Why the lower court Judge's opinion was misplaced:
"To get to that result, the district court had to discount plaintiffs’ plausible
factual allegations, improperly weigh evidence, impose novel legal doctrines, and
make credibility determinations that have no place on a motion to dismiss.
Under the proper motion to dismiss standards, Plaintiffs have met their
burden. Indeed, Plaintiffs have exceeded that burden not only by making plausible
allegations but also by providing extensive concrete support for those allegations.
Plaintiffs have followed the Supreme Court’s instruction to explain what would have
happened in a world without the unconstitutional removal restriction. To the extent
the district court found that exercise too speculative, that is a quarrel with the
Supreme Court’s holding in Collins, not with the sufficiency of plaintiffs’
allegations.
The only remaining question, according to the Supreme Court, is whether the removal restriction harmed the Companies’ shareholders by impeding the
President’s ability to pursue policies that would have benefited them. Specifically,
the Court said that a public statement from the President explaining that he
disapproved of the actions of FHFA’s director and that he would have removed him
from office would “clearly” show that the removal restriction harmed the
shareholders.
Former President Trump has said precisely that. In direct response to the
Supreme Court’s decision, the former President has unequivocally stated that, if he
had “controlled FHFA from the beginning of [his] Administration, as the
Constitution required,” he would have removed the FHFA director from office,
“ordered FHFA to release these companies from conservatorship,” “fully privatized
the companies,” and ensured that the companies’ common stock increased in value.
But “because of the unconstitutional restriction,” he continued, his “Administration
was denied the time it needed to fix this problem.” ROA.1225. And the actions taken
by the Trump Administration after it finally took control of FHFA are consistent
with the former President’s statement. Thus, there is nothing left for this Court to do
other than to apply the Supreme Court’s decision and order the district court to enter
an injunction placing Plaintiffs in the position they would be in absent the
unconstitutional removal restriction—or, at a minimum, to permit this case to move
forward to summary judgment.
Independently, Plaintiffs have plausibly alleged that FHFA’s self-funding
structure—which grants the Director full control over FHFA’s funding with no
oversight from Congress—violates the Appropriations Clause. The district court
invoked the discretionary “mandate rule” to dismiss Plaintiffs’ Appropriations
Clause claims on procedural grounds. But Plaintiffs’ claims fall within the court’s
mandate. In any case, an exception to the discretionary mandate rule for intervening
changes in law applies here.
The district court’s dismissal should be reversed.
