"the Federal Circuit in a two-sentence
footnote suggested (without holding) that Petitioners
do not have a cognizable property interest in their
stock because it had held that the Companies once in
conservatorship had no cognizable property interest
in their net worth. Pet.App.53a n.14.
This off-hand, unbriefed suggestion, going to the
merits rather than the directness of the claim, is friv-
olous and would not present any genuine question.
First, even if the Federal Circuit were correct as to the
Companies (which it is not, see, generally Andrew T.
Barrett v. United States, Petition for A Writ of Certio-
rari, No. 22-__ (July 22, 2022)), the suggestion would
not follow. If, for example, the Companies were liqui-
dated, no one would claim they retained any interest
in their property, yet private shareholders would re-
tain their property rights in the liquidation proceeds.
Indeed, the Recovery Act expressly recognizes this
truism. Supra Statement A. Supposing the govern-
ment may with impunity seize the Companies’ assets,
it is a separate question whether it may do the same
to Petitioners.
Second, the mere possibility of something like the
Net Worth Sweep, under the Recovery Act’s general
authorization of a conservatorship, does not vaporize
property rights during the conservatorship. That is so
even under the Federal Circuit’s (overly generous)
view of the malleability of background property rights
in the face of new legislation. The most that inheres
“in the title,” so as to “defeat a property interest,” is
“specific regulation,” not potential regulation. Piszel v.
United States, 833 F.3d 1366, 1374–75 (Fed. Cir. 2016);
A&D Auto Sales, Inc. v. United States, 748 F.3d 1142,
1152 (Fed. Cir. 2014) (same). The whole point of the
Takings Clause is that the government must compen-
sate property owners for authorized action. E.g., Pre-
seault v. I.C.C., 494 U.S. 1, 17 (1990).
Third, the two cases on which the Federal Circuit
relied are irrelevant on this issue, which is why no
party cited either of them on it in the Federal Circuit.
They merely involved challenges to being placed into
conservatorship or receivership (and consistent with
longstanding background law)—which is not at issue
here—not to action such as here in the course of a con-
servatorship or receivership (and unlike any taken be-
fore). See Golden Pac. Bancorp v. United States, 15
F.3d 1066, 1069, 1073–74 (Fed. Cir. 1994); Cal. Hous.
Sec., Inc. v. United States, 959 F.2d 955, 958–59 (Fed.
Cir. 1992). That is why the same court had no trouble
later recognizing a shareholder’s property interest in
even a contingent surplus from a receivership. First
Hartford, 194 F.3d at 1296; see Cal. Hous, 959 F.2d at
957 n.2 (similar); see also Waterview Mgmt. Co. v.
F.D.I.C., 105 F.3d 696, 701 (D.C. Cir. 1997) (“To read
the statute . . . to permit a federal agency acting as
conservator or receiver to sell assets in disregard of all
pre-receivership rights, raises significant constitu-
tional questions under the takings clause.”).
Fourth, even if one were merely applying a Penn
Central balancing analysis of a regulatory-taking
claim in the context of a regulated industry, the result
would be the same. See Cienega Gardens v. United
States, 331 F.3d 1319, 1350 (Fed. Cir. 2003) (explain-
ing that a party can have reasonable investment
backed expectations even where a business operates
in “a heavily-regulated industry,” because not all reg-
ulatory changes are reasonably foreseeable); cf. Col-
lins, 141 S. Ct. at 1776."
AI
