Replies to post #15845 on Fannie Mae Preferred S (FNMAS)

[44centsAKAchoccake]

Well, there is uncertainty, but we could come up with some "what ifs" just for fun. One thing I was thinking about was what if the Court of Appeals comes out with a bad decision (mostly Ds on the DC circuit now). Would the conservative block on SCOTUS possibly enjoy overturning them. Possibly, yes.

On what grounds? The discretion of a conservator is limited in the sense that they should stay within their authority under the regulatory statute? Possibly, yes.

There is some evidence that SCOTUS doesn't think that the discretion of a regulator (and perhaps even a conservator) is unlimited.

Since I'm not a lawyer let me just add that society would be better off if legitimate property rights are respected. Unlimited discretion without judicial oversight could be bad from a public policy standpoint.

[44centsAKAchoccake]

Mach Mining v. EEOC

Question
Are the Equal Employment Opportunity Commission’s conciliation efforts judicially reviewable and, if so, to what extent?



http://www.scotusblog.com/2015/01/argument-analysis-search-for-workable-standard-of-review-of-the-eeocs-efforts-to-conciliate/

Summary, plus transcript and audio

http://www.oyez.org/cases/2010-2019/2014/2014_13_1019Thomas C. Goldstein: That's right.

Justice Ginsburg, Justice Kennedy, we are not asking you to import the good faith bargaining case law and regulations from the NLRA.

Our point is different; and that is, it is commonplace for the courts to review this sort of thing.

There are five statutes.

This statute has been enforced by 40 -- for 40 years and courts have looked into notions like bargaining or whether parties complied with the court's order to mediate.

So this isn't notionally something that is so unusual that Congress--

Justice Sonia Sotomayor: Well, it's unusual enough that there's a huge split among the circuits as to how to define what they're reviewing.

I can't find any consistency among more than about two of them.

And so I go back to -- I know you say you've cited cases about the imperative of judicial review, but on the administrative level, it's after a final action.

This is not a final action.Justice Stephen G. Breyer: Well, what about that?

That's what I -- I mean, in my mind, of course, there should be judicial review.

There is of everything just about.

But the issue is how much.

Thomas C. Goldstein: --Yes.

Justice Stephen G. Breyer: All right.

Now, what's your view on that?

Because as I -- we just had a case where when an IRS official wants to subpoena some material, all he has to do is say it's in good faith.

Ah.

But there could be an unusual case where we want to get more than that affidavit.

Thomas C. Goldstein: Yes.

Justice Stephen G. Breyer: So we wrote an opinion, and probably you've read it, and we said, well, judge, yeah, if it's unusual and you really have some thought here that the IRS is in bad faith, you can go a little further.

Well, that seems to me to be the kind of thing that would apply here.

Thomas C. Goldstein: Sure.

Justice Stephen G. Breyer: And then -- okay.

So you're perfect satisfied.

I take it the closest to this is the Fourth, Sixth, and Tenth Circuit, a minimal showing of good faith, that's the end of it, but you're never going to say never.

Thomas C. Goldstein: Yes.

Now, those courts--

Justice Stephen G. Breyer: That's what your -- well, maybe there will be agreement on this.

Thomas C. Goldstein: --I doubt it.

The -- Justice -- Justice Breyer, that is exactly right.

Justice Stephen G. Breyer: You know, this is a -- this is Hornbook law, I thought, use it till this point.

But everything is reviewable.

Now, that isn't quite true, but if you want to apply for a visa at a foreign embassy abroad, at our embassy is not reviewable.

Okay, and maybe there's a military thing, but even the even the -- even the things like the Panama Canal toll, where they said it wasn't reviewable, Davis says it should have been.

And the answer to your problem is it's not -- it's not reviewable, the three cases or so where we said it wasn't.

The answer is the agency has broad discretion, and because they have such broad discretion, the court can review it, but unless it's very unusual, they have to decide for the agency.

Now, eight circuits have roughly followed that; three, more detailed than others.

And I haven't found anything in your brief that says in the last 40 years, the EEOC has, as a result, found its functioning seriously hampered.

And -- and so why -- what's -- that's why I'm -- I'm wondering.

Nicole A. Saharsky: Well, a couple points.

First of all, I'm afraid that I may have misunderstood the Chief Justice's question.

If there was no attempt at conciliation at all, then, you know, these letters would not exist and we think that that potentially would be a problem, but that--

Chief Justice John G. Roberts: --You're saying if the agency -- the agency couldn't possibly have violated the law?

They wouldn't say we have attempted to we will contact you, and then not contacted you?

Nicole A. Saharsky: --I agree that that would be a problem, but that is not what Petitioner is arguing for.

He has not identified case--

Chief Justice John G. Roberts: No, it's not a question of what he's arguing for, it's a question of what you are arguing for.

You are arguing that there is no judicial review, full stop.

And I'm trying to pose a question where it seems to me that it would be utterly unreasonable for you to say you don't get judicial review of that basic question.

I am very troubled by the idea that the government can do something and we can't even look at whether they've complied with the law.

I'm not terribly troubled by the idea that the scope of our judicial review is limited.

And I just wanted you to tell me which it is, is it that there's no authority for a court to review government action alleged to be in violation of law, or is it that the scope of judicial review for various reasons is sharply circumscribed?

Nicole A. Saharsky: --It's the second one, and I'm sorry if I misunderstood your question earlier.

The scope of judicial review depends on the condition that the court -- that Congress put in for the commission to meet, and that is in subsection (f)(1) of this -- this provision, which is that there has to be the commission unable to obtain an agreement acceptable to it.

What Petitioner seeks judicial review of is the process behind it and puts in place these factors for reviewing the process behind it.

And Justice Breyer--

Justice Anthony Kennedy: What -- what -- what can you tell us about what the proper function of the court is in a case like the Chief Justice put?

They said there was no attempt to conciliate and when we attempted to conciliate, they -- they wouldn't answer our calls.

Now, it -- it seems to me as I read your brief that you did indicate that there was some very bare bones requirements that the agency had -- had to meet and it could be reviewed.

I can't find any -- any other context where the court has essentially declined to review a statutory precondition to -- to suit at all.


Justice Stephen G. Breyer: So that's what -- that's where we are.

I'm trying to -- what I'd like you to do, I'm going to get you to focus on just what you want to say, that the framework in which I'm putting it is of course there is review, but of course at the same time, there is very broad discretion given to the EEOC.

So courts do not intervene; be careful, it's an unusual case.

Now, that's what you want.

Now, I want to know how to say that.

And the case that comes to me the closest was the case that we had with the IRS where, in fact, of course the IRS says, we're in good faith.

And the court says, that's just fine, unless of course there is an unusual situation.

Now, one can write those words.

In that kind of opinion, I've noticed it works best if you also give an example through the use of the case.

Now, that's where I am.

And since I think that's what you want -- something like that is what you want to argue, I'm asking you for help how to write that.

Nicole A. Saharsky: --Right.

And what I'm saying is that there is -- the way not to write that is by relying on a good-faith standard, because I think you have a misimpression about the courts of appeals, and how it has been working in the courts of appeals, which is some of the courts have adopted a good-faith standard, but they are putting very onerous requirements on the EEOC in terms of looking at--

Justice Antonin Scalia: We don't have adopt a good -- we don't have to adopt a good-faith standard.

We -- we could simply say that if you are really trying to conciliate, there are a few things that you got to do.

And one of them is to make an offer.

Is that difficult to figure out?

Nicole A. Saharsky: --There are several problems with that.

The first of all is that the statute says that the process is supposed to be informal and this is adding a level of formality to it.

The second thing is that--

Justice Anthony Kennedy: --We're looking we're looking for a safety net, that we said, please, tell us what the minimum rule is.

You don't you have not articulated a minimum rule.

All you say is I can't think of one.

Nicole A. Saharsky: --No, I'm saying that--

Justice Anthony Kennedy: And that doesn't answer Justice Breyer's question, and our general question, how do you want us to write what you want to hold in this case?

Nicole A. Saharsky: --What I'd like the Court--

Justice Anthony Kennedy: All I hear is no review, period, goodbye.

Justice Sonia Sotomayor: Now, I don't want to hear we sent letters.

I -- I'm positing the hypothetical: You sent letters, but when they called you said, we're going to trial.

You didn't make -- no discussion whatsoever.

You sent the letter, they called and said, let's sit down, and you -- and the government says, no.

Okay?

Tell me how we -- how we write a decision that avoid -- that addresses that kind of case.

Nicole A. Saharsky: --Well, we do think that the decision that the Court should write should focus on what the obligation is that's on the EEOC, the particular text that Congress enacted.

And the obligation that's on the EEOC is that before it can sue, it has to have been unable to secure from the respondent a conciliation agreement acceptable to the commission.

So if that's--

Justice Anthony Kennedy: Fine, then what is the Court supposed to do to determine whether that obligation is met?

So far, I think your answer is nothing.

Nicole A. Saharsky: --I think what the Court is supposed to do is if it's controverted, look at the letters indicating that there was an effort that was made by the EEOC and, as a general matter, not look behind those.

I mean, there was--

Chief Justice John G. Roberts: So trust you?

Nicole A. Saharsky: --a year-long -- process--

Chief Justice John G. Roberts: Just trust you?

Nicole A. Saharsky: --Well--

Chief Justice John G. Roberts: The other side is challenging with whatever evidence it has.

Maybe it's voluminous -- affidavits, records -- and you say, trust us.

Here's a letter saying we did it.

That's the end of the case.

Nicole A. Saharsky: --There's significant incentives that operate on agencies even when there's not judicial review.

In this case, for example, the EEOC has substantial resource that don't allow it to sue--

Chief Justice John G. Roberts: But there are incentives on most people to tell the truth most of the time, but that doesn't mean that's the end of it.

Nicole A. Saharsky: --There is also review by the President and by Congress, Congressional committees.

There are actually reports that are required every year to Congress in the statute itself.

Justice Antonin Scalia: Ms. Saharsky, I don't even agree with you about the incentives.

I think, as the other side points out, there is considerable incentive on the EEOC to fail in conciliation so that it can bring a big-deal lawsuit and get a lot of press and put a lot of pressure on this employer and on other employers.

There are real incentives to have conciliation fail.

Nicole A. Saharsky: I don't think that that's true in most cases; and even in high-profile cases where the EEOC may believe that there's a very serious, substantial claim of employment discrimination, it is always easier to come to an agreement then to have to go through the burdens of litigation.

The EEOC finds reasonable cause in approximately 3500 charges every year.

It only has the resources to litigate in about 130 of them.

That's as of 2013.

So there are--

Justice Sonia Sotomayor: I know what your position is, but assume ours is just the hypothetical.

It doesn't mean you've lost, but ours is that we have to give some teeth to judicial review greater than what you're suggesting.

Justice Kennedy asked you once.

I'm asking you -- or I asked you once before, he's asked again, and I'm asking again.

Nicole A. Saharsky: --Right.

And that's--

Justice Sonia Sotomayor: Give us give us what you don't want.

Nicole A. Saharsky: --Right.

And the reason--

Justice Sonia Sotomayor: Give us a way to write it that gives you the least -- the less intrusion -- the least intrusion but more than what you want to do.

Nicole A. Saharsky: --Yes.

And to be frank, the reason that this is a struggle is because the courts of appeals, even those that have tried to put a minimum good faith standard in place, have seen these standards spiral out of control and lead to significant collateral litigation.

So I don't mean -- I understand the effort that you're looking for, Justice Sotomayor, and I will do my best to provide that guidance; but I'm telling you that even in the three circuits that have tried to use a minimal good-faith standard, they have been scrutinizing everything that the EEOC has been doing, all of the letters back and forth.

You've gotten into situations where you're even deposing EEOC investigators in district courts, and that's one thing that -- if I could just back up, because I think this is a really important point, is that there are four various, serious problems that this has led to in the district courts and in the courts of appeals.

We're talking about mini trials on a collateral issue that's not the merits of the discrimination but on this question of whether the EEOC tried hard enough, and it is not the case that the EEOC is failing to conciliate.

The EEOC is attempting conciliation in these cases.

Petitioner can't identify cases in which it has not conciliated at all.

What they're saying is that we didn't try hard enough, and that requires these mini trials.

The second very serious problem with all the standards the courts of appeals have adopted is that they have to make up standards that appear nowhere in the statute, and they have struggled.

These five guidelines that Petitioner now proposes appeared for the first time in their Supreme Court brief.

These are not the standards they were urging to the district court.

Justice Stephen G. Breyer: What about that analogy with that IRS case?

Nicole A. Saharsky: I think that that is a good analogy because the Court recognized that it would not be appropriate to second-guess--

Justice Stephen G. Breyer: So could we copy that, you know, just copy that, making appropriate changes, and say, look, Judge, you have to see -- you have their affidavit.

As long as you think that affidavit really was the bottom line, we could conciliate it unless you have good reason to think that isn't so.

That's the end of it, unless there is evidence of an abuse of process that we'll allow you to go further because conciliation, mediation is really a matter that Congress intended to leave up to the agency.

And even what sounds minimal, minimal, at least the agency has to make an offer.

Maybe they don't.

Maybe the best way to conciliate it is you sit there and say, well, you know, that can be in some circumstance.

So you -- you -- what about some?

Is that not possible?

Nicole A. Saharsky: --Yes.

I take your point, Justice Breyer.

I think there are some modifications that I would make to it, but I think--

Justice Stephen G. Breyer: What?

Nicole A. Saharsky: --towards -- the end of your question, you actually raise a really important ancillary point, which is that the process of trying to come to a negotiation and conclusion with someone often requires an element of strategy, that you might wait for them to make the first offer or you might find someone who says, we're never going to come to an agreement on this.

And that's happened in some cases; and, yet, those folks still come into court and say, The EEOC didn't try hard enough.

Well, you told us you were never going to come to an agreement.

Justice Ruth Bader Ginsburg: Well, what has been going on, in fact, in these cases now with some courts having just general good faith, others having a three factor test?

You raised a problem here that the EEOC was hit with a bunch of interrogatories.

Has that been going on?

Nicole A. Saharsky: Yes.

The EEOC is really faced with -- you know, is really between a rock and a hard place.

It does its best to conciliate and it never knows whether some court is going to find it to be insufficient later.

The EEOC is attempting to maintain the confidentiality of these proceedings.

When employers are in conciliation, of course they want it to be confidential, but then when this gets to court, they say, oh, we don't care about confidentiality anymore.

Let's all put it before the court, but the problem is that has effects for later cases.

Once employers know and the commission knows that this is all going to come out and what Petitioner proposes, it really destroys the conciliation process.

It's really a bedrock--

Justice Antonin Scalia: Do you disagree that they can publish it in the New York Times if they want?

Nicole A. Saharsky: --Well, partially, the the confidentiality provision has two portions to it.

The first says that the EEOC can't make public what happened.