Fannie Mae (FNMA)

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ROLG on 5th circuit en banc

J Barnes

November 13, 2018 at 4:12 pm


Rolg
Today the 5th circuit granted rehearing in banc, it voids the previous opinion. Is this a positive step for ps ? What may ps expect from this ?

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ruleoflawguy

November 13, 2018 at 9:51 pm


WHOA!

One of the truisms of judicial review is that judges don’t take a case unless they have to.

This applies even more so with respect to rehearings en banc. A merits panel has already heard this case and issued its opinions, 2-1 against Ps with a stinging dissent by Judge Willets. A majority of the 5th circuit judges have decided that the case needs to be reheard. You simply are not going to get a conclusion that the case needs to be reargued and re-decided unless a majority of judges have a serious belief that the dissent may be right. Ask a judge if he is overworked (and underpaid) and you will get unanimous agreement. Judges don’t grant rehearings without significant reason.

P briefs are due 12/12, and govt briefs due 1/11/19. oral argument to be heard two weeks thereafter.

the rehearing order doesn’t specify, but Ps asked for rehearing on both the APA claim (that NWS not within conservator’s authority to conserve and preserve assets) and denial of relief on finding that FHFA is unconstitutionally structured. It seems both claims are up for re-argument and rehearing.

also the rehearing order doesn’t state that this case is being consolidated with the All-American separation of powers case. I take that as a plus since that would only tend to complicate things for the hearing en banc.

this is headline good news for Ps.

rolg

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ruleoflawguy

November 13, 2018 at 10:59 pm


just a quick addendum if I may.

the 5th circuit rules go to the extraordinary length to say that rehearings en banc are “disfavored”. meaning, don’t waste our time unless a rehearing is truly called for.

the process generally is that if after the losing party requests rehearing en banc, a judge has to take up the petition and discuss it with the other judges, all of whom have their own workload and see this judge championing the rehearing petition as only adding to their burden. one can assume this judge in this case was Willett. then this judge has to convince a majority of all the other judges (including the two judges in the majority who disagreed with him) that rehearing should be granted…in effect, that there is a sufficiently high probability that the merits panel majority was wrong that it is worth the time and trouble for a do-over.

I haven’t found any studies as to the percentage rate of reversals in federal circuit court rehearings en banc. but why would a full circuit court grant such a rehearing unless prime facie a majority believed that such reversal was a real possibility.

rolg

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ruleoflawguy

November 13, 2018 at 11:47 pm


this will be my last thought on the matter (for tonight).

the 5th circuit rules states this: “THE MOST ABUSED PREROGATIVE – PETITIONS FOR REHEARING EN BANC ARE THE MOST ABUSED PREROGATIVE OF APPELLATE ADVOCATES IN THE FIFTH CIRCUIT. FEWER THAN 1% OF THE CASES DECIDED BY THE COURT ON THE MERITS ARE REHEARD EN BANC; AND FREQUENTLY THOSE REHEARINGS GRANTED RESULT FROM A REQUEST FOR EN BANC RECONSIDERATION BY A JUDGE OF THE COURT RATHER THAN A PETITION BY THE PARTIES.”

see http://www.ca5.uscourts.gov/docs/default-source/forms-and-documents—clerks-office/rules/federalrulesofappellateprocedure.pdf. p.35-4.

it is worth noting that, in response to Ps petition for rehearing en banc of both the APA and constitutional claims, fnma/treasury not only resisted rehearing of the APA claim but also asked for rehearing of the merits panel holding that fhfa was unconstitutionally structured (though no relief was to be granted Ps).

so one might ask whether this rehearing en banc is being granted in response to Ps or fhfa/treasury’s petitions.

simply, the court would not have granted rehearing en banc of both claims if it was responding to only fhfa/treasury’s petition. if that were the case, the order would have been restricted to a rehearing of only the constitutional claim.

couldn’t it have been an order that granted both petitions (indicating possible agreement with Ps on APA claim, and with fhfa/treasury on the constitutional claim)?

the rehearing order states: “A member of the court having requested a poll on the petitions for rehearing en banc, and a majority of the circuit judges in regular active service and not disqualified having voted in favor…”

so perhaps the full court found that both petitions had merit. however, while I am reading perhaps too closely, it would seem that two judges, and not just a member as set forth in the order, would have asked for a rehearing in such event.

rolg

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jtimothyhoward?

November 14, 2018 at 8:50 am


ROLG–Thank you. That’s very good information and analysis. And I agree with you that the en banc rehearing is excellent news for the plaintiffs.

We’ve now seen two reversals of judicial viewpoint on net worth sweep-related opinions in the last month and a half: Judge Lamberth’s ruling on September 28 that claims related to the breach of implied covenant in Perry Capital should be allowed to proceed, and now the 5th Circuit’s decision to rehear the appeal of the Collins case en banc. In both instances, I suspect what’s happened is that as judges have had time to focus more closely on the fact patterns in these cases, the argument that the net worth sweep was a matter of judgment permissible under HERA–as opposed to a pre-meditated seizing of two companies’ assets, covered up by a now-revealed sequence of false statements by Treasury– becomes less credible or sustainable, and is now cracking. If so, we may indeed finally have reached a turning point in this saga.

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