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"Do you know for sure whether or not punitive damages are off the table in federal court on temporary or permanent unconstitutional taking cases were the federal government acts with malice?"
Robert, I do not know to a certainty. IMO such punitive damages are *theoretically* STILL available. But it would be a rare bird, a true case of first impression for each court to consider, and such a rare award IMO would very likely go up on Writ of Cert to SCOTUS who would then reverse it, for any number of reasons, none I necessarily think are entirely persuasive, but that's that. Better off taking just compensation as the gift horse in a settlement, rather than pushing to trial, let alone all the way to the horse-trading of SCOTUS & federal friends. Just keeping it real.
He was better than predecessors.
One public comment that speaks volumes was his request that Congress revise HERA to grant the Director power to grant federal charters for new competing guarantors. He was looking at today & far forward. We never know if he was speaking from theory, practicality, frustration, and/or just having his strings pulled. It was a Long shot seeing as how Corker-Warner and other bills with similar ideology never made it very far. (No way that happens under Biden. Zero chance.)
"I'm pretty sure that Cedar Point Nursery, decided last term would apply as the SCOTUS ruled that California needed to compensate the aggreived Plaintiffs for the temporary 5th Amendment rights violations."
Agree. Also, a surprise in Cedar Point was Chief Rogers at long last moving 'just compensation' back where it belongs: into a post-opinion damages discussion, rather than as a necessary element to a Taking holding in the first place ( #sea-change !!! )
But as you say, IMO absolutely, the time between the NWS and Jan 21 letter is a logical way to define a damages period for the Taking that will (hopefully) be found.
I agree. My Venezuelan friend summarizes it like this:
“Americans love to put up those orange road-work signs, except when they pave a short bridge with 3 miles of bad road.”
LOL. Wasnt that also an episode of White Collar? ;)
I think generally, most will need to find an exception, and few exceptions are iron clad. Black letter law states a max 6 yr SOL and that is only for claims eligible in the Court of Fed Claims. So, SOL expired in 2014 for bailout and 2018 for NWS.
There are 2 exceptions in case law that I can think of. One, and best chance is that federal case law supports the idea of tolling SOL for the number of days that a class action was pending certification, and giving that number of days to individual Ps who did NOT opt in for certification. The P has to have met the defined class criteria and chosen to not opt in; this preserves their right for later. But they also face a defense of ‘Issue preclusion’, which varies by federal circuit. So if you as P tomorrow file a Takings claim supported by a threshold issue that the class’ case was dismissed, I think it’s hard to see how tolling in that scenario does anything except give a license to litigate forever, which undermines a basic reason for SOLs. So in most opt out cases, you have to live with the real risk of some closed doors.
The other exception I might research is whether somehow state statutory law related to tolling or property recovery can be construed: e.g., any statutory Takings law, personal property law, or statutory adoptions of the Restatement Second of Contracts. Maybe one or more defined or undefined statutory terms could be ‘construed’ to make it seem highly unfair for the clock to start ‘until X’ criteria was met. For example the Wisconsin supreme court has extended its statutory terminology to reach unrecovered but locatable stolen property like classic cars that go missing for decades. Why? The statutes never contemplated the possibility of global theft rings, nor Interpol. I think Theft is a strong statutory word, but, bad faith at common law is nearly the intangible equivalent IMO.
Robert, I should have spoken more clearly. I did not mean to say that a constitutional claim has no statute of limitation ! (FWIW, I don’t believe that assertion would be a true statement either!).
Rather my point was meant narrowly only this: in a Takings claim that reaches the trial or merits stage, it is likely IMO that Collins now provides a clear & ready-made piece of a Takings puzzle. BUT just ONE piece.
(Though clearly the full puzzle picture is, naturally, ‘dogs playing cards’)
Robert. Agree. In Collins, SCOTUS was not asked to evaluate a Takings claim.
The ongoing Takings cases will likely use Collins, but only to the extent of proffering one particular element of a Takings claim (whether the action was authorized). So Collins is relevant insofar as it rules out an Illegal Exaction, and makes for a more efficient filing, but in & of itself Collins is not nearly sufficient for a Takings claim.
Her chances are slim to none, and slim just left town.
Any idea why the Brookings Inst report compared a possible baby F/F (AFH) — as operationally similar to FHLBs? Why isn’t F/F itself a more apt comparison? If the baby has no charter & is thus neither a GSE nor a guarantor, what is its authority?
This is very curious.
Is it possible that the report and/or USG are implying (with no lack of convenient vagueness) that all new equity investors in a baby GSE must be *commercial entities*, and thus like FHLB members, also must pay a buy-in (for preferred baby stock)?
As I understand, Member preferred stock in FHLBs lacks voting or resale rights, but still must be redeemed by FHLB on demand. It doesn’t get much more ‘nationalized’ than that, right? So might UST plan to leverage its baby F/F seed investment in a similar way: by charging a membership fee to members for eligibility?
And how do we all feel now about letting the big boys take turns carving up the cake, before it’s even out of the oven?
I disagree with the author's assertion that POTUS will repeat history's mistake. You can never repeat what you can never recall. ;]
Yes it cuts both ways. Agree on both points.
Robert, IMO that phrasing is more of a procedural ‘catch-all’. If new material evidence arises at trial, P can then still request that their remedy be reconsidered or reconciled to this new evidence.
But, speaking from experience, sadly the catch-all is most notable when Ps *forget* to use it; because in that particular case, Ds can take advantage of Ps omission & object to Ps in-discovery or trial motion to reconsider remedy. And the judge IMO will agree with D.
Agree. Soon streaming on all movie channels: ‘One flew over the Czar’s Nest’
“Wouldn't this arrangement be government competing with private industry? Not a good thing, see China.”
Good insight.
I agree. Predictably, the Brookings paper is deliberately vague. It fails to explain how (let alone WHY) a co-op portfolio lending model translates - at all - to the F/F Guarantee-to-Securitize model. These 2 models are as different as oil & water. But why worry about that if someone else has to always clean up the mess?
I hereby motion that we all start calling this new future-insolvent subsidiary (drum roll…): “MAGGIE” — for ‘Mortgage Affordability GSE’ and also because her mannerisms already remind me of a certain Simpsons’ toddler.
“It wouldn't take much more for AGTHX to amass a big enough FMCKJ stake to block a 2/3 vote on any amendments”
Kthomp are you of the opinion that HERA didn’t transfer all shareholder voting rights or privileges to the Conservator? Just curious how (or how else) such ‘block’ would occur. Thx.
Robert,
If I were the builder Id make the free-riding members do 50 push ups to enter.
I have not heard. Any judge there can transfer Wash Fed to Sweeney, if Sweeney agrees. I would assume the clerk has pinged both judges about the Notice filed in Kelly & just awaits their decision. Otherwise the clerk must assign Kelly at random (which may be a waste but can still be reassigned).
Guido2 agree. I read Joseph’s question as asking how the CFC cases could result in a judgment with an equitable (non-monetary) order for ending the Conservatorship. IMO they cannot. But… other circuits certainly could hear such claim by using the CFC Takings result.
The same fact pattern can support different legal consequences. That was my point. Moreover the fact Ps must play this multi-jurisdiction, multi-card bingo game is *widely criticized* that no one can really justify. It only enriches lawyers & USG. What else is new.
I agree CFC can normally only order monetary damages. But a plaintiff victory in the CFC for a Taking could be used in other circuits, where amended complaints would add a claim for violation of due process.
Current Common law provides that a federal Agency decision *based on a factor not contemplated by Congress* is a violation of due process guaranteed under the Fifth Amendment, and it fundamentally undermines the principle of the separation of powers. Let me know if you want some citation to authority on any point.
I tend to agree with most of this.
California has Home Rule, except for charter cities. So if the state passes what amounts to an ‘ordinance veto’, it flies in the face of its own separation of powers. I would argue that substantial and procedural rights not reserved by the state constitution are being taken from localities, just like you said: it abrogates every city’s power to set its own zoning for issues like noise, density, traffic, fire & police vehicle access. If the city requires public hearings for zoning changes (many do because it affects vested expectations) the government has effectively overridden due process. This will not stand. A city or group is going to fight back
California already allows ADUs, i.e., Mother-in-law structures. So who does this help? How will this in the aggregate reduce rent? This is more supply side hooey geared at special interests. Legacy owners now can flip from ‘milking it’ to a legalized cash-and-dash. And put in a tattoo shop just for fun.
Ya, SCOTUS split the baby. #KingSolomon
Robert I agree with you if Ps survive SJ, their odds improve dramatically. No question backward relief is available, and a rising tide would lift all boats. Also, there might be a hidden issue lurking that would motivate somebody.
Robert, yes to discovery but IMO court will limit the scope significantly. No to shifting burden. Most significant is Ds motion to dismiss for SJ; to survive the assault I think Ps need someone with personal knowledge of POTUS’ views from direct communication with HIM. Anything less is hearsay. I doubt News Articles & third party emails will carry the day.
“It is factual”.
In your opinion? Or…?
Well then if you will be so kind as to Share with the court evidentiary foundations under the FRE for each of your 4 smoking guns? Forthwith, we shall, I say, we uh shall shooorely proceeeeed, a sir.
Mind those hearsay and speculation steps; they’re du-hoooozies!
If Collins loses on a Ds pretrial motion for Summary Judgment, Bhatti will follow suit.
Pretty much correct. If credible evidence indicates POTUS *wanted* to fire the full Director but *believed* he could not do so, then any Director decision thereafter may be challenged (!), and, may result in a remedy. Those NWS payments would be reversed.
FOFreddie. Agree. Also IMO FWIW, I think shareholders cases are best understood as derivative.
Robert makes an important distinction.
Also, one set of plaintiffs has requested a jury trial; if the case survives pre-trial motions made by the defense, the odds favor settlement before the full trial is over.
LOL. Yet that makes me sad for Sancho.
Yes but with a caveat: IMO Collins can not be so easily applied to other federal agencies. The reason is that FDIC & FHFA in their conservatorship and receivership powers are the exception, not the norm. The parent is a sleepy fire-breathing (firrea-breathing?) dragon and the other is its young ambitious firstborn. You don’t want to wake either one if you can help it.
Robert warrants expiration date are (on paper) result of the SPSA. Not HERA.
FHFA & UST can renegotiate the warrant expiration date. SCOTUS just set the lowest bar since roller-rink limbo.
FOFreddie, thanks. IMHO Calhoun is long on rhetoric, short on details.
Calhoun suggests that this vaguely-described joint venture between FNMA and Freddie would be "operationally similar" to the FHLBs. Huh? How?
Guarantors are not banks, and banks are not guarantors.
I am skeptical that this venture could be a profitable stock, and in fact, it is not even clear to me who would be able to buy the stock or if any dividends would even be paid. By analogizing the JV to a FHLB, Calhoun seems to imply there could be required some kind of distinct ownership and liability conditions in order to be able to participate in the benefits of the venture. (One risk is arbitrage...could the member bank/ use the funds for something else higher risk or not part of the mission?)
Regarding F/F recap, I think this would be a nice turn of events. The F/F AFH business, most likely (IMHO and guesswork) is NOT a profit center, or if it is, it's probably extremely thin and subject to higher tail risk. Thinking more, if my assumption is right, this might also suggest why FHFA hired so many people in 2020 during a pandemic -- partly to add staff to analyze where and how to cut costs, without also harming the statutory public mission goals? I kinda like it, in truth.
[FWIW, when Calhoun mentions fiduciary duty it is in context of a post-conservatorship GSE world, so, it merely repeats what the law already requires of a recap, post-conservatorship. Nothing to see here IMO.]
Agree or disagree it’s well worth a read. Why? SCOTUS majority frequently accepts PLF Amicus Briefs.
Now…if only Chief Roberts would finally heed the word of the spokesman for Duluth Underwear and “get a pair.”
“Why not file said lawsuit yourself?”
Honestly that is probably just as valid an idea, as any other raised to date. In a way I wish I owned at least a single share so I would meet standing. But I do not. Best I can do is kibbutz.
Some limits are sensible, to avoid layering of risk in certain concentrations. But the objections I hear about are where Calabria set arbitrary portfolio caps via this “letter” without a heads-up. That’s a tough one to swallow for lenders. No lead time. Plus the cap is a ‘hard stop’ with a rolling 12-month calculation.
I am aware of some lenders cut out of these market segments right after Q2. So for the rest of the next 2 quarters in 2021, their sales must be $0 just to STAY AT the cap. Why? Again: no lead-time, and a 12-month denominator. Who besides North Korea regulates this way?
Lenders have forward commitments, not to mention their active open loans, and none were allowed to clear their pipelines or any other leeway. The letter authorizes Calabria to issue exceptions, but he didn’t. What an A$$clown.
Quote: “There is a paragraph on the bottom of Page 18 which will allow the UST to recognize 50% of expected profits if legislation is just INTRODUCED.”
Well, correction, I think:
It says the 50% would be recognized upon *Administrative* rule and policy. This means the Executive branch (President) including any federal agency actions.
It also says *no* recognition ($0) for legislation, *until* fully passed & signed!
Quote:”Maybe things have changed post Collins which will prompt JB to go back to the NWS (&) indefinite conservatorship?”
I don’t see justification for a reversion to the original NWS. Despite popular criticism, the Collins decision reaffirms that at minimum, FHFA *must* follow a reasoned decision-making process as Conservator, to avoid a finding of APA arbitrary action. So an excuse like “the devil made me do it” would not fly (but admittedly, the bar seems barely higher…). Bottom line, FHFA and Biden would need to state a real rational justification plus support it with an objectively verifiable record.
SCOTUS is not gonna fall for the “banana in the tailpipe” twice. Though they may still slip on a peel.
Regarding the Lucas case: IMO Lucas may not be the good fit it seems to be. It cuts both ways. Lucas only requires that a state regulation have some foothold in prior law or practice in situations where it completely destroys the value of an owner’s property. This ‘foothold’ (as set out in Scalia’s exception) ended up swallowing most of his rule, and was later used in both regulatory use takings & non-regulatory physical takings. Lucas ends up, at best, an ad hoc inquiry by the judge into whether the state’s background in such a total taking was well-rooted in some old custom, however esoteric. (I’m mildly surprised no one tried to use the locally-funded and sponsored witch trials in Salem MA). Scalia gave no guidance on its exception methodology, and ultimately this subjectivity would undercut the goal of Lucas, which was meant as a clear, bright line rule *in favor of* owners’ rights.
((If Hard cases make bad law, Lucas is IMO “Exhibit A”.))
Lucas tried to leap beyond the prior balancing approach of benefit v harm, but ultimately most Lucas cases still just become new varieties of Penn Central in their ad hoc subjectivity, so the state wins.
Fortunately —and I think for GSE shareholders , maybe also timely— the SCOTUS majority seems to agree that Takings law is in dire need of revision.
Professor Richard Epstein’s recent blog on the June 2021 Cedar Point vs. Hassid takings case is (IMO) *spot-on*. It doesn’t go all the way to pre-New Deal law, but it sure has all the hallmarks of a turning point. I agree 90% with Epstein. I think the next case or two in Takings will be selected specifically to overrule Penn Central (thus also Lucas). Penn Central was wrong then and is wrong today. Whether this change comes in time to aid shareholders is anyone’s guess. GLTA.
Yet, good news on Wells and its kind:
Before Dodd-Frank: TBTF (Too Big to Fail)
After Dodd-Frank:TBTB(Too Big?Too Bad!)