Yes it’s helpful that the requests for review are from both red and blue states. I don’t think there is much doubt SCOTUS must hear CFPB v CFSA.

If SCOTUS declines, then IMHO:

(1) CFPB could still ask for a Fifth Circuit all-hands appeal ( ‘en banc’). But that will be a losing effort and CFPB obviously knows it: I see only 7 of 19 CFPB-friendly judges (probably the main reason for the unusual leap from ‘panel’ straight to a USSC Writ of Cert).

(2) Every CFPB action in TX, Mississippi and Louisiana becomes subject to individual case challenges with merit. Death by a thousand cuts would commence, so CFPB instead might need to consider at least “staying” all its actions for an indeterminate time in those 3 states. And good riddance to bad rubbish.

I don’t think Seila or Collins had enough tools to deploy a bulldozer, per se. But the looming issue of FHFA self-funding outside of Appropriations will likely merit further and closer appellate review if the Court agrees to hear CFPB v CFSA (which I think is about 80% likely).

That said, *a better scalpel* in Collins could have (and should have) been wielded by SCOTUS. IMO, Gorsuch still has the best idea for Removal remedy because it uses the same rule as in Appointments cases. I don’t see a meaningful reason to differentiate the two types of cases. Alito’s rule, albeit novel, is a wrong turn onto Subjective Street.

“Combined with the Court’s holding that every FHFA director had full authority to carry out the functions of his office, it is hard to imagine how the removal restriction that never had legal effect could have caused any legally cognizable harm, as any harm would have been due to the President’s own mistake of
law and not to any unlawful action by a director.2"

A lot to unpack here. Bear with me. TIA.

First, Schlitz’s conclusion is applied to Seila Law v CFPB, it contradicts the remedy adopted by Chief Roberts’ (supported by a 7-2 count!). Instead, Schlitz would propose that the for-cause CFPB Director (who was not fired) should not have had his demand-for-documents nullified.

This is flat WRONG. The Seila court order enforcing the CFPB demand-for-documents *was rejected* by the Chief. Why else on remand was the lower court ordered to see if a later Director cured the CFPB doc demand (by ratifying it)? Schlitz ignores this rather obvious jurisprudential problem.

Second, in Bhatti v FHFA (which is obliged to follow Collins v Mnuchin) Schlitz now says POTUS is necessarily a victim of his “own mistake”. What mistake? In what sense? Schlitz never really says. And why is this the superseding kill-switch (sufficient)? Schlitz spends only a broadly worded, single sentence saying why. That’s not an explanation.

Finally, if we accept that harm can only occur if POTUS acts against a statute, then POTUS will be forced into more litigation. This high-minded framework is simply doomed to fail on more realistic levels:

(1) Congress will be motivated to create more and more statutory ambiguity to put POTUS in a permanent state of hunched shoulders; forced to act, POTUS will **over-act** on these ever increasing power issues, causing needless litigation and costing Treasury and tax payers, while enriching only the usual law firms (who can now go on the offensive).

(2) Most importantly, this proposed gloss on remedy opens one more stall door into the herd mentality of courts being required to defer to Agencies (Chevron deference). This ultimately thus cedes even more power to Agencies and Congress from POTUS, who is the only branch leader singly accountable directly to citizen voters.

So instead of offering a better balance mechanism, this fiasco just quietly presses the same old thumbs on the same old scale.

“4617(a)(7)…”

The Anti-Injunction clause (“AIC”) does not bar constitutionally-based claims.
No case has held that it does so.

The AIC does bar non-constitutional claims, as long as the Agency exercises (rather than exceeds) its statutory power.

If you are asking why Congress can limit courts in the latter situation, the answer I can best give is that history and precedent support it, particularly since the Chevron case in 1984. But it is not without criticism.

It’s a situational power-chisel. Most of all it illuminates just how deeply embedded judicial deference to Agencies has become in different ways, affecting everyday life. And…It gets worse. POTUS has tested the limits of this thru Executive Orders. In the end, SCOTUS reveals its jurisprudential tendency (of the day) by deciding to *not hear* certain challenges or to relegate them to the shadow docket. It’s a fairly-hot hot-mess.

“Congress wrote the funding method for both the consumer B and FHFA
why can a court (question)?”

First, our Constitution itself sets up a a hierarchy of laws. If any lesser law conflicts with the Constitution, then the Constitution automatically trumps the lesser law.

Second, per Marbury v Madison, the power to say what a law ultimately means — especially its constitutional dimensions — belongs emphatically and finally in the Supreme Court.

“So FHFA will become constitutional?”

No. Based on Senator Toomey’s remarks, he introduced Senate Bill 5280 on 12/15 for only the CFPB. The bill is not yet available for reading, so if you want you can track its status here:

https://www.congress.gov/bill/117th-congress/senate-bill/5280

IMO SCOTUS will hear this case.

The result in Seila has basically taken the CFPB out of the separation of powers (for-cause single Director) frying pan, and INTO the Non-Delegation Fire.

Here is my thought process in Seila Law and Dodd-Frank. Having the president direct up to 12 percent of Federal Reserve funds, as Title X of Dodd-Frank now does, causes the same kind of constitutional harm as a limit of 50% or 100%. By passing a law leaving it up to federal agencies how much money to spend, Congress unlawfully divests its core legislative appropriations power. After Seila, POTUS could also unilaterally instead spend $1.00
and use the broad delegation of power to defund CFPB. So after Seila, Dodd-Frank delegates to POTUS all the power of the purse. That cannot be correct.

Robert,

Numbers are not my strong suit. That said, per FHFA website, the US Treasury’s commitment to each enterprise was last tweaked in the 2nd Amendment to the SPSPAs way back in 2009 (see link below for Fannie’s).

The doc says Treasury max commitment is the *greater of* $200 Billion, OR, that amount plus any deficiencies (and minus any surpluses) from 2010-2012.

So IMO the UST commitment to each enterprise is a known, hard-and-fast figure (certainly NOT unlimited) no less than $200B.


https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-Second-Amend-to-the-Amended-and-Restated-SPSPA_12-24-2009.pdf

Thanks for posting the Wash Post article.

Yes

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.

Agree

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