Wednesday, September 06, 2023 5:40:58 PM
The Supreme Court ruled that the shareholders were not entitled to bring their statutory claim because the FHFA was not in violation of HERA's anti-injunction clause "no court may take any action to restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver". They (incorrectly IMO) ruled that the FHFA did not exceed it's authority when it was acting in the best interests of the regulated entity or the Agency. They ignored the part about the conserve and preserve aspects. Old news.
The unconstitutional provision about removal of the Director was rectified, for better or worse, so that future administrations can put in whatever puppet they want to head FHFA. This means future Directors will have different outlooks based on political winds. Future Directors may want to unwind the mess that was created.
The SC decision is not an impenetrable barrier to any future judicial review of the FHFA/Treasury agreements. It's a point in time, single case denial. There may very well be a future FHFA action that is challenged for exceeding it's authority. Just because it didn't exceed in the last case doesn't mean anything FHFA does in the future is not excessive or beyond what it should do as a Conservator or Receiver. Additionally, the FHFA Director can allow or request a judicial review, challenge the legitimacy or legality of any of it's agreements or policies, something the shareholders were denied. The anti-injunction clause does not apply to the agency itself.
As for the remedy being cash and cash only. Sure, just peanuts. However, it sets the precedent that fair dealing breaches are not going to be under the radar any longer. While they still wield a lot of power, it shows that the FHFA & Treasury cannot operate with complete impunity.
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