Replies to post #562965 on Fannie Mae-No Politics (FNMA)

[obiterdictum]

"The En Banc opinion did use the word "plausibly". See the top of page 4 in the opinion."

The word was used to highlight the dispute in question. But court is clear about invalidating the third amendment.

"Now to apply this understanding of conservator powers to the Third Amendment. We hold the Shareholders stated a plausible claim that the Third Amendment exceeded statutory authority. Transferring substantially all capital to Treasury, without limitation, exceeds FHFA’s powers to put the GSEs in a “sound and solvent condition,” “carry on the[ir] business,” and“preserve and conserve [their] assets and property.” We ground this holding in statutory interpretation, not business judgment"

This is an inaccurate representation of the actual decision made on Count 1. Below is a majority decision on Count 1 and the net worth sweep.

A majority decision:

"The complaint states a plausible claim that FHFA exceeded its statutory authority. Judge Haynes’s dissent suggests that the Shareholders could waive the legal standard for reviewing the grant of a motion to dismiss. But the Supreme Court explained in Iqbal that “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”212 The standard is generally applicable, and we see no exception here. When we reverse the grant of a motion to dismiss, the district court may decide if fact issues require trial or if summary judgment should be granted.213 The proper remedy is to reverse the motion-to-dismiss denial and remand Count I for further proceedings." See: p. 42

Notice that there is no invalidation of the net worth sweep. There is a reversal of the Defendants motion to dismiss the APA net worth sweep claim and the case is remanded back to the District Court for further proceedings (trial or summary judgment).

Concerning Count IV, a different majority refused to invalidate the net worth sweep.

"Our decision not to invalidate the Net Worth Sweep is thus grounded in our respect for the Constitution and our co-equal branches of government." See p. 59.

In summary, the Shareholders’ ongoing injury, if indeed there is one,7 is remedied by a declaration that the “for cause” restriction is declared removed. We go no further. We will not let the Shareholders pick and choose parts of the PSPAs to invalidate when the President had adequate oversight over their adoption and particularly when two different presidents have selected agency heads who have supported the Net Worth Sweep. The appropriate remedy is the one that fixes the Shareholders’ purported injury. That is exactly what our declaratory judgment does. Consequently, we decline to invalidate the Net Worth Sweep or PSPAs.8 Instead, we conclude, given that the majority of the court has found the FHFA unconstitutionally structured, that the appropriate remedy for that finding is to declare the “for cause” provision severed." See p. 60

See: http://www.ca5.uscourts.gov/opinions/pub/17/17-20364-CV2.pdf