President-elect Trump
nominated him to serve as Treasury Secretary that the new Administration
intended to get [Fannie and Freddie] out of government control.” ROA.1191
(internal quotation marks omitted); see also ROA.1192 (“In testimony before
the House Financial Services Committee in the summer of 2017, Secretary
Mnuchin stated that leaving [Fannie and Freddie] in conservatorship makes
no sense.” (internal quotation marks omitted)).
• “President Trump’s eventual pick for FHFA Director, Mark Calabria, then
serving as Vice President Pence’s chief economist, said that the Trump
Administration is committed to ending the conservatorship of Fannie Mae and
Freddie Mac.” ROA.1192 (internal quotation marks omitted); see also
ROA.1192–93 (“In a speech after becoming FHFA Director, Mr. Calabria
stated that the centerpiece of our strategy is to end the Fannie and Freddie
conservatorships.” (internal quotation marks omitted)).
• “In 2018, the Executive Office of the President issued a report outlining
numerous proposals to end the conservatorship of Fannie Mae and Freddie
Mac and transition[] Fannie Mae and Freddie Mac to fully private entities.”
ROA.1192 (internal quotation marks omitted).
• “In a March 2019 directive, President Trump instructed Treasury to consult with FHFA and develop proposals for [e]nding the conservatorships of Fannie
and Freddie.” ROA.1192 (internal quotation marks omitted).
• “During Director Calabria’s tenure, FHFA also sent an annual report to
Congress stating that FHFA’s end-state vision for the Enterprises is to return
[them] to operating as fully-private companies outside of conservatorship.”
ROA.1194 (internal quotation marks omitted).
• “In September 2019, Treasury issued a report in response to the President’s
March 2019 directive. On page one, the report stated that the Companies’
conservatorships should come to an end. The Treasury report also stated that
the Companies should be recapitalized and exit conservatorship as promptly
as practicable. On the same day, FHFA issued a press release praising the
Treasury report and saying that [a]fter nearly 11 years, ending the
conservatorships of Fannie Mae and Freddie Mac is now a top priority for this
Administration and the FHFA.” ROA.1193 (internal quotation marks and
citations omitted).
• “Mr. Mnuchin said the new Administration wanted to privatize the Companies
and that t makes no sense that these are owned by the government.”
ROA.1196 (internal quotation marks omitted).
• “Director Calabria said he expected that, as part of a public offering of new
shares of Fannie and Freddie stock, Treasury would sell off its shares to recoup the taxpayer investment.” ROA.1196–97 (internal quotation marks
omitted).
Plaintiffs further allege that, given the financial condition of the Companies when
President Trump took office, ROA.1194, the Trump Administration could not
immediately accomplish its stated goals of releasing the Companies from
conservatorship without certain preparatory steps,"
Maybe if DOJ reminded their federal agencies about how the US Constitution works, these federal agencies would stop being in violation so often and the DOJ wouldn't be so busy !
Meanwhile in the latest court filing in the 5th Circuit Appealate Court: "The Trump Administration sought to unwind these policies but was unable to
do so because of HERA’s removal restriction, later held unconstitutional by the
Supreme Court in this case. Collins, 141 S. Ct. at 1783–84."
"Second, and relatedly, Treasury’s
liquidation preference had to be eliminated. ROA.1196."
"But the Trump Administration was not able to achieve its goals of leading the
Companies out of conservatorship and into private ownership due to the removal
restriction. ROA.1199, 1212. The Trump Administration and Director Watt
disagreed on at least two critical issues. First, they disagreed about implementing the
Net Worth Sweep. ROA.1200–01. Second, they disagreed about whether the
executive branch could or should lead the Companies out of conservatorship without
congressional action. ROA.1199–1200. Director Watt thought that any effort to
release the Companies from conservatorship should occur by legislation, while the
Trump Administration thought it both lawful and desirable for the executive branch
to act without further legislation. ROA.1201–02. This standoff continued until
Director Watt’s term ended two years into the Trump presidency. Id."
"In fact, plaintiffs have provided more than just counterfactual allegations.
Although it is not Plaintiffs’ burden to present evidence at the motion to dismiss
stage, Plaintiffs have nonetheless presented direct evidence of President Trump’s
intent to have managed the FHFA absent the removal restriction and specifically to
have fired Director Watt—straight from President Trump himself. Plaintiffs attached
to their First Amended Complaint a letter from President Trump to Senator Rand
Paul explaining the actions he would have taken in the first two years of his
Administration had the unconstitutional removal restriction not been in place.
ROA.1225. In the letter, President Trump focuses on “the need to privatize Fannie
Mae and Freddie Mac,” Id., and “what [he] would have been able to accomplish if
[he] had been able to fire the incompetent Mel Watt from day one of [his] Administration,” Id. President Trump acknowledges the Supreme Court’s decision
in this case and recognizes that “[t]he Supreme Court’s decision asks what I would
have done had I controlled FHFA from the beginning of my Administration, as the
Constitution required.” Id. President Trump leaves no doubt as to the answer to that
question. He explains in no uncertain terms:
From the start, I would have fired former Democrat Congressman and
political hack Mel Watt from his position as Director and would have
ordered FHFA to release these companies from conservatorship. My
Administration would have also sold the government’s common stock
in these companies at a huge profit and fully privatized the companies.
The idea that the government can steal money from its citizens is
socialism and is a travesty brought to you by the Obama/Biden
administration. My Administration was denied the time it needed to fix
this problem because of the unconstitutional restriction on firing Mel
Watt.
Id.
That should be the end of any dispute over whether Plaintiffs are entitled to a
retrospective remedy based upon their presidential removal claim. Collins states that
“a public statement” by the President “expressing displeasure with actions taken by
a Director” and “assert[ing] that he would remove the Director if the statute did not
stand in the way” would “clearly” show that the removal restriction harmed
shareholders. 141 S. Ct. at 1789. In other words, that public statement would be
dispositive. Here, the former President has provided just such a statement in direct
response to the Supreme Court’s decision."
Do you think when Congress passed HERA, they delegated to the FHFA the authority to decide major questions of Economic and Political Importance, like nationalizing 2 private corporations that are the lynchpins of the Secondary Mortgage Market?
Do you think the SCOTUS blessed the NWS as a CONSTITUTIONALLY VALID AGENCY ACTION? Because they DID NOT.
Here's David Thompson in a court filing from a couple of days ago: "(“An internal
Treasury document dated August 16, 2012, expressed the same sentiment: ‘By
taking all of their profits going forward, we are making clear that the [Companies]
will not ever be allowed to return to profitable entities.’”)."
More from the 128 House members Amicus Brief on the inherent problems with federal agency overreach and the Nondelegation Doctrine as well as the violation of the MAJOR QUESTIONS DOCTRINE (same applies to FHFA's NWS overreach as well!):
"If such a tangential connection to a long-
distant emergency could justify forgiving a trillion
dollars in debt, it is difficult to see what true limits
would exist on the Secretary’s power. See A.L.A.
Schechter Poultry Corp. v. United States, 295 U.S.
495, 537–38 (1935) (Congress cannot give the
executive branch “unfettered discretion” to act as
“needed or advisable for the rehabilitation and
expansion of trade or industry”)."
The Debt Forgiveness undoubtedly has “vast
‘economic and political significance,’” Utility Air
Regul. Grp. v. EPA, 573 U.S. 302, 324 (2014), and thus
triggers the major questions doctrine,"
Think about how sweet the perpetual conservatorships are for the FHFA and the UST. So long as the courts keep giving their thumbs up to the theft why would they possibly act to end their sweet nirvana status quo?
Did I mention, the shareholders are the only ones complaining about it? With the perpetual CONservatorships we get the privilege of actually paying the FHFA's defense attorneys bills too!
Maybe Sandra will go Jacuzzi shopping at lunch for her soon to be remodeled Executive Suite, WHO IS GOING TO STOP HER?
Don't you think that a federal agency run by DeMarco (btw, an Unelected and unaccountable to anyone in the government or the shareholders) should not be to decide (and he did it with zero input from his senior staff) to Nationalize 2 of the lynchpins of the US Secondary Mortgage Market?
Just seems like A LOT OF POWER TO GIVE ONE MAN.
Doesn't bother you?
It seems clear by now that the status quo is favored by 2 large stakeholders, the MBA (who loves the elevated gfees and profits handsomely at the expense of hard working low and moderate income American Families) and the NAR (which knows it can keep asking SLT for more subsidized low income housing funds while the GSES are suspended in never ending conservatorships).
I just don't see anyone in this administration really focusing on exiting the CONservatorships, with the occasional quips from SLT, "We're preparing for the exit from conservatorship".
Do the annual Scorecards even mention exiting the CONservatorships?
Amici on the importance of NOT delegating the power of the purse to a 4th Branch of Gubmint (applies to the FHFA as well):
"The power
of the purse is one of Congress’s most potent checks
against the executive branch, ..."
George Mason (drafter of the Bill of Rights, in a little paper doc called the CONSTITUTION):
"“[t]he purse & the sword ought
never to get into the same hands”
“The legislature not only commands the purse but
prescribes the rules by which the duties and rights of
every citizen are to be regulated.” THE FEDERALIST
NO. 78 (A. Hamilton); see also King v. Burwell, 576
U.S. 473, 517 (2015)"
"This
“power over the purse may, in fact, be regarded as the
most complete and effectual weapon with which any
constitution can arm the immediate representatives
of the people.” THE FEDERALIST NO. 58 (J. Madison);
see also 1 THE RECORDS OF THE FEDERAL CONVENTION
OF 1787, at 139–40 (M. Farrand ed. 1937) "
"The Constitution accordingly imposed strict
requirements to ensure that Congress retained
accountability and control over actions that would
affect the federal fisc. See, e.g., U.S. Const. art. I, § 7,
cl. 1 (Origination Clause); id. § 8, cl. 1 (Taxing and
Spending Clauses); id. § 8, cl. 2 (Borrowing Clause);
id. § 8, cl. 5 (Coinage Clause); id. § 9, cl. 4 (Direct
Taxation Clause); id. § 9, cl. 7 (Appropriations and
Statement-and-Account Clause). These limitations
“assure that public funds will be spent according to the letter of the difficult judgments reached by
Congress as to the common good and not according to
the individual favor of Government agents.” OPM v.
Richmond, 496 U.S. 414, 428 (1990).
"That view makes significant
national financial decisions dependent on “the
individual favor of Government agents”....which would risk a serious
executive encroachment on Congress’s Article I power
of the purse. OPM, 496 U.S. at 428.
You don't think we'd be OUT OF THE CONSERVATORSHIPS HAD DJT BEEN ABLE TO FIRE MEL WATT ON DAY 1?
MC seemed like a man on a mission to get'er her done, UNTIL HE MAXED OUT THE ERCF in the 2d 1/2 of the previous administration.
Had the previous administration been able to fire MW on Day 1, they could have started planning before he took office.
The JB administration may have thrown the beleaguered Nationalized Shareholders a bone. By thrusting the Constitutionality of federal agency overreach into the National Spotlight and Debate with the $400B Student loan forgiveness, the JB administration is trying to do what he couldn't get passed through the US Congress done via federal agency overreach.
Just like the Obama administration Nationalized the GSES with the NWS via the FHFA and UST, something that would never have made it through the US Congress.
Here's 128 House of Representatives Amicus Brief filed with the SCOTUS today:
TABLE OF CONTENTS
TABLE OF AUTHORITIES ....................................... ii
INTEREST OF THE AMICI CURIAE ...................... 1
SUMMARY OF THE ARGUMENT ........................... 5
ARGUMENT .............................................................. 7
I. The Debt Forgiveness Implicates
Constitutional Separation of Powers .................. 7
II. The Court’s Precedents Call for Requiring
Clear Statutory Authority for the Debt
Forgiveness .......................................................... 9
III. The HEROES Act Does Not Clearly
Authorize the Debt Forgiveness ....................... 13
A. There Is No Clear Authority for
Forgiveness ................................................... 13
B. At the Very Least, There Is No Clear
Authority for Blanket Forgiveness .............. 17
IV. The Executive Branch Has Effectively
Abandoned the Proffered Basis for the Debt
Forgiveness ........................................................ 20
CONCLUSION ......................................................... 22
https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=408812
Chairwoman Foxx said:
"Moreover, this administration is bypassing Congress, which is elected by the American people to protect their interests. Congress is the only body with the authority to enact sweeping and fundamental changes of this nature, and it is ludicrous for President Biden to assume he can simply bypass the will of the American people.”
Representative Duncan said: “The Biden Administration does not have the authority to unilaterally ‘forgive’ student loan debt across the board, and attempting to do so is nothing more than a political maneuver. This exploits the original intention of the HEROES Act of 2003, oversteps the authority of Congress, undermines the will of the American people, and would send the country further into a debt spiral. The Court should invalidate the Secretary of Education’s sweeping student loan forgiveness program since it trespasses on Congressional authority and violates the separation of powers.”
Jennifer Mascott, Assistant Professor and Co-Executive Director of The C. Boyden Gray Center for the Study of the Administrative State at the Antonin Scalia Law School said: "The Gray Center's Separation of Powers Clinic was pleased with the opportunity for Scalia Law School students and Clinic Director Trent McCotter to represent Members of Congress in this case addressing core questions of statutory interpretation and the exercise of governmental power."
The Biden administration is exploiting language in the 2003 HEROES Act to waive the student loans of millions of Americans who do not qualify.
Why the lower court Judge's opinion was misplaced:
"To get to that result, the district court had to discount plaintiffs’ plausible
factual allegations, improperly weigh evidence, impose novel legal doctrines, and
make credibility determinations that have no place on a motion to dismiss.
Under the proper motion to dismiss standards, Plaintiffs have met their
burden. Indeed, Plaintiffs have exceeded that burden not only by making plausible
allegations but also by providing extensive concrete support for those allegations.
Plaintiffs have followed the Supreme Court’s instruction to explain what would have
happened in a world without the unconstitutional removal restriction. To the extent
the district court found that exercise too speculative, that is a quarrel with the
Supreme Court’s holding in Collins, not with the sufficiency of plaintiffs’
allegations.
The only remaining question, according to the Supreme Court, is whether the removal restriction harmed the Companies’ shareholders by impeding the
President’s ability to pursue policies that would have benefited them. Specifically,
the Court said that a public statement from the President explaining that he
disapproved of the actions of FHFA’s director and that he would have removed him
from office would “clearly” show that the removal restriction harmed the
shareholders.
Former President Trump has said precisely that. In direct response to the
Supreme Court’s decision, the former President has unequivocally stated that, if he
had “controlled FHFA from the beginning of [his] Administration, as the
Constitution required,” he would have removed the FHFA director from office,
“ordered FHFA to release these companies from conservatorship,” “fully privatized
the companies,” and ensured that the companies’ common stock increased in value.
But “because of the unconstitutional restriction,” he continued, his “Administration
was denied the time it needed to fix this problem.” ROA.1225. And the actions taken
by the Trump Administration after it finally took control of FHFA are consistent
with the former President’s statement. Thus, there is nothing left for this Court to do
other than to apply the Supreme Court’s decision and order the district court to enter
an injunction placing Plaintiffs in the position they would be in absent the
unconstitutional removal restriction—or, at a minimum, to permit this case to move
forward to summary judgment.
Independently, Plaintiffs have plausibly alleged that FHFA’s self-funding
structure—which grants the Director full control over FHFA’s funding with no
oversight from Congress—violates the Appropriations Clause. The district court
invoked the discretionary “mandate rule” to dismiss Plaintiffs’ Appropriations
Clause claims on procedural grounds. But Plaintiffs’ claims fall within the court’s
mandate. In any case, an exception to the discretionary mandate rule for intervening
changes in law applies here.
The district court’s dismissal should be reversed.
Thanks, I love the intellectual stimulation of this investment! All my other ones are super boring and predictable.
Plus I worked my arse off at Fannie Mae for 5 years and would hate to see all that work result in the companies turning into HUD 2, it would be a tremendous disservice to the hard working American Families reaching for the American Dream.
I think that's why when the JPS were issued in 2006 or 2007, they were considered CET1 capital, but in response to the 2008 great financial crisis, FASB or whomever decides said no more non maturity JPS count as CET1.
It'd be interesting if someone knew whether or not DTA'S were considered CET1 capital pre crash 2008.
There was a possibility that the Collins victory resulted in a non phyrric remedy and gave us a remedy in line with what 3 of the Judges in the EnBanc Panel ruling recommended (i.e., elimination of the NWS).
That's the thing about litigation you just can't predict the eventual ruling and the Defendants probably offered shareholders their 1st and least best offer to settle anyway if anything at all.
The SOP (insulated FHFA Director) Victory in Collins 1 may be influential in Collins 2 SOP (insulated from Congressional Appropriations) if it has legs, which in the 5th Circuit it could.
Thanks! It all started with your post and dare I say, Glen Bradfords Fannie gate page and his and his helpers posting the latest federal circuit court filings (I just don't feel like renewing my PACER password --- YET !)
David Thompson and his legal team as well!
Keep fighting the good fight Guido, WE HAVE THE TRUTH ON OUR SIDE!
Think about, the FHFA was set up by HERA to MAKE THE AGENCY INDEPENDENT AND IMMUNE FROM CONTROL BY OUR ELECTED POTUS AS WELL AS OUR ELECTED REPS IN CONGRESS BY BYPASSING THE CONGRESSIONAL APPROPRIATIONS POWER.
Here, David Thompson talks about the ELECTED head of the Executive Branch being powerless to control the FHFA.
"More significantly, the constitutional problem is that the
President of the United States wanted to return the Companies to private control in
a particular way that required FHFA’s cooperation and would have benefited
Plaintiffs. Under our constitutional structure, the President was entitled to pursue
that policy rather than being put to the choice of either sitting idly by until Director
Watt’s term ended or attempting to address the situation through whatever second-
best alternatives he could carry out through Treasury acting alone.
The President had a policy he intended to implement; but as the President
himself has made clear, the removal restriction prevented him from implementing
that policy during his administration. The restriction thus violated the Constitution
and harmed Plaintiffs. Even under Justice Kagan’s opinion, that entitles Plaintiffs to
a remedy, for Justice Kagan “agree[d] that plaintiffs alleging a removal violation are
entitled to injunctive relief . . . when the President’s inability to fire an agency head
affected the complained-of decision.” Id. at 1801.
"For one, this broad policy consideration is again wholly outside the bounds of the
district court’s limited inquiry at the motion to dismiss stage. For another, the district
court’s reasoning fails on its own terms. Separation of powers cases of course often
carry significant policy implications. And a presidential Administration may have to
take actions it might otherwise not take in order to remedy a constitutional violation
that occurred during a prior Administration. Cf. Regents, 140 S. Ct. at 1901
(requiring the Trump Administration to adhere to the Obama Administration’s
DACA program). Cf. Milliken v. Bradley, 433 U.S. 267, 281 (1977) (“The scope of
a district court’s equitable powers to remedy past wrongs is broad, for breadth and flexibility are inherent in equitable remedies.”). That inherent fact of remedies in the
separation of powers context provides no basis for dismissing Plaintiffs’ claims out
of hand.
And Plaintiffs’ proposed remedy is retrospective in nature, as the Supreme
Court recognized. See ROA.1177 (“Plaintiffs are therefore entitled to retrospective
relief to put them in the position they would have been in were it not for the
unconstitutional removal restriction.”); see also ROA.1221 (requesting “an
injunction that restores Plaintiffs to the position they would have been in were it not
for the unconstitutional removal restriction”); see also Rop v. FHFA, 50 F.4th 562,
576 (6th Cir. 2022) (“But, on appeal, like in Collins, shareholders ask only for relief
effecting a zeroing out of Treasury’s liquidation preference or converting of
Treasury’s senior preferred stock to common stock. The Court identified this as
retrospective relief, Collins, 141 S. Ct. at 1787 & n.22, and this request for
retrospective relief is tethered to shareholders’ argument that the Recovery Act’s
removal restriction is unconstitutional.”). Finally, the principal practical effect of
Plaintiffs’ requested remedy would be to put Fannie and Freddie in a stronger
financial position, which if anything would expand the policy options of the current
Administration."
At the motion to dismiss stage, the district court was required to take
Plaintiffs’ plausible allegations as true. Instead, the district court disbelieved Plaintiffs’ plausible allegations, weighed the evidence in Defendants’ favor, and
chose to disbelieve a former President of the United States. The district court
ultimately discounted Plaintiffs’ factual allegations as “mere speculation.”
ROA.1521; see also ROA.1523 (“Plaintiffs’ Amended Complaint fails to plead that
any harm was more than speculative.”). But Plaintiffs have done precisely what the
Supreme Court called for. The Supreme Court instructed Plaintiffs, and in turn the
lower courts, to determine what would have happened absent the unconstitutional
removal restriction. That is—by definition—a counterfactual exercise. Plaintiffs’
duty under the Court’s framework was to allege facts to establish, by a
preponderance of evidence, what would have happened under different
circumstances. Plaintiffs did just that—and more. Indeed, President Trump’s letter
takes all speculation out of the matter. ROA.1225. In the end, the district court may
be entitled to disagree with the Supreme Court’s prescription of a counterfactual
inquiry. But it is not entitled to dismiss Plaintiffs’ plausible allegations on that basis."
"The Supreme Court
applied § 4617(f) to bar Plaintiffs’ statutory claim yet made no mention of the
provision with respect to Plaintiffs’ constitutional claim despite extensive analysis
of that claim"
"§ 4617(f) has no bearing here."