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Thanks for posting the Wash Post article.
Good thoughts. I read your posts with interest as well. I agree perspective is important and that the sheer size of the national debt is a real problem, and hard to even comprehend. There is relatedly a real problem in lobbying, donations, influence and governance.
Since you mentioned the Takings cases pending Writ of Cert to SCOTUS, I think if SCOTUS declines to hear the case, it will say something about liberty —particularly the broad deference due from courts to agencies under the Chevron doctrine.
Remarkably (and as Robert from Yahoo has mentioned,) Kavanaugh surprised many this year in finally chipping away at the Chevron doctrine in his opinion in West Virginia v EPA. Might this new exception to Chevron directly impact pending takings, removal power or separation of powers (appropriations) claims? I don’t know. But the Takings case arose in the Court of Appeals for the Federal Circuit, where Chief Justice Roberts is assigned. The chief would only need 3 other justices to rally to his flag.
“Treasury is not in the business of making huge profits…”
That was certainly true before the great financial crisis. But Treasury made a sea change in policy throughout the GFC, shifting away from break-even and toward profit-making. F/F were just the first of many.
Whether using the Emergency Economic Stabilization Act of 2008, or whether it was acting via one-off deal-making, Treasury made a ‘sea change’ by profit seeking. But U.S. courts and Congress supported Treasury and the Fed Reserve Bank of New York in their behavior.
Examples? Over 900 banks and nearly $100 Billion made outside of F/F.
https://projects.propublica.org/bailout
Regarding what the proper bailout behavior and control “should” be, I suggest professor Steven Davidoff.
https://minnesotalawreview.org/wp-content/uploads/2011/05/Davidoff_PDF.pdf
A leftist think tank praising a federal Agency? Please don’t spoil the ending. Hard pass.
Robert I do not think FHFA assessments are double-insulated.
FHFA collects assessments from the Enterprises and the FHLBs without a USG middleman (unlike the CFPB —which draws its budget funds from Treasury).
That said, FHFA is clearly ‘insulated’ —as noted. So is FHFA’s singular insulation still an aggravating factor in some greater, still to-be-determined multi-factor separation of powers calculus for independent agencies? IMO yes. But in which court and in what case will this be explained? Stay tuned.
Robert, yes, HERA did include language to that effect in its section 1106(f)(2) “Assessments,” which amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4516), section 1316.
‘‘(f) TREATMENT OF ASSESSMENTS.—
(…)
‘‘(2) NOT GOVERNMENT FUNDS.—The amounts received by the Director from any assessment under this section shall not be construed to be Government or public funds or appropriated money.”
Footnote 2 is painted with too broad of a brush.
I need to reread Collins to be sure, but yeah, judge Ellison is ‘reaching’ here.
SCOTUS in Collins did not review the NWS for all possible constitutional violations (was free speech also ruled out? ).
The Collins plaintiffs lost on remand (from SCOTUS) in their district court in Texas.
Search for the post yesterday by Imbellish to get the link to the 13-page decision by (liberal) judge Ellison.
Robert, I think Ellison is mistaken when he characterizes the intervening authority on the Appropriations claims (counts II & IV) as Collins v Yellen at SCOTUS. Rather, I the intervening authority was the recent CFPB case. So IMO, Ps can appeal that as an error.
Agree. There will be an appeal.
Collins’ odds on remand in Texas were slim to none; now I see Slim just left town.
Robert IMHO you are correct about the CFPB ruling. My first thoughts:
1) The CFPB case’s panel decision is binding on the Texas southern federal district court, and obviously the precedent is FHFA-plaintiff-friendly
2) Collins will need court permission to allow their pleading to be amended at the eleventh hour (to add this new claim after statute of limitations) under rules of civil procedure: but the judge IMO will do so (!)!while also granting a new continuance to allow the defendants more time so as not prejudice them.
3) Whether you agree or disagree with the prevailing Unitary Executive philosophy, having lost at a Fifth Circuit 3-0 panel decision, the CFPB and DOJ evidently see the elephant in the room, hence they are *skipping en banc review*, opting instead to request SCOTUS review. Fascinating.
For statuses, search for the 11/8/22 post here by familymang
(See litigation calendar on spreadsheet).
USA filed its brief 11/9. So at the absolute earliest I might expect a decision Fri 12/9.
https://www.supremecourt.gov/docket/docketfiles/html/public/22-100.html
?? Nice burn.
SCOTUS response time averages 4 weeks
https://www.scotusblog.com/election-law-explainers/the-certiorari-process-seeking-supreme-court-review/
Yes but Not by summons; by subpoena.
Or, this title for the saga Soap opera:
The Misguiding Light
Sadly the odds of that happening (IMO) are Slim to none. And Slim just left town.
Just saying a ‘thank u’ for the spreadsheet.
Um. Green Day? Im just gonna leave that.
Robert I respect your view as always. But IMO FFacts is stating the most likely remedy. So again all this is my opinion and I am not practicing law here or giving advice here. Just sharing ‘one mans couch view.’
“I have always thought of this as being related to the implicit fair dealing for the public securities markets but I dont think that was in the pleadings right?”
Correct. It was the DC Circuit appeal that instructed Lamberth on remand to rebrief the remaining claim as now styled.
“Sounds like Judge Lamberth will have to decide to impute Delaware law or not?”
He could decide that. But he also can first write to the VA state supreme court, and request that they weigh in.
“Will will probably know soon if summary judgement is granted?”
Honestly I don’t think anyone can accurately handicap that date.
“Do you think Judge Lamberth may just stay his case once the Cert petition is filed until SCOTUS decides to take up the appeal or not?”
Possibly. But property law and contract law are rarely 100% coterminous. So one does not necessarily control or inform the other.
I can think of three reasons. All which may be wrong. That said:
(1) the recap shortage favors Freddie: Freddie is a bit closer to its minimum recap target than Fannie is, according to Timothy J Howard (former FNMA CFO). I’m nowhere near a finance expert, so I defer to TH’s blog.
(2) the current contract claim litigation could cause a ‘fork in the road’, putting Freddie further ahead to stay. How?
The USG’s current brief in the DC Circuit argues that the state of Virginia (Freddie’s domicile) has never truly adopted the doctrine of breach of implied duty of good faith (in VA’s common law of contracts).
My Observations?
(a) I think this is the first time that this key issue has been formally raised. That might suggest it’s a hard row to hoe; but another thought is that for public policy reasons, the USG did not want to stick this likely recap-fork into the ground— until it was absolutely necessary.
(b) Delaware’s adoption of this doctrine—particularly as a stand-alone claim*— is not accepted by all states(!!!)
So, in this scenario, Freddie commons likely lose on summary judgment in the DC District (as a matter of law). Any appeal would be a waste of ink (such polar-opposites are a favorites of courts for efficiency reasons- and thus rarely misunderstood). Given more uncertainty toward the FNMA contract merits outcome, Freddie gains now an incremental legal lead, on top of its financial lead.
Hmmm.
“Best. Lawyer.” Yes, except he’s neither.
Robert I am working on a more fleshed out reply to this. Just wanted you to know. The Cedar Point case expands regulatory takings law, but like any case it has some degree of uncertainty to future application.
One reason for caution is it was arguably a rare ‘outlier’ in its facts: the CA code made a poor choice of words in allowing union reps onto private land (to inform migrant laborers about their rights), by mandating that the union “take access”. Rogers led his argument by a textual plain language approach noting the word “take” is what is. So in 20 years we may find Cedar Point seems a ‘sea change’ superficially but in reality it only captured a single, unlucky boat in its storm. ((Or … maybe Rogers built it as a bridge to the likely final phase of his career ….to elevate individual property rights?).
The case’s possible legal fit with tradition & application to F/F requires more thought. More to follow. GLTA. I feel for you guys.
So I did. Control is the principle. But Exclusion is the right. Good catch.
CAFC 2/22 rejected the Takings claims due to Property law. Per CAFC, Common law requires two ‘first-order elements’ for something to be recognized as property: control and alienability.
—Common Shares, Example—
I still hold an interest (in loose terms) because I can sell, transfer, leverage my F/F common shares (element of alienability).
But my right to judge management performance —my voting right—is now held 100% by the Conservator per HERA (element of control).
So I might hold a non-property interest. But My interest if any is contingent on not being affected, defeased, in part or whole, at any time now or under Conservatorship by another party over whom I have *no formal say*.
That is what the CAFC said 2/22, IMO.
Pay at the pump & dump
Sixth Circuit in Cincinnati is Eastern zone
Click on Familymang’s image—find his post for latest update on cases’ timelines
Collins v Yellen is now back in the Southern District of TX, following remand from the Fifth Circuit, which followed the SCOTUS opinion a year ago.
The down-stream stop-over for another oral in the Fifth Circuit (after SCOTUS) was a complete waste of time. This thing was always headed back to the supplementary pleading stage in the district court.
The judge with the mortgage fraud background is Amal Thapar. IMO for a judge, he certainly has above-average knowledge of the secondary market.
Aside: Curious intersection of my personal life here. FWIW I am not spilling tea here. All public and all verifiable.
One of my clients became indirectly involved with Amal when he was an Assistant US Atty in So Ohio. I once had the pleasure of talking to his boss, and the FBI agents who arrested the suspected mastermind in a Cincinnati area mortgage fraud scheme—Randy Davidson. I recall being told Davidson ‘went quietly’ but was not happy having to surrender his firearm and his passport. Ultimately he pled down to felony tax evasion, while always insisting (with a straight face) he committed no mortgage fraud. My sense of Amal— as I followed the case for years out of a general interest — was that you wouldn’t want to go up against him in court, golf or a card game. GLTA.
Under a HERA Conservatorship, Layton cannot restructure equity without FHFA approval. He should’ve taken the Director golfing and asked.
FHFA is waiting until after both the ECR and the Capital Planning Rules have the full force of law. That then gives FHFA the fullest possible administrative justification for whatever it chooses among the practical outcomes.
But all those new loan disclosure docs mandated by Dodd Frank via HMDA, RESPA and TIL will inform consumers so much *better* now. Right?
Sign & initial here. Pound of flesh there.
Anyone? Bueller?
Uh … no.
There is just the 1 complaint. And despite the court already calendarizing pre-trial matters, I want to again suggest ‘caution’, friends. The calendars are managed to local and federal rules & timelines, thus the court simply cannot wait until ruling on a MSJ before beginning the onerous and pre-trial calendar.
Bottom line: until Lamberth rules on the motions for summary judgment, a trial cannot occur And Ps could lose that ruling.
"But here the LP is a counter of obligation from F and F to Treasury as counted by Treasury".
I would have said it as: "And here the LP is ALSO a counter of obligation ...". Then I think you've got it 100%.
The LP's primary purpose was, and is, to set the UST's priority
The LP's secondary purpose was, and is, to count the total obligation.
The Court of Appeals for the Federal Circuit decision on 2/22 was a 3 judge merits panel. The CAFC rarely grants en banc rehearings:
“Because each merits panel may enter precedential opinions, a party seeking en banc consideration must typically show that either the merits panel has (1) failed to follow existing decisions of the U.S. Supreme Court or Federal Circuit precedent or (2) followed Federal Circuit precedent that the petitioning party now seeks to have overruled by the court en banc.”
https://cafc.uscourts.gov/home/case-information/case-filings/petitions-for-rehearing-rehearing-en-banc/
If either of the above criteria can be met by Ps then they could get a rehearing en banc (all judge-hands on deck). I just don’t see how.