Thanks!
And I'd like to apologize if I seemed confrontational. I was just coming off an argumentative post from another poster and may have had the testosterone still built up in my system. lol.
As for the article, I'm typing as I'm reading. I'll let you know ahead of time, I agreed with some and disagreed with some.
The beginning of the article isn't that big of a deal...just restating what has happened.
I think the opinion piece of the article begins with the statement "It should be no surprise that, in my view, the dissent has the stronger of the argument." This statement is important to understand...because Epstein is saying that a dissent is stronger than a majority opinion. The problem with that is that the dissent has no legal authority. You will almost never hear a dissent quoted in a future opinion. Epstein should know this...
Let's move on to his opinion of the majority...since that is all that really matters.
At no time does the majority opinion note the vast difference in the chaotic financial environment at the time of the original 2008 bailout and the stable markets when the NWS undertaken nearly four years later, or the massive profits that documents revealed in litigation show that Treasury and FHFA fully knew would come right after the NWS went into effect—payments that would have eliminated any supposed inability of Fannie and Freddie to pay dividends going forward.
The above paragraph is interesting. He is definitely right that the majority does not mention this. However, the only problem with Epstein's complaint over this is that the ONLY reason that it would be relevant is if the case was about fraud. This isn't something that was actually being sued for by Perry, and is therefore not relevant. Still, he isn't wrong...I would have liked at least a few more sentences by the court to address this area. But in the end, I don't think it would have swayed the Perry decision since it wasn't relevant to the Perry causes of action.
the majority opinion held that it did not matter that the FHFA could have avoided any purported danger to the GSEs by exercising its payment in-kind-option. In so doing, the majority allowed FHFA and Treasury in combination to impose the NWS that necessarily undermined the conservatorship by turning the enterprises’ money over to Treasury for its own purposes. FHFA’s statutory charge to return the GSEs to a safe and solvent condition was wholly ignored.
I wholly agree with this statement. After the majority came out, I stated that I disagreed with the majority that the word "may" could be used with such subjectivity as it was by the majority. "May" in legalize has always had very specific meaning to include the abilities of the parties, but not to deviate from those abilities. When the majority gave the word "may" to mean that the Conservator didn't need to limit its abilities to what the "may" gave powers for, the majority deviated from historical meanings of the word "may". If this decision were to get reversed for ANY reason in the en banc, this would be one of the most likely reasons.
Finally, the majority opinion showed little grasp of the basic economic transaction. As I have repeatedly argued, there is no need to take discovery on documents given that the transaction itself gave full evidence of both the intention and effect for two government agencies to wipe out the financial interests of the private shareholder.
Epstein is returning to the same flawed issue here as before. This is only relevant in a fraud case. Fraud is not a cause of action in the Perry claim, and so this is not relevant. The "intent" of the government is irrelevant in the ability of HERA to carry out the wishes of the government except in cases of fraud.
Summary:
The parts of Epstein's opinion that I disagree with is around the need to use the intent or misrepresentations of the government to fight the Lamberth case. This might be relevant in other cases involved with the GSEs, but it is not relevant in determining the power of HERA. Indeed, when the remanded portions of Perry go back for discovery around the breach of contract and fiduciary duties claims, these issues of fraud might be extremely relevant. But in determining the power of HERA to give the Conservator the right to institute the NWS, the arguments are moot. What I do agree with is Epstein's interpretation of HERA's requirement that the conservator is limited to the portions within the "may"'s. I hope that this is something that will be addressed in the en banc.
