Good stuff from the Learned Brother, Hamish, in explaining one of the previous courts mistaken assumption upon which they based their decision (btw, Nice analogy to Lucas!):"First, the
Net Worth Sweep did not “indirectly dilute the value”
of petitioners’ property rights; it nullified them in their
entirety, and transferred their value to the Treasury.
Before the Net Worth Sweep, petitioners held rights that
had value because of the potential for future dividends – in
particular, they would have considerable value when and if
the Treasury ever sought to receive dividends in excess of
their 10% senior preferred dividend. After the Net Worth
Sweep, petitioners had no rights – zero. No matter how
much money the GSEs might make, 100% of it must go
to Treasury. This government action did not “indirectly
dilute the value” of petitioners’ property; it effected a total
deprivation of 100% of the value of petitioners’ property,
and thus was a categorical taking under this Court’s
decision in Lucas v. South Carolina Coastal Comm’n,
505 U.S. 1003 (1992).
Second, petitioners did not allege an “overpayment”
by the GSEs. The words “overpayment” and “overpaid”
cannot be found in petitioners’ complaint. And that is for
good reason: when the GSEs were forced by the FHFA to
agree to the Net Worth Sweep, they were not “paying” for
anything; they were simply being told to give away 100%
of their future net worth to the Treasury, so that nothing
could ever go to private shareholders such as petitioners,
no matter what. That is not an “overpayment.” It is a
direct taking of 100% of the property held by private
shareholders.
In any event, it does not matter whether the
government takes private property directly, indirectly,
or via a forced “overpayment” by a related party, so long
as the property is taken. If A owes a stream of future
payments to B, it makes no difference whether the
government passes an ordinance requiring A to pay all
future amounts to the government, or instead passes an
ordinance expressly appropriating B’s right to the future
stream of payments from A. Either way, the impact is the
same: all of the future payments that would have gone to
B are instead going to the government. Thus, either way,
B has a right to bring a claim under the Takings Clause.
We are not aware of a single decision by this Court
that could support the conclusion that a person who owns
property that was taken by the government lacks standing
to bring a Takings claim, or is somehow otherwise
precluded from bringing such a claim. It should make
no difference that the property owned is the right to
receive future dividends as a shareholder in a company.
When that property has been taken in its entirety for the
benefit of the government, the shareholder must have a right to bring a claim under the Takings Clause. Holding
otherwise is a drastic abdication of the extent to which
the Takings Clause protects the property rights owned
by shareholders. Such a significant decision should not
be made without review by this Court.
If the Federal Circuit’s decision were correct, that
would mean that the Government could promulgate a rule
requiring 100% of future dividends from any company to
be paid directly to the Treasury, and the shareholders of
that company would have no right to bring a claim for just
compensation under the Takings Clause. That cannot be
correct, and should not be allowed to stand.
AI
