"For one, this broad policy consideration is again wholly outside the bounds of the
district court’s limited inquiry at the motion to dismiss stage. For another, the district
court’s reasoning fails on its own terms. Separation of powers cases of course often
carry significant policy implications. And a presidential Administration may have to
take actions it might otherwise not take in order to remedy a constitutional violation
that occurred during a prior Administration. Cf. Regents, 140 S. Ct. at 1901
(requiring the Trump Administration to adhere to the Obama Administration’s
DACA program). Cf. Milliken v. Bradley, 433 U.S. 267, 281 (1977) (“The scope of
a district court’s equitable powers to remedy past wrongs is broad, for breadth and flexibility are inherent in equitable remedies.”). That inherent fact of remedies in the
separation of powers context provides no basis for dismissing Plaintiffs’ claims out
of hand.
And Plaintiffs’ proposed remedy is retrospective in nature, as the Supreme
Court recognized. See ROA.1177 (“Plaintiffs are therefore entitled to retrospective
relief to put them in the position they would have been in were it not for the
unconstitutional removal restriction.”); see also ROA.1221 (requesting “an
injunction that restores Plaintiffs to the position they would have been in were it not
for the unconstitutional removal restriction”); see also Rop v. FHFA, 50 F.4th 562,
576 (6th Cir. 2022) (“But, on appeal, like in Collins, shareholders ask only for relief
effecting a zeroing out of Treasury’s liquidation preference or converting of
Treasury’s senior preferred stock to common stock. The Court identified this as
retrospective relief, Collins, 141 S. Ct. at 1787 & n.22, and this request for
retrospective relief is tethered to shareholders’ argument that the Recovery Act’s
removal restriction is unconstitutional.”). Finally, the principal practical effect of
Plaintiffs’ requested remedy would be to put Fannie and Freddie in a stronger
financial position, which if anything would expand the policy options of the current
Administration."
At the motion to dismiss stage, the district court was required to take
Plaintiffs’ plausible allegations as true. Instead, the district court disbelieved Plaintiffs’ plausible allegations, weighed the evidence in Defendants’ favor, and
chose to disbelieve a former President of the United States. The district court
ultimately discounted Plaintiffs’ factual allegations as “mere speculation.”
ROA.1521; see also ROA.1523 (“Plaintiffs’ Amended Complaint fails to plead that
any harm was more than speculative.”). But Plaintiffs have done precisely what the
Supreme Court called for. The Supreme Court instructed Plaintiffs, and in turn the
lower courts, to determine what would have happened absent the unconstitutional
removal restriction. That is—by definition—a counterfactual exercise. Plaintiffs’
duty under the Court’s framework was to allege facts to establish, by a
preponderance of evidence, what would have happened under different
circumstances. Plaintiffs did just that—and more. Indeed, President Trump’s letter
takes all speculation out of the matter. ROA.1225. In the end, the district court may
be entitled to disagree with the Supreme Court’s prescription of a counterfactual
inquiry. But it is not entitled to dismiss Plaintiffs’ plausible allegations on that basis."
"The Supreme Court
applied § 4617(f) to bar Plaintiffs’ statutory claim yet made no mention of the
provision with respect to Plaintiffs’ constitutional claim despite extensive analysis
of that claim"
"§ 4617(f) has no bearing here."
