Fannie Mae (FNMA)

[kthomp19]

But in order for those damages to exist, there MUST have been illegal action by the defendant (FHFA), in violating a clause in a contract. That clause is the "Implied Covenant of Good Faith and Fair Dealing" that is part of the Uniform Commercial code and exists in all contracts. It is there because the parties cannot possibly put into writing every possible scenario or action that the other party may take. It is therefore assumed that neither party will conduct itself in a manner that denies the other party the benefits of their side of the contract. It is illegal to violate this code. Full stop.

There is a huge, huge difference between saying that the NWS illegally violated the implied covenant of good faith and fair dealing, and saying that the NWS itself is illegal. Just like there is a huge difference between saying that FHFA and FnF acted in bad faith (which the jury did NOT find) and saying that they violated the implied covenant of good faith and fair dealing (which the jury DID find), which is a mistake you made in the past.

But that does not mean that FHFA can continue to behave in ways that are now deemed illegal between the FHFA and the shareholders.

Read the beginning of the second paragraph on page 13 of Lamberth's opinion regarding defendants' Motion for Summary Judgment:

But whether a certain act falls within FHFA’s statutorily authorized discretion and whether
FHFA may incur monetary damages for exercising that discretion in a manner inconsistent with
its independent contractual obligations are two separate inquiries.

That's Lamberth totally destroying your argument. You are trying to say that since FHFA illegally violated the implied covenant, that therefore the NWS is illegal. That is completely false.

The NWS was fully legal. The Supreme Court said so. Lamberth echoed that here, saying that the NWS was authorized by statute. The distinction he made in that sentence is that FHFA can commit a legal act ("statutorily authorized", in his terms) but still be liable for damages.

The remedy for implied covenant breach is typically a contract remedy and not always monetary damages.

Perhaps, but in this particular case it was only monetary damages. This is the entire contents of the jury's verdict form:




Was it theoretically possible that the jury could have ordered FHFA to unwind part of the contract? Again, perhaps. But it doesn't matter because the plaintiffs only asked for money and the jury only awarded money.

It is confirmation of ILLEGAL ACTIVITY on the part of FHFA. Again, full stop.

Read my first sentence again, and read the verdict form again. The NWS itself was NOT found to have been illegal. Not by this jury, nor any judge or court in the land.

If you think the FHFA can continue using the same practices that have been deemed illegal, you are mistaken.

Tell that to the judge. And jury. Because they clearly disagree.