The APA Claim for a meaningful remedy for the Collins Plaintiffs is perhaps the easier, cleaner, and more intellectually palatable route to invalidating the nws and putting an end to the almost 8 years of the federal government blatantly nationalizing two large private corporations.
While many Judges and perhaps some of the Justices may not feel comfortable reversing a multi billion dollar "contract" and providing RETROSPECTIVE RELIEF via the unconstitionally insulated Director claim, Seila Law said that the Plaintiffs need not create a but for world:
JUSTICE KAGAN: I mean, in a case like
this, Mr. Thompson, where we're trying to figure
out the proper remedy, I mean, it's -- it's --
it's a -- it's a kind of equitable question,
isn't it, and we're trying to figure out what
position you would have been in absent a
constitutional violation. Why -- why isn't that
the right question?
MR. THOMPSON: Well, I think Footnote
12 of Free Enterprise and Seila Law just last
term rejected that. They said plaintiffs don't
have to try to recreate a but-for world. And,
here, if we -- it shows why. We'd have to go
back to 2009 and see what would have happened if
Director Watt, for example, had been there
throughout the entire time and, you know, would
the President have preferred to keep the money
at Fannie and Freddie and spend it on affordable
housing rather than send it all to the
Republican-controlled House of Representatives
and the Treasury?
So that's a difficult --
JUSTICE KAGAN: Does that mean,
Mr. Thompson, that we have to do a great deal
more than invalidate the -- the -- the Third
Amendment and everything that follows from it?
I mean, why shouldn't we go back to the -- the
-- the -- the -- the First or the Second?
MR. THOMPSON: Well, Your Honor, we
focused on the Third Amendment because that's
the -- the feature of this that rearranged the
capital structure, but, as we made clear to the
Fifth Circuit Court of Appeals, we are perfectly
content with all of these arrangements, which,
as we say in the complaint, were a concrete
life-preserver. It's like getting a credit card
with a double-digit interest rate that you can't
repay the debt on. It's not debt, but you can't
pay the money back, and so --
JUSTICE KAGAN: Thank you,
Mr. Thompson.
MR. THOMPSON: -- we would be
perfectly content with it being thrown out.
As to the Takings argument:
JUSTICE BREYER: The talk -- you --
you said, well, this is really like a
nationalization and the -- the government took
the company, gave it to the Treasury, and our
shares are near worthless.
Well, why didn't you bring a takings
claim?
MR. THOMPSON: Your Honor, we have
brought a takings claim, but that doesn't
absolve this Court of -- under the APA, of
addressing our challenge to the lawfulness of
the agency action. There's no reason to think
that --
JUSTICE BREYER: I didn't say it did.
I was just thinking, if you brought a takings
claim --
MR. THOMPSON: Yes, Your Honor.
JUSTICE BREYER: -- and this seems
like a takings claim, why should we stretch out
of recognition or stretch or try to draw lines
unnecessarily on the question of derivative
actions?
MR. THOMPSON: Well, I think it's
basic --
JUSTICE BREYER: I'm -- I'm aware of
derivative action of the conservator. In fact,
he so -- goes so far that the company's hurt,
really hurt, and the shareholders are destroyed,
bring a takings claim, but as long as there's a
colorable claim, as long as there's a colorable
defense, forget it. Apply ordinary derivative
law.
MR. THOMPSON: Well, Your Honor, two
points. Number one, principles of
constitutional avoidance would counsel in favor
of not reading Congress as having authorized
nationalization. There's no reason to think
Congress would have wanted to stick the
taxpayers with a big tab for a takings verdict
in the Court of Federal Claims.
But also, if the Court were to apply
traditional measures of derivative/direct, we
say we win. We would point to the Alleghany
case.
JUSTICE BREYER: I see that, but you
have a rather special company which your
shareholders brought into -- bought into with
knowledge, and that is a company that has a
public as well as a -- more of a public aspect
than ordinary. They're there and both parts are
relevant.
And so even if this is at the border
of derivative action, shouldn't we interpret the
derivative actions -- why not? -- to encompass
what goes on here with a colorable argument that
they did it for the benefit of the -- of the
corporation?
MR. THOMPSON: Well, again, Your
Honor, constitutional avoidance. We don't think
the Court should depart from its precedent in
Alleghany to create a massive takings liability.
JUSTICE BREYER: All right. If I have
time for one more question, I don't know."
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