From New Civil Liberties Alliance brief:
Yet these self-same rights are also very
contemporary—and in dire need of renewed
vindication—precisely because Congress,
administrative agencies, and even sometimes the
courts have neglected them for so long.
NCLA is particularly disturbed by the manner
in which Congress established the Federal Housing
Finance Agency (FHFA)—an agency that was clearly
designed to flout the Constitution’s separation of
powers and its representative form of government.
In dissent on the remedy issue, Judge Willett
(joined by six other judges) argued that the proper
remedy is to vacate the Third Amendment because
“[w]hen a plaintiff with Article III standing challenges
the action of an unconstitutionally-insulated officer,
that action must be set aside.”
The three objections raised by the United States
in its opposition brief were: (1) the challenged action,
(the adoption of the Third Amendment) was taken by
Acting FHFA Director Edward DeMarco, and an Acting
Director enjoys no statutory protection from removal;
(2) HERA’s succession clause bars the Shareholders’
constitutional challenge; and (3) FHFA agreed to the
Third Amendment in its capacity as conservator of
Fannie Mae and Freddie Mac, and the performance of
conservatorship tasks does not involve any exercise of
the executive power of the United States. Opp. Br. 15-
18. The Fifth Circuit correctly decided each of those
issues in the Shareholders’ favor, and the United
States did not raise them in its cross-petition.
Accordingly, the United States has waived the issues
and may not raise them in this Court.
“We have appointed
amicus curiae to present argument in support of the
judgment below when a prevailing party has declined
to defend the lower court’s decision or an aspect of it, ...
and to address the Court’s jurisdiction to decide the
question presented.” Id. at 1282-83. Applying those
criteria, the principle of party presentation dictates
that the Court should not entertain arguments from
the court-appointed amicus curiae with respect to the
three non-jurisdictional issues waived by the United
States.
By limiting its remedy to prospective relief only,
the Fifth Circuit has provided no relief at all to the
Shareholders. The focus of their lawsuit has been to
remedy the injury they incurred when an
unconstitutionally structured federal agency wiped out
their shareholder value by effectively nationalizing
Fannie Mae and Freddie Mac. Now that their property
has been rendered worthless, they have a greatly
reduced interest in what FHFA may do in the future,
so curing the constitutional defect in FHFA’s structure
on a prospective basis is of little interest to them.
It is of no moment that Congress may prefer
severance of § 4512(b)(2) to unwinding some or all of
the actions taken by FHFA while it was
unconstitutionally structured. Of course that would be
Congress’s preference; indeed, the first preference of
the Congress that adopted FHFA undoubtedly was
that the Courts would uphold the constitutionality of
FHFA’s structure. But Congress does not get to choose
the appropriate remedy when courts determine that a
statute it adopted violates the Constitution; that is for
the courts to decide.
Because FHFA is unconstitutionally structured,
it has lacked authority to act throughout the entire
decade of its existence. And because FHFA has by this
time taken a multitude of unauthorized actions,
devising an equitable remedy for those injured by
FHFA’s actions may be a complicated task. But its
complexity should not be an excuse for providing no
retrospective relief. For one thing, denying all such
relief provides precisely the wrong incentives for
government actors. Congress will have no incentive to
avoid creating administrative-agency structures that
violate separation-of-powers principles if it concludes
that courts will do no more than tell the government,
“Don’t do it again.”
More importantly, prospective-only remedies of
this sort deprive citizens of all incentive to sue to
prevent unconstitutional government activity. The
Shareholders have devoted considerable time and
resources to their successful effort to demonstrate the
unconstitutionality of FHFA’s structure. Such efforts
in support of constitutional principles ought to be
encouraged and rewarded.
CONCLUSION
The Court should affirm the Fifth Circuit’s
holding that FHFA’s structure violates the separation
of powers. It should reverse the appeals court’s
determination that Petitioners are entitled to
prospective relief only and instead order relief that
remedies Petitioners’ injuries.
