FHFA rebuttal.
Pulling the old Section 4617(f) argument out again.
July 16, 2019
VIA ECF
Lyle W. Cayce Clerk of Court United States Court of Appeals for the Fifth Circuit F. Edward Hebert Building 600 S. Maestri Place New Orleans, LA 70130-3408
Re: Collins et al. v. Mnuchin et al., No. 17-20364 (en banc oral argument held January 23, 2019)
Dear Mr. Cayce:
FHFA Defendants-Appellees write in response to PlaintiffsAppellants’ July 11 letter citing Department of Commerce v. New York, 139 S. Ct. 2551 (2019).
Department of Commerce has no relevance here. Plaintiffs rely principally on a sentence generally summarizing and quoting the APA’s judicial review provision. 139 S. Ct. at 2567. However, the very next sentence explains that “[r]eview is not available, however, ‘to the extent that’ a relevant statute precludes it….” Id. (quoting 5 U.S.C. § 701(a)(2)). Unlike the Census Act, HERA contains just such a provision: 12 U.S.C. § 4617(f), which precludes courts from “tak[ing] any any action to restrain or affect the exercise of powers or functions [of FHFA] as a conservator….”
Section 4617(f) also disposes of Plaintiffs’ argument that the Third Amendment must be vacated because FHFA’s rationale for it was allegedly “pretextual.” All courts to have considered the issue have agreed that under § 4617(f), subjective motive is irrelevant and the sole issue is whether the
Case: 17-20364 Document: 00515035779 Page: 1 Date Filed: 07/16/2019
July 9, 2019 Page 2
action involves a function of financial-institution conservators. See, e.g., Perry Capital v. Mnuchin, 864 F.3d 591, 612 (D.C. Cir. 2017) (“[N]othing... in [HERA] hinges FHFA’s exercise of its conservatorship discretion on particular motivations.”); id. at 644 (Brown, J., dissenting) (agreeing “no portion of HERA’s text invites such an analysis” into motives).
The Court found pretext relevant in Department of Commerce as part of its scrutiny of the factual explanation the agency furnished to support its action. But under HERA, the inquiry begins and ends at statutory authority. The Complaint here does not even include any arbitrary-and-capricious claim against FHFA. ROA.81-83.
Nor does Department of Commerce support Plaintiffs’ position that if the Court holds HERA’s good-cause removal provision unconstitutional, vacatur of the Third Amendment becomes mandatory. There was no removal-restriction claim in Department of Commerce. In Free Enterprise Fund, the Court held that the applicable remedy for an unconstitutional albeit severable removal restriction is to excise the offending limitation— while leaving the agency, its actions, and authority intact. Panel 51-53; FHFA Supp. En Banc Br. 24-26. Nothing in Department of Commerce suggests any departure from that teaching.
Respectfully Submitted,
Robert J. Katerberg Robert J. Katerberg
Counsel for Defendants-Appellees Federal Housing Finance Agency and Director Mark A. Calabria
