Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

"That brings us to this week’s new business. The Supreme Court will be considering a total of 151 petitions and applications at Thursday’s conference. They will be reviewing only two of those petitions for the second time.

First up is Calcutt v. FDIC, involving separation of powers and administrative law claims. Harry Calcutt was president, CEO, and chairman of the board of Northwestern Bank, a Michigan community bank. After a series of loans with the bank’s biggest customer group went sour, Calcutt was removed from his positions and barred from holding further banking positions by the Federal Deposit Insurance Corporation, whose board members are removable by the president only for cause. The FDIC board acted based on the recommendation of an administrative law judge who was removable by the federal Merit Systems Protection Board only for cause; the MSPB is in turn itself removable by the president only for cause. Critics have long argued that such removal restrictions impinge on the president’s ability to supervise the executive branch and ensure that the laws be faithfully executed.

Calcutt challenged the FDIC’s actions. The U.S. Court of Appeals for the 6th Circuit stayed the FDIC’s order pending appeal, but ultimately denied review. The court held that Calcutt wasn’t entitled to relief on his claims that the removal restrictions on the FDIC board members (and the administrative law judge) violated separation of powers, because under Collins v. Yellen, he had not shown that that the removal restrictions had any effect on his case. Then by a 2-1 vote, the court of appeals held that FDIC had erred in not applying a proximate causation standard in determining the harm Calcutt’s actions had caused, but held that remand was not warranted because substantial evidence still supported the FDIC’s finding that Calcutt had caused and would cause harm.

The majority rejected Calcutt’s invocation of SEC v. Chenery Corp., which held that an agency’s action can be reviewed based only on its own reasoning. The majority wrote that “[r]emand is unnecessary where an agency’s incorrect reasoning was confined to [a] discrete question of law and played no part in its discretionary determination, and [the agency] reaches a conclusion that it was bound to reach.”

Judge Eric Murphy dissented in part. He agreed that Calcutt had not shown that the removal restrictions had affected the FDIC’s past actions. But because the agency had applied the wrong causation standard, Murphy would have remanded for the FDIC to apply the correct causation rules in the first instance. He concluded that the majority had “run[] afoul of basic administrative-law principles” by affirming the FDIC’s decision based on proximate-cause determinations that the agency itself had not made.

The 6th Circuit denied rehearing, although the FDIC did not oppose it. Justice Brett Kavanaugh stayed the decision pending Supreme Court review; the FDIC opposed the stay on the issue of the removal restrictions, although not on the remand issue.

Calcutt now seeks Supreme Court review, supported by a whopping six amicus briefs. He argues that the 6th Circuit violated SEC v. Chenery Corp. by not remanding the case to the agency after determining that the agency had applied the wrong legal standards. He also argues that the 6th Circuit misapplied Collins v. Yellen, saying it does not require separation-of-powers challengers to offer concrete proof of prejudice as a prerequisite to courts resolving separation-of-powers challenges to removal restrictions on the merits. And he argues that the standard is different when a party challenges both past actions and future actions.

The FDIC concedes that summary reversal is warranted on the first issue because the court of appeals should have sent the case back to the FDIC board after it concluded that the board applied the wrong standard. But, the government argues, the court of appeals was correct that Calcutt was not entitled to relief on his separation-of-powers challenges, which does not conflict with any holding of either the Supreme Court or another court of appeals.

Calcutt argues in his reply that if the court summarily reverses on the remand issue, it should “kill two birds with one stone” by correcting its “impossible to satisfy” standard for showing a separation-of-powers error was not harmless. Although Calcutt seems to be pitching mainly for summary reversal, he urges the court to grant plenary review on both issues rather than simply reversing on the remand issue."

https://www.scotusblog.com/2023/05/separation-of-powers-and-mental-health-evidence-in-capital-sentencing/