Just read the introduction of Collins' brief:
INTRODUCTION
One would be hard pressed to find a more egregious example of administrative overreach than the
events that gave rise to this lawsuit. In August 2012—
just after the housing market turned around and
FHFA and Treasury learned that Fannie and Freddie
were about to report the largest earnings in their history—Defendants nationalized these two private, forprofit Companies, removing Plaintiffs and other private shareholders from the Companies’ capital structures. Defendants claim to have had statutory authority to take this step under a law that stressed “[t]he
need to maintain” Fannie and Freddie as “private
shareholder-owned compan[ies],” 12 U.S.C.
§ 1455(l)(1)(C)(v), and several Courts of Appeals
agreed with Defendants’ facially implausible argument that FHFA as the Companies’ “conservator” is
not required to conserve the Companies’ assets.
Apparently recognizing that the argument that
succeeded in several lower courts is unlikely to carry
the day here, Defendants shifted their focus to a different defense; namely, that during conservatorship
only the conservator may sue the conservator for wiping out Plaintiffs’ investments. This argument rests
on a fundamental misconception about who is entitled
to sue under the APA, misapplies long-settled principles for distinguishing between direct and derivative
shareholder claims, and if credited as a matter of statutory construction would lead to a patent violation of
procedural due process.
Both the decision to nationalize Fannie and Freddie and Defendants’ aggressive arguments for unlimited
agency power are symptoms of a serious constitutional disease. In FHFA, Congress established an independent agency headed by a single, unelected Director answerable to no one. This Court held last term
that the CFPB’s identical structure violates the separation of powers. Like any other litigants injured by a
federal official acting without constitutional authority, Plaintiffs are entitled to a meaningful remedy for
this constitutional violation—in this case, a remedy
that restores Plaintiffs to their rightful place in the
Companies’ capital structures.
By the time this suit was filed, the nationalization
of Fannie and Freddie had netted the federal government an astonishing windfall of $124 billion. For both
statutory and constitutional reasons, Defendants’ action cannot stand.
